As filed with the Securities and Exchange Commission on November 5, 2003.
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________
THE STANLEY WORKS
(Exact name of Registrant as specified in its charter)
CONNECTICUT 06-0548860
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
____________
1000 STANLEY DRIVE
NEW BRITAIN, CONNECTICUT 06053
(860) 225-5111
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
__________
BRUCE H. BEATT, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE STANLEY WORKS
1000 STANLEY DRIVE
NEW BRITAIN, CONNECTICUT 06053
TELEPHONE: (860) 225-5111
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copy to:
GREGORY A. FERNICOLA, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036-6522
(212) 735-3000
________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE
DATE OF THIS REGISTRATION STATEMENT AS DETERMINED BY THE
REGISTRANT
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |x|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
____________________
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING PRICE REGISTRATION
UNIT (1) (2) (2) (3) FEE
--------------------------------------------------------------------------------------------------------------------
Debt Securities (4) __ __ __ __
--------------------------------------------------------------------------------------------------------------------
Preferred Stock (4) __ __ __ __
--------------------------------------------------------------------------------------------------------------------
Common Stock (4) __ __ __ __
--------------------------------------------------------------------------------------------------------------------
Depositary Shares (4)
--------------------------------------------------------------------------------------------------------------------
Warrants (5)
--------------------------------------------------------------------------------------------------------------------
Stock Purchase Contracts (6) __ __ __ __
--------------------------------------------------------------------------------------------------------------------
Stock Purchase Units (7) __ __ __ __
--------------------------------------------------------------------------------------------------------------------
TOTAL (8) $900,000,000 100% $900,000,000 $72,810
--------------------------------------------------------------------------------------------------------------------
(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the sale of the securities
registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The
aggregate public offering price of all securities registered hereby will
not exceed $900,000,000 or the equivalent thereof on the date of issuance
in one or more foreign currencies, foreign currency units or composite
currencies. Such amount represents the issue price rather than the
principal amount of any debt securities issued at an original issue
discount.
(3) Exclusive of accrued interest and dividends, if any.
(4) There is being registered hereunder an indeterminate number of shares of
common stock, $2.50 par value per share, preferred stock without par
value, and depositary shares and an indeterminate principal amount of
debt securities (each, an "offered security") as may, from time to time,
be (a) issued or sold at indeterminate prices or (b) issued upon
conversion of, or exchange for, any securities being registered hereunder
that provide for conversion into, or exchange for, an offered security.
Includes offered securities that may be purchased by underwriters to
cover over-allotments, if any.
(5) There is being registered hereunder an indeterminate amount of warrants
(as may, from time to time, be issued or sold at indeterminate prices)
representing rights to purchase certain of the debt securities, common
stock, preferred stock, or depositary shares registered hereunder 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. Includes warrants that may be purchased by
underwriters to cover over-allotments, if any.
(6) There is being registered hereunder an indeterminate amount of stock
purchase contracts (as may, from time to time, be issued or sold at
indeterminate prices) obligating holders to purchase from or sell to us,
and
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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.
Includes stock purchase contracts that may be purchased by underwriters
to cover over-allotments, if any.
(7) There is being registered hereunder an indeterminate amount of stock
purchase units (as may, from time to time, be issued or sold at
indeterminate prices) 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 holders' obligations to purchase our common
stock or other securities under the stock purchase contracts. Includes
stock purchase units that may be purchased by underwriters to cover
over-allotments, if any.
(8) As described in note (2) above, the aggregate public offering price of
all securities issued from time to time pursuant to this registration
statement will not exceed $900,000,000 or the equivalent thereof in one
or more foreign currencies, foreign currency units or composite
currencies.
____________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED NOVEMBER 5, 2003
PROSPECTUS
$900,000,000
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:
o shares of our common stock;
o shares of our preferred stock;
o debt securities, which may be senior debt securities
or subordinated debt securities;
o 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;
o depositary shares representing an interest in our
preferred stock;
o stock purchase contracts to purchase shares of our
common stock; and
o 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 terms of these securities in one or more
supplements to this prospectus. 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.
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 , 2003
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TABLE OF CONTENTS
Page
About this Prospectus....................................................2
Where You Can Find More Information......................................3
Special Note Regarding Forward-looking Statements........................5
The Stanley Works........................................................7
Use of Proceeds..........................................................8
Ratio of Earnings to Fixed Charges.......................................8
Description of Securities................................................9
Description of Debt Securities...........................................9
Description of Capital Stock............................................23
Description of Warrants.................................................29
Description of Depositary Shares........................................32
Description of Stock Purchase Contracts and Stock Purchase Units........35
Plan of Distribution....................................................36
Legal Matters...........................................................39
Experts.................................................................39
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that
we filed with the Securities and Exchange Commission using a shelf registration
process. Under this shelf process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $900,000,000 or the equivalent denominated in foreign
currencies. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. This prospectus does not contain all of the information included
in the registration statement. For a more complete understanding of the
offering of the securities, you should refer to the registration statement,
including its exhibits. The prospectus supplement may also add to, update or
change information contained in this prospectus, and may also contain
information about any material federal income tax considerations relating to
the securities covered by the prospectus supplement. You should read both this
prospectus and any prospectus supplement together with additional information
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.
