Exhibit 10(xx)
THE STANLEY WORKS
RESTRICTED STOCK UNIT PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE
The purpose of the Plan is to provide
non-employee directors of the Company with compensation tied to the
value of the Company’s Common Stock thereby motivating such
directors to perform their duties and responsibilities to the best
of their professional ability and to further align the interests of
such directors with the interests of the Company and its
shareholders.
ARTICLE II
DEFINITIONS
As used in the Plan, the following
terms shall have the meanings specified in this Article 2, except
to the extent provided otherwise in an applicable Award
Certificate.
2.1 Adjustment Event : a stock split, reverse stock split, combination
or exchange of shares, recapitalization, subdivision, merger,
consolidation, reclassification, reorganization, spin-off or other
distribution of stock or property of the Company, partial or
complete liquidation of the Company or any similar transaction
affecting the outstanding Common Stock or the capitalization of the
Company; provided that, when used with respect to in-kind dividends
credited to a Participant’s Dividend Equivalent Account, the
term Adjustment Event shall relate to the property subject to such
in-kind dividend.
2.2 Award : a
cash-settled, restricted stock unit representing the right, subject
to the timing of payment, distribution, adjustment and other
provisions of the Plan, to receive the future cash value of one
share of Common Stock and the amount credited under the related
Dividend Equivalent Account as of the date of
settlement.
2.3 Award Certificate : a written certificate evidencing each Award to a
Participant under the Plan and setting forth certain of the terms
and conditions applicable thereto, which certificate shall be in a
form approved by the Committee from time to time.
2.4 Beneficiary : the Person(s) designated in accordance with
Article 8 below.
2.5 Board :
the Board of Directors of the Company.
2.6 Committee : the Corporate Governance Committee of the Board
or, if there is no such committee, the Board, provided that no
Participant shall be permitted to act in the capacity of a director
with respect to any matters pertaining directly to any of such
Participant’s Awards.
2.7 Common Stock : the common stock of the Company, par value $2.50
per share, subject to adjustment pursuant to Article 7.
2.8 Company :
The Stanley Works, a Connecticut corporation.
2.9 Dividend Equivalent Account
: a notional account established on
the books and records of the Company to record any dividend
equivalent amounts accrued and payable in respect of any
outstanding Awards and any earnings or losses on such dividend
equivalent amounts.
2.10 Effective Date : April 26, 2004.
2.11 Grant Date : with respect to an Award, the date as of which
such Award is granted to a Participant and set forth in the Award
Certificate evidencing such Award.
2.12 Initial Deferral Election Rule
: a Participant’s initial
election with respect to any Award must be made by the end of the
year before the calendar year in which the Grant Date of such Award
occurs and such election must specify a Settlement Date and
Settlement Method; provided, however, a new Participant in the Plan
may make an initial election with respect to an Award within 30
days after such Participant becomes eligible to participate for the
first time in the Plan.
2.13 Market Value : the average of the high and low price on the New
York Stock Exchange for a share of Common Stock on the last trading
day prior to the day as of which Market Value is to be
determined.
2.14 Participant : a non-employee director of the Company who is
granted an Award under the Plan.
2.15 Person :
any natural person, firm, partnership, limited liability company,
association, corporation, company, trust, business trust,
governmental authority or other entity.
2.16 Plan : The
Stanley Works Restricted Stock Unit Plan for Non-Employee
Directors, as set forth herein and as the same may be amended and
in effect from time to time.
2.17 Secretary : the individual holding the position of corporate
secretary of the Company from time to time or his or her
delegate.
2.18 Section 409A : section 409A of the Internal Revenue Code of
1986, as amended, and any proposed, temporary or final regulations,
or any other guidance, promulgated with respect to section 409A by
the U.S. Department of Treasury or the Internal Revenue
Service.
