AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 16, 1999
SECURITIES AND EXCHANGE COMMISSION NO. 33-55663
WASHINGTON, DC 20549
Post-Effective Amendment No. 2 to
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
The Stanley Works
(Exact Name of Registrant as Specified in Its Charter)
Connecticut
(State or Other Jurisdiction of Incorporation or Organization)
06-0548860
(I.R.S. Employer Identification No.)
1000 Stanley Drive
New Britain, Connecticut 06053
(Address of Principal Executive Offices) (Zip Code)
Stanley Account Value Plan
(Full Title of the Plan)
Stephen S. Weddle, Esquire
The Stanley Works
1000 Stanley Drive
New Britain, Connecticut 06053
(Name and Address of Agent For Service)
(860) 225-5111
(Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE **
** No additional registration fee is due because no additional shares are
being registered.
This Registration Statement covers interests in the Plan and
additional shares of Common Stock purchased in accordance with and
issuable under the Plan. Pursuant to Rule 416(c), this Registration
Statement covers an indeterminate number of interests to be offered or
sold pursuant to the Plan described herein. This Registration
Statement also pertains to Depository Stock Purchase Rights of the
Registrant which are attached to the Common Stock.
This Post-Effective Amendment Number 2 shall hereafter become
effective in accordance with Rule 464 promulgated under the Securities
Act of 1933, as amended.
PAGE 2
EXPLANATORY NOTE
This Post-Effective Amendment No. 2 to Registration Statement No.
33-55663 is being filed in order to include as Exhibits 99.3 and 99.4
certain amendments to the Stanley Account Value Plan that were adopted
effective as of January 26, 1999 and April 1, 1999, respectively.
The contents of Registration Statement No. 33-55663 are hereby
incorporated by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 8. EXHIBITS (See Item 9, paragraph 4)
4.1 Restated Certificate of Incorporation (incorporated by
reference to Exhibit (3)(i) to the Annual Report on Form 10-K for
fiscal year ended January 2, 1999).
4.2 By-laws (incorporated by reference to Exhibit 3(i) to the
Quarterly Report on Form 10-Q for the quarter ended July 4, 1998).
4.3 Indenture, dated as of April 1, 1986 between the Company
and State Street Bank and Trust Company, as successor trustee, defining
the rights of holders of 7-3/8% Notes Due December 15, 2002 and 5.75%
Notes Due March 1, 2004 (incorporated by reference to Exhibit 4(a) to
Registration Statement No. 33-4344 filed March 27, 1986).
4.4 First Supplemental Indenture, dated as of June 15, 1992
between the Company and State Street Bank and Trust Company, as
successor trustee (incorporated by reference to Exhibit (4)(c) to
Registration Statement No. 33-46212 filed July 21, 1992).
(a) Certificate of Designated Officers establishing Terms
of 7-3/8% Notes Due December 15, 2002 (incorporated by reference to
Exhibit (4)(ii) to Current Report on Form 8-K dated December 7, 1992).
(b) Certificate of Designated Officers establishing Terms of
5.75% Notes Due March 1, 2004 (incorporated by reference to Exhibit
(4)(ii)(b) to Annual Report on Form 10-K for the fiscal year ended
January 2, 1999).
4.5 Rights Agreement, dated January 31, 1996 (incorporated by
reference to Exhibit (4)(i) to Current Report on Form 8-K dated January
31, 1996).
4.6
(a) Amended and Restated Facility A (364 Day) Credit
Agreement, dated as of October 23, 1996, with the banks named therein
and Citibank, N.A. as agent (incorporated by reference to Exhibit 4(iv)
to the Annual Report on Form 10-K for the year ended December 28, 1996).
PAGE 3
(b) Credit Agreement, dated as of October 21, 1998, among the
Company, the Lenders named therein and Citibank, N.A. as agent
(incorporated by reference to Exhibit 4(iv)(c) to the Quarterly Report
on Form 10-Q for the quarter ended October 3, 1998).
4.7 Amended and Restated Facility B (Five Year) Credit Agreement,
dated as of October 23, 1996, with the banks named therein and Citibank,
N.A. as agent (incorporated by reference to Exhibit 4(v) to the Annual
Report on Form 10-K for the year ended December 28, 1996)
5.1 Opinion of Tyler Cooper & Alcorn dated September 28, 1994
with respect to the legality of the Common Stock (and associated Stock
Purchase Rights) (previously filed with Registration Statement No.
33-55663).
23.1 Consent of Independent Auditors dated September 23, 1994
(incorporated by reference to Exhibit 5.1).
23.2 Consent of Tyler Cooper & Alcorn (incorporated by reference
to Exhibit 5.1).
24 Manually signed copy of power of attorney authorizing the
signing of the Registration Statement and amendments thereto on behalf
of the Registrant's directors (previously filed with Registration
Statement No. 33-55663).
28 The Stanley Works 401(k) Savings Plan (previously filed with
Registration Statement No. 33-55663, redesignated Exhibit 99.1) (no
longer in effect).
99.1 The Stanley Works 401(k) Savings Plan (previously filed as
Exhibit 28 to Registration Statement No. 33-55663) (no longer in effect).
99.2 Stanley Account Value Plan (previously known as The Stanley
Works 401(k) Savings Plan) (previously filed with Post-Effective
Amendment No. 1 to Registration Statement No. 33-55663).
99.3 Amendment to Stanley Account Value Plan effective as of
January 26, 1999 (filed herewith).
99.4 Amendment to Stanley Account Value Plan effective as of
April 1, 1999 (filed herewith).
PAGE 4
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8
and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
New Britain, State of Connecticut, on June 16, 1999.
THE STANLEY WORKS
By:/s/ John M. Trani
John M. Trani
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
NAME TITLE DATE
/s/ John M. Trani
John M. Trani Chairman, June 16, 1999
Chief Executive Officer,
and Director
/s/Theresa F. Yerkes
Theresa F. Yerkes Vice President and Controller June 16, 1999
(Chief Financial Officer and
Chief Accounting Officer)
/s/ *
Stillman B. Brown Director June 16, 1999
/s/ *
Edgar R. Fielder Director June 16, 1999
/s/ *
James G. Kaiser Director June 16, 1999
/s/ *
Eileen S. Kraus Director June 16, 1999
PAGE 5
/s/ *
Hugo E. Uyterhoeven Director June 16, 1999
/s/ *
Walter W. Williams Director June 16, 1999
* By:/s/ Stephen S. Weddle June 16, 1999
Stephen S. Weddle
(As Attorney-in-Fact)
The Plan. Pursuant to the requirements of the Securities Act of
1933, the Plan Administrator of the Stanley Account Value Plan has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New Britain,
State of Connecticut, on June 16, 1999.