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Securities Exchange Act of 1934. You
may read and copy all or any portion of this information at the SEC's principal
office in Washington, D.C. , and copies of all or any part thereof may be
obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices located at 175 W.
Jackson Blvd., Suite 900, Chicago, Illinois 60604 and at 233 Broadway, New
York, New York 10279, after payment of fees prescribed by the SEC. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
rooms. The SEC also maintains a web site that contains reports, proxy
statements and other information about issuers, like The Stanley Works, who
file electronically with the SEC. The address of that site is www.sec.gov.
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.
This prospectus is part of the registration statement and does not
contain all of the information included in the registration statement. Whenever
a reference is made in this prospectus to any contract or other document of The
Stanley Works, the reference may not be complete and you should refer to the
exhibits that are a part of the registration statement for a copy of the
contract or document.
The SEC allows us to "incorporate by reference" information into this
prospectus, 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,
except for any information superseded by information contained directly in this
prospectus. This prospectus incorporates by reference the documents set forth
below that The Stanley Works has previously filed with the SEC. These documents
contain important information about The Stanley Works and its finances.
o Our annual report on Form 10-K for the fiscal year ended December 28,
2002;
o Our quarterly report on Form 10-Q for the quarter ended March 29,
2003;
o Our quarterly report on Form 10-Q for the quarter ended June 28, 2003,
as amended by Form 10-Q/A thereto;
o Our current reports on Form 8-K filed January 17, 2003, January 24,
2003, April 9, 2003, April 29, 2003, May 8, 2003, May 21, 2003; July
22, 2003 and October 22, 2003;
o The Definitive Proxy Statement of The Stanley Works filed with the
Commission on April 3, 2003; and
o The description of our common stock contained in our registration
statement on Form 8-A (SEC file No. 001-5224), filed with the SEC on
October 29, 1985, 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 Securities Exchange Act of 1934 after the date of this prospectus
and before the termination of the offering shall also be deemed to be
incorporated herein by reference. In addition, all documents filed by us
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of the initial registration statement and prior to the effectiveness of
the registration statement shall be deemed to be incorporated herein by
reference. Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in
this prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference in this prospectus modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
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
EXHIBITS TO THE FILINGS WILL NOT BE SENT, HOWEVER, UNLESS THOSE EXHIBITS
HAVE SPECIFICALLY BEEN INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS.
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SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This document and the documents incorporated by reference in this
document may include "forward looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. All statements,
other than statements of historical facts, that address activities, events or
developments that we intend, expect, project, believe or anticipate will or may
occur in the future are forward looking statements. Those statements are
characterized by terminology such as "believe," "anticipate," "should,"
"intend," "plan," "will," "expects," "estimates," "projects," "positioned,"
"strategy" and similar expressions. These statements are based on assumptions
and assessments made by our management in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes to be appropriate, and are not
guarantees of future performance.
We have identified factors that could cause actual plans or results to
differ materially from those included in any forward-looking statements. These
factors include, but are not limited to:
o failure to realize expected benefits of our acquisition on November
25, 2002 of Best Lock Corporation or other recent acquisitions;
o inability to maintain current production rates in our manufacturing
facilities;
o failure of marketing and/or sales efforts;
o inability of the sales force to adapt to changes made in the sales
organization and achieve adequate customer coverage;
o inability to fulfill demand for new and existing products;
o failure of acceptance of new products;
o failure to successfully integrate recently acquired businesses with
existing businesses and the failure to achieve the sales plans for
such businesses;
o increasing competition, and changes in trade, monetary and fiscal
policies and laws, inflation, currency exchange fluctuations and the
impact of dollar/foreign currency exchange rates and interest rates on
our competitiveness or the competitiveness of our products;
o pricing pressure and other changes within competitive markets and the
ability to defend market share;
o continued consolidation of customers in consumer channels and
inventory pressures on and from such customers;
o outcomes of pending and future litigation;
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o events that cause or may cause disruption in distribution and sales
networks such as port closures or labor shortages, war, political
unrest and recessionary or expansive trends in world economies;
o future labor disputes;
o inability to continue improvements in productivity and cost reductions
including inventory reductions, payment terms and reducing selling,
general and administrative expenses as a percentage of sales;
o the strength of the United States economy and the strength of foreign
currencies, including without limitation, the Euro;
o inability to continue to successfully close certain facilities and
reduce workforce;
o failure to increase the efficiency of routine business processes;
o failure to mitigate the effects of any material cost inflation;
o availability of vendors to perform outsourced functions;
o failure to recruit and train new employees;
o failure of recruiting programs and other efforts to maintain or expand
overall Mac Tools truck count;
o the failure of our efforts to restructure our Mac Tools organization
in order to return it to profitability, including, without limitation,
our ability to liquidate certain Mac Tools' retail channel assets at a
satisfactory price;
o the failure of our efforts to decentralize our operations functions,
primarily into our Tools and Access Solutions business groups;
o inability to identify and engage a successor CEO on a timely basis;
and
o failure to satisfy the contingencies necesssary to implement the terms
of a contract entered into during the third quarter of 2003 in the
Tools segment that will involve the acquisition of assets, as well as
marketing, sourcing and manufacturing cooperation.
