<PAGE>
Filed Pursuant To Rule 424(b)(2)
Registration File No.: 333-72861
Prospectus Supplement to Prospectus dated July 22, 1992.
[STANLEY LOGO]
$120,000,000
THE STANLEY WORKS
5.75% Notes Due March 1, 2004
----------------
The Stanley Works will pay interest on the Notes on March 1 and September
1 of each year. The first such payment will be made on September 1, 1999. The
Notes will be issued only in denominations of $1,000 and integral multiples of
$1,000.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
Per Note Total
------------ ---------------
<S> <C> <C>
Initial public offering price ............................ 99.961% $119,953,200
Underwriting discount .................................... 0.600% $ 720,000
Proceeds, before expenses, to The Stanley Works .......... 99.361% $119,233,200
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Notes will accrue from March 1, 1999 and must
be paid by the purchaser if the Notes are delivered after March 1, 1999.
----------------
The underwriters expect to deliver the Notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on March 1, 1999.
GOLDMAN, SACHS & CO. SALOMON SMITH BARNEY
----------------
Prospectus Supplement dated February 24, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
SUPPLEMENT
You should read this prospectus supplement along with the prospectus
that follows carefully before you invest. Both documents contain important
information you should consider when making your investment decision. This
prospectus supplement contains information about the Notes and may add, update
or change information in the accompanying prospectus. You should rely only on
the information provided or incorporated by reference in this prospectus
supplement and the prospectus. The information in this prospectus supplement is
accurate as of its date and the information in the accompanying prospectus is
accurate of its date.
THE COMPANY
The Company is a worldwide producer of tools and door products for
professional, industrial and consumer use. Stanley (Registered Trademark) is a
brand recognized around the world for quality and value. The Company believes
that it is the largest manufacturer of hand tools in the world, featuring a
broader line than any other tool maker. The Company also believes that it is
the leader in the manufacture and sale of pneumatic fastening tools and related
fasteners to the construction, furniture and pallet industries as well as the
leading manufacturer of hand-held hydraulic tools used for heavy construction,
railroads, utilities and public works. In its Door business the Company
believes that it is a U.S. leader in the manufacture and sale of insulated
steel residential entrance doors, builders and architectural hardware products,
mirrored closet doors and hardware for sliding, folding and pocket doors and
the U.S. leader in the manufacture, sale and installation of power operated
sliding doors.
The Company was founded in 1843 by Frederick T. Stanley and incorporated
in 1852. The Company's principal executive offices are located at 1000 Stanley
Drive, New Britain, Connecticut 06053, and its telephone number is (860)
225-5111.
USE OF PROCEEDS
The net proceeds to the Company from the issuance and sale of the Notes
is expected to be approximately $119.2 million, after deducting the
underwriters' discounts and commissions and expenses incurred by the Company in
connection with this offering. The Company intends to use these proceeds to
repay approximately $119.2 million under the Company's commercial paper
program, which provides for up to $400.0 million of borrowings ($298.5 million
of which was outstanding as of January 2, 1999), and bears a blended interest
rate of 5.2%. The Company used the proceeds from the commercial paper issuances
to fund working capital and the purchase of Zag Industries Ltd., an innovator
of plastic storage products, in August, 1998.
DESCRIPTION OF NOTES
Information in this section should be read together with the information
under the caption "Description of Securities" in the accompanying prospectus.
The following description supplements and, to the extent inconsistent, replaces
the description of the general terms and provisions of the Securities set forth
in the accompanying prospectus. Certain terms are defined in the prospectus.
GENERAL
The Notes will be:
o unsecured general obligations of The Stanley Works;
o limited to $120 million principal amount; and
o issued in book-entry form only.
The Notes will be issued under an Indenture, dated as of April 1, 1986,
between the Company and State Street Bank and Trust Company, as successor
trustee (the "Trustee"), as amended by the First Supplemental Indenture, dated
as of June 15, 1992, and will constitute a separate series for purposes of the
Indenture.
MATURITY AND INTEREST
The Notes will mature on March 1, 2004, and are not redeemable prior to
maturity. The Company will pay interest on the Notes
S-2
<PAGE>
on March 1 and September 1 of each year to holders of record on the preceding
February 15 and August 15, respectively. The first interest payment date is
September 1, 1999. Interest accrues from March 1, 1999.
RANKING
Payment of the principal and interest on the Notes will rank equally
with all other unsecured and unsubordinated debt of The Stanley Works. As of
January 2, 1999, The Stanley Works had $490.6 million of indebtedness that
would have ranked equally with the Notes, including $298.5 million of
commercial paper, $100 million aggregate principal amount of the Company's
7 3/8% Notes due 2002 issued under the Indenture, $19.6 million of indebtedness
under industrial revenue bonds, a $39.6 million guarantee of indebtedness of
The Stanley Account Value Plan (an employee benefit plan) and $32.9 million of
other indebtedness.
Since the operations of The Stanley Works are partially conducted
through subsidiaries, the cash flow and the consequent ability to service debt,
including the Notes, of the Company are partially dependent upon the earnings
of its subsidiaries and the distribution of those earnings to, or upon other
payments of funds by those subsidiaries to, The Stanley Works. The subsidiaries
are separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the Notes or to make funds
available therefor, whether by dividends, loans or other payments. In addition,
the payment of dividends and the making of loans and advances to The Stanley
Works by its subsidiaries may be subject to statutory or contractual
restrictions, are contingent upon the earning of those subsidiaries, and are
subject to various business considerations. Any right of The Stanley Works to
receive assets of any of its subsidiaries upon their liquidation or
reorganization (and the consequent right of the holders of the Notes to
participate in those assets) will be effectively subordinated to the claims of
that subsidiary's creditors, including trade creditors. As of January 2, 1999,
The Stanley Works' subsidiaries had outstanding approximately $76.2 million of
indebtedness.
The Indenture does not limit the amount of Securities that may be issued
thereunder and does not limit the amount of additional indebtedness that the
Company or any of its subsidiaries may incur.
DEFEASANCE
The Notes are subject to defeasance under the conditions described in
the accompanying prospectus and the Indenture.
ADDITIONAL INFORMATION
See "Description of Securities" in the accompanying prospectus for
additional important information about the Notes, including:
o information about the Indenture and the Trustee;
o a description of certain restrictions on the Company;
o a description of the events of default under the Indenture; and
o additional terms of the Notes.