THE STANLEY WORKS
(as Plan Administrator)
By: /s/ Stephen S. Weddle
Stephen S. Weddle
Vice President, General Counsel
and Secretary
EXHIBIT INDEX
Exhibit
No. Page
4.1 Restated Certificate of Incorporation (incorporated by
reference to Exhibit (3)(i) to the Annual Report on Form 10-K for
fiscal year ended January 2, 1999).
4.2 By-laws (incorporated by reference to Exhibit 3(i) to the
Quarterly Report on Form 10-Q for the quarter ended July 4, 1998).
4.3 Indenture, dated as of April 1, 1986 between the Company and
State Street Bank and Trust Company, as successor trustee, defining the
rights of holders of 7-3/8% Notes Due December 15, 2002 and 5.75% Notes
Due March 1, 2004 (incorporated by reference to Exhibit 4(a) to
Registration Statement No. 33-4344 filed March 27, 1986).
PAGE 6
4.4 First Supplemental Indenture, dated as of June 15, 1992
between the Company and State Street Bank and Trust Company, as
successor trustee(incorporated by reference to Exhibit (4)(c) to
Registration Statement No. 33-46212 filed July 21, 1992).
(a) Certificate of Designated Officers establishing Terms of
7-3/8% Notes Due December 15, 2002 (incorporated by reference to
Exhibit (4)(ii) to Current Report on Form 8-K dated December 7, 1992).
(b) Certificate of Designated Officers establishing Terms
of 5.75% Notes Due March 1, 2004 (incorporated by reference to Exhibit
(4)(ii)(b) to Annual Report on Form 10-K for the fiscal year ended
January 2, 1999).
4.5 Rights Agreement, dated January 31, 1996 (incorporated by
reference to Exhibit (4)(i) to Current Report on Form 8-K dated
January 31, 1996).
4.6
(a) Amended and Restated Facility A (364 Day) Credit
Agreement, dated as of October 23, 1996, with the banks named therein
and Citibank, N.A. as agent (incorporated by reference to Exhibit 4(iv)
to the Annual Report on Form 10-K for the year ended December 28, 1996).
(b) Credit Agreement, dated as of October 21, 1998, among
the Company, the Lenders named therein and Citibank, N.A. as agent
(incorporated by reference to Exhibit 4(iv)(c) to the Quarterly Report
on Form 10-Q for the quarter ended October 3, 1998).
4.7 Amended and Restated Facility B (Five Year) Credit Agreement,
dated as of October 23, 1996, with the banks named therein and Citibank,
N.A. as agent (incorporated by reference to Exhibit 4(v) to the Annual
Report on Form 10-K for the year ended December 28, 1996)
5.1 Opinion of Tyler Cooper & Alcorn dated September 28, 1994
with respect to the legality of the Common Stock (and associated Stock
Purchase Rights) (previously filed with Registration Statement No.
33-55663).
23.1 Consent of Independent Auditors dated September 23, 1994
(incorporated by reference to Exhibit 5.1).
23.2 Consent of Tyler Cooper & Alcorn (incorporated by reference
to Exhibit 5.1).
24 Manually signed copy of power of attorney authorizing the
signing of the Registration Statement and amendments thereto on behalf
of the Registrant's directors (previously filed with Registration
Statement No. 33-55663).
PAGE 7
28 The Stanley Works 401(k) Savings Plan (previously filed with
Registration Statement No. 33-55663, redesignated Exhibit 99.1) (no
longer in effect).
99.1 The Stanley Works 401(k) Savings Plan (previously filed as
Exhibit 28 to Registration Statement No. 33-55663) (no longer in effect).
99.2 Stanley Account Value Plan (previously known as The Stanley
Works 401(k) Savings Plan) (previously filed with Post-Effective
Amendment No. 1 to Registration Statement No. 33-55663).
99.3 Amendment to Stanley Account Value Plan effective as of
January 26, 1999 (filed herewith).
99.4 Amendment to Stanley Account Value Plan effective as of April
1, 1999 (filed herewith).
EXHIBIT 99.3
Amendment to Stanley Account Value Plan effective as of January 26, 1999
FIRST AMENDMENT
TO THE
STANLEY ACCOUNT VALUE PLAN
THE STANLEY WORKS, a Connecticut corporation with its principal
office in New Britain, Connecticut ("The Stanley Works"), has adopted
this First Amendment to the Stanley Account Value Plan (the "Plan"),
effective January 26, 1999.
The Plan is amended by adding thereto the following new Appendix C:
"APPENDIX C
Temporary Suspension in Certain Participant Initiated Transactions
Notwithstanding any other provision of the Plan, during the period
commencing on January 26, 1999, and ending on March 31, 1999, a
Participant will not be permitted to request any of the following
transactions under the Plan:
1. A change in the rate of Elective Deferral Contributions or
Employee Contributions, including any election to suspend or to resume
such contributions;
2. A rollover contribution or direct rollover to the Plan;
3. An investment election, fund transfer or fund reallocation;
PAGE 8
4. A discretionary withdrawal of the portion of the Choice Account
attributable to after-tax employee contributions transferred on the
Participant's behalf from the Retirement Plan;
5. The taking of a new loan from the Plan or the prepayment of an
existing Plan loan; or
6. Any distribution from the Plan pursuant to the disability,
retirement, death or other severance from service of the Participant.
Furthermore, notwithstanding any other provision of the Plan, during
the period beginning on January 26, 1999, and ending on March 31, 1999,
a Participant will be permitted to request a withdrawal pursuant to
Article 10 to satisfy a financial hardship to the extent that the
withdrawal must be taken during such period and the financial hardship
meets the standards described in said Article, provided that the value
of the Participant's Choice Account as of November 30, 1998 shall be
used pursuant to said Article for purposes of determining the value of
said Choice Account."
Dated the 25th day of January, 1999.
THE STANLEY WORKS
/s/ Mark J. Mathieu
Vice President, Human Resources
EXHIBIT 99.4
Amendment to Stanley Account Value Plan effective as of April 1, 1999
SECOND AMENDMENT
TO THE
STANLEY ACCOUNT VALUE PLAN
By resolution of the Finance and Pension Committee of its Board of
Directors, THE STANLEY WORKS, a Connecticut corporation with its
principal office in New Britain, Connecticut ("The Stanley Works"), has
adopted this Second Amendment to the Stanley Account Value Plan,
effective April 1, 1999, except as otherwise provided below:
1.Article 2 is amended by deleting the definition of "Application
for Benefits" and substituting therefor the following:
PAGE 9
" 'Application for Benefits' means a method prescribed by the Plan
Administrator by which an individual may request a distribution, loan
or withdrawal permitted under the Plan, including a method utilizing
electronic media that is made available by the Plan Administrator in
accordance with the terms of the Plan and permitted by the Internal
Revenue Service and the Department of Labor."
1.Article 2 is further amended by deleting the definition of
"Closing Price."
1.Article 2 is further amended by deleting the definition of "Entry
Date" and substituting therefor the following:
" 'Entry Date' means the first day of each calendar month."
