Exhibit 10
THE BLACK & DECKER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Black & Decker Supplemental Executive Retirement Plan provides
certain supplemental retirement benefits for selected executive employees of The
Black & Decker Corporation and its subsidiaries and affiliates. This Plan is
intended to provide supplemental retirement benefits primarily for a select
group of management and highly paid executive employees.
SECTION 1 - Definitions
Each of the following terms in this Plan has the meaning indicated,
unless a different meaning is plainly implied by the context:
"Actuarial Equivalent" means a benefit having the same actuarial value,
based on the actuarial assumptions used in calculating benefits under The Black
& Decker Pension Plan, and such other reasonable actuarial assumptions and
methods that may be adopted by the Committee from time to time, in its sole
discretion, for use in determining benefits under this Plan.
"Benefit Commencement Date" means (A) in the case of a Participant who
is not a Protected Participant, the date at which the Participant's Credited
Service ends, but only if that date occurs on or after the Participant attains
age 55 and five years of Credited Service and (B) in the case of a Protected
Participant, the date at which his or her Credited Service ends or, if later,
his or her 55th birthday. Notwithstanding the foregoing, if a Participant's
Termination Date occurs due to Disability prior to the Participant's Normal
Retirement Date, the Participant's Benefit Commencement Date shall mean the
Participant's Normal Retirement Date, unless the Participant elects, with the
Committee's approval, to receive benefits under this Plan at a date preceding
the Participant's Normal Retirement Date (but not earlier than the Participant's
Early Retirement Date), in which case the date benefit payments under this Plan
begin will constitute the Participant's Benefit Commencement Date.
"Black & Decker" means the Corporation, Black & Decker (U.S.) Inc., a
Maryland corporation, Black & Decker Inc., a Delaware corporation, and all of
their subsidiaries and affiliates, both collectively and individually.
"Board" means the Corporation's Board of Directors.
"Change in Control of the Corporation" means 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 such 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 (not including any period prior to
January 1, 1984), individuals who at the beginning of such 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 definition) 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 thereof; (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 which 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 such
surviving entity outstanding immediately after such 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.
"Committee" means the Organization Committee of the Board.
"Committee Secretary" means the Secretary of the Committee.
"Corporation" means The Black & Decker Corporation, a Maryland
corporation.
"Credited Service" means all Benefit Service Credit credited to the
Participant under The Black & Decker Pension Plan (or, if the Participant was
not eligible to participate in The Black & Decker Pension Plan for any period of
employment by Black & Decker, the Benefit Service Credit that would have been
credited under The Black & Decker Pension Plan for that employment by Black &
Decker, if the Participant had been eligible to participate in that plan) plus
the Participant's Salary Continuance Period. Except as credited under The Black
& Decker Pension Plan or unless otherwise determined by the Committee in its
sole discretion, Credited Service under this Plan shall not include any period
of employment with any company during any period when that company was not a
subsidiary or affiliate of the Corporation. Credited Service also includes all
periods of Disability beginning while the Employee is employed by Black & Decker
and continuing as long as the Disability continues up until the Participant's
Normal Retirement Date. Notwithstanding anything to the contrary, no loss of
Credited Service will occur by reason of an interruption in an Employee's period
of Credited Service, regardless of the length of that interruption, and no
Participant shall receive duplicate Credited Service for the same period of
time, whether as a result of the terms of this Plan, The Black & Decker Pension
Plan, any other plan provided or maintained by Black & Decker, or any individual
agreement between the Participant and Black & Decker.
"Disability" means an illness or injury which would cause the Employee
to be disabled under the terms of The Black & Decker Disability Plan or that
totally prevents the Employee from satisfactorily performing the Employee's
usual duties with Black & Decker, as determined by the Committee based on
professional medical advice. The Committee may require the Employee to submit
from time to time to medical examinations by physicians selected or approved by
the Committee to establish the Disability or its continuation, provided that
those examinations may not be required more frequently than once each year. The
Employee's refusal to submit to any examination reasonably requested by the
Committee in accordance with this definition is grounds for the Committee to
find that the Employee's Disability no longer exists.
"Early Retirement Date" means the first day of the calendar month
coincident with or next following the date upon which the Participant has both
attained age 55 and 5 years of Credited Service; provided, however, that, in the
case of a Protected Participant, the Early Retirement Date shall be the first
day of the calendar month coincident with or next following the Protected
Participant's 55th birthday.
2
"Effective Date" means April 27, 2004, the effective date of this
amended and restated Plan. The Prior Plan was originally effective as of January
1, 1984.
"Employee" means any person rendering personal services to Black &
Decker as an employee.
"Final Average Pay" means the average monthly amount of the
Participant's Pay for the three years (whether or not consecutive) in which the
Participant's Pay was the highest out of each of the seven-year periods that end
on the following dates, whichever seven-year period produces the highest
average:
(a) the Participant's Termination Date;
(b) if the Participant's Termination Date is not December 31st of any
given year, the December 31st immediately preceding the
Participant's Termination Date;
(c) the last day of the Participant's Salary Continuance Period, if
applicable;
(d) if the last day of the Participant's Salary Continuance Period is
not December 31st of any given year, the December 31st immediately
preceding the last day of the Participant's Salary Continuance
Period, if applicable;
(e) in the case of a Protected Participant only, the date of the
applicable Change in Control of the Corporation; and
(f) in the case of a Protected Participant only, if the date of the
applicable Change in Control of the Corporation is not December 31st
of any given year, the December 31st immediately preceding the date
of the applicable Change in Control of the Corporation.