BOOK ENTRY DELIVERY AND FORM
Upon issuance, the Notes will be represented by one or more global
securities (a "Global Security") which will be deposited with, or on behalf of,
The Depository Trust Company (the "Depositary") and be registered in the name
of the Depositary or a nominee of the Depositary.
As long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by that Global
Security for all purposes under the Indenture, including receiving payment on
the Notes, receiving notices and for all other purposes under the Indenture and
the Notes. Except under certain limited circumstances described below, owners
of beneficial interests in a Global Security will not be entitled to have Notes
represented by that Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the Notes in definitive form and
will not be considered the owners or holders of the Notes under the Indenture.
Accordingly, each person
S-3
<PAGE>
owning a beneficial interest in a Global Security must rely on the procedures
of the Depositary and, if such person is not a Participant (as defined below),
on the procedures of the Participant through which such person owns its
interest, to exercise any rights of a holder under the Indenture.
Upon the issuance of a Global Security, the Depositary or its nominee
will credit the accounts of persons designated by the Underwriters on its
book-entry registration and transfer system with the respective principal
amounts of the Notes represented by the Global Security. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the Depositary or its nominee ("Participants") or persons that
may hold interests through Participants. Ownership of beneficial interests in a
Global Security will be shown on, and the transfer of that ownership will be
effected only through, the Depositary's or its nominee's records (with respect
to interests of Participants) and on Participant's records (with respect to
interests of persons other than Participants). The laws of some states require
that certain purchasers of securities take physical delivery of such securities
in definitive form. These laws and their limitations may impair the ability to
transfer beneficial interests in a Global Security.
Principal and interest payments on Notes registered in the name of the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the sole registered owner of the relevant Global Security. None
of The Company, the Trustee, any paying agent or the registrar for the Notes
will have any responsibility or liability for any aspect of the Depositary's
records relating to or payments made on account of beneficial interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
The Company expects that the Depositary or its nominee, upon receipt of
any payment of principal or interest, will immediately credit each
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the relevant Global
Security as shown on its records. The Company also expects that payments by
Participants to owners of beneficial interests in a Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name", and will be the
responsibility of such Participants.
If the Depositary is at any time unwilling or unable to continue as
depository with respect to any Global Security and the Company does not appoint
a successor depository within 90 days, the Company will issue Notes in
definitive form in exchange for the entire Global Security. In addition, the
Company may at any time and in its sole discretion determine not to have the
Notes represented by a Global Security and, in such event, will issue Notes in
definitive form in exchange for the entire Global Security. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of Notes in definitive form represented by such
Global Security equal in principal amount to such beneficial interest and to
have such Notes registered in its name. Notes issued in definitive form will be
issued as registered Notes in denominations of $1,000 and integral multiples
thereof, unless otherwise specified by the Company.
Interest on any Notes issued in definitive form will be payable at the
office of the Trustee, which, at the date of this prospectus supplement is
State Street Bank and Trust Company, Corporate Trust, Goodwin Square, 225
Asylum Avenue, 23rd floor, Hartford, CT 06103, or at such other place or places
as may be designated pursuant to the Indenture, provided that the Company, at
its option, may pay interest other than interest due at maturity by check
mailed to registered holders. At the maturity of the Notes, the principal
thereof, together with accrued interest thereon, will be payable in immediately
available funds upon surrender thereof at the office of the Trustee or at such
other place or places as may be designated pursuant to the Indenture.
The Depositary has advised the Company as follows:
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within
S-4
<PAGE>
the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934, as amended. The
Depositary holds securities that its participants deposit with the Depositary.
The Depositary also facilitates the settlement among participants of securities
transactions, such as transfers and pledges in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants include securities brokers and dealers (including the
underwriters), banks, trust companies, clearing corporations, and certain other
organizations ("Direct Participants"). The Depositary is owned by a number of
its Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the Depositary's system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly. The rules applicable to the Depositary and its participants are on
file with the Securities and Exchange Commission.
S-5
<PAGE>
UNDERWRITING
The Company and the underwriters for the offering (the "Underwriters")
named below have entered into an underwriting agreement and a terms agreement
with respect to the Notes.
Subject to certain conditions, each Underwriter has severally agreed to
purchase the principal amount of Notes indicated in the following table:
<TABLE>
<CAPTION>
Underwriters Principal Amount of Notes
- ----------------------------------------- --------------------------
<S> <C>
Goldman, Sachs & Co. ............... $ 72,000,000
Salomon Smith Barney Inc. .......... 48,000,000
------------
Total ............................ $120,000,000
============
</TABLE>
-----------------------------------
Notes sold by the Underwriters to the public will initially be offered
at the initial public offering price set forth on the cover of this prospectus
supplement. Any Notes sold by the Underwriters to securities dealers may be
sold at a discount from the initial public offering price of up to 0.350% of
the principal amount of the Notes. Any such securities dealers may resell any
of the Notes purchased from the Underwriters to certain other brokers or
dealers at a discount from the initial public offering price of up to 0.250% of
the principal amount of the Notes. If all the Notes are not sold at the initial
offering price, the Underwriters may change the offering price and the other
selling terms.
The Notes are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
In connection with the offering, the Underwriters may purchase and sell
the Notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater number of
Notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the Notes while the
offering is in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the representatives have repurchased the Notes
sold by or for the account of such Underwriter in stabilizing or short covering
transactions.
These activities by the Underwriters may stabilize, maintain or
otherwise affect the market price of the Notes. As a result, the price of the
Notes may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
Underwriters at any time. These transactions may be effected in the
over-the-counter market or otherwise.
The Company estimates that its share of the total expenses of the
Offering, excluding underwriting discounts and commissions, will be
approximately $67,000.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
Each of the underwriters or their affiliates have provided commercial or
investment banking services to the Company and may provide these services in
the future. They receive customary fees and commissions for these services.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon by Stephen
S. Weddle, Esq., Vice President, Secretary and General Counsel of the Company.
Certain legal matters will be passed upon for the underwriters by Skadden,
Arps, Slate,
S-6
<PAGE>
Meagher & Flom LLP, New York, New York. Skadden, Arps, Slate, Meagher & Flom
LLP has represented, and continues to represent, the Company in connection with
certain legal matters.
