form10q11062008b.htm


    
      

      

    

    
      
        Exhibit 10.3

      

      THE BLACK & DECKER
EXECUTIVE ANNUAL INCENTIVE PLAN

      


      
        
          
            	
                    1.

                  	
                    Purpose

                  


          

        

        


        The
purpose of The Black & Decker Corporation Executive Annual Incentive Plan is
to make a part of the annual compensation of the Corporation’s officers
dependent on the Corporation’s performance and to provide rewards for
performance as a competitive incentive to their efforts on the Corporation’s
behalf, and thus to enhance and reinforce the Corporation’s ability to achieve
its business goals. It is the intention of the Board of Directors of the
Corporation in adopting the Plan that amounts paid to Participants under the
Plan be “qualified performance-based compensation” within the meaning of Section
162(m) of the Code and the Section 162(m) Regulations.

        


        
          	
                  2.

                	
                  Definitions

                


        

        


        Whenever
used for purposes of the Plan, the following terms have the meanings defined
below, and when the defined meaning is intended, the term is
capitalized:

        


        (a)           “Award”
means a grant to a Participant of incentive compensation under the
Plan.

        


        (b)           “CEO”
means the Chief Executive Officer of the Corporation.

        


        (c)           “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

        


        (d)           “Committee”
means the Compensation Committee of the Board of Directors of the
Corporation.  All members of the Committee shall be members of the
Board of Directors of the Corporation who are not eligible to participate in the
Plan and who are (i) disinterested persons as defined in Rule 16b-3 adopted
pursuant to the Securities Exchange Act of 1934, (ii) outside directors as
defined in the Section 162(m) Regulations, and (iii) independent directors as
defined in the New York Stock Exchange’s corporate governance rules and the
Corporation’s Corporate Governance Policies and Procedures
Statement.

        


        (e)           “Corporation”
means The Black & Decker Corporation.

        


        (f)           “Maximum
Participant Award” means, with respect to a particular Participant, the maximum
Award payable to such Participant as determined in accordance with Section 5(d)
of the Plan.

        


        (g)           “Participant”
means an employee who is an officer of the Corporation who has been designated
to participate in the Plan.

         

        (h)           “Performance
Period” means the fiscal year in respect of which an Award is to be paid under
the Plan.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        
          
            (i)           “Plan”
means The Black & Decker Executive Annual Incentive Plan, as amended from
time to time.

            


            (j)           “Section
162(m) Regulations” mean the regulations adopted pursuant to Section 162(m) of
the Code, as amended from time to time.

            


            (k)           “Subsidiary”
means any domestic or foreign corporation, at least 50% of the outstanding
voting stock or voting power of which is beneficially owned, directly or
indirectly, by the Corporation.

            


            
              	
                      3.

                    	
                      Administration

                    


            

            


            (a)           The
Committee shall determine who shall be a Participant, the applicable performance
goals for each Performance Period and the amount of any Awards paid under the
Plan, shall construe, interpret (subject to Section 3(d) of the Plan) and
administer the Plan, and shall adopt such rules and regulations and take such
other action as it deems appropriate. All decisions by the Committee shall be
final, conclusive and binding on the Corporation and each Participant, former
Participant, beneficiary and every other interested person. The Committee may
condition participation in the Plan by an employee upon the employee agreeing to
certain terms and conditions of employment (including, without limitation,
noncompete, confidentiality or similar provisions). Prior to the payment of any
Awards under the Plan the Committee shall certify, in accordance with the
Section 162(m) Regulations, that the performance goals in respect of the
applicable Performance Period have been satisfied. The Committee will report
annually to the Board of Directors of the Corporation all action taken under the
Plan, including Awards paid.

            


            (b)           Within
90 days of the beginning of each Performance Period (or, if earlier, before 25%
of the period of service to which the performance goals relate has elapsed), the
Committee shall establish or approve performance goals for the Performance
Period. The performance goals established by the Committee shall be stated in
terms of an objective formula or standard and shall be based on one of, or a
combination of, the following factors: the market price of the Corporation’s
Common Stock at the close of business on the last business day of the
Performance Period, increases in the market price of the Corporation’s Common
Stock during the Performance Period, the earnings for the Performance Period
(either before taxes, before interest and taxes, before depreciation,
amortization, interest and taxes, or after all of the foregoing), the earnings
per share for the Performance Period, or, as to the Corporation or any
subsidiary, group, division, or operating unit thereof, the return on equity or
net assets for the Performance Period, the gross margin or cost of goods sold
for the Performance Period, or the cash flow from operations or free cash flow
for the Performance Period.

            
               

                     
(c)           The
Committee shall administer the Plan in a manner consistent with the terms and
conditions of the Section 162(m) Regulations to enable Awards paid under
the

            

             

          

        

      

      
        
          
          

        

        
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        Plan to
be “qualified performance-based compensation” within the meaning of Section
162(m) of the Code and the Section 162(m) Regulations.

        


        (d)           It
is intended that the Plan comply with Section 409A of the Code and the
regulations or guidance issued thereunder and it shall be interpreted
accordingly.

