RESTATED SUPPLEMENTAL PENSION PLAN FOR SALARIED EMPLOYEES
OF THE STANLEY WORKS
WHEREAS, The Stanley Works maintains for its employees who
are employed in salaried positions certain pension, stock bonus
and profit sharing plans designed to meet the requirements of
Section 401(a) of the Internal Revenue Code of 1986; and
WHEREAS, the benefits and contributions that may be provided
under such plans are limited by Sections 401 and 415 of the
Internal Revenue Code and other provisions thereof; and
WHEREAS, the Company maintains the Supplemental Pension Plan
for Salaried Employees of The Stanley Works to provide for certain
employees, in addition to other benefits, benefits that may not be
provided under such plans; and
WHEREAS, the Company now desires to amend and restate such
Supplemental Plan;
NOW, THEREFORE, the Company has adopted the following
Amendment to and Restatement of the Supplemental Plan for Salaried
Employees of the Stanley Works:
A R T I C L E 1
Name and Effective Date
Section 1.1 This Plan shall be known as the "Restated
Supplemental Pension Plan for Salaried Employees of The Stanley
Works".
Section 1.2 This Amendment and Restatement shall be
effective as of January 1, 1993, with respect to salaried
employees of the Company employed on or after such date.
A R T I C L E 2
Definitions
"Affiliate" means any affiliate or subsidiary of The Stanley
Works.
"Applicable Limitation" means each of:
(i) the limitation on elective contributions under
Sections 401(a)(30) and 402(g)(1) of the Code;
(ii) the limitation set forth in Section 401(a)(17) of the
Code on the compensation that may be taken into account under a
plan;
(iii) the limitation on contributions resulting from the
application of Section 401(k) or (m) of the Code;
(iv) the omission from the definition of "Compensation" set
forth in Article II of the Pension Plan and Article II of the
Retirement Plan of amounts deferred pursuant to Section 3 of the
Deferred Compensation Plan for Participants in Stanley's Manage-
ment Incentive Plans; and
(v) the limitation on contributions or benefits, as the
case may be, set forth in the Savings Plan, the Retirement Plan or
the Pension Plan as required by Section 415 of the Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation and Organization Committee
of The Stanley Works.
"Company" means The Stanley Works and any Affiliate that has
adopted the Qualified Plans.
"Eligible Employee" means a Highly Compensated Employee who
is a participant in the Management Incentive Plan of The Stanley
Works.
"Highly Compensated Employee" means a salaried employee of
the Company who during the applicable Plan Year is a highly
compensated employee, as defined in Section 414(q) of the Code.
For purposes of the preceding sentence, the "applicable Plan Year"
means, in the case of deferrals under Section 4.1, the year in
which an election is made under Section 4.7 and, in the case of a
contribution under Section 4.3, the year for which such
contribution is made.
"Pension Plan" means the Pension Plan for Salaried Employees
of The Stanley Works.
"Plan Year" means the applicable plan year of each of the
Qualified Plans.
"Qualified Plan" means each of the Savings Plan, the Retire-
ment Plan and the Pension Plan.
"Retirement Plan" means the Retirement Plan for Salaried
Employees of The Stanley Works.
"Savings Plan" means the Savings Plan for Salaried Employees
of The Stanley Works.
"Supplemental Company Contribution Account" means the account
established under the Plan to which amounts are credited under
Section 4.2.
"Supplemental Employee Contribution Account" means the
account established under the Plan to which amounts are credited
under Section 4.1.
"Supplemental Pension Account" means the account established
under the Plan to which amounts are credited under Section 4.3.
"Unrestricted Qualified Plan Benefit" means the sum of (i)
the Participant's Pension Plan Benefit and the Supplemental
Pension Account and (ii) the actuarial equivalent, determined as
of the date on which distribution commences under the Pension
Plan, of the benefit, if any, that would be payable to the
Participant under the Retirement Plan if no Applicable Limitation
applied.
A R T I C L E 3
Participation in the Plan
Section 3.1 Each Eligible Employee of the Company shall
become a participant in the Plan on the date as of which an amount
is first credited to an account established under Article 4 in the
name of such Eligible Employee. Subject to Section 4.6, an
Eligible Employee shall remain a participant until all amounts to
which he is entitled hereunder have been distributed.
Section 3.2 Participation in the Plan shall not give a
participant any right to remain in the service of the Company or
of an Affiliate, and a participant shall remain subject to
discharge to the same extent as if the Plan had not been adopted.
A R T I C L E 4
Crediting of Accounts; Election to Defer
Section 4.1 (a) If for a Plan Year an Eligible Employee's
contributions under Section 4.2 of the Savings Plan are limited by
reason of the dollar limitation described in paragraph (i) of the
definition herein of Applicable Limitation and such Eligible
Employee has elected, in the manner described in Section 4.7, to
defer a portion of his compensation from the Company (not to
exceed, when added to contributions made under Section 4.2 of the
Savings Plan, 12% of such compensation), there shall be credited
to a Supplemental Employee Contribution Account an amount equal to
the excess of the portion of compensation so elected over such
dollar limitation.
