UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 29, 2005 (November 22, 2005)
THE STANLEY WORKS
(Exact Name of Registrant as Specified in its Charter)
Connecticut 1-5244 06-0548860
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
1000 Stanley Drive
New Britain, Connecticut 06053
(Address of Principal Executive Offices)
Registrant's telephone number: (860) 225-5111
_______________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On November 22, 2005, The Stanley Works (the "Company") consummated an
offering of 450,000 5.902% Fixed Rate/Floating Rate Enhanced Trust Preferred
Securities (liquidation amount $1,000 per preferred security) (the "Preferred
Securities") through its trust subsidiary, The Stanley Works Capital Trust I
(the "Trust"). The Preferred Securities were sold at a price of 100% of
liquidation amount (or an aggregate gross price of $450 million).
Indenture, First Supplemental Indenture and the Junior Subordinated Debt
Securities underlying the Preferred Securities
In connection with the sale of the Preferred Securities by the Trust,
the Company issued $450,100,000 aggregate principal amount of its 5.902% Fixed
Rate/Floating Rate Junior Subordinated Debt Securities due December 1, 2045
(the "Junior Subordinated Debt Securities") pursuant to a first supplemental
indenture, supplementing an indenture, each dated November 22, 2005, between
the Company and HSBC Bank USA, National Association, as indenture trustee
(together, the "Indenture"). All of the Junior Subordinated Debt Securities
were purchased by the Trust with the proceeds the Trust received from the sale
of the Preferred Securities and the Trust Common Securities (as defined below).
The Junior Subordinated Debt Securities were sold at a price of 100% of
principal amount (or an aggregate gross price of $450.1 million).
The Junior Subordinated Debt Securities are general unsecured junior
subordinated obligations of the Company and are subordinated in right of
payment, to the extent set forth in the Indenture, to all existing and future
Senior Indebtedness (as defined in the Indenture).
The Junior Subordinated Debt Securities bear interest from the date of
issuance on November 22, 2005 to December 1, 2010 (the "Fixed Rate Period") at
the annual rate of 5.902% of their principal amount, payable semi-annually in
arrears on June 1 and December 1 of each year, beginning on June 1, 2006. From
December 1, 2010, the Junior Subordinated Debt Securities will bear interest at
an annual rate reset quarterly of 1.40% plus the highest of the 3-Month LIBOR
Rate, the 10-Year Treasury CMT and the 30-Year Treasury CMT (each as defined in
the Indenture) for the related quarterly interest accrual period, subject to a
limit of 13.25%, payable quarterly on each March 1, June 1, September 1 and
December 1, beginning March 1, 2011.
The Indenture provides that payments of interest are subject to
Optional Deferral and Mandatory Deferral provisions. The Company may elect at
any time and from time to time to exercise its right of "Optional Deferral" to
defer one or more interest payments on the Junior Subordinated Debt Securities.
The Company must provide a notice of its election to defer interest no more
than 60 and no fewer than 15 days prior to the relevant interest payment date.
The Indenture also provides that the Company will be subject to "Mandatory
Deferral" and will not be permitted to pay interest on the Junior Subordinated
Debt Securities in an amount in excess of the New Common Equity Amount (as
defined it the Indenture) on any interest payment date if, on the 30th day prior
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to such interest payment date, the Company does not meet certain financial
ratios. The Indenture requires the Company to pay deferred interest only out of
the net proceeds of sales of its common stock. Each of Optional Deferral and
Mandatory Deferral may not (i) extend beyond the maturity or earlier redemption
of the Junior Subordinated Debt Securities and (ii) continue for more than 10
years, whether because of Optional Deferral or Mandatory Deferral, without all
deferred interest being paid in full.
The Indenture provides that, beginning with the first to occur of (1)
the date that is one year after the first interest payment date for which the
Company was required to defer interest because of Mandatory Deferral and (2)
the date that is five years after the first interest payment date for which the
Company deferred interest because of Optional or Mandatory Deferral, the
Company must use its commercially reasonable efforts to sell shares of its
common stock in an amount that will generate sufficient net proceeds to enable
the Company to pay in full all deferred interest.
