Exhibit 10(h)(2) 

                   THE BLACK & DECKER PERFORMANCE EQUITY PLAN


Section 1.   Purpose

         The purpose of The Black & Decker  Performance Equity Plan (the "Plan")
is to attract and retain key  employees of The Black & Decker  Corporation  (the
"Corporation")  and its  Subsidiaries,  to motivate those employees to put forth
maximum  efforts for the  long-term  success of the  business,  and to encourage
ownership of the Corporation's Stock by them.

Section 2.   Definitions

         The following definitions are applicable to the Plan:

         (a)  "Committee"   shall  mean  the   Organization   Committee  of  the
Corporation's  Board of Directors or such other committee of the Board comprised
of not less than three members as the Board of Directors shall from time to time
appoint to administer the Plan. 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  Exchange  Act,  and (ii)  outside  directors  as defined in the
Section 162(m) Regulations.

         (b) "Designated  Beneficiary" shall mean the beneficiary  designated by
the Participant,  in a manner determined by the Committee,  to receive shares of
Stock or other payments due the  Participant  in the event of the  Participant's
death,  or in the absence of an effective  designation by the  Participant,  the
Participant's  surviving  spouse,  or,  if there  is no  surviving  spouse,  the
Participant's estate.

         (c)      "Employee" shall mean a regular full-time salaried
employee of the Corporation or of a Subsidiary.

         (d)      "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

         (e)  "Executive  Officer"  shall  mean  an  executive  officer  of  the
Corporation  within the meaning of Rule 3b-7 promulgated  under the Exchange Act
and a "covered employee" as defined by the Section 162(m) Regulations.

         (f)      "Fiscal Year" shall mean the fiscal year of the
Corporation.

         (g)      "Participant" shall mean an Employee who is selected by
the Committee to participate in the Plan pursuant to Section 5.

         (h)      "Performance Goals" shall mean the performance objective
or objectives relating to, in whole or in part, the performance of the 
Corporation or any Subsidiary, group, division, or operating unit of the 
Corporation or any  Subsidiary  during a Performance  Period.  With respect to a
Participant who is an Executive Officer, the performance  objective
or  objectives  shall be based on one of, or a  combination  of,  the  following
factors:  the  market  price of the Stock at the close of  business  on the last
business  day of the  Performance  Period,  increases in the market price of the
Stock during the Performance  Period, the earnings for the Performance Period or
any  year or  years in 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 any year or years in the Performance Period, or, as to the Corporation or any
Subsidiary, group, division or operating unit thereof, the average annual return
on equity or net  assets for the  Performance  Period or the return on equity or
net assets for a specified year or years in the Performance  Period, the average
annual  gross  margin or cost of goods  sold for the  Performance  Period or the
gross  margin  or cost of  goods  sold  for a  specified  year or  years  in the
Performance Period, or the average annual cash flow from operations or free cash
flow for the  Performance  Period or the cash flow from  operations or free cash
flow for a specified year or years in the Performance Period.

         (i)  "Performance  Period"  shall  mean with  respect  to each grant of
Performance Shares a period of three to five Fiscal Years.

         (j) "Performance  Shares" shall mean a grant pursuant to Sections 5 and
7 of an award in the form of shares of Common Stock or units equivalent thereto.

         (k) "Section 162(m)  Regulations"  shall mean the  regulations  adopted
pursuant to Section 162(m) of the Internal Revenue Code of 1986 (as amended), as
such regulations may be amended from time to time.

         (l)      "Stock" shall mean the common stock, $.50 par value, of
the Corporation.

         (m)   "Subsidiary"   shall  mean  any  business  entity  in  which  the
Corporation,  directly  or  indirectly,  owns 50  percent  or more of the  total
combined voting power of all classes of stock or other equity interests.

Section 3.   Administration

         The Plan shall be administered  by the Committee.  The Committee shall 
have full power to establish the form and terms and conditions (including, 
without limitation, noncompete, confidentiality or similar provisions)  of  the
Performance Share Agreement that shall represent the grant of Performance Shares
to a Participant hereunder,  to construe and interpret the Plan and to establish
and amend rules and  regulations for its  administration.  All actions taken and
decisions made by the Committee  pursuant to the provisions of the Plan shall be
binding  and  conclusive  on all  persons for all  purposes,  including  but not
limited to Participants and their legal  representatives and beneficiaries.  The
rights  of a  Participant  shall  at all  times  be  subject  to the  terms  and
conditions set forth in the respective Performance Share Agreement.