Actual results may differ materially from those expressed or implied
by forward-looking statements. Please take into account that forward-looking
statements speak only as of the date of this prospectus or, in the case of
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.
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THE STANLEY WORKS
We were founded in 1843 by Frederick T. Stanley and incorporated in
1852. We are a worldwide producer of tools and door products for professional,
industrial and consumer use. Stanley(R) 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 operations are classified into two business segments: Tools and
Doors. The Tools segment manufactures and markets carpenters, mechanics,
pneumatic and hydraulic tools as well as tool sets. These products are
distributed directly to retailers (including home centers, mass merchants and
retail lumber yards) and end users as well as through third party distributors.
Carpenters tools include hand tools such as measuring instruments, planes,
hammers, knives and blades, screwdrivers, saws, garden tools, chisels, boring
tools, masonry, tile and drywall tools, as well as electronic stud sensors,
levels, alignment tools and elevation measuring systems.
The Doors segment manufactures and markets commercial and residential
doors, both automatic and manual, as well as closet doors and systems, home
decor, door and consumer hardware and commercial mechanical access hardware and
electronic access controls. Products in the Doors segment include residential
insulated steel, reinforced fiberglass and wood entrance door systems, vinyl
patio doors, mirrored closet doors and closet organizing systems, automatic
doors as well as related door hardware products ranging from hinges, hasps,
bolts and latches to shelf brackets and mechanical and electronic lock sets and
access controls.
We believe that we are one of the largest manufacturers of hand tools
in the world featuring a broader line than any other toolmaker. We also believe
that we are a leader in the manufacture and sale of pneumatic fastening tools
and related fasteners to the construction, furniture and pallet industries as
well as a leading manufacturer of hydraulic tools used for construction,
railroads, utilities and public works. In the Doors segment, we believe that we
are a United States leader in the manufacture and sale of insulated steel
residential entrance doors, commercial hardware products, mirrored closet doors
and hardware for sliding, folding and pocket doors and the United States leader
in the manufacture, sale and installation of automatic sliding and swing
powered doors.
7
USE OF PROCEEDS
Except as otherwise set forth in the 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.
If required, we will include a more detailed description of the use of
proceeds from any specific offering of securities in the prospectus supplement
relating to that offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges
for the periods indicated:
NINE FISCAL YEAR ENDED
MONTHS
ENDED
SEPTEMBER 27, December 28, December 29, December 30, January 1, January 2,
------------ ----------- ------------ ----------- ---------- ----------
2003 2002 2001 2000 2000 1999
------------ ----------- ------------ ----------- ---------- ----------
Ratio of Earnings to Fixed Charges (a) 4.39x 7.70x 6.27x 6.89x 5.88x 5.71x
____________________
(a) The ratio of earnings to fixed charges is calculated on a total enterprise basis. Earnings represent earnings
before income taxes and fixed charges. Fixed charges represent interest incurred plus that portion of rental
expense deemed to be interest. The ratios are based solely on historical financial information.
8
DESCRIPTION OF SECURITIES
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 sell from time to time. These
summary descriptions are not meant to be complete descriptions of each
security. However, this prospectus and the accompanying prospectus supplement
contain the material terms of the securities being offered.
DESCRIPTION OF DEBT SECURITIES
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 will
either be senior debt securities or subordinated debt securities. Senior debt
securities will be issued under a "Senior Indenture" and subordinated debt
securities will be issued under a "Subordinated Indenture." This prospectus
sometimes refers to the Senior Indenture and the Subordinated Indenture
collectively as the "Indentures." The trustee under the Indentures is JPMorgan
Chase Bank.
The forms of Indentures are filed as exhibits to the registration
statement. The statements and descriptions in this prospectus or in any
prospectus supplement regarding provisions of the Indentures and debt
securities are summaries thereof, do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the provisions
of the Indentures and the debt securities, including the definitions therein of
certain terms.
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 the subsidiaries
of this Connecticut corporation.
