UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
THE BLACK & DECKER CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO] BLACK & DECKER
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Notice Of Annual Meeting Of Stockholders
The 2002 Annual Meeting of Stockholders of The Black & Decker Corporation will
be held at the Radisson Prince Charles Hotel, 450 Hay Street, Fayetteville,
North Carolina 28301, on April 30, 2002, at 8:30 a.m., for the following
purposes:
1. To elect eight directors to serve until the next annual meeting;
2. To approve the selection of Ernst & Young LLP as Black & Decker's
independent accountants;
3. To act on two stockholder proposals; and
4. To conduct any other business properly brought before the meeting.
Stockholders of record at the close of business on February 19, 2002, will be
entitled to vote at the meeting or any adjournments of the meeting.
Your vote is important to us. We encourage you to vote as soon as possible by
one of three convenient methods:
. call the toll-free number listed on the proxy card, or
. access the Internet site listed on the proxy card, or
. sign, date, and return the proxy card in the envelope provided.
Your Board of Directors recommends a vote ''for'' each of the nominees included
in the Proxy Statement, ''for'' the ratification of Ernst & Young LLP, and a
vote ''against'' the stockholder proposals.
By Order of the Board of Directors
/s/ Barbara B. Lucas
Barbara B. Lucas
Senior Vice President -- Public Affairs
and Corporate Secretary
March 12, 2002
Proxy Statement
The Notice of Annual Meeting, this Proxy Statement, the enclosed proxy card,
and the Annual Report of The Black & Decker Corporation, including the Annual
Report on Form 10-K which includes the Consolidated Financial Statements for
the year ended December 31, 2001, are being sent beginning March 12, 2002, to
stockholders of record at the close of business on February 19, 2002 (the
''Record Date''). On the Record Date, there were 79,893,383 shares of common
stock outstanding held by 15,854 stockholders of record. Each share of common
stock entitles the holder to one vote.
The Board of Directors is soliciting proxies to be voted at the 2002 Annual
Meeting of Stockholders to be held at the Radisson Prince Charles Hotel, 450
Hay Street, Fayetteville, North Carolina 28301, on April 30, 2002, at 8:30 a.m.
You may vote your shares by: (1) calling the toll-free number listed on the
enclosed proxy card; (2) accessing the Internet site listed on the proxy card;
(3) signing the enclosed proxy card and returning it in the enclosed envelope;
or (4) attending the meeting in person and voting by ballot at the meeting. You
may revoke your proxy, whether given by signing the enclosed proxy card or by
using the telephone or Internet procedure, at any time before it is exercised
by: (1) delivering written notice of revocation to Black & Decker's Corporate
Secretary; (2) delivering another proxy that is properly signed and has a later
date; (3) voting by telephone or through the Internet on a later date; or (4)
voting in person at the meeting. Voting by mail using the enclosed proxy card,
by telephone, or by accessing the Internet does not limit your right to attend
the meeting and change your vote by ballot at the meeting.
The telephone and Internet voting procedures are designed to authenticate your
vote using the special control number assigned to you and listed on the
enclosed proxy card or sent to you by e-mail if you chose to receive your proxy
online. These methods allow stockholders to vote and to confirm that their
instructions have been properly recorded. Your telephone or Internet
instructions will authorize the persons named as Proxies to vote your shares as
you direct.
Upon request, Black & Decker will supply proxy materials to brokerage houses
and other custodians, nominees, and fiduciaries for distribution to beneficial
owners of Black & Decker shares and will reimburse them for their distribution
expenses. Black & Decker has hired a proxy solicitation firm, D. F. King & Co.,
Inc., to assist in the solicitation of proxies and has agreed to pay D. F. King
approximately $13,000 and to reimburse its expenses. The solicitation of
proxies is being made by mail, and also may be made personally, electronically,
or by telephone by Black & Decker employees and representatives of D. F. King.
Black & Decker's principal executive office is at 701 East Joppa Road, Towson,
Maryland 21286, and its telephone number is 410-716-3900.
VOTING SECURITIES
On the Record Date, to Black & Decker's knowledge, no one other than the
stockholder listed in the following table beneficially owned more than 5% of
the outstanding shares of its common stock.
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Title of Amount of Percent of
Name Class Beneficial Ownership Class
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FMR Corp./(1)/ Common Stock 11,968,948 shares/ (2)/ 14.98%
82 Devonshire Street
Boston, Massachusetts 02109
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(1) The Schedule 13G, as amended, filed by FMR Corp. included Edward C. Johnson
3d, Chairman of FMR Corp., and Abigail P. Johnson, a director of FMR Corp.,
as reporting persons. According to the Schedule 13G, FMR Corp. has sole
voting power for 789,398 shares and sole investment power for 11,968,948
shares.
2
(2) Includes 11,150,900 shares (or 13.95% of outstanding common stock)
beneficially owned by Fidelity Management & Research Company, a wholly
owned subsidiary of FMR Corp. and an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940.
ELECTION OF DIRECTORS
Eight directors will be elected to hold office until their successors are
elected and qualified. The presence, in person or by proxy, of the record
holders of a majority of the shares of stock entitled to be voted at the
meeting constitutes a quorum for the conduct of business. If a quorum is
present, the affirmative vote of the record holders of a majority of the shares
of stock represented at the meeting in person or by proxy is necessary to elect
directors. Abstentions will be treated as shares represented at the meeting and
will have the same effect as votes against a director. Unless otherwise
specified, the proxies received will be voted for the election of the following
persons:
Nolan D. Archibald
[PHOTO] Chairman, President, and Chief Executive Officer
The Black & Decker Corporation
Nolan D. Archibald
Mr. Archibald received an undergraduate degree from Weber State University in 1968 and a
master of business administration degree from the Harvard Graduate School of Business in
1970. After serving in various executive positions with Conroy, Inc., Mr. Archibald became
vice president of marketing for the Airstream Division of Beatrice Companies, Inc. in 1977.
His subsequent positions at Beatrice included president of Del Mar Window Coverings,
president of Stiffel Lamp Company, and president of the Home Products Division. In 1983,
he was elected a senior vice president of Beatrice and president of the Consumer and
Commercial Products Group. Mr. Archibald left Beatrice and was elected president and chief
operating officer of Black & Decker in 1985 and chief executive officer in 1986. He has
served continuously in the additional position of chairman of the board since 1987.
Mr. Archibald, who is 58, was first elected a director of Black & Decker in 1985. He also
serves as a director of Brunswick Corporation.
Norman R. Augustine
[PHOTO] Retired Chairman and Chief Executive Officer
Lockheed Martin Corporation
NORMAN R. AUGUSTINE
Mr. Augustine received a bachelor of science degree in 1957 and a master of science
degree in 1959, both in aeronautical engineering, from Princeton University. After serving
in various capacities with Douglas Aircraft Company and Vought Missiles and Space
Company, he joined the United States Department of Defense, where he served as Under
Secretary of the Army. Mr. Augustine joined Martin Marietta Corporation, a predecessor of
Lockheed Martin Corporation, in 1977 as vice president of Aerospace Technical Operations,
became a director in 1986, and rose to the position of chairman of the board and chief
executive officer in 1988. Following the merger of Martin Marietta and Lockheed
Corporation in 1995, he served as president of Lockheed Martin Corporation and later as
chairman of the board and chief executive officer. From 1997 through 1999, Mr. Augustine
was a lecturer with the rank of Professor on the faculty of Princeton University.
Mr. Augustine, who is 66, was first elected a director of Black & Decker in 1997. He also
serves as a director of Lockheed Martin Corporation, Phillips Petroleum Company, and The
Procter & Gamble Company.
3
[PHOTO] Barbara L. Bowles
Chairman and Chief Executive Officer
BARBARA L. BOWLES The Kenwood Group, Inc.
Ms. Bowles received an undergraduate degree from Fisk University in 1968 and a master of
business administration degree from the University of Chicago in 1971. Following
graduation, she held various positions at First National Bank of Chicago, including vice
president of trust investments. From 1981 to 1984, Ms. Bowles was assistant vice president
and director of investor relations for Beatrice Companies, Inc. In 1984, she joined Kraft,
Inc., where she served as corporate vice president until 1989. Ms. Bowles was president and
chief executive officer, and is currently chairman of the board and chief executive officer, of
The Kenwood Group, Inc., an investment advisory firm that she founded in 1989.
Ms. Bowles, who is 54, was first elected a director of Black & Decker in 1993. She also serves
as a director of Wisconsin Energy Corporation, Georgia-Pacific Corporation, Dollar General
Corporation, the Chicago Urban League, and the Children's Memorial Hospital of Chicago.
M. Anthony Burns
[PHOTO] Chairman
Ryder System, Inc.
M. ANTHONY BURNS
Mr. Burns received an undergraduate degree from Brigham Young University in 1964 and a
master of business administration degree from the University of California at Berkeley in
1965. After nine years with Mobil Oil Corporation, he joined Ryder System, Inc. in 1974.
He was elected president and chief operating officer and a director of Ryder in 1979, chief
executive officer in 1983, and chairman of the board of directors in 1985. He retired as
chief executive officer in 2000 and continues as chairman of the board.