"Normal Retirement Date" means the first day of the calendar month
coincident with or next following the date upon which the Participant attains
age 60 and 5 years of Credited Service; provided, however, that, in the case of
a Protected Participant, the Normal Retirement Date shall be the first day of
the calendar month coincident with or next following the Participant's 60th
birthday, regardless of his or her Credited Service.
"Other Retirement Benefits" means the amount (actuarially adjusted, as
described below) of all retirement, disability income and death benefits, or the
like, that the Participant or the Participant's surviving spouse is entitled to
receive in the applicable month under all plans or arrangements provided,
maintained or funded, in part or in whole, by any of the Participant's employers
or former employers (whether or not affiliated with Black & Decker), including
all Social Security Benefits, but excluding; (a) any portion of those
retirement, disability income or death benefits (other than Social Security
Benefits) that is attributable to the Participant's contributions, including
contributions made by the Participant's employer pursuant to a salary reduction
agreement with the Participant (such as under The Black & Decker Executive
Deferred Compensation Plan or The Black & Decker Supplemental Retirement Savings
Plan); (b) any death benefits under a life insurance contract with a life
insurance company; (c) any defined contribution pension, profit sharing or stock
bonus plan, unless that plan is intended to provide the primary source of
retirement income (in addition to Social Security Benefits) funded by Black &
Decker or any other employer for the employees at any location covered by that
plan; (d) any payments to the Participant (including any "parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986) made by
reason of a Change in Control of the Corporation pursuant to an individual
agreement in writing between the Participant and Black & Decker; (e) any amounts
paid under an individual written agreement between the Participant and Black &
Decker which agreement expressly refers to this Plan and provides that those
amounts shall not reduce the benefits under this Plan or otherwise are in
addition to the benefits payable under this Plan; and (f) any amount that
constitutes Pay, as defined in this Plan. Without limiting the generality of the
foregoing, the term "Other Retirement Benefits" includes such benefits payable
to a Participant or the Participant's spouse under any plan or arrangement
provided or maintained at any time by any employer or former employer of the
Participant
3
(whether or not affiliated with Black & Decker) which is employer-funded and
intended to restore retirement or deferred compensation benefits that, but for
the limitations imposed by the Internal Revenue Code of 1986, as amended, on
compensation, contributions and/or benefits taken into account under a plan,
would have been accrued by the Participant under any tax-advantaged or
tax-qualified retirement or deferred compensation plan or on compensation
covered under a tax-advantaged or tax-qualified retirement or deferred
compensation plan (such as The Black & Decker Supplemental Pension Plan).
Notwithstanding anything to the contrary, the amount of the Participant's or
spouse's Other Retirement Benefits in any month shall be increased or decreased
so that the amount of those Other Retirement Benefits offset against the monthly
benefit payable under this Plan is the Actuarial Equivalent of the Other
Retirement Benefits that the Participant or spouse could or would otherwise have
received that month but for the Participant's or spouse's election: (a) to
accelerate payment of those Other Retirement Benefits to a date that precedes
the date benefit payments commenced to the Participant or spouse under this
Plan, (b) to defer the commencement of payment of those Other Retirement
Benefits beyond the earliest date those payments could or would otherwise have
been made, if that date is later than the date benefit payments under this Plan
commenced to the Participant or spouse or (c) to receive those Other Retirement
Benefits in any form of payment other than the available form of payment that
would have provided the largest monthly benefit to the Participant or spouse,
unless, and only to the extent that, the elected form of payment provides
benefits to the Participant's spouse after the Participant's death. Whether an
actuarial adjustment to the Participant's or spouse's Other Retirement Benefits
is appropriate and the amount of that adjustment is to be determined by the
Committee, in its sole discretion, based on the actuarial assumptions in effect
when that adjustment is first determined.
"Participant" means any Employee who qualifies for participation in this
Plan, as more particularly described in Section 2.
"Pay" means (A) the actual compensation paid during the relevant period
by Black & Decker to the Participant for services as an Employee, including
basic salary, bonuses, and annual incentive awards, (B) any amounts contributed
to any employee benefit plan pursuant to a salary or other compensation
reduction agreement with the Participant, and including, for the year of
deferral, amounts deferred by the Participant under any nonqualified deferred
compensation plan (such as The Black & Decker Executive Deferred Compensation
Plan and The Black & Decker Supplemental Retirement Savings Plan), (C) salary
continuation payments during sick leave and other authorized leaves of absence
(other than long-term disability benefits) and (D) the Participant's Salary
Continuance Payments. For the purpose of determining the amount of the
Participant's Salary Continuance Payments that constitutes Pay for any given
period, the Participant's total Salary Continuance Payments shall be credited as
Pay ratably over the Participant's Salary Continuance Period. The term "Pay"
does not include any long-term incentive awards or other amounts paid pursuant
to any long-range performance compensation plan, amounts paid pursuant to The
Black & Decker Performance Equity Plan or any non-cash remuneration, imputed
income (including income imputed under any group life insurance program),
perquisites and other cash or non-cash fringe benefits, such as (but not limited
to) reimbursements or allowances for expenses (such as automobile, moving or
relocation, country club, tax preparation, overseas housing, educational and
similar expense allowances); contributions to or benefits under any employee
pension or welfare benefit plan or payments received by a Participant under any
non-qualified deferred compensation plan (such as The Black & Decker Executive
Deferred Compensation Plan or The Black & Decker Supplemental Retirement Savings
Plan); stock bonuses, income attributable to discount stock purchases, stock
options or stock appreciation rights; income attributable to the vesting of
restricted property benefits under any plan or arrangement; and allowances for
or the provision of counseling or other personal services (such as financial and
tax counseling). For any period during which the Participant is entitled to
Credited Service by reason of a Disability, the Participant's Pay is deemed to
continue during that Disability period at a monthly rate equal to 1/12th of (i)
the Participant's basic salary (before any salary reduction for contributions to
any employee benefit plan pursuant to a salary reduction agreement with the
Participant)
4
at the Participant's annual salary rate in effect at the date that the
Disability began, plus (ii) all items (other than basic salary and such salary
reduction contributions) included in the Participant's actual Pay during the
12-month period ending on the date that the Disability began.