EXPERTS
The consolidated financial statements and financial statement schedule
of The Stanley Works included or incorporated by reference in The Stanley
Works' Annual Report on Form 10-K for the year ended January 3, 1998, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
reports thereon included or incorporated by reference therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
S-7
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
[STANLEY LOGO]
$200,000,000
THE STANLEY WORKS
DEBT SECURITIES
The Stanley Works (the "Company") may offer from time to time up to
$200,000,000 aggregate principal amount of its debt securities (the
"Securities"). As used herein, Securities shall include Securities denominated
in U.S. dollars or, at the option of the Company if so specified in the
accompanying Prospectus Supplement, in any other currency, including composite
currencies such as the European Currency Unit. The Securities will be offered
in one or more separate series or issues in amounts, at prices and on terms to
be determined at the time of offering. See "Plan of Distribution."
The terms of the Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, currency,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, if any, any redemption terms, the initial public offering price and
the net proceeds to the Company from the sale of the Securities and other
special terms in connection with the offering and sale of the series of the
Securities in respect of which this Prospectus is being delivered are set forth
in the accompanying Prospectus Supplement ("Prospectus Supplement").
The Securities will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company.
Securities of a series may be issuable in registered form without coupons,
including in the form of one or more global securities,
------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
The Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved
in the sale of the Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and any applicable
commissions or discounts are set forth in or may be calculated from the
Prospectus Supplement with respect to such Securities. The net proceeds to the
Company from such sale will be the purchase price less such commission in the
case of an agent, the purchase price in the case of the dealer, or the public
offering price less such discount in the case of an underwriter and less, in
each case, other attributable issuance expenses. See "Plan of Distribution."
------------
The date of this Prospectus is July 22, 1992
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THOSE DESCRIBED IN THE PROSPECTUS SUPPLEMENT. THIS PROSPECTUS AND
THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THEIR RESPECTIVE DATES OR THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Act") and in accordance therewith files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. and at
the regional offices of the Commission at 75 Park Place, New York, New York and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C., at
prescribed rates. The Company's Common Stock is listed on the New York Stock
Exchange and the Pacific Stock Exchange. Such reports, proxy statements and
other information concerning the Company can also be inspected and acquired at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005 and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104. This Prospectus does not contain all the information set
forth in the Registration Statement on Form S-3 and the exhibits thereto which
the Company has filed with the Commission under the Securities Act of 1933 and
to which reference is hereby made for further information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference and made a
part hereof: (1) the Company's Annual Report on Form 10-K for the year ended
December 28, 1991; (2) the Company's Quarterly Report on Form 10-Q for the
quarter ended March 28, 1992; (3) the Company's Current Report on Form 8-K
dated April 10, 1992, as amended; (4) the Company's Current Report on Form 8-K
dated April 15, 1992 and (5) the Company's Current Report on Form 8-K dated
July 15, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any or
all of the foregoing documents incorporated by reference herein (not including
exhibits to such documents unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to The Stanley
Works, 1000 Stanley Drive, New Britain, Connecticut 06053, Attention:
Secretary; (203) 225-5111.
2
<PAGE>
THE COMPANY
The Stanley Works, incorporated in Connecticut in 1852, is engaged in the
United States and abroad in three industry segments: Tools, Hardware and
Specialty Hardware.
The Tools segment consists of consumer, industrial and engineered tools.
Consumer tools includes hand tools such as measuring instruments, planes,
hammers, knives, wrenches, sockets, screwdrivers, saws, chisels, boring tools,
masonry, tile and drywall tools, paint preparation and paint application tools,
catalog sales, drapery hardware and Taylor Rental Corporation, franchisor and
operator of the nation's largest system of general rental centers for
do-it-yourselfers and commercial customers. Industrial tools includes
industrial and mechanics hand tools, including STANLEY-PROTO (Registered
Trademark) industrial tools and MAC (Registered Trademark) mechanics tools
and high density industrial storage and retrieval systems. Engineered tools
includes STANLEY-BOSTITCH (Registered Trademark) fastening tools and
fasteners, air tools and hydraulic tools.
The Hardware segment consists of hardware such as hinges, hasps, brackets,
bolts, closet organizer and other shelving, screen and storm door hardware,
sliding and folding doors and door hardware.
The Specialty Hardware segment consists of power-operated doors and gates,
home automation products which include U-install (Registered Trademark) garage
door openers, electronic controls and other products and residential door
systems such as original and replacement garage and entry doors.
The Company believes it is the largest manufacturer of hand tools in the
world and that it offers the broadest line of such products. The Company also
believes it is the largest manufacturer of pedestrian power-operated doors in
the United States and is a major factor in domestic markets with respect to the
manufacture and sale of steel garage doors, radio-controlled garage door
operators, gate operators and insulated steel entry doors. Additionally, the
Company believes that it is the leading manufacturer of professional and
construction air-powered tools and related fasteners and the leading
manufacturer in the United States of high-density industrial storage and
retrieval systems and of portable and mounted hydraulic tools.
The Company attributes its competitive strengths to its extensive
distribution systems and merchandising service, the breadth of its product
lines, its reputation for product quality and its well-known trademarks.
The Company's principal executive office is located at 1000 Stanley Drive,
New Britain, Connecticut 06053 and its telephone number is (203) 225-5111.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR
ENDED ---------------------------------------------------------
MARCH 28, 1992 1991 1990 1989 1988 1987
--------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges ......... 3.56 4.16 4.47 5.29 4.47 4.35
</TABLE>
The ratios of earnings to fixed charges are calculated on a total
enterprise basis. Earnings represent earnings before income taxes, cumulative
adjustment for accounting change and fixed charges. Fixed charges represent
interest incurred plus that portion of rental expense deemed to be interest.
USE OF PROCEEDS
Except as set forth in the Prospectus Supplement, the Company intends to
use the net proceeds from the sale of the Securities for general corporate
purposes, including the financing of its operations, the repayment of debt and
possible business acquisitions. The Company currently has no specific plan for
the use of the net proceeds. Pending such applications, the net proceeds will
be invested temporarily in marketable securities consisting of A-1 or P-1 rated
commercial paper, AA or AAA rated term obligations of corporations or U.S.
government obligations.