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2.19 Subsequent Deferral Election Rule
: a subsequent election to delay a
Settlement Date or change a Settlement Method of an Award
applicable to a Participant’s previously filed election (i)
may not take effect until at least twelve months after the date on
which the election is made; (ii) must require that the settlement
with respect to which such election is made (other than an election
made on account of “disability,” “death” or
an “unforeseeable emergency” each within the meaning of
Section 409A) be deferred for a period of not less than five years
from the date such settlement would otherwise have been made; and
(iii) must be made not less than twelve months before the
Settlement Date of an Award applicable to such previously filed
election.
2.20 Termination Date : the date on which a Participant ceases to serve
as a director of the Company for any reason.
ARTICLE III
ELIGIBILITY AND
PARTICIPATION
Non-employee directors of the Company
who are selected by the Committee to receive an Award shall become
Participants in the Plan. Selection for participation in the Plan
shall not entitle any Participant to continue to serve as a
director of the Company for any period or to receive or be eligible
to receive any subsequent or additional Awards.
ARTICLE IV
TERMS OF AWARDS
4.1 Grant of Awards .
The Committee may grant Awards to
eligible non-employee directors described in Article 3 at such
times, in such amounts and subject to such terms and conditions not
inconsistent with the Plan as it shall determine. Each Award shall
be evidenced by an Award Certificate.
4.2 Vesting of Awards .
Each Award shall be fully vested and
nonforfeitable immediately upon grant to a Participant.
4.3 Dividend Equivalent Rights .
(A) Cash Dividends . In the event that the Company declares and pays
a cash dividend in respect of the Common Stock as of a record date
occurring after the Grant Date of an Award and prior to the
satisfaction of such Award as provided in Article 4.4, the Company
shall credit an amount to the Participant’s Dividend
Equivalent Account, as of the payment date for such dividend, equal
to the product of (i) the cash dividend amount per share of Common
Stock declared and paid, multiplied by (ii) the number of Awards
held by such Participant. Cash amounts credited from time to time
to a Participant’s Dividend Equivalent Account shall be
deemed to earn interest, compounded quarterly, at an annual rate
equal to the rate of interest applicable from time to time under
the Company’s Deferred Compensation Plan for Non-Employee
Directors for the period from the date such cash amount is credited
to the Participant’s Dividend Equivalent Account to the date
of distribution of such amount, as so adjusted, in accordance with
Article 5.
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(B) Dividends In Kind . In the event that the Company declares and pays
a dividend in kind in respect of the Common Stock as of a record
date occurring after the Grant Date of an Award and prior to the
satisfaction of such Award as provided in Article 4.4, the Company
shall credit an amount to each Participant’s Dividend
Equivalent Account, as of the payment date for such dividend, equal
to the product of (i) the then-current fair market value, as
determined by the Committee in its sole discretion, assigned to the
property paid in kind in respect of one share of Common Stock,
multiplied by (ii) the number of Awards held by such Participant.
Amounts credited from time to time to a Participant’s
Dividend Equivalent Account in respect of in-kind dividends shall
be adjusted from time to time to reflect changes in the fair market
value of, or Adjustment Events with respect to, the property
subject to such in kind dividend, as determined by the Company,
during the period from the date such amount is credited to the
Participant’s Dividend Equivalent Account to the date of
distribution, as so adjusted, in accordance with Article
5.
4.4 Elections with respect to Method and Timing of
Settlement . Pursuant to
the Initial Deferral Election Rule, a Participant may elect for an
Award to be settled in one of the following methods (each, a
“ Settlement
Method ”): (i) in one
lump sum payment, which payment shall be made within twelve months
following such Participant’s Termination Date on the
Settlement Date elected by the Participant, or (ii) in a number of
approximately equal annual installments (not to exceed 10
installments), with the first installment to be paid within twelve
months following such Participant’s Termination Date on the
Settlement Date elected by the Participant and each subsequent
installment to be paid on the first business day of each succeeding
calendar year during the installment period. Each payment shall be
considered a “separate payment” and not of a series of
payments for purposes of Section 409A. The term “
Settlement Date
” means the date (day and month)
elected by the Participant to receive or begin receiving payments
in settlement of his or her Award[s], provided, however, that in
the event such day and month fall on a weekend or holiday, the
Settlement Date shall mean the first business day fo
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