"Plan" means this document, entitled "The Black & Decker Supplemental
Executive Retirement Plan", as it may be amended from time to time. This
document completely amends and restates The Black & Decker Supplemental
Executive Retirement Plan originally effective on January 1, 1984, and last
amended and restated effective as of February 11, 1999 (which is referred to in
this Plan as the "Prior Plan"). To the extent any Participant's Termination Date
occurred prior to the Effective Date, the Participant's and his or her spouse's
benefits under this Plan, and the payment thereof, shall be determined under the
terms of the Prior Plan, as in effect on the Participant's Termination Date.
"Protected Participant" means a Participant who is an Employee when a
Change in Control of the Corporation occurs.
"Salary Continuance Payments" means (A) in the case of a Participant who
is a participant in the Salary Continuance Plan, the maximum "Salary
Continuance" payments (as defined in the Salary Continuance Plan), if any, that
the Participant may be eligible to receive under the Salary Continuance Plan;
(B) all payments, if any, that are in lieu of future compensation items that
would otherwise constitute "Pay" under the terms of this Plan and that the
Participant may be entitled to receive, under the terms of any individual
agreement in writing between the Participant and Black & Decker, as a result of
the termination of his or her employment with Black & Decker (whether by action
of Black & Decker or the Participant); and (C) in the case of a Protected
Participant, all payments, if any, that are in lieu of future compensation items
that would otherwise constitute "Pay" under the terms of this Plan and that the
Protected Participant may be entitled, under the terms of any individual
agreement between the Participant and Black & Decker, to receive as a result of
the Participant's termination of the Participant's employment with Black &
Decker (whether by action of Black & Decker or the Participant) coincident with
or following a Change in Control of the Corporation. In all cases, a
Participant's entitlement to Salary Continuance Payments and the amount thereof
shall be determined at his or her Termination Date, before any offset for
severance pay, vacation pay, salary continuance, notice pay, a termination
indemnity or the like or compensation received from a subsequent employer,
without regard to whether those payments are made in one lump sum payment or
periodically and without regard to the amount of severance or salary continuance
that is actually paid to the Participant thereafter.
"Salary Continuance Period" means the maximum period with respect to
which the Participant's Salary Continuance Payments are to be measured under the
terms of the Salary Continuance Plan or applicable individual agreement,
determined at the Participant's Termination Date, without regard to the actual
period over which those payments may be made and without regard to whether those
payments are made in one lump sum payment or periodically. Notwithstanding
anything to the contrary, a Participant's Salary Continuance Period will be
taken into account under this Plan only if the Participant is entitled to Salary
Continuance Payments at his or her Termination Date.
"Salary Continuance Plan" means The Black & Decker Executive Salary
Continuance Plan, effective May 1, 1995, as amended from time to time, or any
salary continuance plan that is a successor to, or replacement for, that plan.
"Social Security Benefit" means the retirement, disability income or
death benefits under any plan or arrangement which is sponsored, mandated or
administered by any government and which provides or would provide retirement or
disability income to the Participant and to which any of the Participant's
employers or former employers (whether or not affiliated with Black & Decker)
has made contributions on the Participant's behalf.
5
"Termination Date" means the last date on which the Participant is
actively employed by, and renders services to, Black & Decker as an Employee
prior to his or her termination of employment with Black & Decker (whether by
action of Black & Decker or the Participant).
SECTION 2 - Eligibility
Any management or highly paid executive employee may be selected for
participation in this Plan by the Organization Committee or any other committee
of the Board designated by the Board for such purpose and will automatically
become a Participant on the date designated by that committee. Any Employee who
was still employed by Black & Decker and was a Participant in the Prior Plan
immediately prior to the Effective Date shall continue as a Participant under
this Plan without further action by the Board or any such committee.
