FILED
PURSUANT TO RULE 424(B)(5)
REGISTRATION
NO. 333-153646
PROSPECTUS
SUPPLEMENT
(To
Prospectus Dated September 24, 2008)
201,679
Shares
Common
Stock
We are registering a total of up to
201,679 shares of our common stock that are issuable to certain former employees
of The Black & Decker Corporation (“Black & Decker”) upon the
exercise of certain options issued under The Black & Decker 1996 Stock
Option Plan and The Black & Decker 2003 Stock Option Plan that we have
agreed to assume in connection with our acquisition of Black & Decker.
The exercise prices of the options we have assumed range from approximately
$23.53 to $72.44 per share of our common stock. If all such former employees
purchase all of the shares of our common stock subject to the assumed options,
we will receive aggregate proceeds of up to approximately $12
million.
Our common stock is listed for trading
on the New York Stock Exchange (the “NYSE”) under the symbol “SWK.” On March 11,
2010, the last reported sales price of our common stock on the NYSE was $58.83
per share.
See “Risk factors” beginning on page
S-5 of this prospectus supplement to read about important factors you should
consider before investing in our common stock.
Neither the Securities and Exchange
Commission (the “SEC”) nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus supplement or the accompanying prospectus. Any representation to the
contrary is a criminal offense.
The date
of this prospectus supplement is March 12, 2010.
CALCULATION
OF REGISTRATION FEE
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Title
of Securities to Be Registered
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Amount
to Be Registered (1)
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Proposed
Maximum Offering Price Per Share
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Proposed
Maximum Aggregate Offering Price
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Amount
of Registration Fee
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Common
stock, $2.50 par value per share (and associated Series A Junior
Participating Preferred Stock purchase rights)
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201,679(2) | $ | 58.50(3) | $ | 11,798,222 | $ | 842 | |||||||||
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(1)
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Pursuant
to Rule 416 promulgated under the Securities Act of 1933, as amended (the
“Securities Act”), this prospectus supplement shall also cover any
additional shares of our common stock that become issuable by reason of
any stock dividend, stock split, recapitalization or other similar
transaction which results in an increase in the number of outstanding
shares of our common stock.
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(2)
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Pursuant
to the Agreement and Plan of Merger entered into as of November 2, 2009
(the “Merger Agreement”) by and among The Black & Decker Corporation,
a Maryland corporation (“Black & Decker”), The Stanley Works, a
Connecticut corporation (“Stanley”), and Blue Jay Acquisition Corp., a
Maryland corporation, on March 12, 2010, outstanding options to purchase
shares of common stock of Black & Decker held by former employees were
converted into options to purchase shares of our common stock, subject to
appropriate adjustments to the number of shares and the exercise price of
each such option. The number of shares registered hereunder
represents the maximum number of shares of our common stock issuable upon
the exercise of such options, subject to appropriate adjustments
thereto.
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(3)
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Estimated
solely for purposes of calculating the registration fee in accordance with
Rule 457(h) of the Securities Act on the basis of the weighted
average exercise price of the outstanding
options.
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Prospectus
Supplement
Page
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S-4
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| RISK FACTORS |
S-5
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| USE OF PROCEEDS |
S-5
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| EXPERTS |
S-9
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You should rely only upon the
information contained in this prospectus supplement, the accompanying prospectus
and the documents they incorporate by reference. We have not authorized any
other person to provide you with different or additional information. If anyone
provides you with different or additional information, you should not rely on
it. You should assume the information appearing in this prospectus
supplement and the accompanying prospectus is accurate only as of their
respective dates. Our business, financial condition, results of operations and
prospects may have changed since those dates.
This prospectus supplement, the
accompanying prospectus and any documents incorporated herein by reference
contain or incorporate statements that are “forward-looking” within the meaning
of the Private Securities Litigation Reform Act of 1995.
Those statements include trend analyses
and other information relative to markets for our products and trends in our
operations or financial results as well as other statements that can be
identified by the use of forward-looking language such as “may,” “should,”
“believes,” “expects,” “anticipates,” “plans,” “estimates,” “intends,”
“projects,” “goals,” “objectives,” or other similar expressions. Our actual
results, performance or achievements could be materially different from the
results expressed in, or implied by, those forward-looking statements. Those
statements are subject to risks and uncertainties, including but not limited to
the risks described in any documents incorporated herein by reference. When
considering those forward-looking statements, you should keep in mind the risks,
uncertainties and other cautionary statements made in this prospectus
supplement, any accompanying prospectus and the documents incorporated by
reference.
A variety of factors could cause our
actual results to differ materially from the expected results expressed in our
forward-looking statements, including those set forth in this prospectus
supplement, the accompanying prospectus or any documents incorporated herein by
reference, including the “Risk Factors,” “Business” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” section of our
reports and other documents filed with the SEC. Factors that may cause our
actual results to differ materially from those we contemplate by the
forward-looking statements include, among others, the following
possibilities:
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inability
to maintain and improve the overall profitability of our
operations;
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inability
to limit the impact of steel and other commodity and material price
inflation through price increases and other
measures;
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inability
to capitalize on future acquisition opportunities and fund other
initiatives;
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inability
to invest in routine business
needs;
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the
risk that the cost savings and other synergies anticipated to be realized
from the merger (as well as future acquisitions) may not be fully realized
or may take longer to realize than
expected;
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disruption
from the merger making it difficult to maintain relationships with
customers, employees or suppliers;
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the
risk that the businesses will not be integrated successfully, or that the
integration will be more costly or more time consuming and complex than
anticipated;
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failure
to continue improvements in productivity and cost reductions in all
aspects of our operations;
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failure
to identify and effectively execute overhead cost reduction
opportunities;
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inability
to generate free cash flow and maintain strong credit
metrics;
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inability
to successfully settle routine tax
audits;
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continued
access to credit markets on favorable terms, and the maintenance by us of
an investment grade credit rating;
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inability
to negotiate satisfactory payment terms for the purchase and sale of
goods, material and products;
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inability
to sustain the success of our marketing and sales efforts, including our
ability to recruit and retain an adequate sales force and to maintain our
customer base;
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inability
of the sales force to adapt to any changes made in the sales organization
and achieve adequate customer
coverage;
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inability
to stimulate demand for our
products;
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inability
to develop and introduce new products and identify and develop new
markets;
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loss
of significant volumes of sales from our larger
customers;
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inability
to maintain current production rates in our manufacturing facilities, to
respond to significant changes in product demand, or to fulfill demand for
new and existing products;
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inability
to implement, manage and maintain our operating systems
effectively;
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inability
to continue successfully managing and defending claims and
litigation;
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increased
pricing pressures and other changes from customers and competitors and the
inability to defend market share in the face of
competition;
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continued
consolidation of customers, particularly in consumer
channels;
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inventory
management pressures on our
customers;
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changes
in trade, monetary, tax and fiscal policies and
laws;
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the
final geographic distribution of future earnings and the effect of
currency exchange fluctuations and impact of dollar/foreign currency
exchange and interest rates on the competitiveness of products, our debt
program and our cash flow;
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the
strength of the United States and global
economies;
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the
impact of events that cause or may cause disruption in our distribution
and sales networks, such as war, terrorist activities, political unrest,
and recessionary or expansive trends in world
economies;
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inability
to mitigate cost increases generated by, for example, continued increases
in the cost of energy or significant Chinese Renminbi or other currency
appreciation; and
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failure
to recruit and train new employees.
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There can be no assurance that other
factors not currently anticipated by us will not materially and adversely affect
our business, financial condition, and results of operations. You are cautioned
not to place undue reliance on any forward-looking statements made by us or on
our behalf. Please take into account that forward-looking statements speak only
as of the date of this prospectus supplement or, in the case of the accompanying
prospectus or any documents incorporated herein by reference, the date of any
such document. We do not undertake any obligation to publicly correct or update
any forward looking statement if we later become aware that it is not likely to
be achieved. You are advised, however, to consult any further disclosures we
make on related subjects in reports to the SEC.
This summary contains basic information
about us and this offering. Because it is a summary, it does not contain all of
the information that you should consider before investing in our common stock.
You should read this entire prospectus supplement, the accompanying prospectus
and the documents incorporated by reference carefully, including the section
entitled “Risk Factors” in our Annual Report on Form 10-K and any updates to
such risks in subsequently filed Quarterly Reports on Form 10-Q and our
financial statements and the notes thereto incorporated by reference into this
prospectus supplement before making an investment decision. Unless otherwise
indicated, all references in this prospectus supplement to “the Company,”
“Stanley,” “we,” “our,” “us,” or similar terms mean Stanley Black & Decker,
Inc. and its subsidiaries.
The
Company
Stanley Black & Decker, Inc.
(formerly known as The Stanley Works) was founded in 1843 by Frederick T.
Stanley and incorporated in 1852. We are a diversified worldwide supplier of
tools and engineered solutions for professional, industrial and
construction & do-it-yourself use, as well as engineered security
solutions for industrial and commercial applications. Stanley® is a
brand recognized around the world for quality and value.
Our principal executive office is
located at 1000 Stanley Drive, New Britain, Connecticut 06053 and our telephone
number is (860) 225-5111.
On March 12, 2010, we acquired Black
& Decker in accordance with the terms of a merger agreement (the “Merger
Agreement”) entered into as of November 2, 2009. Pursuant to the
Merger Agreement, Black & Decker stockholders received 1.275 shares of the
Company’s common stock for each share of Black & Decker common stock, with
cash paid in lieu of fractional shares. In addition, we agreed to
assume outstanding options to acquire shares of Black & Decker common stock
previously issued by Black & Decker, including those held by former
employees of Black & Decker, and assume certain
Black & Decker stock
plans.
Black & Decker, a Maryland
corporation, is a leading global manufacturer and marketer of power tools and
accessories, hardware and home improvement products, and technology-based
fastening systems. With products and services marketed in over 100 countries,
Black & Decker enjoys worldwide recognition of its strong brand names
and a superior reputation for quality, design, innovation and
value.
The
Offering
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Issuer
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Stanley
Black & Decker, Inc.
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Common
stock offered
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201,679
shares of common stock, par value $2.50 per share (the “Shares”), all of
which are issuable to former employees of Black & Decker pursuant to
options assumed by the Company in connection with the merger.
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Use
of proceeds
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If
all the options to acquire common stock granted to former employees of
Black & Decker are exercised in full, we will receive total cash
proceeds of approximately $12 million. We intend to use these
net proceeds for general corporate purposes.
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New
York Stock Exchange symbol
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“SWK”
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Your
investment in our common stock involves certain risks. In consultation with your
own financial and legal advisers, you should carefully consider, among other
matters, the discussion of risks relating to our business under the caption
“Risk Factors” in our Annual Report on Form 10-K and any updates to such risks
in subsequently filed Quarterly Reports on Form 10-Q before deciding whether an
investment in our common stock is suitable for you. If any of these risks
actually occurs, our business, results of operations and financial condition may
suffer. As a result, the trading price of our common stock may decline, and you
might lose part or all of your investment.