Mr. Burns, who is 59, was first elected a director of Black & Decker in January 2001. He
also serves as a director of J. P. Morgan Chase & Co., Pfizer Inc., and J. C. Penney
Company, Inc. He is a member of The Business Council and the Board of Trustees of the
University of Miami in Florida, and is active in cultural and civic organizations in Florida.
Malcolm Candlish
[PHOTO] Retired Chairman and Chief Executive Officer
First Alert, Inc.
MALCOLM CANDLISH
Mr. Candlish received an undergraduate degree from the London School of Economics in 1956.
After holding marketing positions with the Beecham Group in London and Brazil and with
Colgate-Palmolive in New York, Mr. Candlish worked for McKinsey & Company, Inc. from 1965 to
1977 in numerous locations around the world and was elected a partner in 1971. From 1977 to
1983, he held various positions with Wilson Sporting Goods, including vice president and general
manager of the International Division, senior vice president of marketing, and president. He
then served six years as president and chief executive officer of Samsonite Corporation. In 1989,
Mr. Candlish joined Sealy, Inc. as president and chief operating officer, and shortly thereafter
was named chief executive officer and chairman of the board. In 1992, Mr. Candlish left Sealy,
Inc. and was elected a director, chairman of the board, and chief executive officer of First Alert,
Inc., a manufacturer of home safety products. He relinquished the position of chief executive
officer in 1996 and the position of chairman of the board in 1998.
Mr. Candlish, who is 66, was first elected a director of Black & Decker in 1991. He also serves
as a director of AmerUs Group.
4
[PHOTO] Manuel A. Fernandez
Chairman Emeritus
MANUEL A. FERNANDEZ Gartner Group, Inc.
Mr. Fernandez received an undergraduate degree in electrical engineering from the University
of Florida in 1967 and completed post-graduate studies in electrical engineering at that
university in 1969. He also completed post-graduate work in business administration at the
Florida Institute of Technology. He held various positions with ITT, Harris Corporation, and
Fairchild Semiconductor Corporation before becoming president of Zilog Incorporated in 1979.
In 1982, he joined Gavilan Computer Corporation as president and chief executive officer and,
in 1984, became president and chief executive officer of DataQuest, Inc., an information
technology service company. From 1991, he served as president, chairman, and chief executive
officer of Gartner Group, and was elected chairman emeritus in 2001. Since 1998, he also has
been the managing director of SI Ventures, a venture capital firm.
Mr. Fernandez, who is 55, was first elected a director of Black & Decker in 1999. He also
serves as a director of Brunswick Corporation and several private companies and
foundations and is a trustee of the University of Florida.
Benjamin H. Griswold, IV
[PHOTO] Senior Chairman
Deutsche Banc Alex. Brown
BENJAMIN H. GRISWOLD, IV
Mr. Griswold received an undergraduate degree from Princeton University in 1962 and a
master of business administration degree from the Harvard Graduate School of Business in
1967. He joined Alex. Brown & Sons in 1967, became a partner of the firm in 1972, was
elected vice chairman and director in 1984, and became chairman of the board in 1987.
Upon the acquisition of Alex. Brown by Bankers Trust New York Corporation in 1997, he
became senior chairman of BT Alex. Brown, and upon the acquisition of Bankers Trust by
Deutsche Bank in 1999, he became senior chairman of Deutsche Banc Alex. Brown.
Mr. Griswold, who is 61, was first elected a director of Black & Decker in July 2001. He also
serves as a director of Baltimore Life Insurance Company.
Anthony Luiso
[PHOTO] Retired President-Campofrio Spain
Campofrio Alimentacion, S.A.
ANTHONY LUISO
Mr. Luiso received an undergraduate degree from Iona College in 1967 and a master of business
administration degree from the University of Chicago in 1982. Upon graduation from college,
he was employed by Arthur Andersen & Co. and, in 1971, joined Beatrice Companies, Inc.
Mr. Luiso held various positions at Beatrice, including president and chief operating officer of
the International Food Division and president and chief operating officer of Beatrice U.S. Food.
Mr. Luiso left Beatrice in 1986 to become group vice president and chief operating officer of
the Foodservice Group of International Multifoods Corporation and served as chairman of the
board, president, and chief executive officer of that corporation until 1996. He served as
executive vice president of Tri Valley Growers during 1998. In 1999, he joined Campofrio
Alimentacion, S.A., the leading processed meat-products company in Spain, as president-
international and subsequently served as president Campofrio Spain through 2001.
Mr. Luiso, who is 58, was first elected a director of Black & Decker in 1988.
5
BOARD OF DIRECTORS
Compensation of Directors Under the Non-Employee Directors Stock Plan (the
''Directors Stock Plan''), non-employee directors receive an annual retainer of
500 shares of common stock and cash in an amount equal to the value of the
shares. Committee chairs receive an additional 50 shares and cash in an amount
equal to the value of the shares. No separate meeting fees are paid. Directors
have the option to receive their cash fees in shares of common stock or to
defer all or a portion of their fees in the form of ''phantom shares.''
Under the 1995 Stock Option Plan for Non-Employee Directors (the ''Directors
Stock Option Plan''), directors who are not full-time employees of Black &
Decker receive options to purchase 2,500 shares of common stock when they first
become directors and upon each re-election. The option exercise price under the
Directors Stock Option Plan is the market price on the date of grant. Options
become exercisable eleven months from the date of grant and remain exercisable
for ten years from the date of grant.
Black & Decker provides $100,000 of term life insurance for each director who
is not an employee and $200,000 of accident insurance coverage during each day
that a director travels in connection with Black & Decker's business.
Black & Decker provides retirement benefits to directors who were elected prior
to 1994 and retire after having served for five or more years. The annual
amount of the benefit is $15,000 (one-half of the annual retainer on the date
the retirement plan was closed to newly elected directors). Retirement benefits
are paid in monthly installments to the director or the director's surviving
spouse until: (1) the number of monthly payments made equals the number of
months of service by the director; (2) 120 monthly payments have been made; or
(3) the last day of the month following the death of the individual entitled to
the payments, whichever occurs first. The retirement benefit is based only on
service as a non-employee director, and no director first elected after 1993
may participate.
During 2001, the Board of Directors met five times. All directors attended more
than 75% of the total number of meetings of the Board and Board committees on
which they served.
Committees The Board of Directors has four committees: Executive,
Organization, Audit, and Finance. All committees other than the Executive
Committee are composed of non-employee directors.
Executive Committee The Executive Committee is currently composed of Nolan D.
Archibald (Chairman), Norman R. Augustine, Malcolm Candlish, and Anthony Luiso.
The Executive Committee meets when required during intervals between meetings
of the Board and has authority to exercise all of the powers of the Board
except as limited by the Maryland General Corporation Law. The Committee did
not meet during 2001.
Audit Committee The Audit Committee, which is currently composed of Malcolm
Candlish (Chairman), Norman R. Augustine, M. Anthony Burns, and Benjamin H.
Griswold, IV, each of whom is independent within the meaning of the rules of
the New York Stock Exchange, met four times during 2001. The Audit Committee
operates under a written charter adopted by the Board. Its functions and
qualifications for membership are set forth in its charter, a copy of which is
attached as Appendix A to this Proxy Statement.
Finance Committee The Finance Committee, which is currently composed of
Norman R. Augustine (Chairman), Barbara L. Bowles, Malcolm Candlish, and Manuel
A. Fernandez, met five times during 2001. Its functions include: (1) reviewing
financial policies and procedures, operating and financial results, capital
expenditures, operating budgets, and proposals for corporate financing,
including the issuance, sale, and repurchase of Black & Decker's securities;
(2) approving short-term and long-term borrowings in amounts in excess of
established thresholds; (3) making dividend recommendations to the Board; (4)
reviewing certain acquisitions, mergers, divestitures, capital expenditures,
dispositions of real estate, interest rates, and foreign currency movements and
exposures; and (5) reviewing the pension plans of Black & Decker and its
subsidiaries.
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Organization Committee The Organization Committee, which is currently composed
of Anthony Luiso (Chairman), Barbara L. Bowles, and Manuel A. Fernandez, met
five times during 2001. Its functions include: (1) reviewing management
structure and performance; (2) recommending the election or removal of officers
and planning for succession; (3) reviewing the job performance of elected
officers; (4) recommending salaries and benefits for principal corporate
officers; and (5) administering incentive compensation plans and stock option
plans.
The Organization Committee also is responsible for: (1) proposing to the Board
a slate of nominees for election as directors at the annual meeting of
stockholders; (2) recommending candidates to fill Board vacancies between
annual meetings of stockholders; (3) nominating annually a slate of officers
and members of the standing committees of the Board; and (4) evaluating the
continuing physical and mental fitness of individual directors to serve. In
nominating directors, the Organization Committee will consider nominees
recommended by stockholders.