GENERAL
The debt securities will be our direct unsecured obligations. The
senior debt securities will rank equally with all of our other senior 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 notes, 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 notes 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
9
(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 describe the terms relating to the
specific series of debt securities being offered. These terms will include some
or all of the following:
o the title of debt securities and whether they are subordinated debt
securities or senior debt securities;
o any limit on the aggregate principal amount of the debt securities;
o the price or prices at which we will sell the debt securities;
o the maturity date or dates of the debt securities;
o 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;
o the date or dates from which any interest will accrue or the method by
which such date or dates will be determined;
o the right, if any, to extend the interest payment periods and the
duration of any such deferral period, including the maximum
consecutive period during which interest payment periods may be
extended;
o 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;
o 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;
o the place or places where the principal of (and premium, if any) and
interest on the debt securities will be payable;
10
o 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;
o 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;
o the denominations in which the debt securities will be issued, if
other than denominations of $1,000 and integral multiples of $1,000;
o 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;
o 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;
o provisions, if any, granting special rights to holders of the debt
securities upon the occurrence of specified events;
o 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;
o 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;
o whether the subordination provisions summarized below or different
subordination provisions will apply to the debt securities;
o 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;
o 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;
o 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;
o the depositary for global or certificated debt securities;
o any special tax implications of the debt securities;
11
o any trustees, authenticating or paying agents, transfer agents or
registrars or other agents with respect to the debt securities; and
o 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.
Unless otherwise specified in the applicable prospectus supplement,
debt securities 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. However,
unless otherwise noted in the prospectus supplement, subordinated debt
securities will be subordinate and junior in right of payment to all of our
Senior Indebtedness, to the extent and in the manner set forth in the
Subordinated Indenture.
Under the Subordinated Indenture, "Senior Indebtedness" means all of
our obligations in respect of any of the following, whether outstanding at the
date of execution of the Subordinated Indenture or thereafter incurred or
created:
o the principal of (and premium, if any) and interest due on our
indebtedness for borrowed money;
o all obligations guaranteed by us for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments;
o all obligations guaranteed by us evidenced by bonds, debentures, notes
or similar written instruments, including obligations assumed or
incurred in connection with the acquisition of property, assets or
businesses (provided, however, that the deferred purchase price of any
other business or property or assets shall not be considered
indebtedness if the purchase price thereof is payable in full within
90 days from the date on which such obligation was created);
o any obligations of ours as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally
accepted accounting principles;
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o all of our obligations for the reimbursement on any letter of credit,
banker's acceptance, security purchase facility or similar credit
transaction;
o all of our obligations in respect of interest rate swap, cap or other
agreements, interest rate future or options contracts, currency swap
agreements, currency future or option contracts and other similar
agreements;
o all obligations of the types referred to above of other persons for
the payment of which we are responsible or liable as obligor,
guarantor or otherwise; and
o all obligations of the types referred to above of other persons
secured by any lien on any of our property or assets (whether or not
such obligation is assumed by us).
Senior Indebtedness does not include:
o indebtedness or monetary obligations to trade creditors created or
assumed by us in the ordinary course of business in connection with
the obtaining of materials or services;
o indebtedness that is by its terms subordinated to or ranks equal with
the subordinated debt securities; and
o any of our indebtedness to our affiliates unless otherwise expressly
provided in the terms of any such indebtedness.
Senior Indebtedness shall continue to be Senior Indebtedness and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
Unless otherwise noted in the accompanying prospectus supplement, if
we default in the payment of any principal of (or premium, if any) or interest
on any Senior Indebtedness when it becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise, then, unless
and until such default is cured or waived or ceases to exist, we will make no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) in respect of the principal of, or premium, if any, or interest on
the subordinated debt securities or in respect of any redemption, retirement,
purchase or other requisition of any of the subordinated debt securities.
In the event of the acceleration of the maturity of any subordinated
debt securities, the holders of all senior debt securities outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due on the senior debt securities before the holders of the
subordinated debt securities will be entitled to receive any payment of
principal (and premium, if any) or interest on the subordinated debt
securities.
If any of the following events occurs, we will pay in full all Senior
Indebtedness before we make any payment or distribution under the subordinated
debt securities, whether in cash, securities or other property (other than
securities of The Stanley Works or any other corporation provided for by a plan
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of reorganization or readjustment the payment of which is subordinate, at the
least to the extent provided pursuant to these subordination provisions, to the
payment of all senior indebtedness then outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), to any holder of subordinated debt securities:
o any dissolution or winding-up or liquidation or reorganization of
ours, whether voluntary or involuntary or in bankruptcy, insolvency or
receivership;
o any general assignment by us for the benefit of creditors; or
o any other marshaling of our assets or liabilities.
In such event, any payment or distribution under the subordinated debt
securities, whether in cash, securities or other property, which would
otherwise (but for the subordination provisions) be payable or deliverable in
respect of the subordinated debt securities, will be paid or delivered directly
to the holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness has been paid in
full. If any payment or distribution under the subordinated debt securities is
received by the trustee of any subordinated debt securities in contravention of
any of the terms of the Subordinated Indenture and before all the Senior
Indebtedness has been paid in full, such payment or distribution or security
will be received in trust for the benefit of, and paid over or delivered and
transferred to, the holders of the Senior Indebtedness at the time outstanding
in accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full.
By reason of this subordination, in the event of insolvency, our
creditors who are holders of Senior Indebtedness, as well as certain of our
general creditors, may recover more, ratably, than the holders of the
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:
o limit the amount of indebtedness or lease obligations that may be
incurred by us and our subsidiaries; or
o 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.