SECTION 3 - Retirement Benefit
(a) Benefit Percentage. Any Participant whose Credited Service with
Black & Decker terminates at or after the Participant's Early Retirement Date
or, in the case of a Protected Participant, whose Credited Service with Black &
Decker terminates at any time, whether before or after his or her Early
Retirement Date, is entitled to receive under this Plan a monthly benefit
beginning on the first day of the calendar month after the Participant's Benefit
Commencement Date and continuing for the Participant's life. The amount of each
monthly benefit payment under this Section 3 (before the reductions in Sections
3(b) and 3(c)) is to be equal to:
(A) 50% of his or her Final Average Pay, in the case of a
Participant (other than a Protected Participant) who has less
than fifteen (15) years of Credited Service or whose Benefit
Commencement Date occurs on or before October 14, 1998;
(B) 60% of his or her Final Average Pay, in the case of a
Participant (other than a Protected Participant) who has at
least fifteen years of Credited Service and whose Benefit
Commencement Date occurs after October 14, 1998; and
(C) 60% of his or her Final Average Pay, in the case of a Protected
Participant.
(b) Reduction for Early Commencement. Notwithstanding anything to the
contrary, in any case where the Participant's Benefit Commencement Date occurs
before his or her Normal Retirement Date, the monthly benefit amount determined
under Section 3(a) shall be reduced by one-twelfth (1/12th) of 2 percentage
points of Final Average Pay for each full calendar month by which the
Participant's Benefit Commencement Date precedes the Participant's Normal
Retirement Date.
(c) Reduction for Less Than 10 Years' Service. Notwithstanding anything
to the contrary in this Plan, if a Participant (other than a Protected
Participant) has less than 10 years of Credited Service at the Participant's
Benefit Commencement Date, the monthly benefit determined under Section 3(a), as
reduced by any reduction required under Section 3(b) and before any offsets
under Section 4, is to be multiplied by a fraction, the numerator of which
equals the Participant's years of Credited Service (including fractional years)
and the denominator of which equals 10 years. This Section 3(c) shall not apply
in the case of a Protected Participant.
(d) Benefit Examples. Examples of the monthly benefits payable, as
determined under this Section 3, are set forth in Schedule I attached to this
Plan and incorporated into this Plan by this reference.
6
SECTION 4 - Benefit Offsets. Notwithstanding anything to the contrary,
the amount of the Participant's benefit each month, as determined under Section
3, and as reduced by any reduction required under Sections 3(b) and 3(c), or,
the amount of the Participant's surviving spouse's benefit under Section 5, is
to be further reduced by the Other Retirement Benefits payable to the
Participant or spouse during that month. In the event that the Other Retirement
Benefits for any month exceed the monthly benefit payment for that month under
this Plan, determined under Section 3 or Section 5, such excess shall be carried
over and added to the Other Retirement Benefits for subsequent months, so that
it is offset against subsequent monthly benefit payments under this Plan until
such excess is exhausted. The offsets to the Participant's or spouse's benefits
under this Section 4 are not to be increased to reflect any increase in Other
Retirement Benefits attributable to increases in the cost-of-living after the
Other Retirement Benefits commence and no benefit is payable to the Participant
or spouse in any month when those Other Retirement Benefits (including
carry-overs from prior months) exceed the monthly benefit amount determined
under Section 3, as reduced under Sections 3(b) and 3(c), or in the spouse's
case, the benefit determined under Section 5. The Committee will decide, in its
sole discretion, the manner in which these offsets are to be applied.
SECTION 5 - Death Benefits
No benefits under this Plan are payable after the Participant's death
except as otherwise provided in this Section 5.
(a) Eligibility for Death Benefit. In the case of a Participant (other
than a Protected Participant) who dies before attaining age 55 and 5 years of
Credited Service, no benefits under this Plan are payable after the
Participant's death. In the case of a Participant (other than a Protected
Participant) who dies after attaining age 55 and 5 years of Credited Service,
the Participant's surviving spouse, if any, is entitled to receive the spouse's
death benefit described in Section 5(b). In the case of any Protected
Participant who dies at any time, the Protected Participant's surviving spouse,
if any, is entitled to receive the spouse's death benefit described in Section
5(b).
(b) Spouse's Death Benefit. Subject to the offsets in Section 4, the
spouse's death benefit under this Section 5(b) shall be a monthly benefit for
the spouse's life with monthly payments beginning on the first day of the
calendar month coincident with or immediately following the date of the
Participant's death (or, in the case of a Protected Participant only, the date
that would have been the Protected Participant's 55th birthday, if later than
his or her date of death). The amount of the spouse's monthly benefit shall be
equal to one-half (50%) of the monthly benefit (determined under Section 3, but
before the offsets under Section 4) that the Participant was receiving or would
have been entitled to receive as of the date of the Participant's death.
SECTION 6 - Vesting
(a) General. Except in the case of a Protected Participant, upon
termination of a Participant's Credited Service at any time for any reason
before the Participant attains age 55 and 5 years of Credited Service, the
Participant's (and the surviving spouse's) right to benefits under this Plan
shall be completely forfeited. In the case of a Protected Participant or his or
her surviving spouse, all of the Protected Participant's right to benefits under
this Plan (except the surviving spouse's right to receive death benefits under
Section 5) shall be completely forfeited if the Protected Participant dies
before his or her Benefit Commencement Date. Except in the case of a Protected
Participant and his or her surviving spouse, if this Plan is terminated by the
Corporation on or after the Participant attains age 55 and 5 years of Credited
Service but before the Participant's Benefit Commencement Date, the Participant
shall be entitled to receive a monthly benefit under this Plan commencing at the
Participant's Benefit Commencement Date
7
and continuing for the Participant's life in the amount the Participant would
have received under this Plan based on the Participant's Credited Service and
Final Average Pay determined at this Plan's termination date, and the
Participant's surviving spouse shall be entitled to receive the corresponding
death benefit pursuant to Section 5. If this Plan is terminated or amended after
a Change in Control of the Corporation, each Protected Participant who has not
consented in writing to that termination or amendment shall be entitled to
receive a monthly benefit, commencing at his or her Benefit Commencement Date,
that is not less than the monthly benefit the Protected Participant would have
received, as a Protected Participant, if this Plan termination or amendment had
not occurred and the Protected Participant's surviving spouse shall be entitled
to receive the corresponding death benefit pursuant to Section 5.