Section 4.   Maximum Amount Available for Grants

         (a) The maximum  number of  Performance  Shares that may be granted and
the  maximum  number  of shares  of Stock  that may be issued  under the Plan is
1,500,000,  subject to  adjustment  as provided  in Section  11. If  Performance
Shares are forfeited  under the Plan, they and any related shares of Stock shall
again be available for grant and issuance under the Plan. Subject to Section 10,
if Performance  Shares are paid in cash rather than in shares of Stock, they and
any related shares of Stock shall not be available for grant and issuance.

         (b)      Shares of Stock delivered under the Plan shall be made
available from authorized but unissued shares.

         (c) With  respect  to each  Performance  Period  beginning  on or after
January 1, 1996, the maximum  number of Performance  Shares that may be granted,
and the maximum number of shares of Stock that may be issued, to any Participant
shall be 75,000.

Section 5.   Participation; Grants

         The Committee shall from time to time make grants of Performance Shares
to  Participants  selected from among those Employees who, in the opinion of the
Committee,  have the  capacity  to  contribute  in  substantial  measure  to the
successful  performance  of the  Corporation  and its  Subsidiaries.  In  making
grants,   the  Committee  may  take  into  account  a  Participant's   level  of
responsibility,  rate of compensation,  individual performance and contribution,
and such  other  criteria  as it deems  appropriate.  If an  Employee  becomes a
Participant  after the  commencement  of a  Performance  Period,  the  number of
Performance  Shares  granted,  if any,  may be  prorated  for the length of time
remaining  in the  Performance  Period.  With  respect to any Employee who is or
becomes an Executive  Officer,  the  Committee  may not designate the Employee a
Participant  more than 90 days after the  commencement of a Performance  Period.
The Committee may not grant Performance Shares to any member of the Committee.

 Section 6.  Performance Goals

         The Committee shall establish Performance Goals for each Performance 
Period on the basis of such criteria, and to accomplish such objectives,  as the
Committee may from time to time determine.  The Committee shall also establish a
schedule or schedules for the Performance Period setting forth the percentage of
the  Performance  Shares  granted that will be earned or forfeited  based on the
percentages of the Performance  Goals for the period that are actually  achieved
or exceeded. To provide Participants with additional motivation,  the Committee,
in its  discretion,  may provide for the  issuance to  individual  Participants,
where  Performance  Goals in excess of a target are  achieved  or  exceeded,  of
additional,  fully vested and unrestricted  Performance Shares not to exceed 50%
of the Performance Shares granted for the Performance Period; provided, however,
that with respect to Performance  Periods beginning on or after January 1, 1996,
if such an  additional  grant is made to an  Executive  Officer,  the  number of
additional  Performance  Shares to be granted to the Executive  Officer shall be
fixed by the Committee  within 90 days of the  commencement  of the  Performance
Period, and the grant of additional  Performance Shares to the Executive Officer
shall be contingent upon the attainment of the Performance Goals established, in
writing,  by the Committee within 90 days of the commencement of the Performance
Period.  In setting  Performance  Goals, the Committee may use return on equity,
earnings  growth,  revenue  growth,  peer  comparisons or such other measures of
performance in such manner as it deems appropriate;  provided, however, that for
Performance  Periods  beginning on or after January 1, 1996,  Performance  Goals
established  with respect to a Participant who is an Executive  Officer shall be
based on one of, or a combination of, the factors set forth in the definition of
Performance Goals. The Committee shall establish Performance Goals before, or as
soon as practicable after, the commencement of the Performance Period;  provided
that with respect to a Participant  who is an Executive  Officer the Performance
Goals shall be  established  in writing by the  Committee not later than 90 days
after the commencement of the Performance Period.  During the Performance Period
and until such time  thereafter  as payment is made in  accordance  with Section
8(b),  the  Committee  shall have the authority to adjust upward or downward the
Performance Goals or the measure or measures of performance in such manner as it
deems  appropriate to reflect  unusual,  extraordinary  or nonrecurring  events,
changes in applicable  accounting  rules or  principles or in the  Corporation's
methods of accounting, changes in applicable tax law or regulations,  changes in
Fiscal Year or such other  factors as the  Committee  may  determine,  including
authority  to  determine  that  all or any  portion  of any  Performance  Shares
otherwise  earned  for the  Performance  Period  have not been  earned  (even if
applicable   Performance   Goals   originally   established   have  been   met).
Notwithstanding  the preceding  sentence,  with respect to a Performance  Period
beginning  on or  after  January  1,  1996,  the  Committee  shall  have no such
authority to the extent that the  existence or exercise of the  authority  would
result in any awards made to such  Participants  for the Performance  Period not
being excluded from covered compensation under the Section 162(m) Regulations as
a result  of the  qualified  performance  based  compensation  exclusion  in the
Section 162(m) Regulations.