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LIMITATION ON LIENS
The Senior Indenture will provide that if we or any Restricted
Subsidiary 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, 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 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 will provide 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.
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
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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 (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
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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":
o default in the payment of any installment of interest on any debt
securities in such series for 30 days after becoming due;
o default in the payment of principal or premium, if any, of any debt
securities in such series when due;
o default in the performance of any other covenant for 90 days after
notice;
o 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;
o 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;
o certain events of bankruptcy, insolvency or reorganization; and
o 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.
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 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 will 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
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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:
o 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;
o 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;
o the trustee shall have been offered reasonable indemnity against its
costs, expenses and liabilities in complying with such request;
o the trustee shall have failed to institute proceedings 60 days after
the receipt of such notice, request and offer of indemnity; and
o 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.
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 will 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.
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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 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
19
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:
o 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,
o 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,
o 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 security that would be due and payable
upon a declaration of acceleration of the maturity thereof or the
amount thereof provable in bankruptcy,
o 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,
o 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,
o impair the right to institute suit for the enforcement of any payment
on or after the stated maturity of debt securities of any series,
o 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,
o reduce the requirements for quorum or voting by holders of a
particular series of debt securities in Section 15.4 of the
Indentures,
o 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,
o 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
o modify any of the above provisions.
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
20
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:
o 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
o 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.
Under the Indentures, we will be 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
21
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:
o 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 Securities Exchange Act of
1934 and no successor depositary has been appointed for 90 days; or
o We determine, in our sole discretion, that the global security shall
be exchangeable.
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.
REGARDING THE TRUSTEE
The trustee under the Indentures is JPMorgan Chase Bank. The trustee
is permitted to engage in other transactions with us and our subsidiaries from
time to time, provided that if the trustee acquires any conflicting interest it
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.
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DESCRIPTION OF CAPITAL STOCK
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 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. As of October 31, 2003, we had 81,053,776 shares of our
common stock outstanding and no shares of preferred stock outstanding. 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.
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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:
o the designation of the series;
o the number of shares within the series;
o whether dividends are cumulative and, if cumulative, the dates from
which dividends are cumulative;
o the rate of any dividends, any conditions upon which dividends are
payable, and the dates of payment of dividends;
o whether the shares are redeemable, the redemption price and the terms
of redemption;
o the amount payable to you for each share you own if we dissolve or
liquidate;
o whether the shares are convertible or exchangeable, the price or rate
of conversion or exchange, and the applicable terms and conditions;
o any restrictions on issuance of shares in the same series or any other
series;
o voting rights applicable to the series of preferred stock; and
o any other rights, priorities, preferences, restrictions or limitations
of such series.
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
24
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 3, 1996, which is referred to herein as the 1996 Rights
Agreement. Provisions of the CBCA, the certificate of incorporation, the bylaws
and the 1996 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 from time to time by a majority of the total number
of directors which we would have at the time such number is fixed if there were
no vacancies. 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
25
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:
o the chairman of the board,
o the president,
o the secretary, or
o 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.
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 by our corporate secretary, in the case of an annual meeting, not
less than 30 days prior to the election meeting. 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 some information relating to each person whom
the shareholder proposes to nominate for election as a director:
o the name, age, business and residence addresses, and the principal
occupation or employment of the person;
o the number of shares of our capital stock which are beneficially owned
by the person; and
o any other information relating to the person that would be required to
be disclosed in a proxy statement or other filings required to be made
in connection with solicitations of proxies for election of directors
pursuant to the Exchange Act.
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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 60 days, but no more than 90 days, prior to the
anniversary date of the immediately preceding annual meeting of shareholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within 30 days before or after that anniversary date, notice
by the shareholder in order to be timely must be received not later than the
close of business on the tenth day following 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:
o a brief description of the business desired to be brought before the
meeting and the reasons for conducting that business at the meeting;
o the name and record address of that shareholder;
o 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;
o a description of all arrangements or understandings between that
shareholder and any other person in connection with the proposal of
that business and any material interest of that shareholder in that
business; and
o a representation that the shareholder intends to appear in person or
by proxy at the meeting to bring that business before the meeting.
1996 RIGHTS AGREEMENT
On January 31, 1996, the 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, 1996. Each right represents the right to
purchase one two-hundredths of a share of preferred stock upon the terms and
subject to the conditions set forth in the 1996 Rights Agreement. In the event
a person becomes a beneficial owner of ten percent (10%) or more, subject to
exceptions, of the shares of our common stock then outstanding and if certain
prescribed mergers, consolidations, asset sales, or other similar transactions
occur, then the operation of shareholder rights pursuant to the 1996 Rights
Agreement could result in the possible dilution of a potential acquiror's
interest in us. Consequently, the provisions of the 1996 Rights Agreement could
discourage unsolicited takeover bids of our company by third parties.