A director may not serve on the Organization Committee if he or she is or was
an employee of Black & Decker, is receiving compensation from Black & Decker in
any capacity other than as a director, or is an employee or principal of an
adviser, consultant, or significant customer of or supplier to Black & Decker.
Nomination of Directors Only persons nominated in accordance with Black &
Decker's bylaws are eligible for election as directors. Nominations may be made
at the stockholders' meeting only by the Board of Directors, a nominating
committee or person appointed by the Board or by a stockholder who is entitled
to vote and follows the procedures described below.
A stockholder may nominate a person for election as a director by sending a
written notice to the Corporate Secretary at 701 East Joppa Road, Towson,
Maryland 21286, that is received not less than 90 days nor more than 110 days
prior to the meeting. If Black & Decker provides less than 100 days' notice of
the date of the meeting, the stockholder's notice must be received no later
than the close of business on the tenth day after the meeting notice was mailed
or the public disclosure was made, whichever occurred first. The stockholder's
notice must include: (1) the name, age, business address, and residence address
of the nominee; (2) the principal occupation or employment of the nominee; (3)
the number of shares of common stock owned by the nominee; and (4) any other
information relating to the nominee that is required to be disclosed in
solicitations for proxies for election of directors according to Regulation 14A
under the Securities Exchange Act of 1934. The stockholder also must include
the stockholder's name and address and the number of shares of common stock
owned by the stockholder. Black & Decker may require any proposed nominee to
furnish other information that may be necessary to determine the nominee's
eligibility to serve as a director. If the chairman of the meeting determines
that a nomination was not made in accordance with these procedures, the
chairman will announce this at the meeting, and the nomination will be
disregarded.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require that Black & Decker
disclose late filings of reports of stock ownership, or changes in ownership,
by its directors, officers, and 10% stockholders. Based on its review of the
copies of forms it received, or written representations from reporting persons
that they were not required to file a Form 5, Black & Decker believes that,
during 2001, all reports required under Section 16(a) of the Securities
Exchange Act for its directors, officers, and 10% stockholders were filed on a
timely basis.
SECURITY OWNERSHIP OF MANAGEMENT
The Board of Directors has adopted a stock ownership policy for executives, the
primary purpose of which is to strike a balance between the objectives of stock
ownership and individual financial planning. The policy provides for minimum
share ownership targets ranging from shares having a market value of one times
the base salary of certain executives to five times the base salary of the
chief executive officer. Until the minimum share-ownership target is met, an
executive is expected to retain at least 50% of the net shares received under
stock-based compensation plans. The policy does not apply to executives who are
60 years of age or older.
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The following table shows the number of shares of Black & Decker common stock
beneficially owned on the Record Date by each director-nominee, each named
executive officer, and all current directors and executive officers as a group.
Other than Mr. Archibald, who beneficially owns 1.3% of the common stock, each
director and named executive officer beneficially owns less than 1% of the
common stock, and all current directors and executive officers as a group
beneficially own 3.2% of the common stock. The table also includes: (1) shares
of common stock that directors and executive officers have the right to acquire
within 60 days of the Record Date, including shares that they have the right to
acquire by exercising stock options; and (2) stock units that have been
deferred by directors, but ultimately will be paid in shares of common stock
under the Directors Stock Plan. The stock units are not entitled to be voted
and may not be transferred, but have been listed in the table because they
represent part of the total economic interest of the directors in Black &
Decker stock.
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Number of Shares
Beneficially Owned
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Nolan D. Archibald 1,033,988/(1)/
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Norman R. Augustine 21,211/(2)/
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Barbara L. Bowles 18,000/(3)/
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M. Anthony Burns 3,958/(4)/
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Malcolm Candlish 23,447/(3,5)/
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Charles E. Fenton 158,515/(6)/
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Manuel A. Fernandez 13,066/(7)/
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Benjamin H. Griswold, IV 2,375
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Paul A. Gustafson 171,997/(8)/
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Anthony Luiso 24,521/(3,9)/
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Michael D. Mangan 62,599/(10)/
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Paul F. McBride 300,000/(11)/
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All Directors and Executive Officers as a Group (25 persons) 2,585,362/(12)/
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(1) Includes 710,000 shares that may be acquired within 60 days of the Record
Date by exercising stock options. Also includes 3,110 shares held under the
Retirement Savings Plan and 85,580 shares held by or for the benefit of
members of Mr. Archibald's immediate family as to which Mr. Archibald has
sole or shared voting or investment power.
(2) Includes 12,000 shares that may be acquired within 60 days of the Record
Date by exercising stock options granted under the Directors Stock Option
Plan. Also includes 4,211 stock units held for the benefit of Mr. Augustine
in a deferred compensation account under the Directors Stock Plan. The
stock units ultimately will be paid in shares of common stock at the end of
the deferral period selected by Mr. Augustine.
(3) Includes 15,000 shares that may be acquired within 60 days of the Record
Date by exercising stock options granted under the Directors Stock Option
Plan.
(4) Includes 3,333 shares that may be acquired within 60 days of the Record
Date by exercising stock options granted under the Directors Stock Option
Plan.
(5) Includes 5,200 shares owned by a revocable trust over which Mr. Candlish
has voting and investment power in his capacity as a settlor and a trustee.
Also includes 1,147 stock units held for the benefit of Mr. Candlish in a
deferred compensation account under the Directors Stock Plan. The stock
units ultimately will be paid in shares of common stock at the end of the
deferral period selected by Mr. Candlish.
(6) Includes 1,770 shares held under the Retirement Savings Plan and 126,500
shares that may be acquired within 60 days of the Record Date by exercising
stock options.
(7) Includes 10,000 shares that may be acquired within 60 days of the Record
Date by exercising options granted under the Directors Stock Option Plan.
Also includes 3,066 stock units held for the benefit of Mr. Fernandez in a
deferred compensation account under the Directors Stock Plan. The stock
units ultimately will be paid in shares of common stock at the end of the
deferral period selected by Mr. Fernandez.
(8) Includes 4,248 shares held under the Retirement Savings Plan and 151,125
shares that may be acquired within 60 days of the Record Date by exercising
stock options. Also includes 50 shares held for the benefit of a member of
Mr. Gustafson's immediate family.
8
(9) Includes 4,521 stock units held for the benefit of Mr. Luiso in a deferred
compensation account under the Directors Stock Plan. The stock units
ultimately will be paid in shares of common stock at the end of the
deferral period selected by Mr. Luiso.
(10) Includes 99 shares held under the Retirement Savings Plan and 62,500
shares that may be acquired within 60 days of the Record Date by
exercising stock options.
(11) Includes 300,000 shares that may be acquired within 60 days of the Record
Date by exercising stock options.
(12) Includes 20,788 shares held for the account of the executive officers
under the Retirement Savings Plan and 2,093,683 shares that executive
officers and directors have the right to acquire within 60 days of the
Record Date by exercising stock options. Also includes 12,945 stock units
held in deferred compensation accounts for the benefit of non-employee
directors under the Directors Stock Plan. The stock units ultimately will
be paid in shares of common stock at the end of the deferral periods
selected by participating directors.
The information provided in the table above is based on information received
from the directors and executive officers. The inclusion of shares in the table
is not an admission of beneficial ownership by the director or executive
officer next to whose name the shares appear. Unless otherwise indicated in a
footnote, the director or executive officer had sole voting and investment
power over the shares.
EXECUTIVE COMPENSATION
The following tables and text summarize, in accordance with regulations of the
Securities and Exchange Commission, Black & Decker's compensation of its
executive officers.
Summary Compensation The following table shows a three-year history of Black &
Decker's compensation of its chief executive officer and the four other most
highly compensated executive officers based on total annual salary and bonus
for 2001.
Annual Compensation Long-Term Compensation
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Awards Payouts
------------ ------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Options/SARs LTIP Payouts Compensation
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Nolan D. Archibald 2001 $1,200,000 $ 850,000 $ 99,174/(a)/ 200,000 $ -- $139,964/(b)/
Chairman, President, and 2000 1,100,000 1,250,000 154,342/(c)/ 1,000,000 1,156,978 137,964
Chief Executive Officer 1999 1,016,667 2,200,000 154,955/(d)/ 200,000 1,221,296 143,214
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Paul F. McBride 2001 560,000 275,000 50,422/(e)/ 100,000 -- 40,313/(f)/
Executive Vice President 2000 525,000 350,000 26,061/(e)/ 200,000 550,968 28,763
1999 339,103 750,000 330,675/(g)/ 600,000 -- 597,027
- ----------------------------------------------------------------------------------------------------------------
Charles E. Fenton 2001 395,000 162,345 27,343/(h)/ 30,000 -- 36,624/(i)/
Senior Vice President and 2000 376,667 260,000 27,637/(h)/ 150,000 374,716 35,890
General Counsel 1999 363,750 337,500 27,828/(h)/ 30,000 310,185 41,627
- ----------------------------------------------------------------------------------------------------------------
Michael D. Mangan 2001 375,385 156,180 27,785/(j)/ 30,000 -- 37,742/(k)/
Senior Vice President and 2000 346,667 230,000 26,213/(j)/ 125,000 183,625 28,085
Chief Financial Officer 1999 38,043 100,000 6,078/(j)/ 50,000 -- 193,866
- ----------------------------------------------------------------------------------------------------------------
Paul A. Gustafson 2001 373,333 200,000 26,234/(l)/ 35,000 -- 28,120/(m)/
Executive Vice President 2000 345,000 250,000 26,527/(l)/ 175,000 292,085 39,218
1999 320,000 400,000 26,113/(l)/ 35,000 242,323 24,213
- ----------------------------------------------------------------------------------------------------------------
(a) The total cost to Black & Decker of the perquisites and other personal
benefits received by Mr. Archibald did not exceed the lesser of $50,000 or
10% of the total amounts reported in the Salary and Bonus columns and,
therefore, is not included.