1.Article 2 is further amended by adding the following new
definition of "Stanley Stock Fund:"
" 'Stanley Stock Fund' means the investment fund available under the
Plan, substantially all of the assets of which are invested in shares
of Stanley Stock and the assets of which also include certain cash
investments."
1.Article 2 is further amended by deleting the definition of
"Suspense Account" and substituting therefor the following, effective as
of January 1, 1998:
" 'Suspense Account' means the bookkeeping record of Stanley Stock
purchased with the proceeds of an Exempt Loan which has not been
allocated to Participants' Accounts."
1.Article 2 is further amended by deleting the definition of
"Valuation Date" and substituting therefor the following:
" 'Valuation Date' means each business day."
1.Article 3 is amended by deleting said Article in its entirety
and substituting therefor the following:
"A R T I C L E 3
Employees Eligible to Participate
Section 3.1 (a) Every Employee of the Company shall become a
Participant on the Entry Date next following the later of (i) his or
her Employment Commencement Date, or (ii) the date on which such
individual is employed by the Company as an Employee.
PAGE 10
(b) The Plan Administrator shall notify every Employee of his or her
eligibility to participate. Subject to Section 3.4, each Participant
may elect, under the procedures established by the Plan Administrator,
to have a specified portion of his or her Compensation contributed under
the Plan as Elective Deferral Contributions and/or Employee
Contributions. Such contributions shall commence as soon as
administratively practicable following a Participant's election in
accordance with the procedures established by the Plan Administrator.
Section 3.2 A Participant who incurs a Break in Service shall again
become a Participant on the date on which he or she subsequently
becomes an Employee.
Section 3.3 For purposes of this Article, a Leave of Absence under
Article 15 shall be treated as a period of Employment Status.
Section 3.4 Anything herein to the contrary notwithstanding, an Employee
who is compensated by the Company on an hourly basis at its National
Hand Tools division is not eligible to have Elective Deferral or
Employee Contributions made on his or her behalf or to receive Matching
Allocations."
1.Article 4 is amended by deleting Section 4.3 and substituting
therefor the following, effective as of January 1, 1998:
"Section 4.3 All Elective Deferral Contributions and Employee
Contributions described in Section 4.2 shall be made by means of payroll
deductions. All Elective Deferral Contributions and Employee
Contributions shall be paid to the Trustee not later than the fifteenth
business day of the month following the month in which such
contributions are withheld. The amount of the Elective Deferral
Contributions and Employee Contributions credited each month to the
Choice Account (in the form of shares of Stanley Stock pursuant to
Section 18.4(a)) shall equal the amount of such contributions elected
to be made by the Participant for that month pursuant to Sections 4.2(a)
and (b)."
1.Article 4 is further amended by deleting Section 4.4 and
substituting therefor the following:
"Section 4.4 A Participant may, at any time, direct the Plan
Administrator to suspend, resume or change the percentage of his or her
Elective Deferral Contributions and/or Employee Contributions. The
rate of a Participant's contributions shall be designated in a whole
multiple of 1%. Anything herein to the contrary notwithstanding, the
Plan Administrator may establish restrictions on the right of the
group of Participants who are Highly Compensated Employees to suspend,
resume or change the percentage of their Elective Deferral Contributions
during a Plan Year and shall communicate any such restrictions to such
group of Participants."
PAGE 11
1.Article 7 is amended by deleting Section 7.1(d) and
substituting therefor the following:
"(d) 'Eligible rollover distribution' means the distribution under
the Plan, or, in the case of a payment described in Section 7.1(a)(ii)
under another qualified plan, of all or a portion of the balance to
the credit of a distributee, other than: a distribution that is one of
a series of substantially equal periodic payments made not less
frequently than annually for the life or life expectancy of the
distributee or the joint lives or joint life expectancy of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; the portion of any distribution
that is required to be made under Section 401(a)(9) of the Code; the
portion of any distribution that is not includible in gross income
(other than by reason of the exclusion for net unrealized appreciation
of employer securities) and the portion of a hardship distribution that
is described in Code Section 401(k)(2)(B)(i)(IV) and received by the
distributee prior to his or her attainment of age 59-1/2 or separation
from service with the employer maintaining the plan from which the
hardship withdrawal is made."
1.Article 7 is further amended by deleting Section 7.1(b) and
substituting therefor the following:
"(b) For purposes of subsection (a)(i) and (ii), money or property
contributed to this Plan must be derived from a plan distribution which
constitutes payment within one taxable year of the recipient's entire
balance under the plan. Contributions made under subsection (a) may
not include amounts contributed on an after-tax basis by the employee
to the plan from which the distribution was received, or amounts
received by the employee in a distribution attributable to the death
of an individual with respect to whom the employee is the beneficiary.
The amount of any contribution under subsection (a) which includes
proceeds from the sale of property received in a plan distribution may
not be greater than the fair market value of the property at the time
of sale. Contributions made under subsection (a) must be received by
the Trustee on or before the 60th day after the day on which the
individual received the distribution."
1.Article 7 is further amended by deleting Section 7.3 and
substituting therefor the following:
"Section 7.3 Under such rules and procedures as the Plan
Administrator may establish, any Employee may make a direct rollover
to this Plan of an eligible rollover distribution made after 1992,
other than amounts included in such distribution attributable to the
death of an individual with respect to whom the Employee is the
beneficiary."
1.Article 7 is further amended by deleting Section 7.5 and
substituting therefor the following:
PAGE 12
"Section 7.5 In the case of a distribution or withdrawal made under
this Plan, notwithstanding any other provision of the Plan, a
distributee may elect, in accordance with procedures established by
the Plan Administrator, that all or a portion of an eligible rollover
distribution to be made to the distributee shall instead be distributed
in a direct rollover."
1.Article 8 is amended by deleting Section 8.1 and
substituting therefor the following:
"Section 8.1 A Participant's Accounts shall be invested as follows:
(a) (i) A Participant's Choice Account shall be invested in
the Stanley Stock Fund to the extent not reinvested in another
investment fund in accordance with an election made by the Participant
pursuant to Section 26.3(b) or paragraph (ii).
(ii) The amount in an individual's Choice Account attributable
to Elective Deferral Contributions, Employee Contributions and amounts
rolled over or contributed to this Plan in accordance with Article 7,
that are contributed to such account as of a date after June 30, 1998,
shall be invested at the direction of the individual as provided in
Section 8.2.
(b) The amounts allocated to a Participant's Cornerstone Account
shall be invested by an investment manager appointed by the Company
pursuant to Section 8.5.
(c) The amounts allocated to a Participant's Auxiliary Account shall
be invested as provided in Article 28."
