Exhibit 10(aa)(1)
December 12, 2002
Mr. John W. Schiech
The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
Dear John:
The Black &
Decker Corporation (the "Corporation") considers it essential
to the best interests of its stockholders
to foster the continuous employment of
key management personnel. In this connection, the Board of Directors of the
Corporation (the "Board") recognizes that, as is the case with many
publicly
held corporations, the possibility of a
change in control of the Corporation may
exist and that such possibility, and the uncertainty and questions
that it may
raise among management, may result in the
departure or distraction of management
personnel to the detriment of the
Corporation and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued
attention and dedication of members of the
Corporation's management, including yourself, to their
assigned duties without
distraction in the face of potentially
disturbing circumstances arising from the
possibility of a change in control of the
Corporation,
although no such
change
is now contemplated.
In order to
induce you to remain in the employ of the Corporation, the
Corporation agrees that you shall receive the
severance benefits set forth in
this letter agreement (the "Agreement") in the event your employment with
the
Corporation is terminated subsequent to a
"change in control of the Corporation"
(as defined in Section 2 hereof) under the
circumstances described below.
1. Term of
Agreement. This
Agreement shall commence on the date hereof
and shall continue in effect through
December 31, 2007; provided, however, that
if a change in control of the Corporation
shall have occurred
prior to December
31, 2007, this Agreement shall continue in effect for a period of
36 months
beyond the month in which the change in
control of the Corporation occurred, at
which time this Agreement shall terminate.
Notwithstanding
the foregoing,
and
provided no change in control of the
Corporation
shall have occurred, this
Agreement shall automatically terminate upon the earlier to
occur of (i) your
termination of employment with the
Corporation, or (ii) the Corporation's giving
you notice of termination, regardless of
the effective date of such termination.
<PAGE>
Mr. John W. Schiech
December 12, 2002
Page 2
2. Change in
Control. No benefits
shall be payable
hereunder unless
there shall have been a change in control of the Corporation, as set forth
below. For purposes of this Agreement,
a "change in control
of the Corporation"
shall mean a change in control of a nature
that would be required to be reported
in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not
the Corporation is in fact required to
comply therewith,
provided that, without
limitation, such a change in control shall
be deemed to have occurred if (A) any
"person" (as that term is used in Sections
13(d) and 14(d) of the Exchange Act),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any of its subsidiaries or a corporation
owned, directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding securities; (B) during any period of two
consecutive years, individuals who at the beginning
of that period
constitute
the Board and any new director (other than
a director designated by a person who
has entered into an agreement with the Corporation to effect a transaction
described in clauses (A) or (D) of this
Section) whose
election by the Board or
nomination for election by the
Corporation's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either
were
directors at the beginning of the period or whose
election or
nomination
for
election was previously so approved, cease for any reason to
constitute
a
majority of the Board; (C) the Corporation enters into an agreement, the
consummation of which would result in the
occurrence of a change
in control of
the Corporation; or (D) the stockholders of the Corporation
approve a merger,
share exchange or consolidation of the
Corporation with any other corporation or
entity, other than a merger, share exchange or consolidation
that would result
in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent
(either by remaining
outstanding
or by being
converted into voting securities of the surviving
entity) at least 60%
of the
combined voting power of the voting securities of the Corporation or the
surviving entity outstanding immediately after the merger, share exchange or
consolidation, or the stockholders of the
Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by
the Corporation of all or substantially all
the Corporation's assets.
3. Termination
Following Change in
Control of the Corporation. If any
of the events described in Section 2 hereof
constituting a change
in control of
the Corporation shall have occurred, you shall be entitled to the benefits
provided in Subsection 4(iii) hereof upon the
subsequent
termination
of your
employment during the term of this Agreement unless the termination is (A)
because of your death or Disability, (B) by
the Corporation for Cause, or (C) by
you other than for Good Reason.
(i)
Disability. If,
as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the
Corporation for six consecutive months, and
within 30 days after written notice of termination is given you shall not
have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability."
<PAGE>
Mr. John W. Schiech
December 12, 2002
Page 3
(ii)
Cause.
Termination by the Corporation of your employment for
"Cause" shall mean termination upon (A) the
willful and continued failure by you
to substantially perform your duties with the
Corporation, other
than any such
failure resulting from your incapacity due
to physical or mental illness or any
such actual or anticipated failure after the issuance by you of a Notice of
Termination (as defined in Subsection
3(iv) hereof) for Good
Reason (as defined
in Subsection 3(iii) hereof), after a
written demand for substantial performance
is delivered to you by the Board, which demand specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, or (B) the willful engaging by you
in conduct that is demonstrably
and materially injurious to the Corporation, monetarily or otherwise. For
purposes of this Subsection, no act or failure to act on your part shall be
deemed "willful" unless done, or omitted to be done, by you not
in good faith
and without reasonable belief that your action or omission was in the best
interest of the Corporation. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and
until there shall have been
delivered to you a copy of a resolution
duly adopted by the affirmative vote of
not less than three-quarters of the entire
membership of the Board at a meeting
of the Board called and held for that
purpose (after
reasonable
notice to you
and an opportunity for you, together with your counsel,
to be heard before
the
Board), finding that in the good faith
opinion of the Board
you were guilty of
conduct set forth above in clauses (A) or (B) of the first
sentence of this
Subsection and specifying the particulars
thereof in detail.