(b) Forfeiture for Cause. Notwithstanding anything to the contrary, in
the case of a Participant other than a Protected Participant, all of the
Participant's (and surviving spouse's) rights and benefits under this Plan shall
be forfeited:
(i) if the Participant's employment with Black & Decker is
terminated by reason of fraud, misappropriation or intentional material
damage to the property or business of Black & Decker; commission of a
felony; or the continuance of willful and repeated failure by the
Participant to perform his or her duties after written notice to the
Participant specifying such failure; or
(ii) if, for a period of 24 months after his or her Termination
Date, the Participant, without the Corporation's written consent, enters
into competition with Black & Decker or the Participant discloses
confidential information.
Notwithstanding anything to the contrary, the provisions of this
Section 6(b) shall not apply to the rights and benefits under this Plan of a
Protected Participant or the surviving spouse of a Protected Participant.
(c) Competition. For purposes of this Section 6, the Participant shall
be deemed to be in competition with Black & Decker if the Participant, directly
or indirectly, solicits as a customer any company which is or was a customer of
Black & Decker during the Participant's employment, or which is or was a
potential customer of Black & Decker with which Black & Decker has made or will
make business contacts during the Participant's employment; provided, however,
that solicitation of a company as a customer of any business which is not in
direct or indirect competition with any of the types of business conducted by
Black & Decker within any of the same territories as Black & Decker shall not be
prohibited hereby. In addition, a Participant will be deemed to be in
competition with Black & Decker if the Participant directly or indirectly
becomes an owner, officer, director, operator, sole proprietor, partner, joint
venturer, contractor or consultant, or participates in or is connected with the
ownership, operation, management or control of any company in direct or indirect
competition with any of the types of businesses conducted by Black & Decker
within any of the same territories as Black & Decker; provided, however, that
the ownership for investment of less than 5% of the outstanding stock of any of
the classes of stock issued by a publicly-held company shall not be deemed
competition with Black & Decker for purposes of this Section 6. The Participant
shall be deemed to have disclosed "confidential information" if the Participant
fails to preserve as confidential and uses, communicates, or discloses to any
person, to the actual or potential detriment of Black & Decker, orally, in
writing or by publication, any information, regardless of when, where or how
acquired relating to or concerning the affairs of Black & Decker; provided,
however, that the foregoing obligations shall not apply to information which is
or becomes public through no fault of the Participant.
8
(d) Committee's Discretion. The Committee shall have the absolute right
to determine in its sole discretion (i) whether or not a Participant's
employment was terminated as a result of a wrongful act, and (ii) whether or not
a Participant has entered into competition with Black & Decker or has disclosed
confidential information so as to cause a forfeiture of the Participant's
benefits hereunder.
SECTION 7 - Additional Provisions Concerning Benefits
(a) Obligation to Inform. The payments under this Plan are conditioned
on the agreement of the Participant and the Participant's spouse (i) to inform
the Committee of all retirement, disability, Social Security, death benefit and
other benefit payments received or receivable by them that may reduce the
Corporation's obligations to pay benefits under this Plan and (ii) to provide
all information about those payments that the Committee may reasonably request
from time to time in order to administer this Plan.
(b) Currency and Exchange Rates. The benefit payments under this Plan
will be calculated in U.S. dollars using the appropriate currency exchange rate
selected by the Committee in its sole discretion at the Participant's Benefit
Commencement Date. The benefits under this Plan will be paid to the Participant
and the Participant's spouse in any currency designated by the Participant at
the Participant's Benefit Commencement Date (or, if the Participant dies before
benefits commence, the currency designated by the spouse), based on the
appropriate currency exchange rate (selected by the Committee in its sole
discretion) in effect at the Participant's Benefit Commencement Date. Once
benefit payments under this Plan have begun, the currency selected by the
Participant (or the Participant's spouse) and the applicable exchange rate may
not be changed except to the extent that the Committee, in its sole discretion,
may approve a change in order to prevent extreme financial hardship to the
Participant or the Participant's spouse.