1.Article 8 is further amended by deleting Section 8.2(a) and
substituting therefor the following:
"Section 8.2 (a) Subject to the provisions of Article 27 governing
investment directions by an Officer, a Participant may, by means of
instructions to the Plan Administrator, specify in a whole multiple of
1%, the portion of his or her Choice Account attributable to amounts
described in Section 8.1(a)(ii) that is to be invested in any investment
fund available under the Plan, including the Stanley Stock Fund. The
Plan Administrator shall have sole discretion to determine the
investment funds, in addition to the Stanley Stock Fund, available under
the Plan and to establish procedures governing investment directions by
Participants. Upon receipt of a Participant's instructions, the Plan
Administrator shall direct the Trustee and any investment manager
appointed under the Trust Agreement to make the investment therein
specified. A Participant's investment instructions shall remain in
effect until receipt by the Trustee and any investment manager from the
Plan Administrator of a further direction changing or revoking the
direction then in effect with respect to such Participant. To the
extent a Participant does not direct the investment of the relevant
portion of his or her Choice Account, either by failing to provide
PAGE 13
instructions to the Plan Administrator or by revoking any such
instructions then in effect, such portion shall be invested in the
Stanley Stock Fund.
(b) The Plan Administrator is the fiduciary designated under the
Plan for receiving any investment instructions from individuals and,
upon the request of any individual who has provided an investment
instruction under this section, shall provide a written confirmation of
the investment instruction to such individual. The Plan Administrator
may from time to time establish rules and procedures for the proper
administration of the investment funds available under the Plan and for
the direction of investments under this section.
(c) The Plan Administrator shall not be required to comply with any
investment instruction if, in its opinion, compliance (i) would result
in a prohibited transaction (as defined in ERISA Section 406 or Code
Section 4975), (ii) would result in income taxable to the Plan, (iii)
would jeopardize the Plan's tax qualified status under the Code, (iv)
could result in a loss greater than the value of the individual's
Accounts, or (v) would result, directly or indirectly, in a transaction
described in Section 2550.404(c)-1(d)(2)(ii)(E) of the Department of
Labor regulations."
1.Article 8 is further amended by adding the following new
subsection (d) at the end of Section 8.3:
"(d) For purposes of this Section 8.3, the number of shares of Stanley
Stock allocated to a Participant's Accounts shall be the number of
shares of Stanley Stock in the Stanley Stock Fund attributable to the
Participant's proportionate interest in the Stanley Stock Fund."
1.Article 9 is amended by deleting Section 9.1 and
substituting therefor the following:
"Section 9.1 Subject to Section 18.5(a) which governs the crediting
of dividends paid with respect to certain allocated shares of Stanley
Stock, net earnings or losses shall be credited to a Participant's
Accounts with respect to the investments attributable to the Accounts.
Payments of principal and interest on a loan made to a Participant under
Article 11 shall be credited to the Participant's Choice Account.
Anything herein to the contrary notwithstanding, the investment earnings
or losses allocated to a Participant's Cornerstone Account as of a
Valuation Date shall be determined without regard to any amounts
credited to the Cornerstone Account under Section 5.3 as of a date
subsequent to the preceding December 31. For purposes of this section,
the term "Participant" shall include Retired Participants, Disabled
Participants, Terminated Participants and the Beneficiary or Alternate
Payee of any of the foregoing."
1.Article 10 is amended by deleting Section 10.1(c) and
substituting therefor the following:
PAGE 14
"(c) To the extent that the withdrawal will be taken from the portion
of the Participant's Choice Account that may be transferred to the
Retirement Plan to provide the Participant's Contributory Pension
Benefit, the written consent of the Participant's spouse, if any, to
the withdrawal must be obtained in accordance with the provisions of
the Retirement Plan within the 90-day period ending on the date of the
withdrawal. The spouse's consent must acknowledge the effect of the
withdrawal and must be witnessed by a Plan representative or a notary
public. Except for withdrawals for tuition under subsection (a)(ii),
a Participant shall not be permitted to submit more than one hardship
withdrawal application in any Plan Year."
1.Article 10 is further amended by deleting Section 10.3 and
substituting therefor the following:
"Section 10.3 For purposes of a withdrawal under Section 10.1 or
10.2, the Participant's Choice Account shall be valued as of the
Valuation Date on which the Plan Administrator processes the request
for withdrawal. Each withdrawal under Section 10.1 shall be derived
from the sources of funds listed in Section 10.1(d) pursuant to the
order set forth therein and, with respect to each such source, a
withdrawal shall be derived first from investments in the Stanley Stock
Fund attributable to allocations made as of a date before July 1, 1998
and then on a pro rata basis from all pertinent investment funds. The
Plan Administrator shall promptly notify the Trustee of the total
dollar amount to be withdrawn and the respective funds from which it
shall be withdrawn. The Plan Administrator shall disburse such amount
directly to the Participant in cash as soon as practicable."
1.Article 11 is amended by deleting so much of Section 11.1(b)
as precedes paragraph (i) and substituting therefor the following:
"(b) Subject to Article 27, loans shall be made available from an
eligible borrower's vested Choice Account other than the portion
attributable to the Net Contributory Pension Benefit and the portion
held for such borrower's Alternate Payee under a qualified domestic
relations order. A loan may not be taken from any account other than
the Choice Account. An individual may obtain a loan from the Plan if
the individual is an eligible borrower when the loan is made and the
value of the vested portion of the individual's Choice Account equals
or exceeds 200% of the borrowed amount. The value of an eligible
borrower's vested interest in the Choice Account shall be determined
as of the Valuation Date on which the loan administrator processes
the loan request. Requests for loans shall be approved or denied, on
the basis of the following criteria:"
1.Article 11 is further amended by deleting Section
11.1(b)(viii) and substituting therefor the following:
PAGE 15
"(viii) A borrower may have only one loan outstanding at any
time, except to the extent that more than one loan was transferred to
this Plan on behalf of the borrower in a transfer or rollover from
another qualified retirement plan sponsored by a business acquired by
the Company. Subject to Section 11.2(g), the entire outstanding balance
of a loan may be prepaid in a lump sum at any time. A borrower who
prepays or otherwise pays off a loan may request a new loan at any time
after repayment of the prior loan."
1.Article 11 is further amended by deleting Section 11.1(b)(x)
and substituting therefor the following:
"(x) Each loan shall be made in cash and shall be taken from
the sources of funds in the borrower's Choice Account in the following
order:
(A) From an amount equal to the lesser of the
borrower's Elective Deferral Contributions or their current value;
(B) From the amount attributable to amounts
contributed or rolled over to this Plan or transferred in a direct
trustee-to-trustee transfer from another qualified plan (other than
after-tax employee contributions);
(C) From the amount attributable to the funds
transferred from another qualified plan other than amounts described in
(B) or (G);
(D) From the amount attributable to Matching
Allocations;
(E) From the amount attributable to allocations under
Section 18.4(d);
(F) From the amount attributable to Employee
Contributions; and
(G) From the amount attributable to the after-tax
employee contribution account transferred to this Plan from the
Retirement Plan as of January 1, 1984.
