August 26, 1999


Mr. Donald R. McIlnay
150 James Way
Advance, NC  27006

Dear Don:

I am pleased to confirm our offer for the position of President Consumer Sales,
for The Stanley Works. The position is based in Charlotte, NC and will report to
me.

Your base salary will be $300,000 per year, paid monthly. You will also
participate in the Corporate Management Incentive Compensation Program with a
guaranteed incentive payout of $120,000 for the year 2000, which is payable in
February 2001. You will also receive a pro-rated incentive payment for 1999,
which is payable in February 2000. An additional payment of up to $70,000 may be
made in February 2000 if required, so that the sum of the pro-rated bonus, this
additional payment, and the value of the 100,000 share stock option grant above
the option purchase price equals $100,000. You will be eligible for four weeks
of vacation.

On joining the Company, you will also receive a grant of a 100,000 share stock
option under the terms of the Special Stock Option Plan. The Option Purchase
Price will be the price of the stock on the date of grant, which will be within
60 days of your first day of work. Fifty-percent of this grant will vest 36
months following the grant date and 50% will vest 60 months following the grant
date. Starting in 2000, your stock options will be targeted at the 13,000 level
annually. In addition, you will participate in our Long-Term Incentive Plan at
the senior level. Payment of this plan will be made in February 2003.

As an Officer of The Stanley Works, you will participate in current and future
executive benefit programs including our Financial Planning Service, Executive
Life Insurance Program, and the Executive Physical Program. The Company will
also lease and insure a car for your use. You may select any make and model up
to a Fair Market Value of $60,000.00. Details of the executive benefit programs
are attached.

In addition, the Company's Employee Stock Purchase Program (ESPP) allows you to
purchase company stock up to 15% of your base pay annually (capped at $25,000),
at 15% below the market price. The Company's 401k Plan will match 50% of
employee contributions up to 7% of your pay and the Company Defined Contribution
Pension Plan contributes either 3%, 5% or 9% of pay each year depending upon
your age.

Enclosed is a copy of a Consent Order with the Federal Trade Commission
regarding "Made in USA". Please read and sign the attached and return it to the
address indicated.



Should a future relocation be required, the Company will cover the standard
relocation costs associated with the sale of your current home and the purchase
of a home at the new location.

You should be aware that your employment with Stanley will continue as long as
mutually acceptable, and as such is terminable by either the Company, or by
yourself, at any time and for any reason. Commencing employment is contingent
upon our Medical Department determining that you are physically suited for the
duties of the position. This includes a drug-screening test. Please contact Skip
Proctor at 860-827-3935 to make the necessary arrangements.

The Stanley Works Health Plans become effective on the first of the month
following your date of employment. They will be explained to you in detail on
your first day of employment. You can usually extend your existing medical
coverage for a limited period of time to cover any lapse between the plans.

Don, I am delighted that you will join our team. There's a lot of exciting work
to be done and I know that you will make a great contribution to our success. If
you have any questions, please give me a call at 860-827-3990 or Mark Mathieu at
860-827-3818.

Please indicate your acceptance by signing below and return a copy to me.

Sincerely,



John M. Trani                                          Donald McIlnay
Chairman and CEO

Cc:    Carol L'Heureux - Executive Compensation & Relocation
       Skip Proctor, Director HR - Sales America

Enclosures:  Deferred Compensation Plan (December 19, 1995)
             1990 Stock Option Plan (April 23, 1997)
             Executive life Insurance Program
             Financial Planning Service
             Executive Physical Program
             Employee Benefits Booklet
             FTC Consent Order
             Executive Car Program