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
27
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 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:
o 2/3 of our disinterested directors expressly approve the proposed
business combination; or
o The following conditions are satisfied:
o 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
o A proxy statement is mailed to all shareholders of the
corporation for the purpose of soliciting shareholder
approval of the business combination.
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:
o the holders of 80% of the voting power of the outstanding shares of
our voting stock; and
o 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,
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, requiring
directors acting with respect to mergers, sales of assets and other specified
transactions to consider, in determining what they reasonably
28
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:
o is or was our director, officer, employee or agent, or
o served at our request as a director, officer, employee or agent of
another corporation.
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.
DESCRIPTION OF WARRANTS
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 specific terms of the
warrants offered through that prospectus supplement. As of October 31, 2003, we
had no warrants outstanding.
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
29
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:
o the offering price;
o the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
o the number of warrants offered;
o 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;
o the exercise price and the amount of securities you will receive
upon exercise;
o the procedure for exercise of the warrants and the circumstances,
if any, that will cause the warrants to be automatically exercised;
o the rights, if any, we have to redeem the warrants;
o the date on which the right to exercise the warrants will commence
and the date on which the warrants will expire;
o the designation and terms of the securities with which the warrants
are issued and the number of warrants issued with each such
security;
o the date on and after which the warrants and the related securities
will be separately transferable;
o U.S. federal income tax consequences;
o the name of the warrant agent; and
o any other material terms of the warrants.
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
30
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.
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DESCRIPTION OF DEPOSITARY SHARES
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.
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
32
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.
33
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.
34
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.
35
PLAN OF DISTRIBUTION
GENERAL
We may sell the securities being offered hereby in one or more of the
following ways from time to time:
o to underwriters for resale to purchasers;
o directly to purchasers; or
o through agents or dealers to purchasers.
In addition, we 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.
The prospectus supplement with respect to each offering of securities
will include:
o the terms of the offering;
o the names of any underwriters or agents;
o the name or names of any managing underwriter or underwriters;
o the purchase price or initial public offering price of the
securities;
o the net proceeds from the sale of the securities;
o any delayed delivery arrangements;
o any underwriting discounts, commissions and other items
constituting underwriters' compensation;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any commissions paid to agents.
36
The offer and sale of the securities described in this prospectus by
us, underwriters or the third parties described above may be effected from time
to time in one or more transactions, including privately negotiated
transactions, either:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices relating to such prevailing market prices; or
o at negotiated prices.
Offerings of our equity securities pursuant to this prospectus may
also be made into an existing trading market for such securities in
transactions at other than a fixed price, either
o on or through the facilities of any national securities exchange or
quotation service on which such securities may be listed or quoted
at the time of sale; or
o to or through a market maker otherwise than on such exchanges.
Such at-the-market offerings will be conducted by underwriters acting
as our principal or agent, who may also be third-party sellers of securities as
described above.
SALES THROUGH UNDERWRITERS OR DEALERS
If underwriters are used in the sale, the underwriters will acquire
the securities for their own account. The underwriters may resell the
securities from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may offer securities to the public either
through underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as underwriters. Unless we
inform you otherwise in the prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to certain conditions,
and the underwriters will be obligated to purchase all the offered securities
if they purchase any of them. The underwriters may change from time to time any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers.
During and after an offering through underwriters, the underwriters
may purchase and sell the securities in the open market. These transactions may
include over-allotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, which means that selling
concessions allowed to syndicate members or other broker-dealers for the
offered securities sold for their account may be reclaimed by the syndicate if
the offered securities are repurchased by the syndicate in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the offered securities, which may be higher than the
price that might otherwise prevail in the open market. If commenced, the
underwriters may discontinue these activities at any time.
37
Some or all of the securities that we offer through this prospectus
may be new issues of securities with no established trading market. Any
underwriters to whom we sell our securities for public offering and sale may
make a market in those securities, but they will not be obligated to do so and
they may discontinue any market making at any time without notice. Accordingly,
we cannot assure you of the liquidity of, or continued trading markets for, any
securities that we offer.
In addition, we may sell some or all of the securities covered by this
prospectus through:
o purchases by a dealer, as principal, who may then resell those
securities to the public for its account at varying prices
determined by the dealer at the time of resale;
o block trades in which a dealer will attempt to sell as agent, but
may position or resell a portion of the block, as principal, in
order to facilitate the transaction; or
o ordinary brokerage transactions and transactions in which a
broker-dealer solicits purchasers.
We will include in the applicable prospectus supplement the names of
the dealers and the terms of the transaction.
DIRECT SALES AND SALES THROUGH AGENTS
We may sell the securities directly. In this case, no underwriters or
agents would be involved. We may also sell the securities through agents
designated from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the offered securities, and we will
describe any commissions payable to the agent. Unless we inform you otherwise
in the prospectus supplement, any agent will agree to use its reasonable best
efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the
Securities Act of 1933 with respect to any sale of those securities. We will
describe the terms of any such sales in the prospectus supplement.