Each loan shall be derived from the sources of funds listed above
pursuant to the order set forth above and, with respect to each such
source, a loan shall be derived first from investments in the Stanley
Stock Fund attributable to allocations made as of a date before July 1,
1998 and then on a pro rata basis from all pertinent investment funds."
1.Article 11 is further amended by deleting Section 11.2(a)
and substituting therefor the following:
PAGE 16
"Section 11.2 (a) A loan shall be evidenced by a promissory note
(the 'note') payable to the order of the Trust Fund providing for
repayment by means of payroll deductions over a stated term, specified
in a whole multiple of six months, commencing on the date of the loan."
1.Article 11 is further amended by deleting Section 11.2(d) and
substituting therefor the following:
"(d) The note shall bear a rate of interest equal to the prime rate as
reported in The Wall Street Journal on the first business day of the
month in which the loan request is processed."
1.Article 11 is further amended by deleting Section 11.2(g)(i)
and substituting therefor the following:
"(g) (i) Upon the occurrence of an event of default under
paragraph (ii), (iii), (iv) or (v) of subsection (e), the loan
administrator may, in its discretion, declare that all amounts
outstanding under the note are immediately due and payable in full
without the necessity of further notice. In such event, any payments
remaining under the note shall be accelerated and the unpaid principal
balance and accrued interest under the note shall be immediately due
and payable in a single lump sum. The individual may deliver to the
loan administrator a check or money order for the entire unpaid
principal and accrued interest on or before the last day of the
calendar quarter following the calendar quarter in which the
borrower's last payment due under the note was made.
1.Article 11 is further amended by deleting Section 11.3 and
substituting therefor the following:
"Section 11.3 (a) An eligible borrower may apply for a loan in
accordance with the procedures established by the loan administrator.
The applicant shall specify the amount of the proposed loan in a whole
multiple of $1.00 and shall supply such financial information
concerning the applicant as the loan administrator may reasonably
require. If the purpose of a proposed loan is relevant to the
availability or term of the loan, the applicant must specify the
reason for the borrowing.
(b) The loan administrator shall notify the applicant as to whether
the loan request has been approved within a reasonable period of time
following receipt of the required information.
(c) To the extent that the loan proceeds will be taken from the
portion of the eligible borrower's Choice Account that may be
transferred to the Retirement Plan to provide the Participant's
Contributory Pension Benefit, the written consent of the eligible
borrower's spouse, if any, to the loan must be obtained in accordance
with the provisions of the Retirement Plan within the 90-day period
preceding the date of the loan. The spouse's consent must acknowledge
PAGE 17
the effect of the loan and must be witnessed by a Plan representative or
a notary public.
(d) Notwithstanding any other provision of the Plan, if spousal
consent to a loan has been obtained to the extent required under
subsection (c), the vested portion of a borrower's Choice Account
shall be reduced at the time of the borrower's death or at the time the
borrower is entitled to a distribution under the Plan by an amount equal
to the then outstanding balance of any loan to the borrower and such
reduction shall be treated as a repayment of such loan. If less
than 100% of the vested portion of the borrower's Choice Account,
determined before the foregoing reduction, is payable to the surviving
spouse, the amount payable to such surviving spouse shall be determined
after such reduction."
1.Article 11 is further amended by deleting Section 11.5 and
substituting therefor the following:
"Section 11.5 A loan shall be considered an investment of the
borrower's Choice Account which has been directed by the borrower, and
payments of principal and interest shall be allocated in the reverse
order in which the funds were taken from the Choice Account under
Section 11.1(b). Such payments of principal and interest shall be
invested on a pro rata basis in proportion to the investment elections
with respect to the borrower's contributions to the Choice Account in
effect on the date on which such payments are made, provided that a
payment of the loan principal representing the portion of the Choice
Account attributable to Matching Allocations or to contributions made
prior to July 1, 1998 shall be invested in the Stanley Stock Fund. If
no Elective Deferral or Employee Contributions are being made at the
time a loan payment is allocated to the borrower's Choice Account,
such loan repayment shall be invested in the Stanley Stock Fund."
1.Article 12 is amended by deleting Section 12.3(b) and
substituting therefor the following:
"(b) After any transfer under subsection (a), the vested portion of
the balance of the Retired, Disabled or Terminated Participant's
Accounts shall be paid as soon as practicable in a lump sum payment
consisting of whole shares of Stanley Stock plus cash equal to the
value of any fractional interest in a share of such stock, unless the
individual elects to receive cash in lieu of stock. If, as of the
date of such distribution, the individual has an outstanding loan under
Article 11, any distribution under this Section 12.3(b) shall include
the balance of the note described in Section 11.2 and such distribution
shall fully discharge the Plan with respect to the value of the
individual's Choice Account attributable to the outstanding loan amount.
(c) Notwithstanding subsection (b), if the entire vested balance of
a Retired, Disabled or Terminated Participant exceeds $5,000, no portion
of such vested balance may be distributed to such individual in a lump
sum before his or her Normal Retirement Date without the individual's
PAGE 18
consent. The Retired, Disabled or Terminated Participant shall be
given the opportunity to elect to receive a distribution at any time
following termination of Employment Status by filing an Application for
Benefits with the Plan Administrator. An individual who fails to file
an Application for Benefits with the Plan Administrator within 90 days
following receipt from the Plan Administrator of such application and
the information required by Section 14.2 shall be deemed to have
elected to defer receipt of a distribution until a subsequent date.
In such event, an Application for Benefits must be made within 90 days
before such subsequent distribution date. The vested balance of the
individual's Accounts shall be valued as of the later of the
Valuation Date on which he or she ceases to have Employment Status or
the Valuation Date on which the individual's Application for Benefits
(and certification of disability, if applicable) is processed by the
Plan Administrator. In no event will distribution of amounts payable
from the Plan on behalf of an individual whose Employment Status
terminates be deferred beyond the date required by Section 12.4."
1.Article 12 is further amended by adding the following new
subsection (d) at the end of Section 12.4:
"(d) All distributions required under this Section 12.4 shall be made
in accordance with Section 401(a)(9) of the Code, which is incorporated
herein by this reference, and the Regulations thereunder, including the
minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 thereof. Distributions required to be made to a
Participant under this Section 12.4 while he or she has Employment
Status shall be made to the extent required by Section 401(a)(9) of the
Code and the Regulations thereunder."
1.Article 12 is further amended by deleting Section 12.5(a)
and substituting therefor the following:
"Section 12.5 (a) Upon the death before the Benefit Commencement
Date of a Participant with Employment Status, or of a Retired or
Disabled Participant, the death benefit payable shall be the total
value of the individual's Accounts (including any death benefit payable
on such individual's behalf under Article 28). Upon the death before
the Benefit Commencement Date of a Participant or Terminated Participant
who does not have Employment Status, the death benefit payable shall be
the vested portion of the individual's Accounts, which shall include any
death benefit payable on his or her behalf under Article 28. The
individual's Accounts shall be valued as of the Valuation Date on which
the Application for Benefits is processed by the Plan Administrator.
