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Item 1.01.
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Entry into a Material Definitive Agreement.
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Underwriting Agreement
On May 11, 2017, Stanley Black & Decker, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting
Agreement”) with Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC, as representatives of the underwriters named therein, related to the offering, issuance and
sale of 7,500,000 of its Equity Units (the “Equity Units”), including 750,000 Equity Units pursuant to the underwriters’ exercise of their over-allotment option in full. Pursuant to the terms of the Underwriting Agreement, the Company
sold the Equity Units to the underwriters at a price of 97% of the initial public offering price. The Underwriting Agreement contains customary terms, conditions, representations and warranties and indemnification provisions.
The offering of the Equity Units was made under the Company’s Registration Statement on Form
S-3ASR
(Registration
No. 333-207522),
which was originally filed with the Securities and Exchange Commission on October 20, 2015, and closed on May 17, 2017. The Company used a portion of the net proceeds of the
Equity Units offering to enter into capped call transactions with counterparties, including certain of the underwriters or their affiliates.
The
Underwriting Agreement is filed as Exhibit 1.1 to this Form
8-K
and is incorporated herein by reference. The description of the terms of the Underwriting Agreement is qualified in its entirety by reference to
such exhibit.
Purchase Contract Agreement
On
May 17, 2017, the Company entered into the Purchase Contract and Pledge Agreement (the “Purchase Contract Agreement”), among the Company, The Bank of New York Mellon Trust Company, N.A., as Purchase Contract Agent, and HSBC Bank USA,
National Association, as Collateral Agent, Custodial Agent and Securities Intermediary, pursuant to which the Equity Units were issued. Each Equity Unit initially consists of a unit referred to as a Corporate Unit (as defined below) with a stated
amount of $100 comprised of (i) a contract to purchase from the Company, on May 15, 2020, for a price of $100, a number of newly-issued shares of the Company’s common stock, par value $2.50 per share (the “Common Stock”),
equal to the applicable settlement rate (each a “Purchase Contract” and collectively the “Purchase Contracts”) and (ii) a 10% undivided beneficial interest in one share of 0% Series C Cumulative Perpetual Convertible
Preferred Stock, without par value, with a liquidation preference of $1,000 (the “Convertible Preferred Stock” and, each 10% undivided interest thereof together with a Purchase Contract, a “Corporate Unit”). The Convertible
Preferred Stock is pledged to the Company to secure the Equity Unit holders’ obligations under the Purchase Contract Agreement to purchase the Common Stock. The Purchase Contract Agreement includes customary agreements and covenants by the
Company.
Holders of Corporate Units may create “Treasury Units” or “Cash Settled Units” from their Corporate Units as provided in the
Purchase Contract Agreement by substituting Treasury securities or cash, respectively, for the Convertible Preferred Stock comprising a part of the Corporate Units. Holders of Equity Units will be entitled to receive, quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year, commencing on August 15, 2017, distributions consisting of contract adjustment payments of 5.375% per year on the stated amount of $100 per Equity Unit, which will
accrue from May 17, 2017 and will be payable by the Company in cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election, subject to the Company’s right to defer contract adjustment
payments in certain instances.
The Purchase Contract Agreement and the Forms of Corporate Unit, Treasury Unit and Cash Settled Unit representing the
Equity Units are filed as Exhibits 4.1, 4.2, 4.3 and 4.4 to this Current Report on Form
8-K,
respectively, and are incorporated by reference herein. The descriptions of the material terms of the Purchase
Contract Agreement and the Forms of Corporate Unit, Treasury Unit and Cash Settled Unit representing the Equity Units are qualified in their entirety by reference to such exhibits.
HSBC Bank USA, National Association and The Bank of New York Mellon Trust Company, National Association are each
the trustee for certain of the Company’s outstanding notes. HSBC Bank USA, National Association, The Bank of New York Mellon Trust Company, National Association and their respective affiliates have, from time to time, performed, and may in the
future perform, other financial, banking and other services for the Company, for which they received or will receive customary fees and expenses.