(b) Includes $5,100 in contributions to the Retirement Savings Plan, $52,714 in
life insurance premiums, and $82,150 in contributions to the Supplemental
Retirement Savings Plan, all paid by Black & Decker.
(c) Includes perquisites and other personal benefits of $68,166. The
perquisites and other personal benefits include personal use of Black &
Decker's aircraft at an approximate cost to Black & Decker of $24,274 and
reimbursement for financial counseling fees of $31,057.
9
(d) Includes perquisites and other personal benefits of $67,763. The
perquisites and other personal benefits include personal use of Black &
Decker's aircraft at an approximate cost to Black & Decker of $36,806 and
reimbursement for financial counseling fees of $17,603.
(e) The total cost to Black & Decker of the perquisites and other personal
benefits received by Mr. McBride did not exceed the lesser of $50,000 or
10% of the total amounts reported in the Salary and Bonus columns and,
therefore, is not included.
(f) Includes $13,013 in life insurance premiums and $27,300 in contributions to
the Supplemental Retirement Savings Plan, both paid by Black & Decker.
(g) Includes reimbursement for moving expenses of $165,658. Also includes
$145,280 paid to Mr. McBride to cover the income tax liability associated
with that reimbursement of moving expenses.
(h) The total cost to Black & Decker of the perquisites and other personal
benefits received by Mr. Fenton did not exceed the lesser of $50,000 or 10%
of the total amounts reported in the Salary and Bonus columns and,
therefore, is not included.
(i) Includes $3,400 in contributions to the Retirement Savings Plan, $15,715 in
life insurance premiums, and $17,509 in contributions to the Supplemental
Retirement Savings Plan, all paid by Black & Decker.
(j) The total cost to Black & Decker of the perquisites and other personal
benefits received by Mr. Mangan did not exceed the lesser of $50,000 or 10%
of the total amounts reported in the Salary and Bonus columns and,
therefore, is not included.
(k) Includes $3,400 in contributions to the Retirement Savings Plan, $19,580 in
life insurance premiums, and $14,762 in contributions to the Supplemental
Retirement Savings Plan, all paid by Black & Decker.
(l) The total cost to Black & Decker of the perquisites and other personal
benefits received by Mr. Gustafson did not exceed the lesser of $50,000 or
10% of the total amounts reported in the Salary and Bonus columns and,
therefore, is not included.
(m) Includes $5,100 in contributions to the Retirement Savings Plan and
$23,020 in life insurance premiums, both paid by Black & Decker.
Option/SAR Grants in Last Fiscal Year The following table shows information
about grants of stock options to named executive officers under Black &
Decker's stock option plans during 2001. No freestanding stock appreciation
rights (''SARs'') were granted to executive officers during 2001.
- ---------------------------------------------------------------------------------------------
Potential Realized Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
--------------------------------------------- ---------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted Fiscal Year Price Date 5% 10%
- --------------------------------------------------------------------------------------------
Nolan D. Archibald 200,000 15.7% $29.995 9/20/2011 $3,772,740 $9,560,860
Paul F. McBride 100,000 7.8 29.995 9/20/2011 1,886,370 4,780,430
Paul A. Gustafson 35,000 2.7 29.995 9/20/2011 660,230 1,673,151
Charles E. Fenton 30,000 2.4 29.995 9/20/2011 565,911 1,434,129
Michael D. Mangan 30,000 2.4 29.995 9/20/2011 565,911 1,434,129
- ------------------------------------------------------------------------------ -------------
These stock options have an exercise price equal to the fair market value of
common stock on the date of grant and become exercisable in four equal annual
installments beginning 12 months after the date of grant. They also include a
limited SAR, i.e., upon a change in control, the stock options would be
canceled, and the holder would be entitled to a cash payment equal to the
difference between the market value of a share of common stock and the exercise
price of each outstanding option.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values The following table shows information regarding stock
options exercised by Black & Decker's named executive officers during 2001 and
the number and value of unexercised stock options at December 31, 2001. The
value of unexercised stock options is based on the closing price of $37.73 per
share of common stock on December 31, 2001, the last trading day of 2001. As of
that date, no freestanding SARs were outstanding.
10
- --------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs at Money Options/SARs at
Shares December 31, 2001 December 31, 2001
Acquired Value ------------------------- ----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------
Nolan D. Archibald 750,000 $21,404,063 710,000 1,350,000 $5,955,300 $1,547,000
Paul F. McBride -- -- 300,000 600,000 -- 773,500
Paul A. Gustafson -- -- 151,125 236,250 395,884 270,725
Charles E. Fenton -- -- 126,500 202,500 409,158 232,050
Michael D. Mangan -- -- 43,750 161,250 -- 232,050
- --------------------------------------------------------------------------------
Long-Term Incentive Plan
In 2001, the Board of Directors adopted The Black & Decker Executive Long-Term
Performance/Retention Plan to drive performance and retain key executive
employees. Awards under the Plan are granted at the discretion of the
Organization Committee, a disinterested committee of the Board composed of
non-employee directors. Payment of the awards will depend on Black & Decker
achieving the earnings-per-share goal for fiscal year 2003 set by the Committee
at the time of the awards. If the goal is achieved or exceeded, awards will be
paid in cash in 2004. If Black & Decker's earnings per share (excluding
non-recurring items) for fiscal year 2003 are less than the goal set by the
Committee, payments will be reduced pro rata. The following table shows awards
under the Plan to the named executive officers.
--------------------------------------------------------------------------
Number of Performance or
Shares, Other Period Estimated Future Payouts under
Units or until Non-Stock Price-Based Plans
Other Maturation or ------------------------------
Name Rights Payout Target/Maximum
--------------------------------------------------------------------------
Nolan D. Archibald -- 3 years $7,275,000
Paul F. McBride -- 3 years 3,500,000
Paul A. Gustafson -- 3 years 1,285,000
Charles E. Fenton -- 3 years 1,090,000
Michael D. Mangan -- 3 years 1,015,000
--------------------------------------------------------------------------
A participant who is terminated involuntarily other than for cause before the
payment date will receive a pro rata share of the award that otherwise would
have been paid if the participant had continued in the employment of Black &
Decker.
The Board adopted a companion plan with an identical goal for key executives
other than the named executive officers. Awards under these plans replaced
Performance Equity Plan awards for the performance periods ending in 2001,
2002, and 2003.
Pension Benefits The following table shows the estimated annual retirement
benefits payable under Black & Decker's pension plans to participating
executives, including the executive officers named in the Summary Compensation
Table, based on the stated average annual compensation and years of service.
Black & Decker maintains non-contributory, tax-qualified defined benefit plans
that cover most officers and salaried employees. Tax code provisions limit the
annual benefits that may be paid from tax-qualified retirement plans. Black &
Decker also maintains supplemental plans for specified executives that
authorize payment outside of the tax-qualified plans of annual benefits in
excess of amounts permitted to be paid under the tax-qualified plans. The
following table reflects benefits payable under both the tax-qualified plans
and the applicable supplemental plans for executives participating in the
tax-qualified plans and the applicable supplemental plans.
11
Pension Plan Table
----------------------------------------------------------------------
Years of Service
------------------------------------------------------
Average Annual
Compensation 15 20 25 30 35
---------------------------------------------------------------------
$ 500,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000
750,000 450,000 450,000 450,000 450,000 450,000
1,000,000 600,000 600,000 600,000 600,000 600,000
1,250,000 750,000 750,000 750,000 750,000 750,000
1,500,000 900,000 900,000 900,000 900,000 900,000
1,750,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000
2,000,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
2,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
3,000,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000
3,500,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000
4,000,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
- --------------------------------------------------------------------------------
Although the normal retirement age is 65 for pension plan purposes, normal
retirement age is 60 with five years service for supplemental plan purposes.
The amounts in the Pension Plan Table assume that benefit payments will start
when the participant reaches age 60 with five years of service. If payments
start before age 60, the benefit amount would be actuarially reduced. For at
least ten but less than 15 years of service, the amounts in this table would be
50% of average annual compensation. For less than ten years of service, the
amounts in the table would be 5% of average annual compensation for each year
of service. These reductions, however, would not apply to participants when a
change in control occurs.