3
<PAGE>
DESCRIPTION OF SECURITIES
The Securities are to be issued under an indenture (the "Indenture")
between the Company and The Connecticut National Bank as successor to Morgan
Guaranty Trust Company of New York (the "Trustee") (the "Indenture"). A copy of
the form of the Indenture is filed as an exhibit to the Registration Statement.
The following description summarizes certain general terms and provisions of
the Securities and the Indenture and is subject to the detailed provisions of
the Indenture. Whenever any particular section of the Indenture or any term
defined therein is referred to, such section or definition is incorporated
herein by reference, and the statement in connection with which such reference
is made is qualified in its entirety by such reference.
GENERAL
The Indenture does not limit the amount of Securities which can be issued
thereunder and provides that additional Securities may be issued thereunder up
to the aggregate principal amount which may be authorized from time to time by
the Company's Board of Directors. Reference is made to the Prospectus
Supplement for the following terms of the particular series of Securities being
offered thereby: (i) the designation, aggregate principal amount and authorized
denominations of the series; (ii) the percentage of principal amount at which
the series will be issued; (iii) the date or dates on which the series will
mature; (iv) the rate or rates per annum, if any, at which the series will bear
interest (or the manner of calculation thereof); (v) the times at which any
interest will be payable; (vi) the place or places where the principal and
premium, if any, and interest, if any, on the series will be payable; (vii) the
currency or currencies (including composite currencies) of payment of principal
of and premium if any, and interest thereon if other than U.S. dollars; (viii)
the prices, terms and conditions of any optional or mandatory redemption
provisions; and (ix) any other special terms (including any additional
covenants or modifications or amendments to existing provisions of the
Indenture). (Section 301) Pursuant to the Indenture, the Company may amend or
modify the provisions of the Indenture described below under "Certain Rights to
Require Purchase of Securities by the Company Upon Change of Control" with
respect to a particular series of Securities prior to the issuance thereof. Any
such amendment or modification will be described in the Prospectus Supplement
or an amended Prospectus relating to that particular series. The Securities may
be presented for transfer or exchange to the corporate trust office of the
Trustee in The City of New York or at any other office or agency maintained by
the Company for such purposes. (Sections 305 and 1002). The Securities will be
interchangeable without service charge, but the Company may require payment to
cover taxes or other governmental charges. (Section 305).
The Securities will rank on a parity with the Company's other unsecured
and unsubordinated indebtedness, including any indebtedness that is outstanding
under the Credit Agreements (as hereafter defined) and $141.1 million aggregate
principal amount of the three series of debt securities currently outstanding
under the Indenture at March 28, 1992. In addition, at March 28, 1992, the
Company had $256.7 million outstanding principal amount of additional
indebtedness that also constitutes senior indebtedness of the Company and,
therefore, is pari passu with the Securities. Of this amount, approximately $31
million (representing indebtedness under industrial revenue bonds) is secured
by various assets of the Company and is, therefore, effectively senior in right
of payment to the Securities, which are unsecured.
The Securities will be issued in registered form without coupons,
including in the form of one or more global securities ("Global Securities").
Unless otherwise provided in an applicable Prospectus Supplement with respect
to a series of Securities, Securities denominated in U.S. dollars will be
issued only in denominations of $1,000 or any integral multiple thereof.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's Paying Agent for payments with respect to the Securities. Any
other Paying Agents in the United States initially designated by the Company
for the Securities will be named in the related Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agents or approve a change in the office through
which any Paying Agent acts, except that the Company will be required to
maintain a Paying Agent in each Place of Payment for such series. All monies
paid by the Company
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to a Paying Agent for the payment of principal of and premium, if any, and
interest, if any, on any Security which remains unclaimed at the end of two
years after such principal, premium or interest shall have become due and
payable will be repaid to the Company, and the Holder of such Security will
thereafter look only to the Company for payment thereof. (Section 1003).
Interest on the Securities that is punctually paid is payable to the persons in
whose names the Securities are registered at the close of business on the
regular record date for such interest. Interest on the Securities that is not
punctually paid ("Defaulted Interest") shall cease to be payable to the
registered holder thereof on the regular record date and may be paid by the
Company either (i) to the persons in whose names the Securities are registered
at the close of business on the special record date for the payment of the
Defaulted Interest or (ii) in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of any series
may be listed and upon notice to such exchange and the Trustee, if after the
giving of such notice to the Trustee, the Trustee for the Securities of such
series deems such payment to be practicable. Pursuant to the Indenture,
interest is punctually paid if paid on the date specified for a particular
series of Securities to be the fixed date on which an instalment of interest is
due and payable. Interest paid after the date on which an instalment of
interest is due and payable but prior to the expiration of the 30 day grace
period for defaults with respect to the payment of any instalment of interest
or interest that has been paid by the Company in connection with the rescission
of the declaration of acceleration of the maturity of a series of Securities
will be payable in accordance with the Defaulted Interest payment provisions
described above.
Some of the Securities may be issued as Discounted Securities (bearing no
interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their stated principal
amount. Federal income tax consequences and other special considerations
applicable to any Discounted Securities will be described in the Prospectus
Supplement relating thereto.
The Indenture provides the Company with the ability, in addition to the
ability to issue Securities with terms different than those of Securities
previously issued, to "reopen" a previous issue of a series of Securities and
issue additional Securities of such series.
GLOBAL SECURITIES
Securities of a series may be issued in whole or in part in the form of
one or more Global Securities that will be deposited with, or on behalf of, a
depository identified in the Prospectus Supplement relating to such series.
Global Securities will be issued in registered form and in either temporary or
permanent form. Unless and until it is exchanged for Securities in definitive
form, a temporary Global Security may not be transferred except as a whole by
the depository for such Global Security to a nominee of such depository or by a
nominee of such depository to such depository or another nominee of such
depository or by such depository or any such nominee to a successor of such
depository or a nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to any
depository arrangements.
Upon the issuance of a Global Security, the depository for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Securities represented by such Global
Security. Such accounts shall be designated by the underwriters or agents with
respect to such Securities or by the Company if such Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the depository for
such Global Security or its nominee ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the depository (with respect to
participants' interests) for such Global Security or by participants or persons
that hold through participants (with respect to beneficial owners' interests).