(b) If for a Plan Year an Eligible Employee's contributions
under Section 4.2 of the Savings Plan are limited by reason of an
Applicable Limitation, other than as described in subsection (a),
and such Eligible Employee has elected, in the manner described in
Section 4.7, to defer a portion of his compensation from the
Company, there shall be credited to a Supplemental Employee
Contribution Account an amount equal to the excess (i) over (ii)
where:
(i) is the amount that would have been contributed
under Section 4.2 of the Savings Plan in the
absence of the Applicable Limitation, and
(ii) is the amount actually contributed under Section
4.2 of the Savings Plan.
Section 4.2 (a) If for a Plan Year an amount is credited
to a Supplemental Employee Contribution Account under Section 4.1,
there shall be credited to a Supplemental Company Contribution
Account an amount equal to the excess of (i) over (ii) where:
(i) is the amount that would have been contributed by
the Company under Section 5.2 of the Savings Plan
with respect to the sum of the elective contribu-
tions made to the Savings Plan and the amount
credited under Section 4.1 if all of such amounts
had been contributed to the Savings Plan, and
(ii) is the amount actually contributed by the Company
under Section 5.2 of the Savings Plan.
(b) If the amount that may be contributed by the Company
under Section 5.2 of the Savings Plan is limited by reason of an
Applicable Limitation, otherwise than as described in subsection
(a), there shall be credited to a Supplemental Company Contribu-
tion Account an amount equal to the excess of (i) over (ii) where:
(i) is the amount that would have been contributed by
the Company under Section 5.2 of the Savings Plan
in the absence of the Applicable Limitation, and
(ii) is the amount actually so contributed by the
Company.
Section 4.3 If the contributions made by the Company on
behalf of an Eligible Employee under Section 4.2 of the Pension
Plan are less than the amount that would have been contributed by
the Company if an Applicable Limitation did not apply, there shall
be credited to a Supplemental Pension Account an amount equal to
the excess of the amount that, in the absence of the Applicable
Limitation, would have been contributed under Section 4.2 of the
Pension Plan over the amount actually so contributed by the
Company.
Section 4.4 If a Participant's Unrestricted Qualified Plan
Benefit exceeds the sum of the amount payable to him under the
Pension Plan and the actuarial equivalent, determined as of the
date on which distribution commences under the Pension Plan, of
the amount payable to him under the Retirement Plan, subject to
Section 5.1, there shall be payable to him under this Plan such
excess.
Section 4.5 (a) A participant's Supplemental Employee
Contribution Account and Supplemental Company Contribution Account
shall be adjusted to reflect the rate of return such accounts
would have earned if they had been invested in accordance with the
provisions of the Savings Plan. Such rate of return shall further
reflect any additional amount that would have been payable under
the Retirement Plan by reason of the rate of return actually
achieved under the Savings Plan.
(b) A participant's Supplemental Pension Account shall be
adjusted to reflect the rate of return such account would have
earned if it had been invested in the trust fund maintained under
the Pension Plan.
(c) For purposes of subsections (a) and (b), the applicable
rate of return shall be calculated from the time when the contri-
butions to the applicable Qualified Plan would have been allocated
to the participant's account thereunder in the absence of the
Applicable Limitation.
Section 4.6 (a) In the event that a participant shall
cease to be an Eligible Employee or the Company, in its sole
discretion, shall determine that a participant may no longer
actively participate in the Plan, any election under Section 4.1
shall be deemed to have been revoked and no election may be made
under such section, and no amounts shall be credited under
Sections 4.2(b) and 4.3.
(b) If a participant described in subsection (a) later
becomes an Eligible Employee or the Company determines that such
participant may recommence active participation in the Plan, as
the case may be, such participant shall again become an active
participant in the Plan; crediting under Sections 4.2(b) and 4.3
shall recommence; and, upon the filing of an election under
Section 4.7, crediting under Section 4.1 shall recommence.
(c) Any amount credited to an account established under
Article 4 in the name of a participant who was not an Eligible
Employee for the Plan Year with respect to which such amount was
credited shall be distributed in a cash lump sum payment upon the
first to occur of the participant's death, disability or
separation from service with the Company or an Affiliate or the
first day of the calendar year in which the participant attains
age 60. No further amount shall be credited to any account
established in the name of a participant described in this
subsection unless and until such participant becomes an Eligible
Employee. When such a participant becomes an Eligible Employee,
amounts credited to an account established in the name of the
participant after he or she becomes an Eligible Employee shall be
distributed in accordance with Section 6.1 and amounts to which
this subsection applies shall be distributed in accordance with
this subsection.
