Black & Decker CEO Nolan Archibald Letter to Employees Re: Stanley Workd Merger

Dear Black & Decker Employee:

I want to share with you some very important news about Black & Decker.

This afternoon, we announced that Black & Decker and The Stanley Works have agreed to merge in a transaction that creates a larger, stronger, globally diversified industrial company with a broad array of products and services. Together, our companies will be better positioned to grow globally and provide greater value to our respective stakeholders.

By way of background, Stanley came to us several months ago to discuss the possibility of combining our businesses to build a company that could grow faster as a combined entity than either company could independently. Since that initial discussion, we have had numerous interactions with Stanley and subsequent discussions with outside financial and legal advisors to examine all aspects of the proposed merger and what it will mean for us. Our Board of Directors concluded that uniting our two companies, with their complementary product and market fit, makes excellent financial and strategic sense.

The new company will be named Stanley Black & Decker, and will be 50.5% owned by Stanley shareholders and 49.5% owned by Black & Decker shareholders. It will begin with annual sales of $8.4 billion and a comprehensive global product offering. We share a common heritage and passion for developing innovative products that meet the evolving needs of our customers and individual end users. We also share a commitment to operational excellence that will make our new combined company the supplier of choice for these groups.

I will become the Executive Chairman of the new company, and John Lundgren, Stanley's current Chairman and Chief Executive Officer, will become the President and CEO of Stanley Black & Decker. We are in the process of identifying the key leaders for the combined company's operating units. The new company will be headquartered in New Britain, CT, and Towson will remain the Power Tools headquarters.

This merger draws on the historic and treasured legacy that both companies have earned, and will position the new company to achieve profitable growth. We will combine Black & Decker's winning strategy of market-leading brands, world-class innovation, unmatched end-user focus and global distribution with the highly respected Stanley brands. The new company will enjoy a larger world-wide commercial and operational presence.

I know this news is unexpected, and I certainly appreciate that it will cause uncertainty about what this means for many of you. We will work to address that uncertainty as quickly as possible, but understandably it will take some time. Decisions affecting people are the most difficult any management team must make. I believe that for the majority of employees, this merger will create excellent career opportunities that come with being part of a larger organization. As soon as more information is available, we will share it with you. For now, you should know that there will be no immediate changes.

This transaction is expected to close as soon as we receive the necessary regulatory and shareholder approvals, which we anticipate will be in the first half of 2010. Until the transaction is completed, Black & Decker and Stanley will continue to act as separate businesses, and you should continue to focus on your current job priorities. As always, please refer any media or shareholder inquiries to Roger Young at (410) 716-7549.

Attached are some FAQs with more information about the transaction, and also attached is the press release. Tomorrow, you will receive a link to a brief video message from me about this announcement. Going forward, we will provide additional updates on how our operations will be combined and successfully integrated.

This is an important time for our company. I thank you for your continued support and for your contributions to our success.

Sincerely yours,
Nolan D. Archibald