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens
The Indenture provides that if the Company or any Restricted Subsidiary
shall issue, assume or guarantee any evidence of indebtedness for money
borrowed ("Indebtedness") secured by a mortgage,
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security interest, pledge or lien ("Mortgage") on any Principal Property, or
shares of stock or Indebtedness of any Restricted Subsidiary, the Company will
secure or cause such Restricted Subsidiary to secure the Securities equally and
ratably with such secured Indebtedness, unless the aggregate amount of all such
secured Indebtedness would not exceed 10% of Consolidated Net Tangible Assets.
(Section 1008).
Such limitation will not apply to Indebtedness secured by (a) Mortgages on
property of any corporation existing at the time such corporation becomes a
Restricted Subsidiary, (b) Mortgages on any property existing at the date of
the Indenture or at the time of acquisition by the Company or a Restricted
Subsidiary (including acquisition through merger or consolidation), (c)
Mortgages securing Indebtedness of a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (d) purchase money and construction Mortgages
entered into within specified time limits, (e) mechanics liens, tax liens,
liens in favor of any governmental body to secure progress, advance or other
payments or the acquisition of real or personal property from any governmental
body pursuant to contract or provision of statute, any other liens, charges and
encumbrances incidental to construction, conduct of business or ownership of
property of the Company or any Restricted Subsidiary which were not incurred in
connection with borrowing money, obtaining advances or credits or the
acquisition of property and in the aggregate do not materially impair use of
any Principal Property or which are being contested in good faith, or (f) any
extension, renewal or replacement of any of the aforementioned Mortgages not in
excess of the principal amount of such Indebtedness plus the fee incurred in
connection with such transaction. (Section 1008).
Limitations on Sale and Leaseback Transactions
The Indenture provides that neither the Company nor any Restricted
Subsidiary may enter into any sale and leaseback transaction involving any
Principal Property unless the aggregate amount of all Attributable Debt with
respect to such transactions would not exceed 10% of Consolidated Net Tangible
Assets.
Such limitation will not apply to any sale and leaseback transaction if
(a) the lease is for a period of not more than three years, (b) the purchaser's
commitment is obtained within a specified period after the acquisition,
construction or placing in service of the Principal Property, (c) the rent
payable pursuant to such lease is to be reimbursed under a contract with the
United States Government or any instrumentality or agency thereof, (d) the
transaction is between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, (e) the Company or such Restricted Subsidiary would be
entitled as described in "Limitations on Liens," above, to mortgage such
Principal Property without equally and ratably securing the Securities, or (f)
the Company or such Restricted Subsidiary, within 180 days after the effective
date of the transaction, applies to the retirement of Securities or other
Indebtedness of the Company or a Restricted Subsidiary an amount equal to (A)
either (i) the lesser of the net proceeds of the sale or transfer or the book
value at the date of such sale or transfer of the Principal Property leased, if
the transaction is for cash, or (ii) the fair market value of the Principal
Property leased, if the transaction is for other than cash, minus (B) the
amount equal to the principal amount of Securities delivered to the Trustee
within such 180 days for cancellation and the principal amount of Indebtedness
voluntarily retired (including any premium or fee paid in connection therewith)
within such 180 days. (Section 1009).
Certain Definitions
"Restricted Subsidiary" means a Subsidiary (i) substantially all the
property of which is located, or substantially all the business of which is
carried on, within the United States, and (ii) which owns a Principal Property;
provided, however, that the term shall not include any Subsidiary which is
solely or primarily engaged in the business of providing or obtaining financing
for the sale or lease of products sold or leased by the Company or any
Subsidiary or which is primarily engaged in the business of a finance company
either on a secured or an unsecured basis.
"Principal Property" means all real property and tangible personal
property constituting a manufacturing plant located within the United States
owned by the Company or a Restricted Subsidiary, exclusive
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of (i) motor vehicles, mobile materials-handling equipment and other rolling
stock, (ii) office furnishings and equipment, information and electronic data
processing equipment, (iii) any property financed through obligations issued by
a state or possession of the United States, or any political subdivision or
instrumentality of the foregoing, on which the interest is not, in the opinion
of tax counsel of recognized standing or in accordance with a ruling issued by
the Internal Revenue Service, includible in gross income of the holder by
reason of Section 103 (a) of the Internal Revenue Code (or any successor to
such provision) as in effect at the time of the issuance of such obligations,
(iv) any real property held for development or sale, or (v) any property the
gross book value of which (including related land and improvements thereon and
all machinery and equipment included therein without deduction of any
depreciation reserves) is less than 10% of Consolidated Net Tangible Assets or
which the Board of Directors of the Company determines is not material to the
operation of the business of the Company and its Subsidiaries taken as a whole.
"Consolidated Net Tangible Assets" means the excess over current
liabilities of all assets properly appearing on a consolidated balance sheet of
the Company and its consolidated Subsidiaries after deducting goodwill,
trademarks, patents, other like intangibles, and the minority interests of
others in Subsidiaries. A Subsidiary is defined to mean any corporation of
which at least a majority of all outstanding stock having ordinary voting power
in the election of directors of such corporation is at the time, directly or
indirectly, owned by the Company or by one or more Subsidiaries of the Company
or by the Company and one or more Subsidiaries. (Section 101).
"Attributable Debt" in respect of any Sale and Lease-Back Transaction
means, as of the time of the determination, the lesser of (i) the sale price of
the Principal Property so leased multiplied by a fraction the numerator of
which is the remaining portion of the base term of the lease included in such
transaction and the denominator of which is the base term of such lease, and
(ii) the total obligation (discounted to present value at the implicit interest
factor, determined in accordance with generally accepted financial practice,
included in the rental payments or, if such interest factor cannot readily be
determined, at a rate of interest of 10% per annum, compounded semi-annually)
of the lessee for rental payments (other than amounts required to be paid on
account of property taxes as well as maintenance, repairs, insurance, water
rates and other items which do not constitute payments for property rights)
during the remaining portion of the base term of lease included in such
transaction. (Section 1009).
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may consolidate or merge with or into any other corporation,
and the Company may sell or transfer all or substantially all of its assets to
another corporation, provided, among other things, that (a) the corporation
formed by or resulting from any such consolidation or merger or the transferee
of such assets shall be a corporation organized and existing under the laws of
the United States, any State thereof or the District of Columbia and shall
expressly assume by supplemental indenture payment of the principal of and
premium, if any, and interest, if any, on the Securities and the performance
and observance of the Indenture and (b) the Company or such successor
corporation shall not immediately thereafter be in default under the Indenture.