If all of the assumed options granted
to former employees of Black & Decker are exercised in full, we will issue
201,679 shares of our common stock for total cash proceeds of approximately $12
million. We currently intend to use the net proceeds from any
exercises of these options for general corporate purposes. General
corporate purposes may include repayment of debt, repurchases of outstanding
shares of common stock, acquisitions, investments, additions to working capital,
capital expenditures, and advances to or investments in our subsidiaries or
other business enterprises. Net proceeds may be temporarily invested
prior to use.
Overview
On March 12, 2010, we acquired Black
& Decker. Pursuant to the Merger Agreement, we agreed to assume
certain outstanding options to purchase shares of common stock of Black &
Decker held by former employees of Black & Decker. Those options were issued
by Black & Decker under the Black & Decker 2003 Stock Option Plan,
as amended and restated (the “2003 Plan”), and the Black & Decker 1996
Stock Option Plan, as amended and restated (the “1996 Plan” and
collectively, the “Plans”). Upon the completion of the merger, those options
became exercisable to purchase shares of our common stock, subject to
appropriate adjustments to the number of shares and the exercise price of each
such option. This prospectus supplement relates to the shares of our common
stock that may be issued upon exercise of those assumed options.
This prospectus supplement only
discusses the treatment of stock options held by former employees of Black &
Decker that were assumed by us under the Merger Agreement.
Introduction
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1.
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How
do the Plans work?
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Under the Plans, awards may be granted
in the form of stock options, stock appreciation rights and limited stock
appreciation rights. All outstanding stock options granted by Black
& Decker to former employees under the Plans were assumed and converted as
part of the merger and are discussed in this prospectus supplement. A
committee appointed by the Board of Directors of Black & Decker was
authorized to designate executives and other key employees of Black & Decker
and its subsidiaries to receive grants of stock options and to set the terms and
conditions of the stock option awards as it deemed appropriate. The
terms and conditions for a stock option award are set forth in an award
agreement (the “Option Agreement”). The terms and conditions of the
Plans are governed by the official Plan documents. In the event of
any inconsistency between this prospectus supplement and the official Plan
documents or your Option Agreement, the Plan documents or your Option Agreement
will control.
Following the merger, the Board of
Directors of Stanley (the “Board”) or a committee appointed by the Board (the
“Committee”) will administer the Plans and the outstanding awards under the
Plans.
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2.
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What
is the purpose of the Plans?
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The purpose of the Plans was to provide
stock option holders an opportunity to acquire a proprietary interest in Black
& Decker and an incentive to increase the prosperity, growth and earnings of
Black & Decker.
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3.
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Does
Stanley intend to grant additional awards under the
Plans?
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No additional awards will be made under
either the 2003 Plan or the 1996 Plan.
Basics
Of Plan Participation
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4.
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How
did the completion of the merger affect my
awards?
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Upon completion of the merger on March
12, 2010, each outstanding stock option to purchase Black & Decker common
stock was assumed and converted pursuant to the Merger Agreement into a stock
option to acquire shares of Stanley common stock. The stock option
has been adjusted to preserve the value of the award. The number of
shares of Stanley common stock underlying each stock option has been determined
by multiplying the number of shares of Black & Decker common stock subject
to such stock option immediately prior to the completion of the merger by the
1.275 exchange ratio, and rounding down to the nearest whole
share. The exercise price per share of each stock option has been
determined by dividing the per share exercise price of such stock option by the
1.275 exchange ratio, and rounding up to the nearest whole cent.
Except as set forth in this prospectus
supplement, all other terms and conditions of your stock option remain the same
as were in effect immediately prior to the completion of the
merger.
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5.
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How
will a change in our shares of common stock affect my
award?
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The Committee will proportionately
adjust your stock option to reflect any increase or decrease in the number of
our issued and outstanding shares of common stock resulting from a change in
Stanley’s capital structure or distributions to stockholders (including any
stock dividend, recapitalization, stock split, combination, merger,
consolidation, exchange, acquisition, reorganization or similar change in the
capital structure of Stanley).
Stock
Options
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6.
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What
is a stock option?
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A stock option gives you the right to
purchase shares of our common stock at the exercise price.
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7.
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Are
there different types of stock
options?
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No, all of the stock options are
nonqualified stock options.
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8.
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What
are the terms of my stock option?
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Black & Decker originally
determined the terms of your grant. At the time of grant, you were
given an Option Agreement that tells you the original number of shares covered
by the stock option, the original exercise price, the expiration date, any
conditions to exercise and any other terms or conditions that
apply. As discussed in Question 4 above, the number of shares covered
by the stock option and the exercise price have been adjusted in connection with
the merger.
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9.
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How
is the exercise price of my stock option
determined?
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The exercise price of stock options can
be no less than the fair market value of a share (as defined in the Plans) on
the date it was granted. As discussed in Question 4 above, the number
of shares covered by the stock option and the exercise price have been adjusted
in connection with the merger.
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10.
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When
can I exercise my stock options?
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Your stock options are fully vested and
exercisable through the expiration of your grant (see Question 12
below).
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11.
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How
do I exercise my stock options?
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If you want to exercise your converted
stock options, you should contact UBS at 1-800-530-5521.
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12.
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When
do my stock options expire?
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In the case of holders who had at least
10 years of service at the time of his or her termination of employment and
whose age plus years of service exceeded 55, the stock options will expire three
years after the holder's date of termination of employment. For all
other holders, the stocks options expire 30 days after the holder's date of
termination of employment. After the stock option's expiration date,
you can no longer exercise your option. In addition, if certain
events occur—such as your death or disability—your stock option may expire
earlier. The Plans and/or your Option Agreement include this
information, which may vary among your stock options. Please read the
applicable Plan and/or your Option Agreement carefully so that you understand
the effect of various events.
Restrictions
On Transfer And Sale
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13.
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Are
my awards transferable?
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Generally, you cannot sell, transfer,
pledge, assign or otherwise alienate or hypothecate your award, other than by
will or the laws of descent and distribution or a qualified domestic relations
order, depending on the terms of the Plans and/or your Option
Agreement. Unless otherwise provided in the Plans and/or your Option
Agreement, during your lifetime, only you can exercise the rights associated
with a stock option.
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14.
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What
restrictions might apply to the shares I
acquire?
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You are not subject to additional
restrictions imposed by the Company.
General
Plan Information
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15.
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How
are the Plans administered now?
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The Plans are administered now by our
Committee. All questions of interpretation or application of the
Plans are determined by the Committee, and its decisions are final.
If you have additional questions about
this prospectus supplement or the Plans in general, you should direct your
questions to the Corporate Secretary at 860-225-5111.
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16.
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Can
the Plans be amended, suspended or
discontinued?
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Our Board generally may amend, suspend
or discontinue the Plans, or any part of the Plans, at any time or for any
reason. However, no amendment that would materially and adversely
affect your rights under an outstanding stock option may be made without your
consent.
U.S.
Income Tax Implications
The discussion below is a general
description of the expected U.S. Federal income tax effects of stock options
based on current law. This section only applies to your stock option
if you are subject to U.S. taxation. The discussion does not address
Social Security, state, local or foreign taxes, or any other tax consequences
that may be relevant to you based on your particular
circumstances. Because these stock options involve complex tax
considerations, we urge you to consult your personal tax advisor before you make
any decisions about your stock option.
Stanley is not guaranteeing any
particular tax results related to your stock option. Stanley will
withhold taxes and report income amounts to the IRS and other taxing authorities
as required by applicable laws.
IRS CIRCULAR 230
DISCLAIMER: TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT
CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF
FEDERAL TAX ISSUES IN THIS COMMUNICATION (AND ATTACHMENTS) IS NOT INTENDED OR
WRITTEN BY US TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY YOU FOR THE
PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE INTERNAL
REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN AS PART OF THE DISCLOSURE IN THIS
PROSPECTUS SUPPLEMENT, WHICH IS BEING USED BY US IN CONNECTION WITH THE
PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) OF THE TRANSACTIONS
OR MATTERS ADDRESSED HEREIN; AND (C) YOU SHOULD SEEK ADVICE BASED ON YOUR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
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17.
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Are
the Plans tax-qualified or subject to
ERISA?
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No. The Plans are not
governed by the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and none of the
Plans is a “qualified retirement plan” under section 401(a) of the Internal
Revenue Code.
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18.
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When
will I be taxed with respect to a nonqualified stock
option?
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In general, you are not subject to tax at the time a nonqualified
stock option is granted. Generally, you will recognize ordinary
income for U.S. Federal income tax purposes in the year in which the
nonqualified stock option is exercised in an amount equal to the excess of (a)
the fair market value of the purchased shares on the exercise date over (b) the
exercise price. Stanley will have to collect any applicable
withholding taxes with respect to such income.
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19.
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Will
I recognize additional income when I sell shares acquired under a
nonqualified stock option?
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Yes. You will recognize
capital gain to the extent the amount realized upon the sale of such shares
exceeds their fair market value at the time you recognized the ordinary income
(in general, the exercise date) with respect to their acquisition. A
capital loss will result to the extent the amount realized upon the sale is less
than such fair market value. The gain or loss will be long-term if
the shares are held for more than one year prior to the
disposition. The holding period generally starts at the time the
nonqualified stock option is exercised.
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20.
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What
is the alternative minimum tax?
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The AMT is an alternative method of
calculating the income tax you must pay each year in order to assure that a
minimum amount of tax is paid for the year. The AMT is based upon a
determination of your alternative minimum taxable income (“AMTI”) for a
particular taxable year. Your AMTI is determined by your regular
taxable income for the year, subject to adjustment of certain additional items
of income and tax preference including the spread on an incentive stock option
(the excess of the fair market value of the purchased shares at the time of
exercise over the exercise price paid per share) at the time of exercise,
whether or not the shares are subsequently disposed of in a disqualifying
disposition and the disallowance or limitation of certain deductions otherwise
allowable for regular tax purposes. The AMT will, however, be payable
only to the extent that it exceeds your regular U.S. Federal income tax for the
year (computed without regard to certain credits and special
taxes).
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21.
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What
are the Company’s tax
effects in connection with awards?
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We generally will be entitled to a
deduction in the same amount and at the same time that you recognize ordinary
income related to your award.
This prospectus covers the shares of
our common stock that are issuable upon exercise of options granted to former
employees of Black & Decker and assumed by us in connection with our
acquisition of Black & Decker. Former employees include executors,
administrators or beneficiaries of the estates of deceased employees, guardians
or members of a committee for incompetent former employees, or similar persons
duly authorized by law to administer the estate or assets of former employees
and directors. We are offering these shares of our common stock directly to the
holders of these options according to the terms of their option agreements. We
are not using an underwriter in connection with this offering. These shares will
be listed for trading on the New York Stock Exchange.
