Filed by: The Stanley Works
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: The Stanley Works
Commission File No. 1-5224
Please see below for a communication to all associates from CEO John Trani:
Click here:
(http://stanleyatwork/) http://stanleyatwork/ then click on the new
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Features:
Bermuda Reincorporation: Update from CEO John Trani:
--May 17 Letter to All Associates
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LETTER TO ALL ASSOCIATES FROM JOHN TRANI
May 17, 2002
I know the past week has been a difficult one. Politicians and the press
have scrutinized our company's decision to re-incorporate - a decision
necessary to ensure the viability of Stanley Works and the preservation of
U.S. jobs. We have and will always operate our company with the highest
level of integrity.
Let me first discuss the shareowner vote. We understand that there were
concerns raised about the vote. Any mistakes that were made were
unintentional, and we did our best to clear up any confusion.
Although the shareowner vote, in our view, was fair and appropriate, even
the appearance of impropriety is unacceptable. Therefore, we have decided
to schedule a revote. This gives me another opportunity to explain why a
re-incorporation is necessary for Stanley Works.
In today's economy, we are forced to compete against numerous foreign
companies that pay lower taxes on their international operations.
Re-incorporation will allow us to compete with foreign companies on a level
playing field. As we all have seen, companies that can't compete either
disappear, or are acquired by stronger companies. As The Wall Street
Journal pointed out yesterday, between 1998 and 2001, 78% of all large
international acquisitions involved foreign companies taking over U.S.
companies. We think that the unfair tax advantage that foreign companies
have plays a big role in this. We want to keep our management and our
headquarters in the U.S. I hope you want that too.
I hope you are also aware that two companies that compete directly against
us, Cooper Tools, which sells Lufkin tape rules, Plumb hammers, and
Crescent wrenches, and Ingersoll-Rand, which sells Schlage locksets and
Ingersoll-Rand power air tools, recently completed their own
re-incorporation. Even in the US, our major competitors now have a
competitive tax advantage that we don't.
We believe that other U.S. companies will continue to take similar actions
until Congress creates a tax system that doesn't hurt U.S. companies trying
to compete in the global marketplace. However, for the sake of our company,
all of you and our shareholders, we cannot afford to wait for Congress to
act.
I also want to set the record straight on another important point. We
believe that the U.S. Government will receive more in taxes as a result of
our re-incorporation. The issue is not about reducing US tax dollars, it is
about reducing Stanley's global tax rate. We believe that reducing our
global tax rate means we will have more cash to strengthen and grow our
company. Becoming a stronger company allows us to preserve thousands of
U.S. jobs and create new ones. With a stronger company, we expect a higher
stock price and more wealth for our stockholders. More wealth means more
taxes for the U.S. government - and we believe shareholders will have more
wealth even after the government takes its cut. In short, everyone wins.
So how will re-incorporation affect you? You will work for a stronger
competitor in the global marketplace. Otherwise, there will be no impact on
day-to-day operations and there will not be any layoffs as a result of
re-incorporation. More importantly, this will enable Stanley Works to
compete on a level playing field, which should result in more growth and
more jobs.
Stanley Works has a wonderful 159-year history, and our job is to take
actions that will enable the company to be around for another 159 years.
Once again, we want everyone to vote. Let's try collectively to beat the
92.5% that voted last time, as difficult as that will be. And please do not
hesitate to write to me with any question that is on your mind or those
around the water cooler. We'll get back to you promptly.
Thanks for your support. Integrity is the #1 value of our company. We
intend to defend that value with every ounce of energy we have.
John
The foregoing does not constitute an offer of any securities for sale, or
an offer or invitation to purchase any securities. A registration statement
on form S-4 will be filed with the Securities and Exchange Commission
("SEC") which will contain a form of proxy statement / prospectus with
respect to the reincorporation, providing details of the transaction. This
registration statement will be available at the SEC's web site,
http://www.sec.gov. When finalized, these documents will be available at
the SEC's web site and Stanley's web site, http://www.stanleyworks.com.
Investors should read these documents before making a decision concerning
the transaction.
The Stanley Works, its officers and directors may be deemed to be
participants in the solicitation of proxies from shareowners in favor of
the reincorporation. Information about the directors and executive officers
and ownership of stock is set forth in the proxy statement/prospectus
relating to the annual meeting of The Stanley Works contained in the Form
S-4 of The Stanley Works, Ltd. filed with the SEC on April 2, 2002.