(Section 801).
CERTAIN RIGHTS TO REQUIRE PURCHASE OF SECURITIES BY THE COMPANY UPON CHANGE IN
CONTROL
In the event of any Change in Control (as hereinafter defined) of the
Company, each holder of Securities of any series shall have the right, at the
holder's option, to require the Company unconditionally to buy all or any part
of the holder's Securities on the date (the "Repurchase Date") that is 100 days
after the date of such Change in Control at 100% of the principal amount
thereof on the Repurchase Date (plus accrued and unpaid interest to the
Repurchase Date) (the "Redemption Price"); provided, however, that such right
shall not be applicable in the case of any Change in Control of the Company
which shall have been duly approved by a majority of the Continuing Directors
(as hereinafter defined) during the period prior to or within 21 days after the
date on which such Change in Control shall have occurred (the "Approval
Period"). A director shall be deemed to be a "Continuing Director" if (i) (a)
such director is not affiliated with the Acquiring Person (as hereinafter
defined) and (b) such director was a member of the Board of Directors
immediately prior to the time that the Acquiring Person became an
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Acquiring Person or (ii) such director (a) is the successor to a Continuing
Director who is not affiliated with the Acquiring Person and (b) is recommended
to succeed a Continuing Director by a majority of Continuing Directors who are
then members of the Board of Directors. The Redemption Price on any Repurchase
Date may be lower than the market price of the Securities on the date of a
Change of Control. As used herein, (i) "Acquiring Person" means any person who
is or becomes the beneficial owner, directly or indirectly, of 10% or more of
the outstanding Common Stock of the Company; and (ii) a "Change in Control" of
the Company shall be deemed to have occurred at such time as (a) any person is
or becomes the beneficial owner, directly or indirectly, of 30% or more of the
outstanding Common Stock or (b) individuals who constitute the Continuing
Directors cease for any reason to constitute at least a majority of the Board
of Directors. (Sections 1301 and 1303).
On or before the seventh day after the termination of the Approval Period
(which date may be 28 days after a Change in Control), the Company is obligated
to mail to all holders of record of the Securities of any series a notice
regarding the Change in Control and, if it was unapproved, the date before
which the repurchase right must be exercised, the applicable price for
Securities of any series and the procedure which the holder must follow to
exercise this right. The Company shall cause a copy of such notice to be
published in a newspaper of general circulation in the Borough of Manhattan,
New York. To exercise this right, the holder of a Security must deliver on or
before the date that is 90 days after the Change in Control written notice to
the Company (or an agent designated by the Company for such purpose) of the
holder's exercise of such right, together with the certificates evidencing the
Security with respect to which the right is being exercised, duly endorsed for
transfer. Such written notice shall be irrevocable. (Section 1302). The Company
will comply with the requirements of Section 14(e) of the Act and Rule 14e-1
promulgated thereunder and any other applicable securities laws or regulations
in connection with the above-described repurchase right becoming exercisable
and any exercise thereof.
Certain of the Company's other indebtedness contains similar provisions
regarding a change in control. The three series of debt securities in the
aggregate principal amount of $141.1 million currently outstanding under the
Indenture are subject to the same Change in Control provisions as the
Securities. The instrument governing approximately $66.4 million of the
Company's other indebtedness contains provisions substantially similar to those
contained in the Indenture obligating the Company to repurchase the
indebtedness outstanding thereunder upon the occurrence of events that
constitute a Change in Control as defined in the Indenture. It is a default
under the instruments governing approximately $90.7 million of the Company's
other indebtedness if any person acquires beneficial ownership of 25% or more
of the outstanding Common Stock. As described below under "Description of
Credit Agreements," the Credit Agreement also contains provisions allowing the
lenders thereunder to require the Company to prepay all amounts outstanding
thereunder upon the occurrence of the events that constitute a Change in
Control as defined in the Indenture. The Company currently has no borrowings
outstanding under the Credit Agreement. The foregoing provisions may affect the
Company's ability to repurchase the Securities upon a Change in Control, which
will depend upon the Company's having sufficient cash available to satisfy such
other obligations and the Company's obligations under the Securities.
Pursuant to the Indenture, the Company may amend or modify the provisions
of the Indenture relating to a Change of Control with respect to a particular
series of Securities prior to the issuance thereof. Any such amendment or
modification will be described in the Prospectus Supplement or an amended
Prospectus relating to that particular series. The Company's ability to amend
or modify the provisions of the Indenture relating to a Change of Control with
respect to any outstanding series of Securities is limited by the general
provisions of the Indenture governing modification and amendment thereof. See
"-- Modification and Waiver of the Indenture" below.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Securities: (i) default in the payment of any
instalment of interest on any Securities in such series for 30 days after
becoming due; (ii) default in the payment of principal or premium, if any, of
any Securities in such series when due; (iii) default in the performance of any
other covenant for 90 days after notice; (iv)
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involuntary acceleration of the maturity of other indebtedness of the Company
in excess of $5 million for money borrowed which acceleration shall not be
rescinded or annulled, or which indebtedness shall not be discharged, within 10
days after notice; (v) entry of certain court orders which would require the
Company to make payments exceeding $5 million and where 60 days have passed
since the entry of the order without it having been satisfied or stayed; (vi)
certain events of bankruptcy, insolvency or reorganization; and (vii) any other
Event of Default that may be set forth in the Prospectus Supplement with
respect to a particular series of Securities. (Section 501). If an Event of
Default shall occur and be continuing with respect to a series of Securities,
either the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities of such series may declare the entire principal amount,
or, in the case of the Discounted Securities, such lesser amount as may be
provided for in such Securities, of all the Securities of such series to be due
and payable. (Section 502).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of default with respect to a particular series of Securities, give
the holders of the Securities of such series notice of such default known to it
(the term default to mean the events specified above without grace periods);
provided that, except in the case of default in the payment of principal of or
premium, if any, or interest, if any, on any of the Securities of such series,
the Trustee shall be protected in withholding such notice if it in good faith
determines the withholding of such notice is in the interest of the holders of
the Securities of such series. (Section 602).
The Company is required to furnish the Trustee annually a statement by
certain officers of the Company to the effect that to the best of their
knowledge the Company is not in default in the fulfillment of any of its
obligations under the Indenture or, if there has been a default in the
fulfillment of any such obligation, specifying each such default. (Section
1006).