In order to facilitate the exercise
of the options, we will furnish, at our expense, such reasonable number of
copies of this prospectus to each holder of options as the holder may request,
together with instructions that such copies be delivered to the beneficial
owners of these options.
The consolidated financial statements
and schedule of the Company and its subsidiaries for the year ended January 2,
2010, and the effectiveness of the Company and its subsidiaries’ internal
control over financial reporting as of January 2, 2010 has been audited by Ernst
& Young LLP, independent registered public accounting firm, as set forth in
its report thereon appearing in the Company’s 2009 Annual Report on Form 10-K,
and incorporated herein by reference. Such consolidated financial
statements and schedule are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.
S-9
Prospectus
The
Stanley Works
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Depositary
Shares
Stock
Purchase Contracts
and
Stock
Purchase Units
We may
offer, issue and sell, together or separately:
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shares
of our common stock;
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shares
of our preferred stock;
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debt
securities, which may be senior debt securities or subordinated debt
securities;
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warrants
to purchase our debt securities, shares of our common stock, shares of our
preferred stock, depositary shares or securities of third parties or other
rights;
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depositary
shares representing an interest in our preferred
stock;
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stock
purchase contracts to purchase shares of our common stock;
and
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stock
purchase units, each representing ownership of a stock purchase contract
and debt securities, preferred securities or debt obligations of
third-parties, including U.S. treasury securities or any combination of
the foregoing, securing the holder’s obligation to purchase our common
stock or other securities under the stock purchase
contracts.
|
We will
provide the specific prices and terms of these securities in one or more
supplements to this prospectus at the time of offering. You should read this
prospectus and the accompanying prospectus supplement carefully before you make
your investment decision.
This
prospectus may not be used to sell securities unless accompanied by a prospectus
supplement.
Investing
in our securities involves a number of risks. See “
Risk Factors” on page 5 before you make your investment
decision.
We may
offer securities through underwriting syndicates managed or co-managed by one or
more underwriters or dealers, through agents or directly to purchasers. The
prospectus supplement for each offering of securities will describe in detail
the plan of distribution for that offering. For general information about the
distribution of securities offered, please see “Plan of Distribution” in this
prospectus.
Our
common stock is listed on the New York Stock Exchange under the trading symbol
“SWK.”
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus or
the accompanying prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
The date
of this prospectus is September 24, 2008
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This
prospectus is part of an “automatic shelf” registration statement that we filed
with the Securities and Exchange Commission, or SEC, as a “well-known seasoned
issuer” as defined in Rule 405 under the Securities Act of 1933, as amended, or
the Securities Act, using a “shelf” registration process. Under this process, we
may sell common stock; preferred stock; debt securities; warrants to purchase
debt securities, common stock, preferred stock, depositary shares or securities
of third parties or other rights; depositary shares; stock purchase contracts
and stock purchase units. This prospectus only provides you with a general
description of the securities that we may offer. Each time we sell securities,
we will provide a supplement to this prospectus that contains specific
information about the terms of the securities. The prospectus supplement may
also add, update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
the accompanying prospectus supplement and any free writing prospectus prepared
by or on behalf of us, together with the additional information described under
the heading “Where You Can Find More Information.”
You
should rely only on the information contained or incorporated by reference in
this prospectus and any prospectus supplement. We have not authorized anyone to
provide you with different information. We are not making offers to sell the
securities in any jurisdiction in which an offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make an offer or
solicitation.
The
information in this prospectus is accurate as of the date on the front cover.
You should not assume that the information contained in this prospectus is
accurate as of any other date.
When used
in this prospectus, the terms “The Stanley Works,” “we,” “our” and “us” refer to
The Stanley Works and its consolidated subsidiaries, unless otherwise specified
or the context otherwise requires.
We file
annual, quarterly and special reports, proxy statements and other information
with the SEC under the Securities Exchange Act of 1934, as amended and the rules
promulgated thereunder (the “Exchange Act”). Our SEC filings are available to
the public at the SEC’s website at www.sec.gov. You may read and copy all or any
portion of this information at the Public Reference Section of the SEC, 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference rooms. We maintain a website at
www.stanleyworks.com. The information on our web site is not incorporated by
reference in this prospectus and any prospectus supplement and you should not
consider it a part of this prospectus and any accompanying prospectus
supplement.
You can
also inspect reports, proxy statements and other information about The Stanley
Works at the offices of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
The SEC
allows us to “incorporate by reference” information into this prospectus and any
accompanying prospectus supplement, which means that we can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
prospectus and any accompanying prospectus supplement, except for any
information superseded by information contained directly in this prospectus, any
accompanying prospectus supplement or any subsequently filed document deemed
incorporated by reference. This prospectus and any accompanying prospectus
supplement incorporates by reference the documents set forth below that The
Stanley Works has previously filed with the SEC (other than information deemed
furnished and not filed in accordance with SEC rules, including Items 2.02 and
7.01 of Form 8-K). These documents contain important information about The
Stanley Works and its finances.
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Annual
Report on Form 10-K for the fiscal year ended December 29,
2007;
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Quarterly
Reports on Form 10-Q for the quarters ended March 29, 2008 and June 28,
2008;
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Current
Reports on Form 8-K filed January 9, 2008, March 4, 2008, March 14, 2008,
April 24, 2008, June 13, 2008, July 23, 2008 and September 22,
2008;
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The
description of our common stock contained in our Registration Statement on
Form 8-A, filed with the SEC on March 24, 1986, and any amendment or
report filed for the purpose of updating such description;
and
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The
description of the depositary preferred stock purchase rights associated
with our common stock contained in our Registration Statement on Form
8-A/A, filed with the SEC on July 23, 2004, and any amendment or report
filed for the purpose of updating such
description.
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All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and any accompanying prospectus
supplement and before the termination of the offering shall also be deemed to be
incorporated herein by reference. We are not, however, incorporating by
reference any documents or portions thereof, whether specifically listed above
or filed in the future, that are not deemed “filed” with the SEC, including our
compensation committee report and performance graph or any information furnished
pursuant to Items 2.02 or 7.01 of Form 8-K or certain exhibits furnished
pursuant to Item 9.01 of Form 8-K.
To obtain
a copy of these filings at no cost, you may write or telephone us at the
following address:
The
Stanley Works
1000
Stanley Drive
New
Britain, Connecticut 06053
Attention:
Treasurer
(860)
225-5111
We will
provide to each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the information that has been incorporated by
reference in the prospectus but not delivered with the prospectus. Exhibits to
the filings will not be sent, however, unless those exhibits have specifically
been incorporated by reference into such documents.
FORWARD-LOOKING
STATEMENTS
This
prospectus and any accompanying prospectus supplement contain or incorporate
statements that are “forward-looking” within the meaning of the Private
Securities Litigation Reform Act of 1995.
Those
statements include trend analyses and other information relative to markets for
our products and trends in our operations or financial results as well as other
statements that can be identified by the use of forward-looking language such as
“may,” “should,” “believes,” “expects,” “anticipates,” “plans,” “estimates,”
“intends,” “projects,” “goals,” “objectives,” or other similar expressions. Our
actual results, performance or achievements could be materially different from
the results expressed in, or implied by, those forward-looking statements. Those
statements are subject to risks and uncertainties, including but not limited to
the risks described in this prospectus any accompanying prospectus supplement
and other documents incorporated by reference. When considering those
forward-looking statements, you should keep in mind the risks, uncertainties and
other cautionary statements made in this prospectus, any accompanying prospectus
supplement and the documents incorporated by reference.
A variety
of factors could cause our actual results to differ materially from the expected
results expressed in our forward-looking statements, including those set forth
in this prospectus, any accompanying prospectus supplement or the documents
incorporated by reference, including the “Risk Factors,” “Business” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of our reports and other documents filed with the SEC.
Factors that may cause our actual results to differ materially from those we
contemplate by the forward-looking statements include, among others, the
following possibilities:
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inability
to maintain and improve the overall profitability of our
operations;
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inability
to limit the impact of steel and other commodity and material price
inflation through price increases and other
measures;
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inability
to capitalize on future acquisition opportunities and fund other
initiatives;
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inability
to invest in routine business
needs;
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inability
to efficiently and promptly integrate recent (as well as future)
acquisitions and achieve anticipated
synergies;
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failure
to continue improvements in productivity and cost reductions in all
aspects of our operations;
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failure
to identify and effectively execute overhead cost reduction
opportunities;
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inability
to generate free cash flow and maintain strong credit
metrics;
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inability
to successfully settle routine tax
audits;
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inability
to access credit markets under satisfactory
terms;
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inability
to negotiate satisfactory payment terms for the purchase and sale of
goods, material and products;
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inability
to sustain the success of our marketing and sales efforts, including our
ability to recruit and retain an adequate sales force and to maintain its
customer base;
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inability
of the sales force to adapt to any changes made in the sales organization
and achieve adequate customer
coverage;
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inability
to stimulate demand for our
products;
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inability
to develop and introduce new products and identify and develop new
markets;
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loss
of significant volumes of sales from our larger
customers;
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inability
to maintain current production rates in our manufacturing facilities, to
respond to significant changes in product demand, or to fulfill demand for
new and existing products;
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inability
to implement, manage and maintain our operating systems
effectively;
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inability
to continue successfully managing and defending claims and
litigation;
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increased
pricing pressures and other changes from customers and competitors and the
inability to defend market share in the face of
competition;
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continued
consolidation of customers, particularly in consumer
channels;
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inventory
management pressures on our
customers;
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changes
in trade, monetary, tax and fiscal policies and
laws;
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the
final geographic distribution of future earnings and the effect of
currency exchange fluctuations and impact of dollar/foreign currency
exchange and interest rates on the competitiveness of products, our debt
program and our cash flow;
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the
strength of the United States and global
economies;
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the
impact of events that cause or may cause disruption in our distribution
and sales networks, such as war, terrorist activities, political unrest,
and recessionary or expansive trends in world
economies;
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inability
to mitigate cost increases generated by, for example, continued increases
in the cost of energy or significant Chinese Renminbi or other currency
appreciation; and
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failure
to recruit and train new employees.
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There can
be no assurance that other factors not currently anticipated by us will not
materially and adversely affect our business, financial condition, and results
of operations. You are cautioned not to place undue reliance on any
forward-looking statements made by us or on our behalf. Please take into account
that forward-looking statements speak only as of the date of this prospectus or,
in the case of any accompanying prospectus supplement or documents incorporated
by reference in this prospectus, the date of any such document. We do not
undertake any obligation to publicly correct or update any forward looking
statement if we later become aware that it is not likely to be achieved. You are
advised, however, to consult any further disclosures we make on related subjects
in reports to the SEC.