SECTION 8 - Corporation's Obligations are Unfunded and Unsecured
Except as otherwise required by applicable law, the Corporation's
obligations under this Plan are not required to be funded or secured in any
manner; no assets need be placed in trust or in escrow or otherwise physically
or legally segregated for the benefit of any Participant; and the eventual
payment of the benefits described in this Plan to a Participant or the
Participant's spouse is not required to be secured to the Participant or them by
the issuance of any negotiable instrument or other evidence of the Corporation's
indebtedness. Neither a Participant nor the Participant's spouse is entitled to
any property interest, legal or equitable, in any specific asset of the
Corporation, and, to the extent that any person acquires any right to receive
payments under the provisions of this Plan, that right is intended to be no
greater than or to have any preference or priority over, the rights of any other
unsecured general creditor of the Corporation. However, the Corporation reserves
the right, in its sole discretion, to accumulate assets to offset its eventual
liabilities under this Plan and physically or legally to segregate assets for
the benefit of any Participant or Participant's spouse (whether by escrow, by
trust, by the purchase of an annuity contract or by any other method of funding
selected by the Corporation) without liability for any adverse tax consequences
resulting to that Participant or that Participant's spouse from the
Corporation's action, except as otherwise provided in this Section with respect
to a Protected Participant and his or her spouse. Any such segregation of assets
may be made with respect to the Corporation's obligations under this Plan for
benefits attributable to an individual Participant, a selected group of
Participants or all Participants, as the Corporation may determine from time to
time, in its absolute discretion. Notwithstanding anything to the contrary, in
the case of a Protected Participant (or his or her spouse), if the Corporation
or any of its affiliates or subsidiaries takes any action (without the written
consent of the Protected Participant or, if the Protected Participant is
deceased, his or her spouse) that causes the Protected Participant or the
Protected Participant's spouse to incur income or other taxes with respect to
any benefit under this Plan before the date that benefit is payable to the
Protected Participant (or his or her spouse), the Corporation shall, within 60
days after a demand therefor is made by the Protected
9
Participant or his or her spouse, reimburse the Protected Participant (or his or
her spouse) for the full amount of those income or other taxes as well as for
the full amount of the income or other taxes the Protected Participant (or his
or her spouse) will incur with respect to such reimbursement or any subsequent
reimbursement hereunder. Benefits under this Plan shall be payable by the
Corporation from the Corporation's general assets and no other company shall
have any responsibility or liability under this Plan. The Corporation's
liabilities under this Plan shall, however, be discharged to the extent of any
payment received by the Participant (or the Participant's surviving spouse) from
any other company made for that purpose and on the Corporation's behalf or for
its benefit.
SECTION 9 - Alienation or Encumbrance
No payments, benefits or rights under this Plan shall be subject in any
manner to anticipation, sale, transfer, assignment, mortgage, pledge,
encumbrance, charge or alienation by a Participant, the Participant's spouse or
any other person who could or might possibly receive benefit payments that were
due to the Participant or the Participant's spouse, but were not paid. If the
Corporation determines that any person entitled to payments under this Plan has
become insolvent, bankrupt, or has attempted to anticipate, sell, transfer,
assign, mortgage, pledge, encumber, charge or otherwise in any manner alienate
any amount payable to that person under this Plan or that there is any danger of
any levy, attachment, or other court process or encumbrance on the part of any
creditor of that person, against any benefit or other amounts payable to that
person, the Corporation may, in its sole discretion and to the extent permitted
by law, at any time, withhold any or all such payments or benefits and apply the
same for the benefit of that person, in such manner and in such proportion as
the Corporation may deem proper.
SECTION 10 - Other Benefits
The provisions of this Plan relate only to the specific benefits
described in this Plan and are not intended to affect any other benefits to
which a Participant may be entitled as a retiree or former employee of Black &
Decker. Nothing contained in this Plan shall in any manner modify, impair or
affect the existing rights or interests of a Participant under any other benefit
plan provided by Black & Decker, and the rights and interests of a Participant
to any benefits or as a participant or beneficiary in or under any or all such
plans shall continue in full force and effect unimpaired, subject nonetheless to
the eligibility requirements and other terms of each such plan. This Section
shall not be interpreted as modifying in any way the effect that the
Participant's termination of employment and retirement has upon the
Participant's rights under such other plans. The benefits provided under this
Plan are not to be applied as an offset against any other retirement or deferred
compensation benefits or payments that are otherwise to be provided by Black &
Decker to the Participant or the Participant's beneficiaries; and those benefits
or payments are to be calculated first, ignoring this Plan's existence. In no
event shall any benefits payable under this Plan be treated as salary or other
compensation to a Participant for the purpose of computing benefits to which the
Participant may be entitled under any other benefit plan of Black & Decker.
SECTION 11 - No Guarantee of Employment
This Plan shall not be construed as conferring any legal rights upon any
Participant for continuation of employment, nor shall it interfere with the
rights of Black & Decker to discharge a Participant and to treat the Participant
without regard to the effect which such treatment might have upon the
Participant under this Plan.
10
SECTION 12 - Cooperation of Parties
Each Participant (and surviving spouse) shall perform any and all
reasonable acts and execute any and all reasonable documents and papers that are
necessary or desirable for carrying out this Plan or any of its provisions.
SECTION 13 - Benefit Claims
(a) Claims Procedure. Any claim by a Participant, a Participant's spouse
or beneficiary that benefits under this Plan have not been paid in accordance
with the terms and conditions of this Plan shall be made in writing and
delivered to the Committee at the Corporation's principal office in the State of
Maryland. The Committee shall notify the claimant if any additional information
is needed to process the claim. All claims shall be approved or denied by the
Committee within 90 days of receipt of the claim by the Committee. If the claim
is denied, the Committee shall furnish the claimant with a written notice
containing:
(1) an explanation of the reason for the denial;
(2) a specific reference to the applicable provisions of this
Plan;
(3) a description of any additional material or information
necessary for the claimant to pursue the claim;
(4) an explanation of the plan's claim review procedure
described in this Section 13; and
(5) a statement of the claimant's right to bring a civil action
under ERISA Section 502(a) following denial of his or her
claim review.