REMARKETING ARRANGEMENTS
Offered securities may also be offered and sold, if so indicated in
the applicable prospectus supplement, in connection with a remarketing upon
their purchase, in accordance with a redemption or repayment pursuant to their
terms, or otherwise, by one or more remarketing firms, acting as principals for
their own accounts or as agents for us. Any remarketing firm will be identified
and the terms of its agreements, if any, with us and its compensation will be
described in the applicable prospectus supplement.
38
DELAYED DELIVERY CONTRACTS
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase securities from us at the public offering price under
delayed delivery contracts. These contracts would provide for payment and
delivery on a specified date in the future. The contracts would be subject only
to those conditions described in the prospectus supplement. The prospectus
supplement will describe the commission payable for solicitation of those
contracts.
GENERAL INFORMATION
We may have agreements with the agents, dealers, underwriters,
remarketing firms and other third parties described above to indemnify them
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribute with respect to payments that the agents,
dealers, underwriters, remarketing firms or such other third parties may be
required to make. Agents, dealers, underwriters, remarketing firms and such
other parties may be customers of, engage in transactions with or perform
services for us in the ordinary course of their businesses.
LEGAL MATTERS
Skadden, Arps, Slate, Meagher & Flom LLP New York, New York and Bruce
H. Beatt, Esq., our general counsel, represent us in connection with this
registration statement. 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. 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,
or has rights to acquire under employee benefit plans, an aggregate of less
than one percent of the common stock of The Stanley Works.
EXPERTS
The consolidated financial statements of The Stanley Works and
subsidiaries appearing in The Stanley Works' Annual Report (Form 10K) for the
year ended December 28, 2002, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given the
authority of such firm as experts in accounting and auditing.
39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses relating to the registration of the securities will be
borne by the registrant. The following expenses, with the exception of the
Securities and Exchange Commission Registration Fee, are estimates.
Securities and Exchange Commission Registration Fee.. $ 72,810.00
Accounting Fees and Expenses......................... $ 25,000.00*
Legal Fees........................................... $ 150,000.00*
Trustees' Fees and Expenses.......................... $ 20,000.00*
Miscellaneous........................................ $ 4,000.00*
----------------
Total................................................ $ 271,810.00*
================
*Estimated
Item 15. Indemnification of Directors and Officers.
Sections 33-770 through 33-776 of the CBCA provide that a corporation
in The Stanley Works' circumstances shall indemnify a director or officer
against judgments, fines, penalties, amounts paid in settlement and reasonable
expenses actually incurred by him, including attorneys' fees, for actions
brought against him in his capacity as a director or officer, when it is
determined by certain disinterested parties that he acted in good faith in a
manner he reasonably believed to be in the corporation's best interest (or in
the case of conduct not in his official capacity, at least not opposed to the
best interests of the corporation). In any criminal action or proceeding, it
also must be determined that the director or officer had no reasonable cause to
believe that his conduct was unlawful. The director or officer must also be
indemnified when he is wholly successful on the merits or otherwise in the
defense of a proceeding or in circumstances where a court determines that he is
entitled to indemnification or that it is fair and reasonable that the director
or officer be indemnified. In connection with shareholder derivative suits, the
director or officer may not be indemnified except for reasonable expenses
incurred in connection with the proceeding (and then only if it is determined
that he met the relevant standard of conduct described above), subject,
however, to courts' power under Section 33-774 to order indemnification. Unless
ordered by a court under Section 33-774, a corporation may not indemnify a
director with respect to conduct for which he was adjudged liable on the basis
that he received a financial benefit to which he was not entitled, whether or
not he was acting in his official capacity.
The Stanley Works Certificate of Incorporation provides that no
director of The Stanley Works will be personally liable to The Stanley Works or
any of its shareholders for monetary damages in an amount greater than the
compensation received by that director for serving The Stanley Works during the
year of the violation to the extent permitted by applicable law, which permits
such limitation provided that such violation must not involve a knowing and
culpable violation of law, enable the director or an affiliate to receive an
improper personal gain, show a lack of good faith and a conscious disregard for
the director's duty to the corporation, amount to an abdication of the
director's duty to the corporation, or
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create liability for an unlawful distribution. See "Description of Securities -
Description of Capital Stock - Anti-Takeover Effects of Provisions of the
Certificate of Incorporation, Bylaw and Other Agreements - Limitation of
Liability of Directors" in the prospectus.
Our bylaws also provide for the indemnification of directors and
officers to the extent permitted by applicable law.
The Company has purchased insurance providing officers and directors
of the Company (and their heirs and other legal representatives) coverage
against certain liabilities arising from any negligent act, error, omission or
breach of duty claimed against them solely by reason of their being such
officers and directors, and providing coverage for the Company against its
obligation to provide indemnification as required by the above-described
statute.
Item 16. List of Exhibits.