The
Stanley Works was founded in 1843 by Frederick T. Stanley and incorporated in
1852. We are a diversified worldwide supplier of tools and engineered solutions
for professional, industrial and construction and do-it-yourself use, and
security solutions for commercial applications. Stanley® is a brand recognized
around the world for quality and value.
Our
principal executive office is located at 1000 Stanley Drive, New Britain,
Connecticut 06053, and our telephone number is (860) 225-5111. Our website is
located at www.stanleyworks.com. Information contained on our website is not a
part of this prospectus and any accompanying prospectus supplement.
Investing
in our securities involves risk. See the risk factors described in our Annual
Report on Form 10-K (together with any material changes thereto contained in
subsequent filed Quarterly Reports on Form 10-Q) and those contained in our
other filings with the SEC for our most recent fiscal year, which are
incorporated by reference in this prospectus and any accompanying prospectus
supplement. Before making an investment decision, you should carefully consider
these risks as well as other information we include or incorporate by reference
in this prospectus. These risks could materially affect our business, results of
operations or financial condition and cause the value of our securities to
decline. You could lose all or part of your investment.
Except as
otherwise set forth in the prospectus and any accompanying prospectus
supplement, we expect to use the net proceeds from the sale of securities for
general corporate purposes, including the financing of our operations, the
possible repayment of short-term indebtedness, and possible business
acquisitions. Pending any specific application, we may initially invest funds in
short-term marketable securities or apply them to the reduction of short-term
indebtedness.
The
following table sets forth our ratio of earnings to fixed charges for the
periods indicated:
| Six Months Ended |
Fiscal
Year Ended December
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| June 28
2008 |
2007
|
2006
|
2005
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2004
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2003
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Ratio
of Earnings to Fixed Charges (a)
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4.9x |
5.2x
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5.1x
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7.5x
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7.5x
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3.9x
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(a)
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The
ratio of earnings to fixed charges is calculated on a total enterprise
basis. For purposes of computing these ratios, earnings represents income
from continuing operations before income taxes and fixed charges. Fixed
charges are the sum of (i) interest expensed and capitalized, (ii)
amortized premiums, discounts and capitalized expenses related to
indebtedness, (iii) an estimate of the interest within rental expense, and
(iv) preference security dividend requirements of consolidated
subsidiaries. Preference security dividend is the amount of pre-tax
earnings that is required to pay the dividends on outstanding preference
securities. The dividend requirement must be computed as the amount of the
dividend divided by (1 minus the effective income tax rate applicable to
continuing operations). Earnings is the amount resulting from adding and
subtracting the following items. Add the following: (a) Pre-tax income
from continuing operations before adjustment for minority interests in
consolidated subsidiaries or income or loss from equity investees, (b)
fixed charges, (c) amortization of capitalized interest, (d) distributed
income of equity investees, and (e) our share of pre-tax losses of equity
investees for which charges arising from guarantees are included in fixed
charges. From the total of the added items, subtract the following: (a)
interest capitalized, (b) preference security dividend requirements of
consolidated subsidiaries, and (c) the minority interest in pre-tax income
of subsidiaries that have not incurred fixed charges. Equity investees are
investments that you account for using the equity method of accounting.
The ratios are based solely on historical financial
information.
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This
prospectus contains summary descriptions of the debt securities, common stock,
preferred stock, warrants, depositary shares, stock purchase contracts and stock
purchase units that we may offer and sell from time to time. These summary
descriptions are not meant to be complete descriptions of each security.
However, at the time of an offering and sale, this prospectus together with the
accompanying prospectus supplement will contain the material terms of the
securities being offered.
As used
in this prospectus, debt securities means the debentures, notes, bonds and other
evidences of indebtedness that we may issue separately, upon exercise of a debt
warrant, in connection with a stock purchase contract or as part of a stock
purchase unit from time to time. The debt securities may either be senior debt
securities or subordinated debt securities. Senior debt securities may be issued
under a “Senior Indenture” and subordinated debt securities may be issued under
a “Subordinated Indenture.” This prospectus sometimes refers to the Senior
Indenture and the Subordinated Indenture collectively as the “Indentures.” The
Indentures have been filed with the SEC and are incorporated by reference in the
registration statement on Form S-3 of which this prospectus forms a part. We may
also issue debt securities under a separate, new indenture. If that occurs, we
will describe any differences in the terms of any series or issue of debt
securities in the prospectus supplement relating to that series or
issue.
The
following briefly summarizes the material provisions of the Indentures and the
debt securities, other than pricing and related terms disclosed in the
accompanying prospectus supplement or pricing supplement, as the case may be.
You should read the more detailed provisions of the applicable Indenture,
including the defined terms, for provisions that may be important to you. You
should also read the particular terms of an offering of debt securities, which
will be described in more detail in the applicable prospectus supplement or
pricing supplement, as the case may be. Copies of the Indentures may be obtained
from The Stanley Works or the applicable trustee.
As used
in this “Description of Debt Securities,” the terms “The Stanley Works,” “we,”
“our” and “us” refer to The Stanley Works, a Connecticut corporation, and do
not, unless otherwise specified, include our subsidiaries.
General
The debt
securities will be our direct unsecured obligations. The senior debt securities
will rank equally with all of our other senior unsecured and unsubordinated
debt. The subordinated debt securities will be subordinate and junior in right
of payment to all of our present and future senior indebtedness to the extent
and in the manner set forth in the Subordinated Indenture.
Since our
operations are partially conducted through our subsidiaries, the cash flow and
the consequent ability to service our indebtedness, including the debt
securities, is partially dependent upon the earnings of our subsidiaries and the
distribution of those earnings or upon the payments of funds by those
subsidiaries to us. Our subsidiaries are separate and distinct legal entities
and have no obligation, contingent or otherwise, to pay any amounts due pursuant
to the debt securities or to make funds available to us, whether by dividends,
loans or other payments. In addition, the payment of dividends and the making of
loans and advances to us by our subsidiaries may be subject to contractual or
statutory restrictions, are contingent upon the earnings of those subsidiaries
and are subject to various business considerations. Any right we may have to
receive assets of any of our subsidiaries upon their liquidation or
reorganization (and the consequent right of the holders of our debt securities
to participate in those assets) will be effectively subordinated to the claims
of such subsidiary’s creditors, including trade creditors.
The
Indentures do not limit the aggregate principal amount of debt securities that
we may issue and provide that we may issue debt securities from time to time in
one or more series, in each case with the same or various maturities, at par or
at a discount. We may issue additional debt securities of a particular series
without the consent of the holders of the debt securities of such series
outstanding at the time of the issuance. Any such additional debt securities,
together with all other outstanding debt securities of that series, will
constitute a single series of debt securities under the applicable Indenture.
The Indentures also do not limit our ability to incur other debt.
Each
prospectus supplement will summarize the material terms relating to the specific
series of debt securities being offered. These terms may include some or all of
the following:
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the
title of debt securities and whether they are subordinated debt securities
or senior debt securities;
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any
limit on the aggregate principal amount of the debt
securities;
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the
price or prices at which we will sell the debt
securities;
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the
maturity date or dates of the debt
securities;
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the
rate or rates of interest, if any, which may be fixed or variable, at
which the debt securities will bear interest, or the method of determining
such rate or rates, if any;
|
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the
date or dates from which any interest will accrue or the method by which
such date or dates will be
determined;
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the
right, if any, to extend the interest payment periods and the duration of
any such deferral period, including the maximum consecutive periods during
which interest payment periods may be
extended;
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whether
the amount of payments of principal of (and premium, if any) or interest
on the debt securities may be determined with reference to any index,
formula or other method, such as one or more currencies, commodities,
equity indices or other indices, and the manner of determining the amount
of such payments;
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the
dates on which we will pay interest on the debt securities and the regular
record date for determining who is entitled to the interest payable on any
interest payment date;
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the
place or places where the principal of (and premium, if any) and interest
on the debt securities will be
payable;
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if
we possess the option to do so, the periods within which and the prices at
which we may redeem the debt securities, in whole or in part, pursuant to
optional redemption provisions, and the other terms and conditions of any
such provisions;
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our
obligation, if any, to redeem, repay or purchase debt securities by making
periodic payments to a sinking fund or through an analogous provision or
at the option of holders of the debt securities, and the period or periods
within which and the price or prices at which we will redeem, repay or
purchase the debt securities, in whole or in part, pursuant to such
obligation, and the other terms and conditions of such
obligation;
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the
denominations in which the debt securities will be issued, if other than
denominations of $1,000 and integral multiples of
$1,000;
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the
portion, or methods of determining the portion, of the principal amount of
the debt securities which we must pay upon the acceleration of the
maturity of the debt securities in connection with an Event of Default (as
described below), if other than the full principal
amount;
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the
currency, currencies or currency unit in which we will pay the principal
of (and premium, if any) or interest, if any, on the debt securities, if
not United States dollars;
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provisions,
if any, granting special rights to holders of the debt securities upon the
occurrence of specified events;
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any
deletions from, modifications of or additions to the Events of Default or
our covenants with respect to the applicable series of debt securities,
and whether or not such Events of Default or covenants are consistent with
those contained in the applicable
Indenture;
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the
application, if any, of the terms of the Indenture relating to defeasance
and covenant defeasance (which terms are described below) to the debt
securities;
|
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whether
the subordination provisions summarized below or different subordination
provisions will apply to the debt
securities;
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the
terms, if any, upon which the holders may convert or exchange the debt
securities into or for our common stock, preferred stock or other
securities or property;
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whether
any of the debt securities will be issued in global form and, if so, the
terms and conditions upon which global debt securities may be exchanged
for certificated debt securities;
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any
change in the right of the trustee or the requisite holders of debt
securities to declare the principal amount thereof due and payable because
of an Event of Default;
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the
depositary for global or certificated debt
securities;
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any
special tax implications of the debt
securities;
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any
trustees, authenticating or paying agents, transfer agents or registrars
or other agents with respect to the debt securities;
and
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any
other terms of the debt securities.
|
Unless
otherwise specified in the applicable prospectus supplement, the debt securities
will not be listed on any securities exchange and will be issued in
fully-registered form without coupons.
Debt
securities may be sold at a substantial discount below their stated principal
amount, bearing no interest or interest at a rate which at the time of issuance
is below market rates. The applicable prospectus supplement will describe the
federal income tax consequences and special considerations applicable to any
such debt securities. The debt securities may also be issued as indexed
securities or securities denominated in foreign currencies, currency units or
composite currencies, as described in more detail in the prospectus supplement
relating to any of the particular debt securities. The prospectus supplement
relating to specific debt securities will also describe any special
considerations and certain additional tax considerations applicable to such debt
securities.
Subordination
The
prospectus supplement relating to any offering of subordinated debt securities
will describe the specific subordination provisions, including the extent of
subordination of payments by us of the principal of, premium, if any, and
interest on such subordinated debt securities.
The
Subordinated Indenture does not limit the issuance of additional Senior
Indebtedness.