No holder of any Security of any particular series shall have any right to
institute any judicial or other proceeding with respect to the Indenture, or
for the appointment of a receiver or trustee, or for any other remedy unless:
(i) an Event of Default shall have occurred or be continuing and such holder
shall have given the Trustee prior written notice of such default, (ii) the
holders of not less than 25% of the outstanding principal amount of Securities
of a particular series shall have requested the Trustee for such series to
institute proceedings in respect of such Event of Default, (iii) the Trustee
shall have been offered reasonable indemnity against its costs, expenses and
liabilities in complying with such request; (iv) the Trustee shall have failed
to institute proceedings for 60 days after the receipt of such notice, request
and offer of indemnity; and (v) no direction inconsistent with such written
request shall have been given for 60 days by the holders of a majority in
principal amount of the outstanding Securities of such series. (Section 507).
The holders of a majority in principal amount of a particular series of
Securities outstanding have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such series or exercising any trust or
power conferred on the Trustee, and to waive certain defaults. (Sections 512
and 513). The Indenture provides that in case an Event of Default shall occur
and be continuing, the Trustee shall exercise such of its rights and powers
under the Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. (Section 601). Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the holders of the Securities
unless they shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request. (Section 603).
DEFEASANCE OF CERTAIN OBLIGATIONS
The Indenture provides that, if the terms of any series of Securities so
provide, the Company may omit to comply with the restrictive covenants in
Sections 1008 (Limitations on Liens) and 1009 (Limitations on Sale and
Leaseback Transactions), and any such omission shall not be an Event of Default
with respect to the Securities of such series, upon the deposit with the
Trustee, in trust, of money and/or U.S. Government Obligations (as defined)
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the
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principal of (and premium, if any), each instalment of interest on, and any
sinking fund payments on the Securities of such series on the Stated Maturity
(as defined) of such payments in accordance with the terms of the Indenture and
the Securities of such series. The obligations of the Company under the
Indenture and the Securities of such series other than with respect to the
covenants referred to above and the Events of Default other than those
described in clauses (iii) (with respect to Sections 1008 and 1009), (iv) and
(v) under "Events of Default" shall remain in full force and effect. Such a
trust may only be established if, among other things, the Company has delivered
to the Trustee an Opinion of Counsel to the effect that the Holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amounts and
in the same manner and at the same times, as would have been the case if such
deposit and defeasance had not occurred. (Section 1011).
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Securities of any series
as described above and the Securities of such series are declared due and
payable because of the occurrence of any remaining Event of Default, the amount
of money and U.S. Government Obligations (as defined) on deposit with the
Trustee will be sufficient to pay amounts due on the Securities of such series
at the time of their Stated Maturity (as defined) but may not be sufficient to
pay amounts due on the Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments.
MODIFICATION AND WAIVER OF THE INDENTURE
The Indenture may be modified or amended without the consent of any
holders to, among other things: (i) add any additional covenants of the Company
for the benefit of the holders, (ii) add additional Events of Default and (iii)
add to the conditions, limitations and restrictions on the authorized amount,
terms or purpose of issue, authentication and delivery as therein set forth,
other conditions, limitations and restrictions thereafter to be observed. Any
such amendments or modifications may be made to the Change in Control
provisions or to the other provisions.
With certain exceptions, the Indenture may be modified or amended with the
consent of the holders of not less than a majority in principal amount of the
outstanding Securities of each series affected by such modification or
amendment; provided that no such modification or amendment may be made, without
the consent of the holder of each of the Securities affected, which would (a)
reduce the principal amount of, or the premium or the interest on, any of the
Securities, reduce the principal of a Discounted Security payable upon the
acceleration thereof, change the Stated Maturity of the principal of, or any
instalment of interest on, any of the Securities, modify the other terms of
payment thereof, or impair the right to institute suit for the enforcement of
any such payments, or (b) reduce the above-stated percentage of Securities, the
consent of the holders of which is required to modify or amend the Indenture,
or the percentage of Securities, the consent of the holders of which is
required to waive certain past defaults. (Section 902).
The Indenture provides that the Company may in a particular instance omit
to comply with certain covenants if before or after the time for such
compliance, the Holders of more than 50% in principal amount of the outstanding
Securities of each series affected thereby waive such compliance. The following
covenants may be waived pursuant to this provision: (a) the covenant to pay
taxes, assessments, government charges and all lawful claims for labor,
material or supplies, which if unpaid would result in a lien on property; (b)
the covenant to maintain the Company's properties used or useful in the conduct
of its business; (c) the covenant to deliver statements on a yearly basis
regarding compliance with the Indenture; (d) the covenant to preserve and keep
in full force and effect the corporate existence; (e) the covenant not to incur
certain liens on certain of the Company's property; and (f) the covenant not to
engage in certain sale and lease-back transactions. (Section 1010).
CONCERNING THE TRUSTEE
The Company and its subsidiaries have customary banking relationships with
The Connecticut National Bank, the Trustee under the Indenture.
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DESCRIPTION OF CREDIT AGREEMENTS
The Company entered into credit agreements each dated as of April 1, 1992
with seven lenders providing for borrowings of $175 million in the aggregate
(collectively, the "Credit Agreements"). The Credit Agreements are identical
except with respect to the identity, description and amount of the commitment
of each lender thereunder. Under the Credit Agreements, the lenders are
committed to lend funds at a rate of interest determined by reference to either
(x) the base rate, which is the highest of (a) the rate announced by Citibank,
N.A. to be its base rate, (b) one-half of one percent per annum above the
secondary market morning offering rate in the United States for three-month
certificates of deposit of major United States money market banks or (c)
one-half of one percent above the federal funds rate or (y) the eurodollar
rate. In addition, the Company may request the lenders to lend funds on a fixed
rate or floating rate basis. In the event that the Company makes such a
request, the lenders may but are not required to submit quotes to the Company
for the amount, interest rate or interest margin and term of the requested
loan. The Company is then free to accept or not to accept any offer made by any
lender.