Within 90 days of receipt of the notice described above, the claimant
shall, if further review is desired, file a written request for consideration
with the Committee. A request for reconsideration must include an explanation of
the grounds for the request and the facts supporting the claim. So long as the
claimant's request for review is pending, including such 90-day period, the
claimant or the claimant's duly authorized representative may review pertinent
documents and may submit issues and comments in writing to the Committee.
A final decision shall be made by the Committee within 60 days of the
filing of the request for reconsideration; provided, however, that the
Committee, in its discretion, may extend this period up to an additional 60
days.
The decision by the Committee shall be conveyed to the claimant in
writing and shall include specific reasons for the decision, with specific
references to the applicable provisions of this Plan on which the decision is
based.
(b) Arbitration. Any dispute or controversy arising in connection with a
benefit claim under this Plan, after the claims procedure in Section 13(a) has
been exhausted, shall be settled exclusively and finally by arbitration to be
conducted in Towson, Maryland before a neutral arbitrator in accordance only
with the commercial arbitration rules then in effect of the American Arbitration
Association. The scope of review of the arbitration conducted hereunder shall be
limited to whether Black & Decker, the Board or the Committee was arbitrary and
capricious in the exercise of its or their discretion pursuant to the terms of
this Plan. The arbitrator appointed hereunder shall have no authority or power
to grant any remedy or relief not otherwise contained in this Plan and may grant
relief contained in this Plan only if the arbitrator
11
determines that the interpretation or administration of this Plan was in fact
arbitrary and capricious. The arbitrator appointed hereunder shall have no
authority to add to, detract from, or modify any term or condition of this Plan.
The arbitrator shall have no authority to grant any relief or remedy other than
as called for by the terms of this Plan even if such relief or remedy is
otherwise available at law or in equity but for the terms and conditions of this
Plan. Judgment may be entered on the arbitrator's award in a court of competent
jurisdiction in the venue of the arbitration.
(c) Attorneys' Fees. The Corporation shall pay to a Protected
Participant or a Protected Participant's surviving spouse all legal fees and
expenses incurred by the Protected Participant or the Protected Participant's
surviving spouse in making a claim for benefits or otherwise in seeking to
obtain or enforce any right or benefit provided by this Plan.
SECTION 14 - Incapacity
If a Participant or the Participant's spouse has become legally
incompetent, then the legal guardian, or other legal representative of such
Participant's or spouse's estate shall be entitled to act for and represent such
incompetent Participant or spouse in all matters and to the same extent as the
Participant or spouse could have done but for such incompetency, including but
not limited to the receipt of Plan benefits.
SECTION 15 - Administration
(a) Committee's Responsibilities. This Plan shall be administered by the
Committee, which shall be responsible for all matters affecting the
administration of this Plan and shall have the following duties and
responsibilities in connection with the administration of this Plan:
(i) To prepare and enforce such rules, regulations and
procedures as shall be proper for the efficient
administration of this Plan, such rules, regulations
and procedures to apply uniformly to all Participants;
(ii) To determine all questions arising in the
administration, interpretation and application of this
Plan, including questions of the status and rights of
Participants and any other persons hereunder;
(iii) To decide any dispute arising hereunder;
(iv) To correct defects, supply omissions, and reconcile
inconsistencies to the extent necessary to effectuate
this Plan;
(v) To compute the amount of benefits which shall be
payable to any Participant or spouse in accordance with
the provisions of this Plan and to determine the person
or persons to whom such benefits shall be paid;
(vi) To select the currency conversion or exchange rates to
be applied in determining a Participant's or spouse's
benefits under this Plan, where foreign currencies are
involved;
(vii) To authorize all payments that shall be made pursuant
to the provisions of this Plan;
(viii) To make recommendations to the Corporation's Board of
Directors with respect to proposed amendments to this
Plan;
12
(ix) To file all reports with government agencies,
employees, and other parties as may be required by law,
whether such reports are initially the obligation of
the Corporation or this Plan; and
(x) To have all such other powers as may be necessary to
discharge its duties hereunder.
(b) Plan Interpretation. The Committee shall have the authority to
interpret this Plan in its sole and absolute discretion. The Committee's
interpretation of this Plan and actions in respect of this Plan shall be binding
and conclusive on all persons for all purposes, subject only to review by an
arbitrator in accordance with the provisions and standards set forth in Section
13(b).
(c) Committee's Liability and Indemnification. Neither the Committee nor
any person acting on its behalf shall be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan unless attributable to gross negligence or willful misconduct. In
addition to such other rights of indemnification they may have as directors,
officers or employees of the Corporation, each member of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which such member may be a party by reason of any action taken or
omitted under or in connection with this Plan, and against all amounts paid in
settlement thereof, provided such settlement is approved by independent legal
counsel selected by the Corporation, or paid by such member in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
member is liable for gross negligence or willful misconduct in such member's
duties; provided that within 60 days after the institution of such action, suit
or proceeding the member shall in writing offer the Corporation the opportunity,
at its own expense, to handle and defend the same.
(d) Self-Dealing. If a Participant is also a member of the Committee,
the Participant may not vote or act upon matters relating specifically to such
member's participation in this Plan.