(iii) Good
Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of
this Agreement, "Good
Reason" shall
mean, without your express written
consent, the occurrence after a change in
control of the Corporation of any of the
following
circumstances unless, in the
case of paragraphs (A), (E), (F), (G) or (H), the circumstances are fully
corrected prior to the Date of Termination specified in the Notice of
Termination, as those terms are defined in
Subsections
3(v) and 3(iv)
hereof,
respectively, given in respect thereof:
(A) the
assignment to you of any duties inconsistent with
your current
status as an executive
of the Corporation
or a substantial
adverse
alteration in the
nature or status of your responsibilities from
those
in effect immediately prior to the change in control of the
Corporation;
(B) a
reduction by the Corporation in your annual base
salary as in
effect on the date hereof or as the same may be increased from
time to time,
except for across-the-board salary reductions similarly
affecting
all senior executives of the Corporation and all senior
executives of
any person in control of the Corporation;
(C) your
relocation
to a location not
within 25 miles of
your office or
job location
immediately prior to
the change in control of
the Corporation,
except for required
travel on the Corporation's business
to an extent
substantially
consistent
with your present
business travel
obligations;
<PAGE>
Mr. John W. Schiech
December 12, 2002
Page 4
(D)
the failure by
the Corporation,
without your consent,
to pay to you
any portion of your
current compensation,
or to pay to you
any portion of
an installment of deferred compensation under any deferred
compensation
program of the Corporation, within seven days of the date such
compensation is
due;
(E) the failure
by the Corporation
to continue in
effect
any bonus to
which you were entitled, or any compensation plan in which you
participated
immediately prior to
the change in control of the Corporation
that is material
to your total
compensation,
including but not limited to
the Corporation's (i) Executive Annual Incentive Plan or other annual
incentive
compensation plan
("AIP"); (ii) Performance Equity Plan or other
long-term
incentive compensation plan ("PEP");
(iii) stock option
plans;
(iv)
retirement
and savings plans; and (v) Supplemental Executive
Retirement Plan
("SERP"); or any
substitute plan or plans adopted prior to
the change in
control of the Corporation, unless an equitable arrangement
(embodied in an
ongoing substitute or
alternative plan) has been made with
respect to the
plan and the equitable
arrangement provides
substantially
equivalent
benefits not
materially less favorable to you (both in terms of
the amount of benefits provided and the level of your participation
relative
to other participants), or the failure by the Corporation to
continue your
participation
therein (or in such
substitute or alternative
plan) on a basis
not materially less favorable (both in terms of the amount
of benefits
provided and the level of your participation relative to other
participants)
than those you
enjoyed immediately prior to the change in
control of the
Corporation;
(F) the failure
by the Corporation to
continue to provide
to you benefits
substantially similar
to those enjoyed by you under any of
the
Corporation's life insurance, medical, dental, health and
accident, or
disability plans
in which you were
participating at the time of the change
in control of
the Corporation, the failure to continue to provide to you an
automobile or
allowance in lieu
thereof, if an
automobile or allowance in
lieu
thereof was provided to you at the time of the
change in control of
the Corporation, the taking of any action by the
Corporation
that would
directly or indirectly
materially
reduce any of these
benefits or deprive
you of any
material fringe benefit enjoyed by you at the time of the
change
in control of
the Corporation, or the failure by the Corporation to provide
to you the
number of paid
vacation days to which
you are entitled on
the
basis of years
of service
with the Corporation in accordance with the
Corporation's
normal vacation policy in effect at the time of the change in
control of the
Corporation;
(G) the
failure
of the Corporation to obtain a
satisfactory
agreement from any successor to assume and agree to
perform
this Agreement,
as contemplated in Section 6 hereof; or
(H) any
purported termination
of your employment
that is
not effected pursuant to a Notice of Termination satisfying the
requirements
of Subsection 3(iv)
<PAGE>
Mr. John W. Schiech
December 12, 2002
Page 5
hereof (and, if
applicable, the
requirements of
Subsection 3(ii) hereof);
for purposes of
this Agreement,
no such purported termination shall be
effective.
Your rights to terminate your employment
pursuant to this
Subsection shall
not
be affected by your incapacity due to
physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights
with respect
to, any circumstance constituting Good
Reason hereunder.
(iv)
Notice of Termination.
Any purported
termination
of your
employment by the Corporation or by you shall be
communicated by written Notice
of Termination to the other party in accordance with Section 7 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice
that
indicates the specific termination provision in this Agreement relied
upon and
that sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(v)
Date of Termination,
Etc. "Date of Termination" shall mean
(A) if your employment is terminated
for Disability, 30 days after Notice of
Termination is given (provided that you
shall not have returned to the full-time
performance of your duties during the
30-day period), and (B) if your employment
is terminated pursuant to Subsections 3(ii) or 3(iii) hereof or for any
other
reason (other than Disability),
the date specified in
the Notice of Termination
(which, in the case of a te