The compensation reflected in the Pension Plan Table is the executive's base
annual salary and bonus (as reported in the Summary Compensation Table),
including salary continuance periods. The amount of compensation used when
calculating the amounts in the Pension Plan Table is an executive's highest
three-year average of compensation out of the last five years (or the last five
calendar years) of employment with Black & Decker, including any salary
continuance period. In the event of a change in control, an executive covered
by certain supplemental plans and employed by Black & Decker on the date of the
change in control will receive full benefits regardless of his or her years of
credited service, and the executive's highest three-year average of
compensation out of the last five years of employment by Black & Decker before
the date of the change in control will be used to calculate the amount of
benefit payments if that average is higher.
The credited years of service for pension purposes as of December 31, 2001, and
the estimated years of service at age 60 for each executive named in the
Summary Compensation Table are as follows:
------------------------------------------------------------
Years of Service Years of Service
Name at December 31, 2001 at Normal Retirement
------------------------------------------------------------
Nolan D. Archibald 16.25 17.75
Charles E. Fenton 12.67 19.08
Paul A. Gustafson 37.21 37.38
Michael D. Mangan 2.17 17.00
Paul F. McBride 2.73 16.83
------------------------------------------------------------
The Pension Plan Table reflects the annual benefit payable beginning at the
participant's 60/th/ birthday in the form of an annuity for the participant's
life. If a participant dies, his or her surviving spouse receives 50% of the
monthly benefits for the spouse's life.
12
The benefits reflected in the Pension Plan Table are reduced by 100% of the
participant's Social Security benefits and any retirement, disability, death,
and similar benefits received from Black & Decker or any other employer.
Severance Benefits and Other Agreements The terms and conditions of employment
of Mr. Archibald are governed by a written employment contract. Mr. Archibald's
contract currently provides for an annual salary of $1,250,000, severance
payments on basically the same terms and conditions as stated below in the
discussion of severance benefits agreements, and the continuation of
substantially all benefits and perquisites for a three-year period following
termination of employment (other than a voluntary termination by Mr.
Archibald), or until he obtains substantially equivalent employment.
In addition to the severance benefits agreements discussed below, Black &
Decker has an executive salary continuance plan covering some executives,
including Messrs. Fenton, Gustafson, Mangan, and McBride. If a covered
executive is terminated other than for cause, the executive's compensation and
benefits will be continued for a specified period of up to two years or until
another position of employment is obtained, whichever occurs first. The
compensation and benefits payable under the salary continuance plan will be
offset by the compensation and benefits paid or credited to the executive by
another employer. Black & Decker will continue to pay the difference between
the new compensation and benefits and the executive's base salary and benefits
at the time of termination, if higher, for the remainder of the salary
continuance period.
In 1986, Black & Decker entered into severance benefits agreements that
provided for payments to be made to certain key management employees who are
terminated following a change in control of Black & Decker. These agreements
have been amended and restated from time to time, and currently cover 18
employees, including each named executive officer. The severance benefits
agreements expire on December 31, 2005, unless a change in control occurs prior
to that date, in which case the agreements expire 36 months after the date of
the change in control. The severance benefits agreements provide for the
payment of specified benefits if employment terminates under certain
circumstances within three years following a change in control. A change in
control is deemed to take place whenever: (1) a person, group of persons, or
other entity becomes the beneficial owner of securities of Black & Decker
having 20% or more of the combined voting power of Black & Decker's
then-outstanding securities; (2) a significant change in the composition of the
Board of Directors occurs; (3) Black & Decker enters into an agreement that
would result in a change of control; or (4) the stockholders of Black & Decker
approve certain types of extraordinary transactions.
Circumstances triggering payment of severance benefits under these agreements
include: (1) involuntary termination of employment for reasons other than
death, disability, or cause; or (2) voluntary termination by the employee in
the event of significant changes in the nature of his or her employment,
including reductions in compensation and changes in responsibilities and powers.
Benefits under the severance benefits agreements generally include: (1) a lump
sum severance payment equal to three times the sum of the employee's annual
base salary and the Annual Incentive Plan maximum payment; (2) payment of
deferred compensation; (3) maintenance for a period of three additional years
of life, disability, accident, medical, dental, and health insurance benefits
substantially similar to those benefits to which the employee was entitled
immediately prior to termination; (4) additional payments to cover any excise
tax imposed by Section 4999 of the Internal Revenue Code; (5) reimbursement of
legal fees and expenses incurred as a result of the termination; and (6) cash
payments in lieu of common stock issuable under stock option plans. For these
purposes, Annual Incentive Plan maximum payment means the higher of the
employee's maximum potential award under the applicable Annual Incentive Plan
for a specified base year or any subsequent year.
13
The Board of Directors believes that these severance benefits agreements
encourage the commitment and availability of key management employees and
ensure that they will be able to devote their full attention and energy to the
affairs of Black & Decker in the face of potentially disruptive and distracting
circumstances in the event of an attempted or actual change in control or an
unsolicited takeover. In any such event, key management employees will be able
to analyze and evaluate proposals objectively with a view to the best interests
of Black & Decker and its stockholders and to act as the Board may direct
without fear of retribution if the change in control occurs. The severance
benefits agreements, however, may have the incidental effect of discouraging
takeovers and protecting the employees from removal, because the agreements
increase the cost that would be incurred by an acquiring company seeking to
replace current management.
Certain Relationships and Related Transactions On June 23, 1999, Black &
Decker made a $100,000 relocation loan to Christopher Metz, a vice president,
in connection with his relocation to California to assume the position of
president of Kwikset. The loan, which does not bear interest, will be forgiven
over a five-year period ending June 15, 2004. If Mr. Metz voluntarily leaves
Black & Decker, however, he will be obligated to pay Black & Decker the entire
$100,000, plus 8% per annum interest. In addition, if Black & Decker transfers
Mr. Metz to a location outside of California before the end of the five-year
period, Mr. Metz will receive a $20,000 credit for each year he resides in
California.
ORGANIZATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Recommendations regarding the annual salaries of Black & Decker's executive
officers are made by the Organization Committee and submitted to the Board of
Directors for approval. The Board did not reject or modify in any material way
any of the recommendations of the Committee during 2001. Awards of incentive
compensation are made by the Committee under the incentive plans described
below and are reported to the Board.
Philosophy and Objectives Black & Decker seeks to attract and retain top
quality executives by providing a competitive, performance-based executive
compensation program. The fixed compensation element of the program is intended
to be, in the aggregate with other compensation, competitive in the
marketplace. The incentive compensation element is designed to focus management
on annual and long-term financial performance and on long-term stock price
performance, with both annual and long-term objectives and both cash and
stock-based rewards. The program reflects Black & Decker's pay-for-performance
philosophy and is intended to provide pay commensurate with performance.
Total payouts under the incentive compensation element of the program vary with
Black & Decker's annual and long-term performance against the objectives and
targets established under each of the incentive compensation plans and, subject
to limitations, with the Committee's subjective evaluation of individual
performance.
Once it is determined that a participant is eligible for payment under the
Executive Annual Incentive Plan (''EAIP'') because the threshold earnings per
share, excluding non-recurring items (gains on the sale of businesses, the
write-off of goodwill, and restructuring charges), have been reached and, if
applicable, the participant's particular business unit reached its financial
targets, the exact amount of the payment is determined by multiplying the
target payment by a payout factor and an individual performance factor.
Although the payout factor is determined by a mathematical formula calculated
against established objectives (including return on net assets, operating
income, or cash flow for executives with operating responsibility), the actual
payment is determined following a subjective evaluation of the participant's
performance and success in areas deemed to be significant to Black & Decker as
a whole or to the particular business unit. A
14
participant's performance evaluation may result in a payment less than (but not
greater than) the amount otherwise payable under the plan. Under certain
circumstances, in the case of individual performance that the Committee deems
extraordinary, the Committee may recommend to the board the payment of a
special bonus outside of the EAIP.
The United States Internal Revenue Code limits deductions for certain
compensation in excess of $1 million annually paid to specified executive
officers of public companies. The Committee continues to monitor its executive
compensation plans and policies with a view toward preserving the deductibility
of executive compensation while maintaining an ability to attract and retain
those executives necessary to assist Black & Decker in reaching its goals and
objectives. Because the Committee believes that the prudent use of discretion
in determining pay level is in the best interest of Black & Decker and its
stockholders, under some circumstances (other than under the EAIP and the
Performance Equity Plan (''PEP'')) the Committee may continue to exercise both
positive and negative discretion in determining appropriate amounts of
compensation. In those situations, part of the compensation paid may not be
deductible.
Principal Components of Executive Compensation The principal components of the
executive compensation program are base salary, annual and long-term incentive
compensation, and stock option incentives.
Black & Decker's objective is to pay its executive officers base salaries that
are sufficient to attract and retain individuals with the qualities believed to
be necessary for the long-term financial success of Black & Decker and that are
competitive in the marketplace. An individual executive officer's salary level
generally is based on responsibilities, tenure, an evaluation of the executive
officer's performance during the period in which he or she has been employed,
and other special circumstances such as the international nature of Black &
Decker's business, overseas assignments, and direct competition for the
executive officer's services. The Committee and the Board of Directors
generally consider increases in base salary at 14-month intervals for executive
officers other than the chief executive officer and at 18-month intervals for
the chief executive officer. The Committee and the Board from time to time also
consider increases in base salary in connection with significant promotions or
increases in the responsibilities of executive officers and when it is
necessary to respond to competitive pressures.