The Junior Subordinated Debt Securities are redeemable prior to their
maturity (1) in whole, but not in part, at any time prior to December 1, 2010,
at a redemption price equal to the greater of (x) 100% of the principal amount
of Junior Subordinated Debt Securities being redeemed and (y) as determined by
the Quotation Agent (as defined in the Indenture), the sum of the present
values of remaining scheduled payments of principal and interest thereon to
December 1, 2010, discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture) plus 0.25%, plus in each case, all accrued
and unpaid interest thereon to but not including the redemption date and (2) in
whole or in part, at any time from time to time on or after December 1, 2010 at
a redemption price equal to the aggregate principal amount of the Junior
Subordinated Debt Securities to be redeemed, plus all accrued and unpaid
interest to but not including the redemption date. There are also certain
redemption provisions in the event certain tax events occur or the Company and
the Trust receive a legal opinion that the Trust may be considered an
investment company under the Investment Company Act of 1940, as amended.
The foregoing description of the Indenture and the Junior Subordinated
Debt Securities does not purport to be complete and is qualified in its
entirety by reference to the full text of the Indenture, including the form of
Junior Subordinated Debt Securities included therein, copies of which are
attached as Exhibits 4.5, 4.6 and 4.7, respectively, to this Current Report on
Form 8-K and are incorporated herein by reference.
The holders of Senior Indebtedness do not have any rights to enforce
any of the covenants contained in the Indenture, other than those that are
contained in Article VI-Subordination that are made expressly for the benefit
of such holders.
Guarantee Agreement
Pursuant to the Preferred Securities Guarantee Agreement, dated
November 22, 2005, between the Company and HSBC Bank USA, National Association,
as guarantee trustee (the "Guarantee Agreement"), the Company irrevocably and
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unconditionally has agreed to pay in full on a subordinated basis "guarantee
payments" to the holders of the Preferred Securities. To the extent not paid by
or on behalf of the Trust, the Company guarantees (1) any accrued and unpaid
distributions required to be paid on the Preferred Securities, to the extent
that the Trust has funds on hand legally and immediately available therefor at
the time; (2) the applicable redemption price with respect to the Preferred
Securities called for redemption, to the extent that the Trust has funds on
hand legally and immediately available therefor at that time and (3) upon a
voluntary or involuntary dissolution, winding-up or liquidation of the Trust
(other than in connection with the distribution of the Junior Subordinated Debt
Securities held by the Trust to the holders of the Preferred Securities), the
lesser of (x) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Preferred Securities, to the extent the Trust has
funds on hand legally and immediately available therefor at the time and (y)
the amount of assets of the Trust remaining available for distribution to
holders of the Preferred Securities after satisfaction of liabilities to
creditors of the Trust as required by applicable law. The guarantee constitutes
an unsecured obligation of the Company and is subordinate and junior in right
of payment to the extent specified in the Guarantee Agreement, to (i) Senior
Indebtedness and (ii) the Junior Subordinated Debt Securities.
The foregoing description of the Guarantee Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text
of the Guarantee Agreement, a copy of which is attached as Exhibit 4.8 to this
Current Report on Form 8-K and is incorporated herein by reference.
Amended and Restated Declaration of Trust and Preferred Securities
The Preferred Securities were issued pursuant to the Amended and
Restated Declaration of Trust, dated November 22, 2005, among the Trust, the
Company, HSBC Bank USA, National Association, as property trustee and as
Delaware trustee, and the administrative trustees parties thereto (the "Trust
Agreement"). Additionally, pursuant to the Trust Agreement, the Trust issued
trust common securities (the "Trust Common Securities") with a total
liquidation amount of $100,000 to the Company.
The Trust Agreement does not permit the Trust to issue any securities
other than the Preferred Securities and the Trust Common Securities. Both the
Preferred Securities and the Trust Common Securities represent undivided
beneficial interests in the assets of the Trust. The sole assets of the Trust
are the Junior Subordinated Debt Securities. If there is an event of default
under the Trust Agreement, the rights of the holders of the Preferred
Securities will be entitled to priority in right of payment over the holders of
the Trust Common Securities.