Certain
Covenants
Except as
set forth below or in any indenture supplemental to the Indentures or in a board
resolution of ours establishing a series of securities under the Indentures, the
Indentures will not:
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limit
the amount of indebtedness or lease obligations that may be incurred by us
and our subsidiaries; or
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contain
provisions which would give holders of the notes the right to require us
to repurchase their notes in the event of a decline in the credit rating
of our debt securities resulting from a change in control,
recapitalization or similar restructuring or in the case of any other
event.
|
Limitation
on Liens
The
Senior Indenture provides that if we or any Restricted Subsidiary (as described
below) shall issue, assume or guarantee any evidence of indebtedness for money
borrowed (“Indebtedness”) secured by a mortgage, security interest, pledge or
lien (“Mortgage”) on any Principal Property (as described below), or shares of
stock or Indebtedness of any Restricted Subsidiary, we will secure or cause such
Restricted Subsidiary to secure any debt securities issued under the Senior
Indenture (the “Senior Securities”) equally and ratably with such secured
Indebtedness, unless the aggregate amount of all such secured Indebtedness,
together with all Attributable Debt (as described below) outstanding pursuant to
the first paragraph of the “Limitation on Sale and Lease-back Transactions”
covenant described below, would not exceed 10% of Consolidated Net Worth. The
Subordinated Indenture does not contain a similar limitation on
liens.
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 us or a Restricted Subsidiary (including
acquisition through merger or consolidation), (c) Mortgages securing
Indebtedness of a Restricted Subsidiary to us 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 ours
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.
Limitation
on Sale and Lease-back Transactions
The
Senior Indenture provides that neither we nor any Restricted Subsidiary may
enter into any sale and lease-back transaction involving any Principal Property
unless the aggregate amount of all Attributable Debt with respect to such
transactions, together with all Indebtedness outstanding pursuant to the first
paragraph of the “Limitation on Liens” covenant described above, would not
exceed 10% of Consolidated Net Worth (as described below).
Such
limitation will not apply to any sale and lease-back 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 instrumentality or agency thereof, (d) the
transaction is between us and a Restricted Subsidiary or between Restricted
Subsidiaries, (e) we or such Restricted Subsidiary would be entitled as
described in “Limitation on Liens,” above, to mortgage such Principal Property
without equally and ratably securing the Senior Securities, or (f) we or such
Restricted Subsidiary, within 180 days after the effective date of the
transaction, apply to the retirement of Senior Securities or other Indebtedness
of ours 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 Senior 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.
Consolidation,
Merger and Sale of Assets
We may
consolidate or merge with or into any other corporation, and we may sell or
transfer all or substantially all of our 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 debt securities issued under either the Senior
Indenture or the Subordinated Indenture and the performance and observance of
the Indenture and (b) we or such successor corporation shall not immediately
thereafter be in default under the Indenture.
Definition
of Certain Terms
“Restricted
Subsidiary” means a Subsidiary (as described below) (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 us 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 us or a Restricted
Subsidiary, exclusive 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, includable 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 Worth or which
our board of directors determines is not material to the operation of our
business and our Subsidiaries taken as a whole.
“Consolidated
Net Worth” means the excess over current liabilities of all assets properly
appearing on our consolidated balance sheet after deducting 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 us or by
one or more Subsidiaries of ours or by us and one or more
Subsidiaries.
“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.
Events
of Default
The
following events are defined in the Indentures as “Events of
Default”:
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default
in the payment of any installment of interest on any debt securities in
such series for 30 days after becoming
due;
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default
in the payment of principal or premium, if any, of any debt securities in
such series when due;
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default
in the performance of any other covenant for 90 days after
notice;
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involuntary
acceleration of the maturity of our indebtedness in excess of $10 million
for money borrowed which acceleration shall not be rescinded or annulled
or otherwise cured, or which indebtedness shall not be discharged, within
10 days after notice;
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entry
of certain court orders which would require us to make payments exceeding
$25 million and where 60 days have passed since the entry of the order
without it having been satisfied or
stayed;
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certain
events of bankruptcy, insolvency or reorganization;
and
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any
other Event of Default that may be set forth in the supplemental indenture
or board resolution with respect to a particular series of debt
securities.
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If an
Event of Default shall occur and be continuing with respect to a series of debt
securities, either the trustee or the holders of at least 25% in principal
amount of the outstanding debt securities (or such lesser amount as may be
provided for in the debt securities of such series) of such series may declare
the entire principal amount of all the debt securities of such series to be due
and payable.
The
Indentures provide that the trustee shall, within 90 days after the occurrence
of default with respect to a particular series of debt securities, give the
holders of the debt 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 or
premium, if any, or interest, if any, on any of the debt 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 debt securities of such series.
We are
required to furnish the trustee annually a statement by certain of our officers
to the effect that to the best of their knowledge we are not in default in the
fulfillment of any of our obligations under the Indentures or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default. No holder of any debt securities of any particular series shall have
any right to institute any judicial or other proceeding with respect to the
Indentures, or for the appointment of a receiver or trustee, or for any other
remedy unless:
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an
Event of Default shall have occurred and be continuing and such holder
shall have given the trustee prior written notice of such continuing Event
of Default;
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the
holders of not less than 25% of the outstanding principal amount of debt
securities of a particular series shall have requested the trustee for
such series to institute proceedings in respect of such Event of
Default;
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the
trustee shall have been offered reasonable indemnity against its costs,
expenses and liabilities in complying with such
request;
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the
trustee shall have failed to institute proceedings 60 days after the
receipt of such notice, request and offer of indemnity;
and
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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 debt securities of such
series.
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The
holders of a majority in principal amount of a particular series of debt
securities outstanding will 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 to the trustee, and to waive certain defaults. The
Indentures provide that in case an Event of Default shall occur and be
continuing, the trustee shall exercise such of its rights and powers under the
Indentures, 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. Subject to such provisions, the trustee will be under no obligation
to exercise any of its rights or powers under the Indentures at the request of
any of the holders of debt securities of a particular series unless they shall
have offered to the trustee security or indemnity reasonably satisfactory to the
trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request.
Discharge,
Defeasance and Covenant Defeasance
If
indicated in the applicable prospectus supplement, we may discharge or defease
our obligations under each Indenture as set forth below.
We may
discharge certain obligations to holders of any series of debt securities issued
under either the Senior Indenture or the Subordinated Indenture which have not
already been delivered to the trustee for cancellation and which have either
become due and payable or are by their terms due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
trustee funds or government obligations denominated in U.S. dollars or in the
foreign currency in which debt securities of such series are payable in an
amount sufficient to pay the entire indebtedness on debt securities of such
series with respect to principal (and premium and additional amounts, if any)
and interest to the date of such deposit (if debt securities of such series have
become due and payable) or to the maturity thereof or the date of redemption of
debt securities of such series, as the case may be.
If
indicated in the applicable prospectus supplement, we may elect either (i) to
defease and be discharged from any and all obligations with respect to the debt
securities of or within any series (except for, among other things, the
obligation to pay additional amounts, if any, upon the occurrence of certain
events of taxation, assessment or governmental charge with respect to payments
on debt securities of such series and other obligations to register the transfer
or exchange of debt securities of such series, to replace temporary or
mutilated, destroyed, lost or stolen debt securities, to maintain an office or
agency with respect to the debt securities and to hold moneys for payment in
trust) (“defeasance”) or (ii) to be released from our obligations with respect
to certain covenants applicable to the debt securities of or within any series
of debt securities and any omission to comply with such obligations shall not
constitute an Event of Default with respect to such series of debt securities
(“covenant defeasance”), upon the deposit with the relevant Indenture trustee,
in trust for such purpose, of money and/or government obligations which through
the payment of principal and interest in accordance with their terms will
provide money in an amount sufficient, without reinvestment, to pay the
principal of (and premium, if any) or interest on such debt securities to
maturity. As a condition to defeasance or covenant defeasance, we must deliver
to the trustee an opinion of counsel to the effect that the holders of such debt
securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance 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 defeasance or covenant
defeasance had not occurred. Such opinion of counsel, in the case of defeasance
under clause (i) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax law occurring after
the date of the relevant Indenture. In addition, in the case of either
defeasance or covenant defeasance, we must deliver to the trustee (i) an opinion
of counsel stating that the money and government obligations or other property
deposited with the trustee to be held in trust will not be subject to any case
or proceeding under any Federal or State bankruptcy, insolvency, reorganization
or other similar law, or any decree or order for relief, and (ii) an officers’
certificate and an opinion of counsel, each stating that all conditions
precedent with respect to such defeasance or covenant defeasance have been
complied with.
We may
exercise our defeasance option with respect to such debt securities
notwithstanding our prior exercise of our covenant defeasance
option.
Modification
and Waiver
Modification
and amendments of the indenture may be made by us and the trustee with the
consent of the holders of not less than a majority in aggregate principal amount
of the outstanding debt securities of each series affected thereby; provided,
however, that no such modification or amendment may, without the consent of the
holder of each outstanding debt security affected thereby:
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change
the stated maturity of the principal of, or any premium or installment of
interest on, or any additional amounts with respect to, debt securities of
any series,
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reduce
the principal amount of, or the rate (or modify the calculation of such
rate) of interest on, or any additional amounts with respect to, or any
premium payable upon the redemption of, debt securities of any
series,
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change
our obligation to pay additional amounts with respect to debt securities
of any series or reduce the amount of the principal of an original issue
discount debt securities that would be due and payable upon a declaration
of acceleration of the maturity thereof or the amount thereof provable in
bankruptcy,
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change
the redemption provisions of debt securities of any series or adversely
affect the right of repayment at the option of any holder of debt
securities of any series,
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change
the place of payment or the coin or currency in which the principal of,
any premium or interest on or any additional amounts with respect to debt
securities of any series is
payable,
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impair
the right to institute suit for the enforcement of any payment on or after
the stated maturity of debt securities of any
series,
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reduce
the percentage in principal amount of an outstanding series of debt
securities, the consent of whose holders is required in order to take
certain actions,
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reduce
the requirements for quorum or voting by holders of a particular series of
debt securities in Section 15.4 of the
Indentures,
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modify
any of the provisions in the Indentures regarding the waiver of past
defaults and the waiver of certain covenants by the holders of a
particular series of debt securities except to increase any percentage
vote required or to provide that certain other provisions of the
Indentures cannot be modified or waived without the consent of the holder
of each debt security of such series affected
thereby,
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make
any change that adversely affects the right to convert or exchange any
series of debt security into or for our common stock or other securities
in accordance with its terms, or
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modify
any of the above provisions.