Historically, the Committee has approved annual bonuses based upon a number of
factors, including earnings per share (''EPS'') performance against established
targets. Individual awards generally have been based upon corporate financial
performance, business unit performance, and a subjective evaluation of
individual performance. Corporate financial performance generally has been
measured by EPS excluding non-recurring items, and business unit performance
generally has been measured by certain financial objectives, including return
on net assets, operating income, and cash flow, against budget. Target
incentive awards then have been multiplied by a payout factor and an individual
performance factor. Throughout the remainder of this Report, references to EPS
mean EPS excluding non-recurring items.
In 2001, the payout factor for executive officers who were members of the
corporate staff was entirely dependent upon EPS. For executive officers with
operating responsibility for individual business units, 25% of the payout
factor was determined by comparing EPS to target, and 75% was determined by
comparing actual business-unit performance to target business-unit performance.
The EPS in 2001 was below the EPS target established by the Committee at the
beginning of the year for purposes of awards under the EAIP. Incentive awards
for 2001 ranged from 41.1% to 68.0% of base salary, reflecting the relationship
of actual EPS to target EPS for the year and the Committee's evaluation of each
15
individual's performance and the performance of the business unit or units for
which the individual was responsible. For the year ended December 31, 2001,
five individuals received awards under the EAIP.
The long-term incentive program is composed of the PEP, stock option plans,
and, for the period 2001 through 2003, the Executive Long-Term
Performance/Retention Plan for the named executive officers and a companion
plan for other executive officers. The two Long-Term Performance/Retention
Plans are referred to collectively as the "Performance Plans." The PEP is a
stock-based performance plan. PEP units provide a potential award, generally
payable in stock, based on Black & Decker's performance during a two- or
three-year performance period against established EPS targets and, in the case
of executives with operating responsibility, certain financial objectives of
the relevant business unit, including return on net assets, operating income,
and cash flow. The EPS targets are established by the Committee at the
beginning of each performance period after consideration of the long-term
operating plan. Stock options generally have a ten-year term, are granted at
fair market value on the date of grant, include limited stock appreciation
rights exercisable in the event of a change in control, and generally become
exercisable in equal annual installments over a four-year period. Under the
Performance Plans, which cover the three-year period 2001 through 2003,
participants surrendered their PEP grants for the periods then ending and were
granted awards payable in cash in 2004 based on Black & Decker's earnings per
share for fiscal year 2003 against a target set by the Committee at the time
the awards were made.
Generally, awards under the long-term incentive program are determined by the
officer's base salary. To maximize the incentive aspects of these programs and
focus on those individuals who are in a position to have the greatest effect on
Black & Decker's performance, the percentages of base salary increase as
responsibility increases. The number of PEP units or stock options and the
amount of the awards under the Performance Plans are not tied to Black &
Decker's past performance, since the ultimate value of the benefit depends on
future corporate performance and the future market values of Black & Decker's
common stock. Approximately 470 individuals received stock options and 61
individuals received awards under the Performance Plans in 2001. The Committee
plans to resume PEP grants for performance periods ending on and after December
31, 2004.
Compensation of the Chief Executive Officer Mr. Archibald's base salary was
$1,250,000. Under the EAIP criteria established at the beginning of 2001, Mr.
Archibald received an award of 68% of his base salary, based on the EPS
achieved in 2001.
Stock options and, for the period ending 2003, the award under the applicable
Performance Plan represent Mr. Archibald's primary long-term incentive
opportunity. Coupled with Black & Decker's stock ownership policy for executive
officers, which is discussed above under the caption ''Security Ownership of
Management,'' these components of the long-term incentive award program are
intended to create a strong motivation to develop and implement strategies that
lead to consistent and lasting increases in Black & Decker's return to its
stockholders. Mr. Archibald's stock ownership significantly exceeds the stock
ownership policy target of five times his salary established by the Board of
Directors.
In September, the Committee awarded Mr. Archibald 200,000 stock options, which
become exercisable in four equal annual installments beginning 12 months after
the date of grant. The grant was made to continue to align his interests with
those of stockholders.
The Committee granted Mr. Archibald an award of $7,275,000 payable in cash in
2004 if Black & Decker achieves the 2003 EPS goal set by the Committee under
the Performance Plans. If the EPS goal is not achieved, the payment will be
reduced proportionately. As a condition of participation in the Performance
Plan, Mr. Archibald surrendered his PEP awards for the performance periods
ending 2001 through 2003.
16
Compensation of Other Executive Officers The named and other executive
officers received salary increases ranging from none to 14.3% during 2001.
The named and other executive officers received annual incentive awards ranging
from $50,000 to $275,000. The Committee granted awards under the Performance
Plans ranging from $235,000 to $3,500,000 to the named and other executive
officers, excluding Mr. Archibald. The incentive awards were determined in a
manner consistent with the plans and philosophy described above.
In addition to Mr. Archibald, a number of named and other executive officers
received stock option grants during 2001. The level of the stock option grants
was determined based on the long-term incentive compensation philosophy
described above. The options have a ten-year term, are exercisable at the fair
market value of the shares of common stock on the date of grant and include
limited stock appreciation rights exercisable in the event of a change in
control as defined in the plans. The stock options become exercisable in four
annual installments beginning 12 months after the date of grant.
Access to Competitive Compensation Data The Committee reviews with management
competitive data from recognized national surveys concerning executive
compensation levels and practices as part of the process of establishing an
appropriate level of overall executive compensation. These surveys include some
of the companies that are included in the Peer Group used by Black & Decker in
the comparison of five-year cumulative total return set forth below, as well as
many other companies not in the Peer Group. The Committee has chosen not to
limit the survey information to companies in the Peer Group because the search
to attract new executives is not limited to companies within the same industry,
and the competition that Black & Decker faces to recruit and retain existing
executives comes from companies in many different industries. After reviewing
the available competitive data, the Committee evaluates the executive's
performance and considers Black & Decker's needs to arrive at individual
compensation decisions.
Anthony Luiso (Chairman)
Barbara L. Bowles
Manuel A. Fernandez
17
[CHART]
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
THE BLACK & DECKER CORPORATION S & P 500 PEER GROUP
------------------------------ --------- ----------
12/96 100 100 100
12/97 131.42 133.36 133.27
12/98 190.39 171.47 110.45
12/99 179.10 207.56 129.85
12/00 136.36 188.66 133.38
12/01 132.71 166.24 140.24
(1) Assumes $100 invested at the close of business on December 31, 1996, in
Black & Decker common stock, Standard & Poor's (S&P) 500 Index, and the
Peer Group.
(2) The cumulative total return assumes reinvestment of dividends.
(3) Peer Group consists of the companies in S&P Hardware and Tools, Value Line
Home Appliances, Business Week Machine and Hand Tools, and Fortune
Industrial and Farm Equipment. A list of the companies in the Peer Group
will be furnished upon request addressed to the Corporate Secretary at 701
East Joppa Road, Towson, Maryland 21286.
(4) Total return is weighted according to market capitalization of each company
at the beginning of each year.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed Black & Decker's audited
financial statements for the fiscal year ended December 31, 2001, with
management and with Black & Decker's independent accountants, Ernst & Young
LLP. Management is responsible for Black & Decker's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of Black & Decker's consolidated financial
statements in accordance with generally accepted auditing standards and for
issuing a report thereon.
The Audit Committee has discussed with Ernst & Young LLP the matters required
to be discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit. The Audit Committee has received the written disclosures
and the letter from Ernst & Young LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), has discussed
with Ernst & Young LLP their independence, and has considered the compatibility
of non-audit services provided by Ernst & Young LLP with their independence.
Based on the review and discussions described above, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
the fiscal year ended December 31, 2001, be included in Black & Decker's Annual
Report on Form 10-K for the fiscal year ended December 31, 2001, for filing
with the Securities and Exchange Commission.
Malcolm Candlish (Chairman)
Norman R. Augustine
M. Anthony Burns
Benjamin H. Griswold, IV
18
APPROVAL OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee recommends, and the Board of Directors selects, independent
public accountants for Black & Decker. The Audit Committee has recommended that
Ernst & Young LLP, who served during 2001, be selected for 2002, and the Board
has approved the selection. Unless a stockholder directs otherwise, proxies
will be voted for the approval of the selection of Ernst & Young LLP as
independent public accountants for 2002. If the appointment of Ernst & Young
LLP is not approved by the stockholders, the Board will consider the selection
of other independent public accountants for 2002.
A representative of Ernst & Young LLP is expected to be present at the 2002
Annual Meeting of Stockholders. The representative will be given the
opportunity to make a statement and will be available to respond to appropriate
questions.