SECTION 16 - Amendments and Termination
The Board of Directors of the Corporation reserves the right at any time
and from time to time to the extent permissible under law, to amend or terminate
this Plan, prospectively or retroactively, in whole or in part; provided,
however, that no such amendment or termination shall, without the Participant's
written agreement, reduce or impair (a) the benefits or rights of any
Participant (or spouse) whose Benefit Commencement Date occurred before the date
the amendment is adopted or this Plan is terminated, (b) the vested benefits and
rights of any Participant who is then employed by Black & Decker or (c) the
right of any Protected Participant and/or his or her surviving spouse to receive
benefits under this Plan determined as if that Plan termination or amendment had
not occurred. Any amendment or termination shall be adopted by resolution of the
Corporation's Board of Directors.
SECTION 17 - Severability
If any provision of this Plan shall be held void or unenforceable, the
remaining provisions of this Plan shall remain in full force and effect;
provided, however, that in interpreting this Plan, such void or unenforceable
provision shall be replaced with an effective and legally permissible provision,
the effect of which shall be identical to, or as close as reasonably possible
to, the effect of the original provision.
13
SECTION 18 - Construction
Any use of the singular shall include the plural, and vice versa, as may
be appropriate. Titles, captions or paragraph headings contained in this Plan
are for purposes of convenience and reference only, and shall not operate to
define or modify the text to which they relate.
SECTION 19 - Choice of Law
This Plan, and the respective rights and duties of the Corporation and
all persons thereunder, shall in all respect be governed by and construed under
the laws of the State of Maryland, except to the extent, if any, that those laws
may have been pre-empted by federal law. This Plan is intended to be a "pension
plan" within the meaning of Section 3(2)(A) of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), which is exempt from Parts 2, 3 and 4
of ERISA by virtue of Sections 201(2), 301(a)(3) and 401(a)(1) thereof,
respectively, and is not designed to meet the requirements of Section 401(a) of
the Internal Revenue Code of 1986, as amended.
SECTION 20 - Parties to be Bound
The provisions of this Plan shall be binding upon, and shall inure to
the benefit of the Corporation, its successors and assigns, and each Participant
and the Participant's spouse.
Originally adopted January 30, 1984
Amendment and Restatement adopted February 18, 1993
Amendment and Restatement adopted July 20, 1995
Amendment and Restatement adopted February 14, 1996
Amendment and Restatement adopted October 15, 1998
Amendment and Restatement adopted February 11, 1999
Amendment and Restatement adopted April 27, 2004
14
THE BLACK & DECKER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SCHEDULE I - EXAMPLES OF BENEFIT AMOUNTS*
STATED AS A PERCENTAGE OF FINAL AVERAGE PAY
PARTICIPANTS (OTHER THAN PROTECTED PARTICIPANTS)
- --------------------------------------------------------------------------------
AGE AT BENEFIT COMMENCEMENT DATE**
------------------------------------------------------------------
YEARS OF
CREDITED
SERVICE AGE 55 AGE 56 AGE 57 AGE 58 AGE 59 AGE 60 OR MORE
- ------------- --------- --------- --------- --------- --------- ----------------
Less than 5 0% 0% 0% 0% 0% 0%
5 20% 21% 22% 23% 24% 25%
6 24% 25.2% 26.4% 27.6% 28.8% 30%
7 28% 29.4% 30.8% 32.2% 33.6% 35%
8 32% 33.6% 35.2% 36.8 38.4% 40%
9 36% 37.8% 39.6% 41.4% 43.2% 45%
10 40% 42% 44% 46% 48% 50%
11 40% 42% 44% 46% 48% 50%
12 40% 42% 44% 46% 48% 50%
13 40% 42% 44% 46% 48% 50%
14 40% 42% 44% 46% 48% 50%
15 or more 50% 52% 54% 56% 58% 60%
- ------------- --------- --------- --------- --------- --------- ----------------
PROTECTED PARTICIPANTS
- --------------------------------------------------------------------------------
AGE AT BENEFIT COMMENCEMENT DATE**
------------------------------------------------------------------
YEARS OF
CREDITED
SERVICE AGE 55 AGE 56 AGE 57 AGE 58 AGE 59 AGE 60 OR MORE
- ------------- --------- --------- --------- --------- --------- ----------------
1 50% 52% 54% 56% 58% 60%
2 50% 52% 54% 56% 58% 60%
3 50% 52% 54% 56% 58% 60%
4 50% 52% 54% 56% 58% 60%
5 50% 52% 54% 56% 58% 60%
6 50% 52% 54% 56% 58% 60%
7 50% 52% 54% 56% 58% 60%
8 50% 52% 54% 56% 58% 60%
9 50% 52% 54% 56% 58% 60%
10 50% 52% 54% 56% 58% 60%
11 50% 52% 54% 56% 58% 60%
12 50% 52% 54% 56% 58% 60%
13 50% 52% 54% 56% 58% 60%
14 50% 52% 54% 56% 58% 60%
15 or more 50% 52% 54% 56% 58% 60%
- ------------- --------- --------- --------- --------- --------- ----------------
*Before application of benefit offsets under Section 4, but after application of
the early retirement reduction (for all Participants) and the reduction for less
than 10 years of Credited Service (for Participants other than Protected
Participants), in Sections 3(b) and 3(c), respectively.
**The examples assume that the Participant's Normal Retirement Date is age 60.