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The
holders of at least a majority in aggregate principal amount of the debt
securities of any series may, on behalf of the holders of all debt securities of
such series, waive our compliance with certain restrictive provisions of the
applicable Indenture. The holders of not less than a majority in aggregate
principal amount of the outstanding debt securities of any series may, on behalf
of the holders of all debt securities of such series, waive any past default and
its consequences under the Indenture with respect to the debt securities of such
series, except a default:
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in
the payment of principal of (or premium, if any), any interest on or any
additional amounts with respect to debt securities of such series;
or
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in
respect of a covenant or provision of the indenture that cannot be
modified or amended without the consent of the holder of each debt
security of any series.
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Under the
Indentures, we are required to furnish the trustee annually a statement as to
performance by us of certain of our obligations under the Indentures and as to
any default in such performance. We are also required to deliver to the trustee,
within five days after occurrence thereof, written notice of any Event of
Default or any event which after notice or lapse of time or both would
constitute an Event of Default.
Payment
and Paying Agents
Unless
otherwise indicated in the applicable prospectus supplement, payment of interest
on a debt security on any interest payment date will be made to the person in
whose name a debt security is registered at the close of business on the record
date for the interest.
Unless
otherwise indicated in the applicable prospectus supplement, principal, interest
and premium on the debt securities of a particular series will be payable at the
office of such paying agent or paying agents as we may designate for such
purpose from time to time. Notwithstanding the foregoing, at our option, payment
of any interest may be made by check mailed to the address of the person
entitled thereto as such address appears in the security register.
Unless
otherwise indicated in the applicable prospectus supplement, a paying agent
designated by us and located in the Borough of Manhattan, The City of New York
will act as paying agent for payments with respect to debt securities of each
series. All paying agents initially designated by us for the debt securities of
a particular series will be named in the applicable prospectus supplement. We
may at any time designate additional paying agents or rescind the designation of
any paying agent or approve a change in the office through which any paying
agent acts, except that we will be required to maintain a paying agent in each
place of payment for the debt securities of a particular series.
All
moneys paid by us to a paying agent for the payment of the principal, interest
or premium on any debt security which remain unclaimed at the end of two years
after such principal, interest or premium has become due and payable will be
repaid to us upon request, and the holder of such debt security thereafter may
look only to us for payment thereof.
Denominations,
Registrations and Transfer
Unless an
accompanying prospectus supplement states otherwise, debt securities will be
represented by one or more global certificates registered in the name of a
nominee for The Depository Trust Company, or DTC. In such case, each holder’s
beneficial interest in the global securities will be shown on the records of DTC
and transfers of beneficial interests will only be effected through DTC’s
records.
A holder
of debt securities may only exchange a beneficial interest in a global security
for certificated securities registered in the holder’s name if:
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DTC
notifies us that it is unwilling or unable to continue serving as the
depositary for the relevant global securities or DTC ceases to maintain
certain qualifications under the Exchange Act and no successor depositary
has been appointed for 90 days; or
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We
determine, in our sole discretion, that the global security shall be
exchangeable.
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If debt
securities are issued in certificated form, they will only be issued in the
minimum denomination specified in the accompanying prospectus supplement and
integral multiples of such denomination. Transfers and exchanges of such debt
securities will only be permitted in such minimum denomination. Transfers of
debt securities in certificated form may be registered at the trustee’s
corporate office or at the offices of any paying agent or trustee appointed by
us under the Indentures. Exchanges of debt securities for an equal aggregate
principal amount of debt securities in different denominations may also be made
at such locations.
Governing
Law
The
Indentures are and debt securities will be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
its principles of conflicts of laws (other than Section 5-1401 of the General
Obligations Law of the State of New York).
Regarding
the Trustee
The
Senior Indenture Trustee is The Bank of New York Mellon Trust Company, N.A., as
successor trustee to JP Morgan Chase Bank N.A., and the Subordinated Indenture
Trustee is HSBC Bank USA, National Association. The Trustees are permitted to
engage in other transactions with us and our subsidiaries from time to time,
provided that if the trustees acquire any conflicting interest they must
eliminate such conflict upon the occurrence of an Event of Default, or else
resign.
Conversion
or Exchange Rights
The
prospectus supplement will describe the terms, if any, on which a series of debt
securities may be convertible into or exchangeable for our common stock,
preferred stock or other debt securities. These terms will include provisions as
to whether conversion or exchange is mandatory, at the option of the holder or
at our option. These provisions may allow or require the number of shares of our
common stock or other securities to be received by the holders of such series of
debt securities to be adjusted.
General
The
following summary description of our capital stock is based on the provisions of
the Connecticut Business Corporation Act, or CBCA, our restated certificate of
incorporation, as amended, and our bylaws, as amended. This description does not
purport to be complete and is qualified in its entirety by reference to the full
text of the CBCA, and to the terms of the restated certificate of incorporation
and bylaws which are included as exhibits to the registration statement of which
this prospectus is a part. See “Where You Can Find More Information.” As used in
this “Description of Capital Stock,” the terms “The Stanley Works,” “we,” “our”
and “us” refer to The Stanley Works, a Connecticut corporation, and do not,
unless otherwise specified, include the subsidiaries of this Connecticut
corporation.
Our
authorized capital stock consists of 200,000,000 shares of common stock, par
value $2.50 per share, and 10,000,000 shares of preferred stock, without par
value. The number of authorized shares of any class may be increased or
decreased by an amendment to our restated certificate of incorporation proposed
by our board of directors and approved by a majority of voting shares voted on
the issue at a meeting at which a quorum exists.
Common
Stock
Each
shareholder of record of our common stock is entitled to one vote for each share
held on every matter properly submitted to the shareholders for their vote.
Holders of our common stock do not have cumulative voting rights. After
satisfaction of the dividend rights of holders of preferred stock, holders of
common stock are entitled ratably to any dividend declared by the board of
directors out of funds legally available for this purpose.
Upon our
liquidation, dissolution or winding up, the holders of our common stock are
entitled to receive ratably our net assets available, if any, after the payment
of all debts and other liabilities and subject to the prior rights of any
outstanding preferred stock.
Holders
of our common stock have no redemption or conversion rights, no sinking fund
provisions and no preemptive right to subscribe for or purchase additional
shares of any class of our capital stock.
The
outstanding shares of our common stock are fully paid and nonassessable, and any
shares of common stock issued in an offering pursuant to this prospectus and any
shares of common stock issuable upon the exercise of common stock warrants or
conversion or exchange of debt securities which are convertible into or
exchangeable for our common stock, or in connection with the obligations of a
holder of stock purchase contracts to purchase our common stock, when issued in
accordance with their terms will be fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of
preferred stock that we may designate and issue in the future.
Preferred
Stock
This
section describes the general terms and provisions of preferred stock that we
are authorized to issue. The applicable prospectus supplement will describe the
specific terms of the shares of preferred stock offered through that prospectus
supplement, as well as any general terms described in this section that will not
apply to those shares of preferred stock. We will file a copy of the certificate
of amendment to our certificate of incorporation that contains the terms of each
new series of preferred stock with the Secretary of the State of Connecticut and
with the SEC each time we issue a new series of preferred stock. Each such
certificate of amendment will establish the number of shares included in a
designated series and fix the designation, powers, privileges, preferences and
rights of the shares of each series as well as any applicable qualifications,
limitations or restrictions. You should refer to the applicable certificate of
amendment as well as our certificate of incorporation before deciding to buy
shares of our preferred stock as described in the applicable prospectus
supplement.
Our board
of directors has been authorized to provide for the issuance of up to 10,000,000
shares of our preferred stock in multiple series without the approval of
shareholders. With respect to each series of our preferred stock, our board of
directors has the authority to fix the following terms:
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the
designation of the series;
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the
number of shares within the series;
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whether
dividends are cumulative and, if cumulative, the dates from which
dividends are cumulative;
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the
rate of any dividends, any conditions upon which dividends are payable,
and the dates of payment of
dividends;
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whether
the shares are redeemable, the redemption price and the terms of
redemption;
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the
amount payable to you for each share you own if we dissolve or
liquidate;
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whether
the shares are convertible or exchangeable, the price or rate of
conversion or exchange, and the applicable terms and
conditions;
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any
restrictions on issuance of shares in the same series or any other
series;
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voting
rights applicable to the series of preferred stock;
and
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any
other rights, priorities, preferences, restrictions or limitations of such
series.
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Your
rights with respect to your shares of preferred stock will be subordinate to the
rights of our general creditors. Shares of our preferred stock that we issue in
accordance with their terms will be fully paid and nonassessable, and will not
be entitled to preemptive rights unless specified in the applicable prospectus
supplement.
Our
ability to issue preferred stock, or rights to purchase such shares, could
discourage an unsolicited acquisition proposal. For example, we could impede a
business combination by issuing a series of preferred stock containing class
voting rights that would enable the holders of such preferred stock to block a
business combination transaction. Alternatively, we could facilitate a business
combination transaction by issuing a series of preferred stock having sufficient
voting rights to provide a required percentage vote of the shareholders.
Additionally, under certain circumstances, our issuance of preferred stock could
adversely affect the voting power of the holders of our common stock. Although
our board of directors is required to make any determination to issue any
preferred stock based on its judgment as to the best interests of our
shareholders, our board of directors could act in a manner that would discourage
an acquisition attempt or other transaction that some, or a majority, of our
shareholders might believe to be in their best interests or in which
shareholders might receive a premium for their stock over prevailing market
prices of such stock. Our board of directors does not at present intend to seek
shareholder approval prior to any issuance of currently authorized stock, unless
otherwise required by law or applicable stock exchange
requirements.
Anti-Takeover
Effects of Provisions of the Certificate of Incorporation, Bylaws and Other
Agreements
The
rights of our shareholders and related matters are governed by the CBCA, the
certificate of incorporation, the bylaws and the Rights Agreement, dated January
19, 2006, which is referred to herein as the Rights Agreement. Provisions of the
CBCA, the certificate of incorporation, the bylaws and the Rights Agreement,
which are summarized below, may discourage or make more difficult a takeover
attempt that shareholders might consider in their best interest. These
provisions may also adversely affect prevailing market prices for our common
stock.
Board
of Directors
The
certificate of incorporation provides that the board of directors will be
classified with approximately one-third elected each year. The number of
directors will be fixed by the board of directors from time to time. The
directors elected by the holders of common stock are divided into three classes,
designated class I, class II and class III. Each class consists, as nearly as
may be possible, of one-third of the total number of such directors. At each
annual meeting of shareholders, successors to the class of directors whose term
expires at that annual meeting will be elected for a three-year term. In
addition, if the number of directors is changed, any increase or decrease will
be apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional director of any class
elected to fill a vacancy resulting from an increase in such class will hold
office for a term that will coincide with the remaining term of that class, but
in no case will a decrease in the number of directors shorten the term of any
incumbent director. Any vacancy on the board of directors may be filled by the
shareholders or by the board of directors, whether such vacancy occurs as a
result of an increase in the number of directors or otherwise. The certificate
of incorporation also provides that directors elected by the holders of common
stock may be removed only for cause by the affirmative vote of at least a
majority of the votes entitled to be cast thereon.