All death benefits payable hereunder shall be paid to the Participant's
surviving spouse, if any, pursuant to subsections (a) and (b) unless the
surviving spouse consents otherwise in the manner required in
subsections (b) and (c).
(b) If the Participant's surviving spouse is entitled to a survivor
benefit under the Retirement Plan, a portion of which is attributable
to the Participant's vested Contributory Pension Benefit,
PAGE 19
the amount necessary to provide such survivor benefit shall be
transferred by the Trustee from the Participant's Choice Account to the
Retirement Plan, unless the surviving spouse has consented in writing
to the waiver of the preretirement survivor benefit under the terms of
the Retirement Plan. The amount necessary to provide such benefit to
the spouse which is to be transferred from the Participant's Choice
Account shall equal the lesser of:
(i) the value as of the date of the transfer of the Contributory
Benefit Reserve; or
(ii) the lump sum actuarial equivalent of the portion of the
vested Contributory Pension Benefit which is payable as a survivor
benefit to the spouse for life determined as of the date of the transfer
in accordance with the provisions of the Retirement Plan. (c) After any
transfer under subsection (b), the remaining amount payable on behalf
of the Participant shall, subject to Section 12.6, be paid to his or
her Beneficiary in the manner provided in Section 12.3(b), as selected
by the Beneficiary, within a reasonable time following the Valuation
Date but in no event later than the end of the calendar year which
includes the fifth anniversary of the Participant's death."
1.Article 13 is amended by deleting Section 13.3(a) and
substituting therefor the following:
"Section 13.3 (a) A Participant's Vesting Years shall include:
(i) any employment with The Stanley Works or any other member
of the Affiliated Group during the period it is a member of the
Affiliated Group;
(ii) except as otherwise provided in a Plan Specification
Schedule, the period of employment with a predecessor employer preceding
the Company's acquisition of the business conducted by such employer,
whether through the purchase by the Company of all of the outstanding
stock of such employer or of all or substantially all of the assets
used by such employer in a trade or business; and
(iii) any period during which the Participant performed services
as a Leased Employee or during which he or she would have been a Leased
Employee but for failure to satisfy the requirements of paragraph
(a)(ii) of the definition of Leased Employee in Article 2.
A Participant who ceases to have Employment Status on a date that is
less than a full year following the most recent anniversary of his or
her Employment Commencement Date shall be given vesting credit for each
month during such partial year in which he or she had Employment
Status. A Participant who incurs a Break in Service shall receive
credit for Vesting Years before the Break in Service in accordance with
subsection (b)."
PAGE 20
1.Article 13 is further amended by deleting Section 13.4 and
substituting therefor the following:
"Section 13.4 (a) A Terminated Participant who has no vested
interest in an Account described in Section 13.2(a) shall be deemed to
have received a lump sum distribution from such Account of $0. Such
distribution shall be deemed to have occurred on the date on which such
individual ceases to have Employment Status. The nonvested portion of
a Terminated Participant's Accounts shall be forfeited upon the earlier
of (i) 90 days following the date on which the individual ceases to
have Employment Status, or (ii) a distribution or deemed distribution
under this Article.
(b) Subject to Section 13.1(b), the vested portion of a Terminated
Participant's Accounts shall be valued and distributed as provided in
Article 12. The nonvested portion of his or her Accounts shall be
forfeited as provided in subsection (a) and applied as soon as
practicable thereafter to satisfy the allocations required under Article
5; provided, however, that such nonvested portion shall be reinstated
if the Terminated Participant again becomes an Employee before incurring
five consecutive one-year Breaks in Service. If a Terminated
Participant described in this Section 13.4(b) returns to Employment
Status and is entitled to have the nonvested portion of the Accounts
reinstated, the amount forfeited shall be reinstated to the appropriate
Accounts from other forfeitures, from shares released from the Suspense
Account or from contributions to the Plan not used to make payments
under an Exempt Loan. Amounts restored to an individual's Accounts
under this section shall not be considered a rollover or a contribution
for any purpose under the Plan."
1.Article 14 is amended by deleting said Article in its
entirety and substituting therefor the following:
"A R T I C L E 14
Application for Benefits
Section 14.1 An Application for Benefits must be filed with the Plan
Administrator as provided in this Article after receipt of the
information required by Section 14.2(a)(ii) and (iii) and no
more than 90 days before the Benefit Commencement Date.
Section 14.2 (a) Not less than 30 and not more than 90 days before
an individual's Benefit Commencement Date, the Plan Administrator shall:
(i) provide the individual with an Application for Benefits;
(ii) provide the individual with the approximate vested value of
the individual's Accounts and an explanation of the Plan's distribution
options; and
PAGE 21
(iii) inform the individual of any right to defer receipt of the
distribution and that failure to file an Application for Benefits within
the time specified in this Article shall be treated as an election to
defer.
If the information required by paragraph (ii) or (iii) is provided to an
individual through an electronic medium, upon such individual's request,
such information shall be furnished to the individual in writing at no
charge.
(b) An individual's Benefit Commencement Date shall not be less than
30 days or more 90 days after the date on which he or she receives the
information required by subsection (a)(ii) and (iii). If an
individual's Benefit Commencement Date will occur more than 90 days
after the date on which he or she receives such information, the Plan
Administrator shall again furnish such individual with the information
required by subsection (a)(ii) and (iii) so that it is received no
more than 90 days before the Benefit Commencement Date. (c) Payment
of benefits may be made less than 30 days (but not less than 8 days in
the case of an individual on whose behalf amounts may be transferred to
the Retirement Plan pursuant to Section 12.3) after an individual's
receipt of the information required by subsection (a)(ii) and
(iii) if:
(i) the Plan Administrator has informed the individual that he
or she is entitled, for a period of at least 30 days after receiving
such information, to consider whether to elect a distribution (and, if
applicable, a particular form of payment); and
(ii) the individual, after receiving the information, elects to
receive a distribution before the end of such 30-day period.
Section 14.4 The Application for Benefits required for the payment
of disability benefits under Article 12 must be filed no later than
one year following a Participant's loss of Employment Status. In
addition, proof of disability in the form of a certification by a
licensed physician selected by the Plan Administrator must be filed with
the Plan Administrator.
Section 14.5 The Application for Benefits required for the payment
of death benefits under Article 12 must be filed by the Beneficiary of
a deceased individual or the legal representative of the individual's
estate. The Plan Administrator may request such verification of an
individual's death as it deems necessary.
Section 14.6 If payment of benefits is to commence to a Terminated
Participant under Article 13, an Application for Benefits must be
filed with the Plan Administrator within 90 days following the
individual's receipt of such application and the information required
by Section 14.2(a)(ii) and (iii). Failure to file an Application for
Benefits within 90 days following receipt thereof from the Plan
PAGE 22
Administrator shall be treated as an election to defer the commencement
of benefits until a subsequent date.