The distribution rates and distribution dates for the Preferred
Securities and the Trust Common Securities correspond to the interest payments
and interest payment dates on the Junior Subordinated Debt Securities. The
amount of funds available to the Trust for distribution to holders of the
Preferred Securities is limited to payments under the Junior Subordinated Debt
Securities.
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In the event of Optional Deferral or Mandatory Deferral with respect
to the Junior Subordinated Debt Securities, distributions on the Preferred
Securities will be deferred by the Trust during such interest deferral period.
Distributions to which the holders of the Preferred Securities are entitled
accumulate additional distributions to the extent of the compounded interest
accruing on the Junior Subordinated Debt Securities.
The Preferred Securities have no stated maturity but must be repaid
upon the repayment of the Junior Subordinated Debt Securities at their stated
maturity or upon the earlier redemption of the Junior Subordinated Debt
Securities. When the Company repays or redeems the Junior Subordinated Debt
Securities, the Trust will simultaneously, subject to certain notice
requirements, use the proceeds therefrom to redeem a Like Amount (as defined in
the Trust Agreement) of the Preferred Securities.
The foregoing description of the Trust Agreement and the Preferred
Securities does not purport to be complete and is qualified in its entirety by
reference to the full text of the Trust Agreement, including the form of
Preferred Security included therein, copies of which are attached as Exhibits
4.9 and 4.10, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Registration Right Agreement
In connection with the issuance of the Preferred Securities on
November 22, 2005, the Trust and the Company entered into a registration rights
agreement (the "Registration Rights Agreement") with Citigroup Global Markets
Inc., Goldman, Sachs & Co. and UBS Securities LLC, as representatives of the
initial purchasers of the Preferred Securities for the benefit of the holders
of the Preferred Securities.
In the Registration Rights Agreement, the Trust and the Company have
agreed, at their cost, to (i) by the 210th day following the closing of the
offering on November 22, 2005, file a registration statement with the
Securities and Exchange Commission (the "SEC") with respect to a registered
offering to exchange the Preferred Securities for exchange preferred securities
(the "Exchange Preferred Securities"), which will have terms substantially
identical in all material respects to the Preferred Securities (except that the
Exchange Preferred Securities will not contain terms with respect to transfer
restrictions and interest rate increases) and (ii) by the 300th day after the
closing of the offering of the Preferred Securities, use their best efforts to
cause the exchange offer registration statement to be declared effective under
the Securities Act of 1933, as amended (the "Securities Act"). The Trust and
the Company have agreed to keep the exchange offer open for not less than 20
days (or longer if required by applicable law) after the date notice of the
exchange offer is mailed to the holders of the Preferred Securities.
In addition, the Trust and the Company have agreed, in certain
limited circumstances, to file a shelf registration statement covering
resales of the Preferred Securities and to use their best efforts to cause
the shelf registration statement to be declared effective under the
Securities Act and to keep effective the shelf registration statement until
the earlier of (x) the second anniversary of the closing of the offering of
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the Preferred Securities or (y) the date on which no securities requiring
registration are outstanding.
The Trust and the Company have also agreed that, if (i) they fail to
file a registration statement required by the Registration Rights Agreement by
the date specified for such filing; (ii) any such registration statement has
not been declared effective by the SEC on or prior to the date specified for
such effectiveness; or (iii) the applicable registration statement is declared
effective but thereafter ceases to be effective during the periods such
registration statement is required to be effective as specified in the
Registration Rights Agreement, then the sole remedy to the holders will be that
the Company will be required to pay "registration default damages" in respect
of the Junior Subordinated Debt Securities at an annual amount representing
0.25% of the liquidation amount of the then-outstanding registrable Preferred
Securities, and the Trust will be required to pay corresponding damages on the
registrable Preferred Securities. Following the cure of the registration
defaults, the accrual of the damages on the Junior Subordinated Debt Securities
and the registerable Preferred Securities will cease.