Shareholder
Action by Written Consent; Special Meetings
Under the
CBCA our shareholders may take action by written unanimous consent of holders of
all of our shares in lieu of an annual or special meeting. Otherwise,
shareholders will only be able to take action at an annual or special meeting
called in accordance with the bylaws.
The
bylaws provide that special meetings of shareholders may only be called
by:
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the
chairman of the board,
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the
president,
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the
secretary, or
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the
chairman of the board, the president or the secretary upon the written
request of the holders of not less than thirty-five percent (35%) of our
outstanding voting stock.
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In
addition, the CBCA provides that a corporation with a class of voting stock
registered under the Exchange Act shall hold a special meeting of shareholders
if the holders of thirty-five percent (35%) of the votes entitled to be cast on
any issue proposed to be considered demand such a meeting.
Advance
Notice Requirements for Director Nominations and Other Proposals
Director Nominations. The
bylaws contain advance notice procedures with regard to shareholder proposals
related to the nomination of candidates for election as directors. These
procedures provide that notice of shareholder proposals related to shareholder
nominations for the election of directors must be received at our executive
offices at least 90 days, but no more than 120 days before the first anniversary
of the date on which the proxy statement for the preceding annual meeting was
mailed; provided, however, that in the event the annual meeting is not within 30
days before or after such anniversary date, notice by the shareholder must be
received not later than the close of business 10 days after the day on which
notice of the date of the annual meeting was mailed or public disclosure of the
date of the annual meeting was made, whichever occurs first. Our bylaws require
that all directors be shareholders of record.
A
shareholder’s notice to our corporate secretary must be in proper written form
and must set forth certain information including:
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the
name, and record addresses of the nominating shareholder, and any other
person on whose behalf the nomination is being made, and the
nominee;
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the
class or series and number of shares of our capital stock which are
beneficially or of record owned by the nominating shareholder or such
other person;
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a
description of all arrangements or understandings between the nominating
shareholder or such other person and any nominee(s) in connection with the
nomination;
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any
other information relating to the nominee that would be required to be
disclosed in a proxy statement or other solicitations of proxies for
election of directors or as otherwise required to be disclosed pursuant to
the Exchange Act had the nominee been nominated by the board of
directors;
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a
consent of the nominee to be named in the proxy statement and to serve if
elected; and
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a
representation that the nominating shareholder intends to appear in person
or by proxy at the meeting to make such
nomination.
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Other Proposals. In addition
to the procedures for nominating directors, the bylaws also contain notice
procedures for other shareholder proposals to be brought before an annual
meeting. To be timely, we must receive shareholder proposals at least 90 days,
but no more than 120 days before the first anniversary of the date on which the
proxy statement for the preceding annual meeting was mailed; provided, however,
that in the event the annual meeting is not within 30 days before or after such
anniversary date, notice by the shareholder must be received not later than the
close of business 10 days after the day on which notice of the date of the
annual meeting was mailed or public disclosure of the date of the annual meeting
was made, whichever occurs first.
A
shareholder’s notice to our corporate secretary must be in proper written form
and must set forth, as to each matter that shareholder proposes to bring before
the meeting:
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a
brief description of the business desired to be brought before the meeting
and the reasons for conducting that business at the
meeting;
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the
complete text of any resolutions to be
presented;
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the
name and record address of that shareholder and any other person on whose
behalf the proposal is made;
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the
class and series and number of shares of each class and series of our
capital stock which are owned beneficially or of record by that
shareholder;
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a
description of all arrangements or understandings between that shareholder
and any such other person in connection with the proposal of that business
and any material interest of that shareholder or such other person in that
business; and
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a
representation that the shareholder intends to appear in person or by
proxy at the meeting to bring that business before the
meeting.
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Rights
Agreement
On
January 19, 2006, our board of directors declared a dividend distribution of one
right for each share of our common stock outstanding on the close of business on
March 10, 2006 and authorized the issuance of one right (as such number may be
adjusted from time to time in accordance with the terms of the Rights Agreement)
per share of our common stock issued between March 10, 2006 and the Distribution
Date. Each outstanding share of common stock currently has one half of a share
purchase right. Each purchase right may be exercised to purchase one
two-hundredth of a share of Series A Junior Participating Preferred Stock at an
exercise price of $220.00, subject to adjustment. The rights, which do not have
voting rights, expire on March 10, 2016, and may be redeemed by us at a price of
$0.01 per right at any time prior to the earlier of the rights’ expiration date
or the close of business on the tenth day following the public announcement that
a person has acquired beneficial ownership of 15% or more of the outstanding
shares of common stock.
In the
event that we are acquired in a merger or other business combination
transaction, provision shall be made so that each holder of a right (other than
a holder who is a 10%-or-more shareowner) shall have the right to receive, upon
exercise thereof, that number of shares of common stock of the surviving company
having a market value equal to two times the exercise price of the right.
Similarly, if anyone becomes the beneficial owner of more than 10% of the then
outstanding shares of common stock (except pursuant to an offer for all
outstanding shares of common stock which the independent directors have deemed
to be fair and in our best interest), provision will be made so that each holder
of a right (other than a holder who is a 10%-or-more shareowner) shall
thereafter have the right to receive, upon exercise thereof, common stock (or,
in certain circumstances, cash, property or our other securities) having a
market value equal to two times the exercise price of the right.
Antitakeover
Legislation
We are
subject to the provisions of Section 33-844 of the CBCA which prohibits a
Connecticut corporation from engaging in a “business combination” with an
“interested shareholder” for a period of five years after the date of the
transaction in which the person became an interested shareholder, unless the
business combination or the purchase of stock by which such person becomes an
interested shareholder is approved by our board of directors, and by a majority
of our non-employee directors, prior to the date on which the person becomes an
interested shareholder. A “business combination” generally includes mergers,
asset sales, some types of stock issuances and other transactions with, or
resulting in a disproportionate financial benefit to, the interested
shareholder. Subject to exceptions, an “interested shareholder” is a person who
owns 10% or more of our voting power, or is an affiliate or associate of The
Stanley Works and owned 10% or more of our voting power within the past five
years.
Under our
certificate of incorporation, the affirmative vote by the holders of 80% of our
outstanding voting stock is required for the approval or authorization of any
business combination involving an interested shareholder. This voting
requirement does not apply if:
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2/3
of our disinterested directors expressly approve the proposed business
combination; or
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The
following conditions are satisfied:
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The
cash and fair market value of other consideration received on a per share
basis by each shareholder is no less than the highest share price (or the
equivalent value) paid by the interested shareholder in acquiring our
capital stock; and
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A
proxy statement is mailed to all shareholders of the corporation for the
purpose of soliciting shareholder approval of the business
combination.
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This 80%
vote is required even if no vote or a lesser percentage is required by any
applicable laws. Additionally, the affirmative vote of the holders of not less
than 80% of our outstanding shares of capital stock is required to modify this
section of our certificate of incorporation.
Notwithstanding
the 80% vote required by our certificate of incorporation, we are also subject
to Section 33-841 and Section 33-842 of the CBCA. These provisions generally
require business combinations with an interested shareholder to be approved by
the board of directors and then by the affirmative vote of at
least:
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the
holders of 80% of the voting power of the outstanding shares of our voting
stock; and
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the
holders of 2/3 of the voting power of the outstanding shares of our voting
stock, excluding the voting stock held by the interested
shareholder;
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unless
the consideration to be received by the shareholders meets certain price and
other requirements set forth in Section 33-842 of the CBCA or unless the board
of directors of the corporation has by resolution determined to exempt business
combinations with that interested shareholder prior to the time that such
shareholder became an interested shareholder.
We are
also subject to Section 33-756(d) of the CBCA, generally requiring directors
acting with respect to mergers, sales of assets and other specified transactions
to consider, in determining what they reasonably believe to be in the best
interests of the corporation, specified interests, including those of the
corporation’s employees, customers, creditors and suppliers and any community in
which any office or other facility of the corporation is located.
Limitation
of Liability of Directors
The
certificate of incorporation contains provisions permitted under the CBCA
relating to the personal liability of directors. The provisions limit the
personal liability to us or our shareholders of a director for monetary damages
for breach of duty as a director to an amount that is not more than the
compensation received by that director for serving us during the year of the
violation. Our bylaws provide for the indemnification and reimbursement of, and
advances of expenses to, any person that is made a party to an action by reason
of the fact that he or she:
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is
or was our director, officer, employee or agent,
or
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served
at our request as a director, officer, employee or agent of another
corporation.
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Our
bylaws provide for indemnification of directors and officers to the fullest
extent permitted by Connecticut law.
Listing.
Our
common stock is listed on the New York Stock Exchange under the symbol
“SWK.”
Transfer
Agent and Registrar.
The
transfer agent and registrar for our common stock is Computershare Investor
Services, LLC.
This
section describes the general terms and provisions of our warrants to acquire
our securities that we may issue from time to time. The applicable prospectus
supplement will describe the terms of any warrant agreements and the warrants
issuable thereunder. If any particular terms of the warrants described in the
prospectus supplement differ from any of the terms described herein, then the
terms described herein will be deemed superseded by that prospectus
supplement.
We may
issue warrants for the purchase of our debt securities, common stock, preferred
stock, depositary shares or securities of third parties or other rights,
including rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies, securities or
indices, or any combination of the foregoing. We may issue warrants
independently or together with other securities, and they may be attached to or
separate from the other securities. Each series of warrants will be issued under
a separate warrant agreement that we will enter into with a bank or trust
company, as warrant agent, as detailed in the applicable prospectus supplement.
The warrant agent will act solely as our agent in connection with the warrants
and will not assume any obligation, or agency or trust relationship, with you.
We will file a copy of the warrant and warrant agreement with the SEC each time
we issue a series of warrants, and these warrants and warrant agreements will be
incorporated by reference into the registration statement of which this
prospectus is a part. A holder of our warrants should refer to the provisions of
the applicable warrant agreement and prospectus supplement for more specific
information.
The
prospectus supplement relating to a particular issue of warrants will describe
the terms of those warrants, including, when applicable:
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the
offering price;
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the
currency or currencies, including composite currencies, in which the price
of the warrants may be payable;
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the
number of warrants offered;
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the
securities underlying the warrants, including the securities of third
parties or other rights, if any, to receive payment in cash or securities
based on the value, rate or price of one or more specified commodities,
currencies, securities or indices, or any combination of the foregoing,
purchasable upon exercise of the
warrants;
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the
exercise price and the amount of securities you will receive upon
exercise;
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the
procedure for exercise of the warrants and the circumstances, if any, that
will cause the warrants to be automatically
exercised;
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the
rights, if any, we have to redeem the
warrants;
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the
date on which the right to exercise the warrants will commence and the
date on which the warrants will
expire;
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the
designation and terms of the securities with which the warrants are issued
and the number of warrants issued with each such
security;
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the
date on and after which the warrants and the related securities will be
separately transferable;
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U.S.
federal income tax consequences;
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the
name of the warrant agent; and
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any
other material terms of the
warrants.