The Exhibits to this registration statement are listed in the Index to
Exhibits on page II-6.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) To include
any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii)
To reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; (iii) To include any material
information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the
registration statement; provided, however, that paragraphs 1(i) and 1(ii) do
not apply if the registration statement is on Form S-3, S-8 or F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
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The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions set forth in Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Britain, State of Connecticut on November
5, 2003.
THE STANLEY WORKS
By /s/Craig A.Douglas
------------------------------
Name: Craig A. Douglas
Title: Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
*
_________________________________ Chairman, Chief Executive Officer and November 5, 2003
John M. Trani Director (Principal Executive Officer)
*
_________________________________ Vice President, Finance and Chief November 5, 2003
James M. Loree Financial Officer (Principal Financial
Officer)
*
_________________________________ Controller (Principal Accounting Officer) November 5, 2003
Donald Allan Jr.
*
_________________________________ Director November 5, 2003
John G. Breen
_________________________________ Director November 5, 2003
Robert G. Britz
II-4
*
_________________________________ Director November 5, 2003
Stillman B. Brown
_________________________________ Director November 5, 2003
Virgis W. Colbert
*
_________________________________ Director November 5, 2003
Emmanuel A. Kampouris
*
_________________________________ Director November 5, 2003
Eileen S. Kraus
*
_________________________________ Director November 5, 2003
John D. Opie
*
_________________________________ Director November 5, 2003
Derek V. Smith
*
_________________________________ Director November 5, 2003
Kathryn D. Wriston
* Bruce H. Beatt, pursuant to Powers of Attorney (executed by each of the
officers and directors listed above and indicated by signing above, and filed
with the Securities and Exchange Commission), by signing his name, does hereby
sign and execute this Amendment to the Registration Statement on behalf of each
of the persons referenced above.
By /s/ Bruce H. Beatt
----------------------
Name: Bruce H. Beatt
II-5
EXHIBIT INDEX
Exhibit
No. Description of Exhibits
---------- -----------------------
1.1 Form of Underwriting Agreement for debt securities to be filed as
an exhibit to a Current Report of The Stanley Works on Form 8-K
and incorporated by reference herein.
1.2 Form of Underwriting Agreement for preferred stock to be filed as
an exhibit to a Current Report of The Stanley Works on Form 8-K
and incorporated by reference herein.
1.3 Form of Underwriting Agreement for common stock to be filed as an
exhibit to a Current Report of The Stanley Works on Form 8-K and
incorporated by reference herein.
3.1 Restated Certificate of Incorporation (incorporated by reference
to Exhibit 3(i) to the Annual Report of The Stanley Works on Form
10-K for the fiscal year ended January 2, 1999).
3.2 Amended Bylaws (incorporated by reference to Exhibit 3(ii) to the
Annual Report of The Stanley Works on Form 10-K for the fiscal
year ended December 29, 2001).
4.1 Specimen of Common Stock Certificate.
4.2 Rights Agreement, dated January 31, 1996
(incorporated by reference to Exhibit (4)(i) to Current
Report on Form 8-K dated January 31, 1996).
4.3 Form of Senior Indenture.
4.4 Form of Subordinated Indenture.
4.5 Form of Senior Note with respect to each particular series of
Senior Note issued hereunder to be filed as an exhibit to a
Current Report of The Stanley Works on Form 8-K and incorporated
by reference herein.
4.6 Form of Subordinated Note with respect to each particular series
of Subordinated Note issued hereunder to be filed as an exhibit to
a Current Report of The Stanley Works on Form 8-K and incorporated
by reference herein.
4.7 Form of Certificate of Amendment with respect to any preferred
stock issued hereunder to be filed as an exhibit to a Current
Report of The Stanley Works on Form 8-K and incorporated by
reference herein.
4.8 Form of Warrant Agreement to be filed as an exhibit to a Current
Report of The Stanley Works on Form 8-K and incorporated by
reference herein.
4.9 Form of Warrant Certificate to be filed as an exhibit to a Current
Report of The Stanley Works on Form 8-K and incorporated by
reference herein.
4.10 Form of Depositary Agreement to be filed as an exhibit to a
Current Report of The Stanley Works on Form 8-K and incorporated
by reference herein.
4.11 Form of Depositary Receipt to be filed as an exhibit to a Current
Report of The Stanley Works on Form 8-K and incorporated by
reference herein.
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4.12 Purchase Contract Agreement setting forth Stock Purchase Contracts
and Stock Purchase Units to be filed as an exhibit to a Current
Report of The Stanley Works on Form 8-K and incorporated by
reference herein.
5.1 Opinion of Bruce H. Beatt as to legality.
(Connecticut Law Opinion).
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to legality.
(New York Law Opinion).
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP, independent accountants.
23.2 Consent of Bruce H. Beatt (included in Exhibit 5.1).
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.2).
24.1 Power of Attorney.
25.1 Statement of Eligibility on Form T-1 of JPMorgan Chase Bank,
Trustee under the Senior Indenture.
25.2 Statement of Eligibility on Form T-1 of JPMorgan Chase Bank,
Trustee under the Subordinated Indenture.
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