Section 14.7 If payment of benefits is to commence to a Retired
Participant under Article 12 and the individual fails to file an
Application for Benefits within 90 days following receipt of
such application and the information required by Section 14.2(a)(ii),
the amount to which such individual is entitled shall be paid as
provided in Article 12 as soon as practicable.
Section 14.8 The election of a form of payment or the designation
of a Beneficiary made in an Application for Benefits may be revised by
filing a new Application for Benefits before the Benefit Commencement
Date.
Section 14.9 An individual for whom benefits are being held by the
Trustee shall keep the Plan Administrator advised of a current mailing
address. The Plan Administrator and the Company shall be discharged
from any liability resulting from a failure to pay benefits as they
become due if reasonable effort has been made to contact the individual
at the last address on record.
Section 14.10 The Plan Administrator shall promptly process each
Application for Benefits and shall notify the applicant in writing of
the action taken regarding his or her Application for Benefits within
90 days following the receipt of such application. In the event of a
denial of benefits, the Plan Administrator shall furnish the applicant
with a written notification which shall include the reasons for the
denial; specific references to the Plan provisions on which the denial
is based; a description of any additional material or information
necessary for the applicant to perfect the Application for Benefits,
including an explanation of why such material or information is
necessary; and an explanation of the review procedure set forth in
Section 14.10.
Section 14.11 An applicant who has received a written denial of an
Application for Benefits may appeal by filing with the Plan
Administrator a written request for review. Such request must be filed
within 60 days following the receipt of the written denial. In
connection with any request for review, the applicant may at any time
review pertinent documents and may submit issues and comments in
writing. The Plan Administrator shall notify the applicant of its
determination within 60 days following its receipt of the request for
review.
Section 14.12 Accounts maintained under the Plan for individuals who
cannot be found shall be forfeited and applied as soon as possible to
satisfy the allocations under Article 5. If an individual files an
Application for Benefits or is located at any time thereafter, an
amount equal to the vested portion of the individual's Accounts,
adjusted for net earnings and losses, shall be reinstated and
distributed in accordance with the terms of the Plan."
PAGE 23
1.Article 18 is amended by deleting Sections 18.3(c) and (d)
and substituting therefor the following:
"(c) under the terms of such loan, the lender shall have no recourse
against the Trust Fund except with respect to amounts contributed in
cash to the Trust Fund and earnings attributable thereto, from
dividends paid on shares of Stanley Stock held in the Trust Fund and
any earnings thereon (which may be used to repay a loan under
Section 18.4(b)(i) or (ii)) and, to the extent permitted by law,
proceeds from the sale of unallocated shares acquired with such loan;
(d) such loan shall be repaid only from amounts loaned to the
Trustee and the proceeds of such loan, from amounts contributed in cash
to the Trust Fund and earnings attributable thereto, from dividends
paid on shares of Stanley Stock held in the Trust Fund and any earnings
thereon (which may be used to repay a loan under Section 18.4(b)(i) or
(ii)) and, to the extent permitted by law, proceeds from the sale of
unallocated shares acquired with such loan;
1.Article 18 is further amended by deleting Section 18.4(b)
(i) and substituting therefor the following:
"(i) cash dividends paid on shares of Stanley Stock allocated to
Participants' Accounts, provided that the amount of dividends
attributable to the number of allocated shares of Stanley Stock
acquired with an Exempt Loan that is made, or deemed to be made,
after August 4, 1989, shall be applied to the payment of that Exempt
Loan and not to any other Exempt Loan, and further provided that
dividends shall not be used to make payments under an Exempt Loan if
the dividends are attributable to contributions made to the Plan in
shares of Stanley Stock or are attributable to the investment of
contributions that are not to be used to make payments under an Exempt
Loan. For purposes of this Section 18.4(b)(i), the shares of Stanley
Stock allocated to Participants' Accounts shall be the number of shares
of Stanley Stock in the Stanley Stock Fund attributable to the
Participants' interests in the Stanley Stock Fund."
1.Article 18 is further amended by deleting Section 18.5(a)
and substituting therefor the following:
"Section 18.5 (a) If dividends described in Section 18.4(b)(i) are
applied during any month to pay principal and interest under an Exempt
Loan, there shall be allocated to the appropriate Accounts of a
Participant a number of shares of Stanley Stock having a market value
on the date of such allocation equal to the dividend paid with respect
to the number of shares of Stanley Stock credited to those Accounts
on the record date for such dividend. If the number of shares of
Stanley Stock released from the Suspense Account is insufficient to
effect the allocation required by the preceding sentence and if there
have not been sufficient contributions to acquire the necessary number
of shares of Stanley Stock, the Company shall make an additional
PAGE 24
contribution pursuant to Section 18.5(b) to the Trust Fund in an amount
sufficient to effect such allocation. For purposes of this Section
18.5(a), the number of shares of Stanley Stock credited to the
Participant's Accounts on the record date shall be the number of shares
of Stanley Stock in the Stanley Stock Fund on such date attributable to
the Participant's proportionate interest in the Stanley Stock Fund on
such date. Following the allocation of shares of Stanley Stock under
this Section 18.5(a), such shares, or the proceeds of such shares, shall
be invested in the Stanley Stock Fund."
1.Article 18 is further amended by deleting Section 18.7 and
substituting therefor the following:
"Section 18.7 (a) For purposes of the allocation of Stanley Stock to
Participants' Choice Accounts, Stanley Stock shall be valued at market
value on the date of allocation. Shares shall be allocated as soon as
practicable after the end of the month with respect to which the shares
are credited. Following such allocation of shares of Stanley Stock,
such shares, or the proceeds of such shares, whichever is applicable,
shall be invested in the Stanley Stock Fund or in another investment
fund pursuant to Section 8.1(a).
(b) For purposes of the allocation of Stanley Stock to Participants'
Cornerstone Accounts, Stanley Stock shall be valued at market value on
the date of allocation. Following such allocation of shares of Stanley
Stock, the proceeds of such shares shall be invested pursuant to
Section 8.1(b).
(c) For purposes of the allocation of Stanley Stock to Participants'
Auxiliary Accounts, Stanley Stock shall be valued at market value on
the date of allocation. Following such allocation of shares of Stanley
Stock, the proceeds of such shares shall be invested pursuant to Article
28."
1.Article 18 is further amended by adding the following
sentence at the end of Section 18.8:
"For purposes of this Section 18.8, the shares of Stanley Stock
allocated to Participants' Accounts shall be the number of shares
of Stanley Stock in the Stanley Stock Fund attributable to the
Participants' interests in the Stanley Stock Fund."
1.Article 18 is further amended by adding the following new
Section 18.11, effective as of January 1, 1998:
"Section 18.11 The Trustee may invest (and withdraw from
investment) all, or any portion of the Trust Fund in a group trust or
common trust fund that expressly limits participation to individual
retirement accounts which are exempt from tax under Section 408 of the
Code and retirement trusts which are exempt from tax under Section
501(a) of the Code pursuant to Section 401(a) of the Code."
