Filer: The Stanley Works Ltd.
Pursuant to Rule 425 under
the Securities Act of 1933
and Rule 14a-6 under Securities Exchange Act of 1934
Subject Company: The Stanley Works
Commission File No.: 1-5224
Registration Statement No.: 333-82382
SLIDE 1
Tonight's Objectives
o To help with tax planning
o To set the record straight
SLIDE 2
Proposed Bermuda
Re-incorporation Transaction
o Change in legal domicile ...
from Connecticut to Bermuda
o Conversion of all shares ... from SWK to SWK Ltd.
o No accounting / operating impacts
o Ownership & voting rights substantially unchanged
o Corporate HQ location, business operations,
customer / supplier relationships, etc.
All remain unchanged
Why Do This?
SLIDE 3
Compelling Long-Term Benefits
o Alignment of corporate structure with increasing
international operations
o Facilitate expansion of international business
o Sustained higher levels of free cash flow generation
... flexibility to fund enhancers of shareowner value
o Potential for higher debt capacity & better ratings ...
generate one year's free cash flow every 5 years
o Improvement of worldwide effective tax rate
Provides Much of the Flexibility Needed
to Grow Internationally
SLIDE 4
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
SLIDE 5
Shareowners Pay Taxes Through Corporation
& Individually as Wealth is Created
____________________________
| U.S. Government |
|____________________________|
^ ^
/ \
/ \
/ \
/ \
___________________ __________________
| Corporate | | Individual |
|___________________| |__________________|
^ ^
| |
______|________________________________________|__________
| Shareowners |
|__________________________________________________________|
SLIDE 6
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
o Stanley is more and more a global company
SLIDE 7
Stanley is More & More a Global Company
o 28% of our Sales are outside the U.S.
o 30% of our Assets are outside the U.S.
o 40% of our Plants are outside the U.S.
o 48% of our People are outside the U.S.
SLIDE 8
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
o Stanley is more and more a global company
o Today, Stanley is disadvantaged against some of our foreign
competitors who pay less taxes ... even in the U.S.
- The transaction levels the playing field
SLIDE 9
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
o Stanley is more and more a global company
o Today, Stanley is disadvantaged against some of our foreign
competitors who pay less taxes ... even in the U.S.
- The transaction levels the playing field
o The U.S. Government will benefit near term from the reincorporation!
SLIDE 10
U.S. Government Will Benefit
Near Term From the Reincorporation
____________________________
| U.S. Government |
|____________________________|
^ ^
/ \
/ \
/ \
/ \
___________________ __________________
| Corporate | | Individual |
|___________________| |__________________|
^ ^
| |
______|________________________________________|__________
| Shareowners |
|__________________________________________________________|
SLIDE 11
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
o Stanley is more and more a global company
o Today, Stanley is disadvantaged against some of our foreign
competitors who pay less taxes ... even in the U.S.
- The transaction levels the playing field
o The U.S. Government will benefit near term from the reincorporation!
o Our long-term objective is for Stanley, collectively, to pay
more -- not less - taxes ... everyone shares in a bigger pie
SLIDE 12
Our Objective is to Pay More Taxes Long Term
... Not Less !
$
/ \
/ \
/ \
80% / \ 20%
/ \
/ \
X X
___________________ __________________
| Shareowners | | U.S. Government |
|___________________| |__________________|
SLIDE 13
Performance vs. Peers
1 Yr. 3 Yrs. 5 Yrs.
----- ------ ------
#2 #1 #2
SLIDE 14
Stock Value
____________________________
| $2.4B New Wealth |
|____________________________|
|
|
|
|
|
|
$ Billions | ____________
| | |
| | |
| ____________ | |
| | | | $4.00 |
| | | | Billion |
| | | | |
| | $1.60 | | |
| | Billion | | |
| | | | |
|________|____________|_____________|____________|______________
Oct. 2000 Apr-02
SLIDE 15
$2.4B
/ \
/ \
/ \
80% / \ 20%
/ \
/ \
X X
___________________ __________________
| Shareowners | | U.S. Government |
|___________________| |__________________|
$1920M $480M
SLIDE 16
Glass Half Empty
______________________
| I expected to pay the |
| tax later ! |
|_______________________|
/
/
GRAPHIC OMITTED
GRAPIC OMITTED
SLIDE 17
Glass Half Full
______________________
| Stanley has been a |
| great investment! |
|_______________________|
/
/
GRAPHIC OMITTED
GRAPIC OMITTED
SLIDE 18
Facts to Consider When Voting
o Corporation is really a creation by and for shareowners
- Those shareowners pay taxes when wealth is created
o Stanley is more and more a global company
o Today, Stanley is disadvantaged against some of our foreign
competitors who pay less taxes ... even in the U.S.
- The transaction levels the playing field
o The U.S. Government will benefit near term from the reincorporation!
o Our long-term objective is for Stanley, collectively, to pay
more -- not less - taxes ... everyone shares in a bigger pie
The Reincorporation is Being Undertaken to
Increase our Share Price to Benefit Shareowners
SLIDE 19
More Facts
o SWK Headquarters WILL NOT move
o Employment WILL NOT be affected
o 401(k) and IRA holdings WILL NOT be taxed
o SWK WILL continue to pay U.S. taxes
o SWK WILL continue on the New York Stock Exchange
o SWK WILL continue to be an S&P 500 company
SLIDE 20
Don't be Confused by the
Media Hype
... This Change Will Benefit
All of Us