Audit Fees The aggregate fees billed by Ernst & Young LLP for professional
services rendered for the audit of Black & Decker's annual financial statements
for the fiscal year ended December 31, 2001, and the reviews of the financial
statements included in Black & Decker's Quarterly Reports on Form 10-Q for that
fiscal year were $2,235,000.
Financial Information Systems Design and Implementation Fees There were no
fees billed by Ernst & Young LLP for professional services relating to
financial information systems design and implementation rendered during the
fiscal year ended December 31, 2001.
All Other Fees The aggregate fees billed by Ernst & Young LLP for professional
services rendered during the fiscal year ended December 31, 2001, other than as
stated above under the caption Audit Fees, were $2,937,000. Of this amount,
$2,477,000 related to professional tax services.
The Board of Directors recommends a vote FOR the approval of the selection of
Ernst & Young LLP as Black & Decker's independent accountants for 2002.
STOCKHOLDER PROPOSALS
The following stockholder proposals were submitted according to Rule 14a-8 of
the Exchange Act. Promptly upon receipt of any oral or written request, Black &
Decker will furnish the names and addresses of the proponent of each proposal
and information concerning the number of shares of common stock that the
proponent beneficially owns. The approval of each stockholder proposal requires
the affirmative vote of a majority of votes cast at the meeting, provided the
holders of a majority of the outstanding shares of stock are present in person
or by proxy at the meeting. Abstentions will be treated as shares represented
at the meeting and will not affect the result of the vote. If a broker, other
record holder, or nominee indicates on a proxy that it does not have authority
to vote certain shares on a particular matter, those shares will be considered
represented at the meeting and will not affect the result of the vote.
Stockholder Proposal 1
Proposal Whereas, our company, as a global corporation, faces numerous complex
problems which affect our interests as shareholders. The international context
within which our company operates is becoming increasingly diverse as we enter
the new millennium.
A ''Millennium Poll on Corporate Social Responsibility'' interviewed over
25,000 citizens in 23 countries and found that two in three citizens want
companies to go beyond their historical role of making a profit, paying
19
taxes, employing people and obeying all laws; they want companies to contribute
to broader societal goals as well (Environics International Ltd., October 1999).
Companies are faced with important concerns arising from diverse cultures and
political and economic contexts. These concerns require management to address
issues that include human rights, workers' rights to organize and bargain
collectively, non-discrimination in the workplace, and sustainable community
development. Companies should find effective ways to eliminate the use of child
labor, forced labor, bribery and harmful environmental practices.
We believe global companies need to implement comprehensive codes of conduct,
such as those found in the ''Principles for Global Corporate Responsibility:
Bench Marks for Measuring Business Performance,'' developed by an international
group of religious investors. Companies need to formulate policies, programs
and practices to address the challenges they face in the global marketplace.
Our company should be in a position to assure shareholders that its employees
are treated fairly and paid a sustainable living wage wherever they work in the
global economy. One important element of ensuring compliance is the utilization
of independent monitors made up of respected local human rights, religious and
other non-governmental organizations that know the local culture. A number of
global companies are developing credible code enforcement mechanisms that
include independent monitoring.
Improving the quality of life for employees and their communities can lead to
increased productivity and enhance the bottom line for the company.
RESOLVED, the shareholders request the Board of Directors to review or amend,
where applicable, its code or standards for its international operations and
report a summary of this review to shareholders by August 2002.
Proponent's Statement in Support of the Proposal
We recommend the review include the following areas:
1. A description of policies which are designed to protect human rights
-- civil, political, social, cultural and economic -- consistent with
respect for human dignity and international labor rights standards.
2. A report on efforts to ensure that the company does not employ
children under the age of fifteen, or younger than the age of completing
compulsory education in the country of manufacture where such age is higher
than fifteen.
3. A report of company policies ensuring that there is no use of forced
labor, whether in the form of prison labor, indentured labor or bonded labor.
4. Establishment of consistent standards for workers' health and safety
practices for handling hazardous wastes and protection of the environment,
as well as promoting a fair and dignified quality of life for workers and
their communities.
We believe a company poised to compete in the 21/st/ century needs
comprehensive global standards to guide its decisions.
Black & Decker's Statement in Opposition to the Proposal The Board of
Directors has adopted The Black & Decker Corporation Code of Ethics and
Standards of Conduct (the ''Code'') to assure that Black & Decker adheres to
ethical standards and obeys applicable laws, including the laws of various
countries in which Black & Decker
20
operates. The Code contains corporate policies relating to employment
practices, employee health and safety, and environmental management, which
apply equally to Black & Decker's worldwide operations.
This shareholder proposal requests the Board to review or amend Black &
Decker's code or standards for its international operations and report a
summary of this review to stockholders. The Board believes that conducting a
special review and preparing a special report on Black & Decker's standards for
international operations is unnecessary and would not be an effective use of
its corporate resources. Black & Decker remains committed to treating all
employees with dignity, fairness and respect, and to protecting the health and
safety of its employees. Further, Black & Decker has initiated a review process
to ensure that its suppliers are committed to the same treatment of their
employees.
The stockholders considered an identical proposal at the 2001 Annual Meeting of
Stockholders, and that proposal was defeated. The Board believes that the
reasons for opposing the resolution at the 2001 Annual Meeting of Stockholders
are equally valid today.
The Board of Directors recommends a vote AGAINST stockholder proposal 1.
Stockholder Proposal 2
Proposal RESOLVED: That the shareholders of Black & Decker Corp. request the
Board of Directors to adopt a policy requiring that stock options, which are
granted to senior executives as part of their compensation, are
performance-based. For purposes of this proposal, performance-based stock
options are defined as either of the following:
(1) Performance Vesting Stock Options -- grants which do not vest or
become exercisable unless specific stock price or business performance goals
are met.
(2) Premium Priced Stock Options -- grants with an option exercise price
higher than fair market value on date of grant.
(3) Index Options -- grants with a variable option exercise price geared
to a relative external measure such as a comparable peer group or S&P
industry index.
(4) Performance Accelerated Stock Options -- grants whose vesting is
accelerated upon achievement of specific stock price or business performance
goals.
Proponent's Statement in Support of the Proposal The bull market of the 1990s
set an unprecedented record of rewarding top executives of a number of
low-performing companies with huge cash payments from the exercise of stock
options. Generally, stock options reward both superior and sub par performance
in a rising market. This phenomenon has engendered concerns that ''the spread
of stock options may be distorting the economy, contributing to a temporary
overvaluation of equities, encouraging shortsighted managerial decisions and
storing up problems for companies in the future. Moreover, the evidence for a
link between options and performance is thin.''/1/ As a result, institutional
investors increasingly are urging that, in order to align the interests of
executives with the interests of stockholders, stock options that are granted
as a part of executive compensation be linked to real and superior performance.
For these reasons, we urge shareholders to vote FOR this proposal.
/1/ The Economist, August 7, 1999
21
Black & Decker's Statement in Opposition to the Proposal The Board of
Directors views stock options as one element of a compensation program designed
to attract and retain talented senior executives in today's highly competitive
market. The Organization Committee of the Board, which is composed entirely of
independent directors and regularly reviews all elements of executive
compensation, uses various compensation tools, including salary, stock option
grants, and other compensation plans, to provide a compensation structure that
recognizes both Black & Decker's performance and the executive's contribution
to that performance. The Organization Committee believes that the current
compensation program aligns the interests of Black & Decker's senior executives
with those of Black & Decker's stockholders. The use of stock options achieves
this alignment. Stock options are inherently performance-based because a holder
of stock options receives no benefit unless Black & Decker's stock price
increases after the date of the stock option grant.
In a volatile stock market, changing to indexed, premium-priced,
performance-vesting, or performance-accelerated options would threaten Black &
Decker's ability to retain its senior executives and to attract other highly
qualified executives. In the current economic environment, Black & Decker may
not experience an increase in its stock price, despite the achievement by Black
& Decker executives of financial and operating objectives, and it is unlikely
that Black & Decker's existing option programs will reward executives for
below-par performance. Black & Decker must compete for talent with U.S.-based
and international companies, the vast majority of which offer conventional
stock options. Given the industry and the types of companies with which Black &
Decker competes for executive talent and from which Black & Decker recruits,
Black & Decker would be at a severe competitive disadvantage if the Board of
Directors adopted the stock option policy described in the proposal.
The stockholders considered an identical proposal at the 2001 Annual Meeting of
Stockholders, and that proposal was defeated. The Board believes that the
reasons for opposing the resolution at the 2001 Annual Meeting of Stockholders
are equally valid today.
The Board of Directors recommends a vote AGAINST stockholder proposal 2.
STOCKHOLDER PROPOSALS AND OTHER BUSINESS TO BE CONSIDERED AT THE 2003 ANNUAL
MEETING OF STOCKHOLDERS
It is expected that the 2003 Annual Meeting of Stockholders will be held on
April 29, 2003. In order to be considered for inclusion in the Proxy Statement
for that meeting, stockholder proposals must be submitted in writing, must be
received on or before November 12, 2002, and must include the full and correct
name and address of the stockholder making the proposal and the number of
shares of common stock owned. If the shares are not registered in the
stockholder's name but are beneficially owned, proof of ownership must be
submitted with the proposal. In addition, the stockholder must state in writing
his or her intention to appear personally or by proxy at the meeting to present
the proposal.