The foregoing description of the Registration Rights Agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Registration Rights Agreement, a copy of which is attached as
Exhibit 4.11 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The description of the terms of the Indenture, the First Supplemental
Indenture, the Junior Subordinated Debt Securities, the Guarantee Agreement,
the Amended and Restated Declaration of Trust, the Preferred Securities and the
Registration Rights Agreement under Item 1.01 above and the Indenture, Form of
Junior Subordinated Debt Securities, the Guarantee Agreement, the Trust
Agreement, Form of Preferred Securities and the Registration Rights Agreement
attached as Exhibits 4.5, 4.6, 4.7, 4.8, 4.9, 4.10 and 4.11, respectively, to
this Current Report on Form 8-K are each incorporated by reference herein.
Item 8.01. Other Events.
On November 22, 2005, The Stanley Works issued a press release
announcing that it had completed the sale of $450 million of Enhanced Trust
Preferred Securities.
A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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Exhibit 4.5 Indenture, dated November 22, 2005,
between The Stanley Works (the "Company")
and HSBC Bank USA, National Association, as
indenture trustee
Exhibit 4.6 First Supplemental Indenture, dated
November 22, 2005, between the Company and
HSBC Bank USA, National Association, as
indenture trustee
Exhibit 4.7 Form of 5.902% Fixed Rate/Floating Rate
Junior Subordinated Debt Securities due
December 1, 2045, included in Exhibit 4.6
hereto
Exhibit 4.8 Guarantee Agreement, dated November 22, 2005,
between the Company and HSBC Bank USA,
National Association, as guarantee trustee
Exhibit 4.9 Amended and Restated Declaration of Trust,
dated November 22, 2005, among the Company,
The Stanley Works Capital Trust I (the
"Trust), HSBC Bank USA, as property trustee
and as Delaware trustee and the
administrative trustees party thereto
Exhibit 4.10 Form of 5.902% Fixed Rate/Floating Rate
Enhanced Trust Preferred Securities
(liquidation amount $1,000 per preferred
security), included in Exhibit 4.9 hereto
Exhibit 4.11 Registration Rights Agreement, dated
November 22, 2005, between the Company, the
Trust and Citigroup Global Markets Inc.,
Goldman, Sachs & Co. and UBS Securities LLC,
as representatives of the initial purchasers
Exhibit 99.1 Press Release, dated November 22, 2005
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 29, 2005
The Stanley Works
By: /s/ BRUCE H. BEATT
-------------------
Bruce H. Beatt
Vice President, General Counsel and
Secretary
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
Exhibit 4.5 Indenture, dated November 22, 2005,
between The Stanley Works (the "Company")
and HSBC Bank USA, National Association, as
indenture trustee
Exhibit 4.6 First Supplemental Indenture, dated
November 22, 2005, between the Company and
HSBC Bank USA, National Association, as
indenture trustee
Exhibit 4.7 Form of 5.902% Fixed Rate/Floating Rate
Junior Subordinated Debt Securities due
December 1, 2045, included in Exhibit 4.6
hereto
Exhibit 4.8 Guarantee Agreement, dated November 22, 2005,
between the Company and HSBC Bank USA,
National Association, as guarantee trustee
Exhibit 4.9 Amended and Restated Declaration of Trust,
dated November 22, 2005, among the Company,
The Stanley Works Capital Trust I (the
"Trust), HSBC Bank USA, as property trustee
and as Delaware trustee and the
administrative trustees party thereto
Exhibit 4.10 Form of 5.902% Fixed Rate/Floating Rate
Enhanced Trust Preferred Securities
(liquidation amount $1,000 per preferred
security), included in Exhibit 4.9 hereto
Exhibit 4.11 Registration Rights Agreement, dated
November 22, 2005, between the Company, the
Trust and Citigroup Global Markets Inc.,
Goldman, Sachs & Co. and UBS Securities LLC,
as representatives of the initial purchasers
Exhibit 99.1 Press Release, dated November 22, 2005