Section 4.7 An election to defer compensation under
Section 4.1 shall be made, and may be revoked, in such manner as
the Committee may from time to time prescribe. Any such election
shall be effective only as to compensation to be earned after the
date of the election.
A R T I C L E 5
Vesting
Section 5.1 Subject to Section 4.4, a participant shall be
vested in each benefit provided under this Plan in accordance with
the vesting provisions of the Qualified Plan to which such benefit
relates.
A R T I C L E 6
Distributions
Section 6.1 (a) Except as otherwise provided in Section
4.6, amounts credited to a participant's Supplemental Employee
Contribution Account and Supplemental Company Contribution Account
shall be distributed upon a participant's retirement, death,
disability or other separation from service with the Company or an
Affiliate, or the later date specified in a written election filed
by the participant with the Committee under this subsection.
Except as otherwise permitted by the Committee in its sole
discretion, no election may be filed under this subsection after
the beginning of the one-year period ending on the date on which a
participant retires, dies, becomes disabled or otherwise separates
from service with the Company or an Affiliate. No more than one
election may be filed by a participant under this subsection.
(b) Except as otherwise provided in subsection (c), amounts
payable under Section 4.4 shall be paid on the date on which
distribution commences under the Pension Plan.
Section 6.2 Distributions under the Plan shall be made in
the form of a cash lump sum payment.
Section 6.3 If, at the time of any payment hereunder, the
Committee determines that a participant to whom or on whose behalf
payment is being made is, for any reason, indebted to the Company
or an Affiliate, The Stanley Works shall be entitled to offset
such indebtedness, including any interest accruing thereon,
against the payment otherwise due under the Plan.
Section 6.4 The Stanley Works shall withhold from any
payment due under the Plan the amount of any tax required by law
to be withheld from compensation paid to an employee.
Section 6.5 Any payment of benefits after a participant's
death shall be made to the beneficiary designated by the partici-
pant under the Qualified Plan to which the benefit payable relates
or to the individual entitled to benefits under such plan in the
absence of a beneficiary designation, unless the participant
designates, on a form provided by the Committee, another individ-
ual or entity to receive benefits payable hereunder after his
death.
Section 6.6 No loans shall be permitted under the Plan.
A R T I C L E 7
Miscellaneous
Section 7.1 The Board of Directors of The Stanley Works
may, at any time and from time to time, amend or terminate this
Plan without the consent of any participant or beneficiary.
Section 7.2 The Plan shall be administered by the Com-
mittee. The Committee shall make all determinations as to the
right of any person to a benefit and the amount thereof. Any
denial by the Committee of a claim by a participant or beneficiary
for benefits under the Plan shall be stated in writing by the
Committee and delivered or mailed to the participant or
beneficiary. Such notice shall set forth the specific reasons for
the denial, written in a manner that may be understood without
legal counsel. The Committee shall afford to any participant or
beneficiary whose claim for benefits has been denied a reasonable
opportunity for a review of the denial of the claim.
Section 7.3 This Plan, including any amendments, shall
constitute the entire agreement between the Company and any
employee, participant or beneficiary regarding the subject matter
of the Plan. There are no covenants, promises, agreements,
conditions or understandings, either oral or written, between the
Company and any such individual relating to the subject matter
hereof, other than those set forth in the Plan. This Plan and any
amendment hereto shall be binding on the parties hereto and their
respective heirs, administrators, trustees, successors and
assigns, and on any beneficiary of a participant.
Section 7.4 If any provision of the Plan shall, to any
extent, be invalid or unenforceable, the remainder of the Plan
shall not be affected thereby, and each other provision of the
Plan shall be valid and enforced to the fullest extent permitted
by law.
Section 7.5 The Company may establish a reserve or make
any investment for purposes of satisfying its obligation to pay
benefits hereunder, and no participant in the Plan shall have any
interest in any such investment or reserve. The right of any
person to receive benefits under the Plan shall be no greater than
the right of any unsecured general creditor of The Stanley Works.
Section 7.6 To the extent permitted by law, the right of
any participant or beneficiary to any benefit hereunder shall not
be subject to attachment or other legal process for the debts of
such participant or beneficiary, and any such benefit shall not be
subject to anticipation, alienation, sale, transfer, assignment or
encumbrance.
Section 7.7 Whenever, in the opinion of the Committee, a
person entitled to receive any benefit hereunder is under a legal
disability or is unable to manage his financial affairs, the
Committee may direct that payment be made to such person or to his
legal representative or to a relative of such person for his
benefit, or the Committee may direct that any payment due here-
under be applied for the benefit of such person in such manner as
the Committee considers advisable. Any payment in accordance with
this section shall be a complete discharge of any liability for
the making of such payment under the provisions of the Plan.
Dated this 24th day of March, 1994.
THE STANLEY WORKS
By /s/ Barbara Bennett
Title: Vice President
Human Resources