Stockholders desiring to bring business before the 2003 Annual Meeting of
Stockholders in a form other than a stockholder proposal in accordance with the
preceding paragraph must give written notice that is received by the Corporate
Secretary at the principal office of Black & Decker after January 9, 2003, and
before January 29, 2003. The written notice must comply with the provisions of
Black & Decker's bylaws summarized below under the heading ''Other Matters.''
OTHER MATTERS
Management does not know of any other matters that will come before the 2002
Annual Meeting of Stockholders. If any other matters are properly brought
before the meeting, or if any of the persons named as nominees for election as
directors should decline or be unable to serve as a director, the persons named
as Proxies are authorized to vote the shares as they see fit and will act
according to their best judgment.
22
The bylaws provide that, to be properly brought before the meeting, business
must be: (1) specified in the notice of meeting (or any supplemental notice)
given by or at the direction of the Board of Directors; (2) otherwise properly
brought before the meeting by or at the direction of the Board; or (3)
otherwise properly brought before the meeting by a stockholder. In addition to
any other applicable requirements, the stockholder must have given written
notice that is received by the Corporate Secretary at the principal executive
office of Black & Decker not less than 90 days nor more than 110 days prior to
the meeting. If Black & Decker provides less than 100 days' notice or prior
public disclosure of the date of the meeting, notice by the stockholder must be
received no later than the close of business on the tenth day following the day
on which the meeting notice was mailed or the public disclosure was made,
whichever occurred first. The stockholder's notice must include: (1) a brief
description of each matter of business to be brought before the meeting and the
reasons for conducting the business at the meeting; (2) any material interest
of the stockholder in the business; (3) the name and address of the stockholder
proposing the business; and (4) the number of shares of common stock
beneficially owned by the stockholder.
No stockholders submitted written notice to Black & Decker that they intended
to bring business before the 2002 Annual Meeting of Stockholders in compliance
with the preceding paragraph. As a result, only the business described in the
attached Notice of Annual Meeting of Stockholders and any other business
brought forth by or at the direction of the Board of Directors will be
considered at the meeting.
No business shall be conducted at the meeting except as described above. If the
chairman of the meeting determines that any business was not properly brought
before the meeting, the chairman will announce this at the meeting and the
business will not be conducted.
March 12, 2002
Towson, Maryland
23
Exhibit A
The Black & Decker Audit Committee Charter
A. Members.
This committee is composed of not less than three members, appointed annually
by the Board, all of whom have no relationship to the Corporation that may
interfere with the exercise of their independence from management and the
Corporation and shall meet the restrictions of Section 303.01(B)(3) of the New
York Stock Exchange Listed Company Manual. All members shall be able to read
and understand fundamental financial statements, including the Corporation's
balance sheet, income statement, and cash flow statement. At least one member
shall have accounting or related financial management expertise. A member shall
be deemed to have the required expertise if the member has past employment
experience in finance or accounting, professional certification in accounting,
or any other comparable experience or background, or has been a chief executive
officer or other senior officer with financial oversight responsibilities.
B. Functions.
(1) Make recommendations to the Board regarding the selection of independent
auditors for the Corporation; approve selection of and change in the
independent auditors selected by the subsidiaries; evaluate the independent
auditors; and ensure that the independent auditors are ultimately accountable
to the Board and the committee.
(2) Meet at least semi-annually with the Corporation's independent auditors
to review and discuss the scope and estimated cost of the annual audit program
and the results of the auditor's work, including reports, management letters,
and the Corporation's accounting procedures and controls.
(3) Serve as a channel of communication between the Board and the
independent auditors.
(4) Meet periodically with the Vice President & General Auditor to review
the internal audit organization, adequacy of resources committed to the
function, the adequacy of the system of internal controls, procedures,
programs, and results of activities.
(5) Review as appropriate changes in accounting standards or rules, any
unusual accrual or reserve having a material effect, the adequacy of tax
reserves, outstanding litigation, and related reserves for exposure.
(6) Review on a continuing basis the administration of the Corporation's
legal compliance program and the Corporation's Code of Ethics and Standards of
Conduct.
(7) Review expenses of the elected officers.
(8) Require the principal independent auditors to provide a written
statement of all relationships between the auditors and the Corporation
consistent with Independence Standards Board Standard No. 1 and review and
approve the level of non-audit work performed by them.
(9) Review and reassess the adequacy of the charter of the committee
annually.
(10) Report the charter, charter amendments and activities of the committee
in the Corporation's proxy statement as required by rules of the SEC.
(11) Review and discuss with management the financial statements in the
Corporation's Annual Report on Form 10-K, discuss with the principal
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, and based on the review and discussion, recommend to
the Board that the audited financial statements be included in the Annual
Report on Form 10-K.
(12) In addition to its specific audit functions, satisfy itself generally
that the accounting practices and internal control systems throughout the
Corporation are adequate to assure reliable and informative financial
reporting, to safeguard corporate assets, to assure compliance with the laws
and regulations to which the Corporation is subject, and to assure adherence to
a high standard of business conduct.
C. Staff Support.
Corporate General Auditor.
25
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
- ------------------------------
[LOGO] BLACK &
DECKER
Annual Meeting of Stockholders
April 30, 2002
The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
HAVE YOU MOVED?
The Black & Decker Corporation
Mail Stop TW266
701 East Joppa Road
Towson, Maryland 21286
Please change my address on the books of The Black & Decker Corporation.
Name of Owner: Account #:
- --------------------------------------------------------------------------------
(Print name exactly as it appears on stock certificate)
From (Old Address):
- --------------------------------------------------------------------------------
(Please Print)
To (New Address):
- --------------------------------------------------------------------------------
Street Address City or
Town State Zip Code
Date: Signature:
- --------------------------------------------------------------------------------
Owner should sign name exactly as it appears on stock certificate.
If this form is signed by a representative, evidence of authority should be
supplied.
P
R
O
X
Y
THE BLACK & DECKER CORPORATION
701 East Joppa Road, Towson, Maryland 21286
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Nolan D. Archibald and Anthony Luiso, and
each of them, Proxies of the undersigned, with power of substitution, to vote
all shares of common stock of Black & Decker that the undersigned could vote if
present at the 2002 Annual Meeting of Stockholders to be held April 30, 2002,
and any adjournments of the meeting. The undersigned further gives the Proxies
authority to vote according to their best judgment on any other matters properly
coming before the meeting.
Election of Directors. Nominees:
01. N.D. Archibald, 02. N.R. Augustine, 03. B.L. Bowles, 04. M.A. Burns, 05.
M. Candlish, 06. M.A. Fernandez, 07. B. H. Griswold, IV, 08. A. Luiso.
You are encouraged to specify your choices by marking the appropriate boxes
(SEE REVERSE SIDE), but you NEED NOT MARK any boxes if you wish to VOTE IN
ACCORDANCE with the Board of Directors' recommendations. Please mark, sign,
date, and return this Proxy promptly using the enclosed envelope.
-------------
SEE REVERSE
SIDE
-------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[X] Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is given, this proxy will be voted FOR all of the Board of
Directors' nominees, FOR Item 2, and AGAINST Items 3 and 4.
- ------------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote
The Board of Directors recommends a vote FOR the nominees and FOR Item 2. AGAINST Items 3 and 4.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of [ ] [ ] [ ] 3. Stockholder Proposal #1 [ ] [ ] [ ]
Directors Ernst & Young LLP
(see reverse) as Independent 4. Stockholder Proposal #2 [ ] [ ] [ ]
Accountants
Vote FOR all nominees, except
- -----------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE(S) ____________________________________________ DATE _________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
Executors, administrators, trustees, etc., should so indicate when signing and
sign as required by the authority they hold.
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL
Dear Stockholder:
Black & Decker encourages you to take advantage of new and convenient ways
by which you can vote your shares. You can vote your shares electronically over
the Internet or by telephone. This eliminates the need to return the proxy card.
To vote your shares electronically, you must use the control number printed
in the box above, just below the perforation. The series of numbers that appear
in the box above must be used to access the system.
1. To vote over the Internet:
. Log on to the Internet and go to the Web site
http://www.eproxyvote.com/bdk. Internet voting will be available
until 12:01 A.M. on April 30, 2002.
2. To vote by telephone:
. On a touch-tone telephone, call toll-free 1-877-PRX-VOTE
(1-877-779-8683) 24 hours a day, seven days a week. Telephone
voting will be available until 12:01 A.M. on April 30, 2002.
. Non-U.S. stockholders should call 1-201-536-8073.
Your electronic vote authorizes the named Proxies in the same manner as if
you marked, signed, dated and returned the proxy card. (If you vote your shares
electronically, do not mail back your proxy card.)
Your vote is important. Thank you for voting.
You can also choose to receive future annual meeting materials
electronically by going to the Web site http://www.econsent.com/bdk.