The Credit Agreements have a three-year term. In the event of a change in
control (defined as the occurrence of any event, act or condition that results
in either (x) any person (other than the employee stock ownership plans)
becoming the beneficial owner, directly or indirectly of more than 30% of the
outstanding common stock of the Company or (y) individuals who constitute
continuing directors ceasing to constitute at least a majority of the Board of
Directors), the lenders have the right to terminate their respective
commitments and require the Company to prepay all amounts then outstanding
under the Credit Agreements. Under the Credit Agreements, an individual will be
deemed to be a continuing director if (a) such person is not affiliated with
the acquiring person and such person was a member of the Board of Directors
immediately prior to the time that the acquiring person became an acquiring
person or (b) such person is the successor to a continuing director who is not
affiliated with the acquiring person and is recommended to succeed a continuing
director by a majority of continuing directors who are then members of the
Board of Directors.
The Credit Agreements contain a number of covenants. These include
covenants with respect to the provision of financial information, compliance
with laws, payment of taxes, preservation of corporate existence and
maintenance of books and records. In addition, the Company is required to
maintain a Consolidated Cash Flow that equals or exceeds 125% of Consolidated
Cash Expenditures. "Consolidated Cash Flow" is defined for any fiscal period as
the sum of (a) consolidated earnings before income taxes of the Company and its
consolidated subsidiaries for such fiscal period (including any earnings
representing net gain on disposition of assets) before extraordinary items and
their tax effects and before income from discontinued operations; (b) to the
extent the amount is greater than zero, (i) the consolidated interest expense
for the Company and its consolidated subsidiaries for such fiscal period, minus
(ii) consolidated interest earnings for the Company and its consolidated
subsidiaries for such fiscal period; and (c) consolidated depreciation and
amortization for the Company and its consolidated subsidiaries for such fiscal
period. "Consolidated Cash Expenditures" is defined for any fiscal period as
the sum of (a) consolidated interest expense of the Company and its
consolidated subsidiaries, (b) consolidated capital expenditures of the Company
and its consolidated subsidiaries and (c) the aggregate amount of all dividends
paid or declared during such fiscal period.
The Credit Agreements also contain certain negative covenants that
restrict the Company's ability to incur liens, engage in sale and lease-back
transactions, merge and modify or amend any individual Credit Agreement.
The Credit Agreements enumerate certain events of default, which include:
(a) the failure of the Company to make payments when due, (b) the breach of any
representation or warranty, (c) the failure by the Company to (i) provide the
lenders with notice regarding a default or the commencement of litigation that
could have a material adverse effect on the Company, (ii) maintain a
Consolidated Cash Flow equal to or greater than 125% of Consolidated Cash
Expenditures, (iii) comply with the negative covenants or (iv) comply with any
other covenant contained in the Credit Agreements and in the case of clause
(iv) only, such failure continues for a period of thirty days, (d) certain
events of bankruptcy or insolvency, (e) (i) the failure by the Company to make
any payment due in respect of any other
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indebtedness of the Company if the aggregate amount of the payment is $5
million or more, (ii) a non-payment default with respect to any other
outstanding indebtedness in the aggregate amount of $5 million or more or (iii)
an "Event of Default" shall have occurred with respect to any other Credit
Agreement, (f) the occurrence of certain events with respect to any of the
Company's employee benefit plans and (g) the rendering of any final judgment
against the Company or any of its principal subsidiaries that when added to any
other outstanding final judgments which remain unstayed, undischarged or
unsatisfied for more than 30 days exceeds $5 million.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters or dealers,
(ii) directly to one or more institutional purchasers, or (iii) through agents
including on a continuous basis. The Prospectus Supplement with respect to the
Securities being offered thereby sets forth the terms of the offering of such
Securities, including the name or names of any underwriters, the purchase price
of such Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which such
Securities may be listed. Only underwriters so named in the Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all the Securities offered by the Prospectus Supplement relating to
such series if any of such Securities are purchased. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offering
and sale of the Securities of the series in respect of which this Prospectus is
delivered is named and any commissions payable by the Company to such agent are
set forth in the Prospectus Supplement relating to such series. Unless
otherwise indicated in such Prospectus Supplement, any such agent is acting on
a best efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Securities of the series to which such Prospectus
Supplement relates providing for payment and delivery on a future date
specified in such Prospectus Supplement. There may be limitations on the
minimum amount which may be purchased by any such institutional investor or on
the portion of the aggregate principal amount of the particular Securities
which may be sold pursuant to such arrangements. Institutional investors to
which such offers may be made, when authorized, include commercial and savings
banks, insurance companies, pension funds, investment companies, educational
and charitable institutions and such other institutions as may be approved by
the Company. The obligations of any such purchasers pursuant to such delayed
delivery and payment arrangements will not be subject to any conditions except
that (i) the purchase by an institution of the particular Securities shall not
at the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject, and (ii) if the particular
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of such Securities less the principal
amount thereof covered by such arrangements. Underwriters will not have any
responsibility in respect of the validity of such arrangements or the
performance of the Company or such institutional investors thereunder.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities
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<PAGE>
Act of 1933, as amended, or to contribution with respect to payments which the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by
Stephen S. Weddle, Esq., Vice President and General Counsel of the Company.
EXPERTS
The consolidated financial statements of The Stanley Works and
subsidiaries for the year ended December 28, 1991, incorporated by reference in
The Stanley Works' Annual Report on Form 10-K for the year ended December 28,
1991 (the "Financial Statements"), have been audited by Ernst & Young,
independent auditors, as set forth in their report on the consolidated
financial statements at December 28, 1991 and December 29, 1990 and for each of
the three fiscal years in the period ended December 28, 1991 included therein
and incorporated herein by reference. The Financial Statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
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<PAGE>
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the Notes offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
---------------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
-----
<S> <C>
About this Prospectus ..................... S-2
The Company ............................... S-2
Use of Proceeds ........................... S-2
Description of Notes ...................... S-2
Underwriting .............................. S-6
Legal Matters ............................. S-6
Experts ................................... S-7
Prospectus
Available Information ..................... 2
Incorporation of Certain Documents By
Reference .............................. 2
The Company ............................... 3
Use of Proceeds ........................... 3
Description of Securities ................. 4
Description of Credit Agreements .......... 11
Plan of Distribution ...................... 12
Validity of Securities .................... 13
Experts ................................... 13
</TABLE>
$120,000,000
THE STANLEY WORKS
5.75% Notes due March 1, 2004
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[STANLEY LOGO]
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GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
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