        


        
          	
                  4.

                	
                  Participation

                


        

        


        (a)           Participation
in the Plan shall be limited to selected officers of the Corporation who the
Committee has determined have a significant influence on the Corporation’s
annual corporate performance. The selection of Participants shall be made by the
Committee within 90 days of the beginning of a Performance Period (or, if
earlier, before 25% of the period of service to which the performance goals
relate has elapsed) and communicated to the Participants as soon thereafter as
practicable.

        


        (b)           At
any time during a Performance Period the Committee may designate new
Participants or remove officers from participation, in its sole discretion. An
officer’s participation in the Plan in any prior year or years shall not give
the officer the right to be a Participant in any subsequent year.

        


        
          	
                  5.

                	
                  Awards

                


        

        


        (a)           At
the end of each Performance Period, the CEO shall submit a written report to the
Committee describing the performance of the Corporation (or, if applicable, a
business unit) relative to those performance goals previously established by the
Committee for the Performance Period.

        


        (b)           Awards
shall be made annually in accordance with the respective performance against the
performance goals established by the Committee for the respective Performance
Period.

        


        (c)           The
decision to pay or not to pay an Award and the amount of the Award to be paid
shall be made by the Committee based on the performance goals established in
respect of the applicable Performance Period and in accordance with the Section
162(m) Regulations. Under no circumstances may the Committee make an Award to a
Participant that exceeds the applicable Maximum Participant Award for the
respective Performance Period. The Committee in its sole discretion may reduce
the amount of any Award paid to a Participant below the amount of the Award that
otherwise would be payable to the Participant upon application of the
performance goals for the applicable Performance Period or may decide not to pay
an Award when performance goals for the applicable Performance Periods have been
satisfied, but under no circumstances may the Committee increase the amount of
any Award that otherwise would be payable to the Participant upon application of
the performance goals for the applicable Performance Period.

         

        
          
            (d)           With
respect to each Participant, the Maximum Participant Award for a Performance
Period shall not exceed $4 million.

          

        

      

      
        
          
          

        

        
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                    6.

                  	
                    Payment
      of Awards

                  


          

          


          (a)           Awards
shall be paid as soon as practicable after the end of a Performance Period (but
in no event later than March 15 of the calendar year immediately following the
end of the Performance Period) and after the Committee has certified that the
applicable performance goals have been satisfied.

          


          (b)           Awards
shall be paid in cash and shall be paid in the currency in which each
Participant’s base salary is paid.

          


          
            	
                    7.

                  	
                    Termination
      of Employment

                  


          

          


          If before
an Award is actually paid to a Participant with respect to a Performance Period
the Participant ceases to be a regular, full-time employee of the Corporation or
any of its Subsidiaries for a reason other than retirement with a right to an
immediate retirement benefit, the Participant’s eligibility under the Plan shall
terminate and no Award will be made. If a Participant’s employment terminates at
a time when the Participant has a right to receive an immediate retirement
benefit from the Corporation or any of its Subsidiaries, the Committee may make
such Award as it deems appropriate under the circumstances; provided, however,
that (i) the Award shall be payable at the time specified in Section 6(a) and
only if the Committee certifies that the applicable performance goals have been
satisfied; and (ii) the Award shall not exceed the Award the Participant would
have been entitled to receive upon application of the performance goals for the
applicable Performance Period if the Participant had been employed for the
entire Performance Period times a fraction the numerator of which shall equal
the number of days the Participant was employed by the Corporation and its
Subsidiaries during the Performance Period and the denominator of which shall
equal the number of days in the Performance Period.

          


          
            	
                    8.

                  	
                    Claim
      to Awards and Employment Rights

                  


          

          


          No
officer or other person shall have any claim or right to be granted an Award
under the Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any person any right to be retained in the employ of the
Corporation or a Subsidiary or affecting the right of the Corporation and its
Subsidiaries to terminate the employment of any person at any time, for any
reason and with or without notice.

          


          
            	
                    9.

                  	
                    Tax
      Withholding

                  


          

          


          The
Corporation or a Subsidiary, as appropriate, shall have the right to deduct from
all Award payments for any Federal, State or local taxes or other similar
payments required by law to be withheld with respect to such
payments.


          
            
              
                 

                


              

               


            

            
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                    10.

                  	
                    Expenses
      of Plan

                  


          

          


          The
expenses of administering the Plan shall be borne by the Corporation and its
Subsidiaries.

          


          
            	
                    11.

                  	
                    Amendment
      and Termination

                  


          

          


          The Board
of Directors may, in its discretion, terminate, amend or modify this Plan at any
time and from time to time.  The Plan may be amended at any time,
including retroactively, to conform the Plan to the provisions and requirements
of Section 409A of the Code and the Section 162(m) Regulations, and no such
amendment shall be considered prejudicial to any interest of any participant
thereunder.

          


          
            	
                    12.

                  	
                    Effective
      Date of the Plan

                  


          

          


          The
original effective date of the Plan was January 1, 1996.  This
amendment and restatement of the Plan is adopted on, and effective as of,
October 16, 2008.

          


        

      

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