PAGE 25
1.Article 26 is amended by deleting Sections 26.3 and 26.4 and
substituting therefor the following:
"Section 26.3 (a) Except as otherwise provided in subsection (b),
for each year in the qualified election period, a qualified Participant
may direct that all, or a portion specified in a whole multiple of
20%, of the number of eligible shares determined under Section 26.2
shall be distributed from the Choice Account to the qualified
Participant in accordance with Section 26.5.
(b) A distribution under subsection (a) that is to be made to a
qualified Participant while he or she has Employment Status and before
the date on which he or she attains age 59-1/2 shall not include any
amount in the qualified Participant's Choice Account attributable to
Elective Deferral Contributions. Moreover, a distribution under
subsection (a) that is to be made to a qualified Participant while he
or she has Employment Status and before attainment of the Normal
Retirement Date shall not include any amounts attributable to his or
her Net Contributory Pension Benefit. To the extent that a
distribution will be taken from the portion of the qualified
Participant's Choice Account that may be transferred to the Retirement
Plan to provide the Participant's Contributory Pension Benefit, the
written consent of the qualified Participant's spouse, if any, to the
distribution must be obtained in accordance with the provisions of the
Retirement Plan within the 90-day period preceding the date of the
distribution. In the event that the number of eligible shares in the
qualified Participant's Choice Account (exclusive of shares
attributable to Elective Deferral Contributions and the Net Contributory
Pension Benefit) would be insufficient to effect a distribution of the
maximum number of such eligible shares that could be elected by the
qualified Participant under subsection (a), such qualified Participant
shall, in lieu of the right to elect a distribution under such
subsection (a), be given the opportunity to direct the investment of
eligible shares in any investment fund available under the Plan in
accordance with Section 8.2.
Section 26.4 Within the 90 days following the end of each of the
five Plan Years in an individual's qualified election period, the Plan
Administrator shall notify such individual of his or her right to make
an election under Section 26.3(a) or (b). Any such election shall be
made in accordance with the procedures established by the Plan
Administrator. A qualified Participant shall be permitted to revoke
an election and make a new election at any time during such 90 day
period. If a qualified Participant fails to file an election within
the 90-day period described in this Section 26.4, the portion of such
Participant's Choice Account that is subject to such election shall
remain invested in the Stanley Stock Fund."
1.Article 26 is further amended by adding the following new
Section 26.7 at the end thereof:
PAGE 26
"Section 26.7 For purposes of this Article 26, the shares of Stanley
Stock allocated to a qualified Participant's Accounts shall be the
number of shares of Stanley Stock in the Stanley Stock Fund
attributable to the Participant's proportionate interest in the Stanley
Stock Fund."
1.Article 27 is amended by deleting said Article in its
entirety and substituting therefor the following:
"A R T I C L E 27
Special Rules Regarding Officers of the Company
Section 27.1 The following definitions shall apply for purposes of
this Article:
(a) 'Cash disposition' means:
(i) with respect to this Plan, an election by an
Officer to receive (A) a hardship withdrawal under Section 10.1, (B)
a discretionary withdrawal under Section 10.2, or (C) a loan under
Article 11, which withdrawal or loan is funded in whole or in part
by a disposition of Stanley Stock attributable to the Officer's
Choice Account; or
(ii) with respect to any other employee benefit plan
sponsored by the Company, an election by an Officer under said plan to
receive a cash distribution of all or a portion of his or her interest
in said plan which distribution is funded in whole or in part by a
disposition of Stanley Stock.
(b) 'Discretionary transaction' means either a cash disposition or
an intra plan transfer that (i) is not made in connection with the
Officer's death, disability, retirement or separation from service
with the Company or (ii) is not made pursuant to Section 12.4 or
pursuant to an election that is made available under Section 26.3 or
that is required to be made available under another provision of the
Code.
(c) 'Employee benefit plan' means:
(i) any employee benefit plan that satisfies the coverage and
participation requirements of Sections 410 and 401(a)(26) of the Code,
or any successor provisions thereof;
(ii) an employee benefit plan described in Section 3(36) or
201(2) of ERISA which is operated in conjunction with a plan described
in paragraph (c)(i) hereof and which provides only the benefits and
contributions that would be provided under said plan described in
paragraph (c)(i) hereof but for any benefit or contribution limitations
set forth in the Code; or
PAGE 27
(iii) a stock purchase plan that satisfies the coverage and
participation requirements of Sections 423(b)(3) and 423(b)(5) of the
Code or Section 410 of the Code, or any successor provisions thereof.
(d) 'Intra plan transfer' means:
(i) an election by an Officer under Section 8.2 either to (A)
transfer all or a portion of his or her Choice Account that is invested
in the Stanley Stock Fund to an another investment fund available
under the Plan, or (B) transfer all or a portion of his or her Choice
Account that is not invested in the Stanley Stock Fund to the Stanley
Stock Fund; or
(ii) an election by an Officer under any other employee benefit
plan sponsored by the Company either to (A) transfer all or a portion
of his or her interest under said plan that is invested in a fund that
consists primarily of shares of Stanley Stock to a fund under said
plan that does not consist primarily of Stanley Stock, or (B) transfer
all or a portion of his or her interest under said plan that is
invested in a fund that does not consist primarily of shares of Stanley
Stock to a fund under said plan that consists primarily of shares of
Stanley Stock.
Section 27.2 (a) (i) Anything herein to the contrary
notwithstanding, in the event of an election by an Officer that effects
a discretionary transaction that is either a cash disposition, or an
intra plan transfer described in Section 27.1(d)(i)(A) or (d)(ii)(A),
such Officer shall be prohibited, for a period of six months from the
date on which such election is made, from making an election under
Section 8.2 which would effect a discretionary transaction that is an
intra plan transfer described in Section 27.1(d)(i)(B).
(ii) Anything herein to the contrary notwithstanding, in the
event of an election by an Officer that effects a discretionary
transaction that is an intra plan transfer described in Section
27.1(d)(i)(B) or (d)(ii)(B), such Officer shall be prohibited, for a
period of six months from the date on which such election is made, from
making an election under this Plan that would effect a discretionary
transaction that is a cash disposition described in Section 27.1(a)(i)
or an intra plan transfer described in Section 27.1(d)(i)(A).
Section 27.3 The provisions of this Article are intended to exempt
transactions in the Plan by Officers from the operation of Section
16(b) of the Exchange Act pursuant to exemptions provided by rules
and regulations as may be promulgated thereunder by the Securities and
Exchange Commission, and are intended to apply to the extent that
compliance with such rules and regulations is necessary to maintain such
exemption, and shall be interpreted in a manner consistent with such
intent."
PAGE 28
Dated the 31st day of March, 1999.
THE STANLEY WORKS
/s/ Mark J. Mathieu
Vice President, Human Resources