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After
your warrants expire they will become void. All warrants will be issued in
registered form. The prospectus supplement may provide for the adjustment of the
exercise price of the warrants.
Warrants
may be exercised at the appropriate office of the warrant agent or any other
office indicated in the applicable prospectus supplement. Before the exercise of
warrants, holders will not have any of the rights of holders of the securities
purchasable upon exercise and will not be entitled to payments made to holders
of those securities.
The
applicable warrant agreement may be amended or supplemented without the consent
of the holders of the warrants to which it applies to effect changes that are
not inconsistent with the provisions of the warrants and that do not materially
and adversely affect the interests of the holders of the warrants. However, any
amendment that materially and adversely alters the rights of the holders of
warrants will not be effective unless the holders of at least a majority of the
applicable warrants then outstanding approve the amendment. Every holder of an
outstanding warrant at the time any amendment becomes effective, by continuing
to hold the warrant, will be bound by the applicable warrant agreement as
amended. The prospectus supplement applicable to a particular series of warrants
may provide that certain provisions of the warrants, including the securities
for which they may be exercisable, the exercise price and the expiration date,
may not be altered without the consent of the holder of each
warrant.
General
We may
offer fractional shares of preferred stock, rather than full shares of preferred
stock. If we do so, we may issue receipts for depositary shares that each
represent a fraction of a share of a particular series of preferred stock. The
prospectus supplement will indicate that fraction. The shares of preferred stock
represented by depositary shares will be deposited under a depositary agreement
between us and a bank or trust company that meets certain requirements and is
selected by us (the “Bank Depositary”). Each owner of a depositary share will be
entitled to all the rights and preferences of the preferred stock represented by
the depositary share. The depositary shares will be evidenced by depositary
receipts issued pursuant to the depositary agreement. Depositary receipts will
be distributed to those persons purchasing the fractional shares of preferred
stock in accordance with the terms of the offering.
We have
summarized some common provisions of a depositary agreement and the related
depositary receipts. The forms of the depositary agreement and the depositary
receipts relating to any particular issue of depositary shares will be filed
with the SEC each time we issue depositary shares, and you should read those
documents for provisions that may be important to you. If any particular terms
of the depositary agreements and the related depositary receipts described in
the prospectus supplement differ from any of the terms described herein, then
the terms described herein will be deemed superseded by that prospectus
supplement.
Dividends
and Other Distributions
If we pay
a cash distribution or dividend on a series of preferred stock represented by
depositary shares, the Bank Depositary will distribute such dividends to the
record holders of such depositary shares. If the distributions are in property
other than cash, the Bank Depositary will distribute the property to the record
holders of the depositary shares. However, if the Bank Depositary determines
that it is not feasible to make the distribution of property, the Bank
Depositary may, with our approval, sell such property and distribute the net
proceeds from such sale to the record holders of the depositary
shares.
Redemption
of Depositary Shares
If we
redeem a series of preferred stock represented by depositary shares, the Bank
Depositary will redeem the depositary shares from the proceeds received by the
Bank Depositary in connection with the redemption. The redemption price per
depositary share will equal the applicable fraction of the redemption price per
share of the preferred stock. If fewer than all the depositary shares are
redeemed, the depositary shares to be redeemed will be selected by lot or pro
rata as the Bank Depositary may determine.
Voting
the Preferred Stock
Upon
receipt of notice of any meeting at which the holders of the preferred stock
represented by depositary shares are entitled to vote, the Bank Depositary will
mail the notice to the record holders of the depositary shares relating to such
preferred stock. Each record holder of these depositary shares on the record
date, which will be the same date as the record date for the preferred stock,
may instruct the Bank Depositary as to how to vote the preferred stock
represented by such holder’s depositary shares. The Bank Depositary will
endeavor, insofar as practicable, to vote the amount of the preferred stock
represented by such depositary shares in accordance with such instructions, and
we will take all action that the Bank Depositary deems necessary in order to
enable the Bank Depositary to do so. The Bank Depositary will abstain from
voting shares of the preferred stock to the extent it does not receive specific
instructions from the holders of depositary shares representing such preferred
stock.
Amendment
and Termination of the Depositary Agreement
The form
of depositary receipt evidencing the depositary shares and any provision of the
depositary agreement may be amended by agreement between the Bank Depositary and
us. However, any amendment that materially and adversely alters the rights of
the holders of depositary shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the depositary shares
then outstanding. The depositary agreement may be terminated by the Bank
Depositary or us only if (1) all outstanding depositary shares have been
redeemed or (2) there has been a final distribution in respect of the preferred
stock in connection with any liquidation, dissolution or winding up of our
company and such distribution has been distributed to the holders of depositary
receipts.
Charges
of Bank Depositary
We will
pay all transfer and other taxes and governmental charges arising solely from
the existence of the depositary arrangements. We will pay charges of the Bank
Depositary in connection with the initial deposit of the preferred stock and any
redemption of the preferred stock. Holders of depositary receipts will pay other
transfer and other taxes and governmental charges and any other charges,
including a fee for the withdrawal of shares of preferred stock upon surrender
of depositary receipts, as are expressly provided in the depositary agreement to
be for their accounts.
Withdrawal
of Preferred Stock
Except as
may be provided otherwise in the applicable prospectus supplement, upon
surrender of depositary receipts at the principal office of the Bank Depositary,
subject to the terms of the depositary agreement, the owner of the depositary
shares may demand delivery of the number of whole shares of preferred stock and
all money and other property, if any, represented by those depositary shares.
Partial shares of preferred stock will not be issued. If the depositary receipts
delivered by the holder evidence a number of depositary shares in excess of the
number of depositary shares representing the number of whole shares of preferred
stock to be withdrawn, the Bank Depositary will deliver to such holder at the
same time a new depositary receipt evidencing the excess number of depositary
shares. Holders of preferred stock thus withdrawn may not thereafter deposit
those shares under the depositary agreement or receive depositary receipts
evidencing depositary shares therefor.
Miscellaneous
The Bank
Depositary will forward to holders of depositary receipts all reports and
communications from us that are delivered to the Bank Depositary and that we are
required to furnish to the holders of the preferred stock.
Neither
the Bank Depositary nor we will be liable if we are prevented or delayed by law
or any circumstance beyond our control in performing our obligations under the
depositary agreement. The obligations of the Bank Depositary and us under the
depositary agreement will be limited to performance in good faith of our duties
thereunder, and we will not be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares or preferred stock unless
satisfactory indemnity is furnished. We may rely upon written advice of counsel
or accountants, or upon information provided by persons presenting preferred
stock for deposit, holders of depositary receipts or other persons believed to
be competent and on documents believed to be genuine.
Resignation
and Removal of Bank Depositary
The Bank
Depositary may resign at any time by delivering to us notice of its election to
do so, and we may at any time remove the Bank Depositary. Any such resignation
or removal will take effect upon the appointment of a successor Bank Depositary
and its acceptance of such appointment. The successor Bank Depositary must be
appointed within 60 days after delivery of the notice of resignation or removal
and must be a bank or trust company meeting the requirements of the depositary
agreement.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS
AND
STOCK PURCHASE UNITS
We may
issue stock purchase contracts, including contracts obligating holders to
purchase from or sell to us, and obligating us to sell to or purchase from the
holders, a specified number of shares of common stock or other securities at a
future date or dates, which we refer to in this prospectus as stock purchase
contracts. The price per share of the securities and the number of shares of the
securities may be fixed at the time the stock purchase contracts are issued or
may be determined by reference to a specific formula set forth in the stock
purchase contracts, and may be subject to adjustment under anti-dilution
formulas. The stock purchase contracts may be issued separately or as part of
units consisting of a stock purchase contract and debt securities, preferred
securities or debt obligations of third parties, including U.S. treasury
securities, any other securities described in the applicable prospectus
supplement or any combination of the foregoing, securing the holders’
obligations to purchase the securities under the stock purchase contracts, which
we refer to herein as stock purchase units. The stock purchase contracts may
require holders to secure their obligations under the stock purchase contracts
in a specified manner. The stock purchase contracts also may require us to make
periodic payments to the holders of the stock purchase contracts or the stock
purchase units, as the case may be, or vice versa, and those payments may be
unsecured or pre-funded on some basis.
The
applicable prospectus supplement will describe the terms of the stock purchase
contracts or stock purchase units. This description is not complete and the
description in the prospectus supplement will not necessarily be complete, and
reference is made to the stock purchase contracts, and, if applicable,
collateral or depositary arrangements relating to the stock purchase contracts
or stock purchase units, which will be filed with the SEC each time we issue
stock purchase contracts or stock purchase units. If any particular terms of the
stock purchase contracts or stock purchase units described in the prospectus
supplement differ from any of the terms described herein, then the terms
described herein will be deemed superseded by that prospectus supplement.
Material United States federal income tax considerations applicable to the stock
purchase units and the stock purchase contracts will also be discussed in the
applicable prospectus supplement.
We may
sell the securities being offered hereby in one or more of the following ways
from time to time:
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to
underwriters for resale to
purchasers;
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directly
to purchasers; or
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through
agents or dealers to purchasers.
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In
addition, The Stanley Works may enter into derivative or hedging transactions
with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. In connection with such a
transaction, the third parties may sell securities covered by and pursuant to
this prospectus and an applicable prospectus supplement. If so, the third party
may use securities borrowed from us or others to settle such sales and may use
securities received from us to close out any related short positions. We may
also loan or pledge securities covered by this prospectus and an applicable
prospectus supplement to third parties, who may sell the loaned securities or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus
supplement.
We will
identify the specific plan of distribution, including any underwriters, dealers,
agents or direct purchasers and their compensation in a prospectus
supplement.
Unless
otherwise indicated in the applicable prospectus supplement, certain legal
matters will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York and Bruce H. Beatt, our general counsel. If the validity
of any securities is also passed upon by counsel for the underwriters of an
offering of those securities, that counsel will be named in the prospectus
supplement relating to that offering. Mr. Beatt beneficially owns and has rights
to acquire less than one percent of our common stock.
The
consolidated financial statements and schedule of The Stanley Works and
subsidiaries for the year ended December 29, 2007 appearing in The Stanley
Works’ Current Report (Form 8-K) dated September 22, 2008, have been audited by
Ernst & Young LLP, independent registered public accounting firm, as set
forth in their report thereon appearing in The Stanley Works’ Current Report on
Form 8-K dated September 22, 2008 and the effectiveness of The Stanley Works and
subsidiaries’ internal control over financial reporting as of December 29, 2007
has been audited by Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon appearing in The Stanley
Works’ 2007 Annual Report on Form 10-K. Both reports are incorporated herein by
reference. Such consolidated financial statements and schedule are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in account and auditing.
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