Section 7.   During Performance Period

         (a)      Performance Shares may be granted in the form of either
shares of Stock or units equivalent thereto as described in the following
paragraphs of this Section 7.

         (b) If  Performance  Shares are granted in the form of shares of Stock,
certificates  representing the Performance Shares shall be issued in the name of
the Participant,  but shall be retained in the custody of the Corporation  until
the expiration of the Performance  Period and the determination of the number of
shares,  if any,  that are to be  forfeited  pursuant to the terms of the grant.
During the Performance Period (and until such time thereafter as payment is made
in  accordance  with  Section  8(b)),  the  Performance   Shares  shall  not  be
transferable,  except  to the  extent  rights  may pass  upon  the  death of the
Participant to a Designated  Beneficiary pursuant to the terms of this Plan. The
Participant  shall have the right during the  Performance  Period to receive all
cash  dividends  and other cash  distributions  with respect to the  Performance
Shares granted to the Participant that have not previously been forfeited and to
vote such shares.  Any  distribution  of shares of stock or other  securities or
property  made  with  respect  to  Performance  Shares  held  in the  name  of a
Participant  shall  be  treated  as  part  of  the  Performance  Shares  of  the
Participant and shall be subject to forfeiture and all the other limitations and
restrictions  imposed upon such Performance  Shares.  Upon the expiration of the
Performance  Period or the  occurrence  of any other event that may give rise to
forfeiture  under the Plan,  the  Corporation  may defer payment of dividends on
Performance  Shares  until a  determination  is made  as to the  number  of such
shares,  if any, to be forfeited,  and no further  dividends  shall be paid with
respect to forfeited  shares  after the date of the  forfeiture  (regardless  of
whether  the  record  date of the  dividend  is  before or after the date of the
forfeiture).  The  Participant  shall  retain the right to vote all  Performance
Shares until a  determination  has been made by the Committee as to whether such
shares, or a part thereof, have been forfeited. In the event of the death of the
Participant,  his  Designated  Beneficiary  shall have the same right to receive
cash  dividends  and other cash  distributions  with respect to the  Performance
Shares that are not forfeited and to vote such shares as the  Participant  would
have had if he had survived.

         (c) If Performance  Shares are granted in the form of units  equivalent
to shares of Stock, no  certificates  shall be issued with respect to the units,
but the  Corporation  shall  maintain a  bookkeeping  account in the name of the
Participant  to which the units shall  relate and the units shall  otherwise  be
treated in a comparable  manner as if the Participant had been awarded shares of
Stock (except that no voting rights or other stock ownership  rights shall apply
to the units).  Each such unit shall represent the right to receive one share of
Stock or a cash  payment  of  equivalent  value at the time,  in the  manner and
subject to the  restrictions  set forth in the Plan. If, during the  Performance
Period,  cash  dividends  or other cash  distributions  are paid with respect to
shares of Stock, the Corporation  shall pay to the Participant in cash an amount
equal to the cash dividends or cash distributions that he would have received if
the  Performance  Shares had been  granted in the form of shares of Stock rather
than units  equivalent  thereto.  If, during the Performance  Period,  shares of
stock or other securities or property are distributed with respect to the
Stock, additional units equivalent to such shares,  securities or property shall
be added to the Participant's  bookkeeping account as additional units and shall
be subject to forfeiture and all other limitations and restrictions imposed upon
the  related  units.  Upon  the  expiration  of the  Performance  Period  or the
occurrence of any other event that may give rise to  forfeiture  under the Plan,
the  Corporation  may  defer  payment  of  dividend   equivalents  on  units  of
Performance Shares until a determination is made as to the number of such units,
if any, to be forfeited,  and no further dividend equivalents shall be paid with
respect to  forfeited  units  after the date of the  forfeiture  (regardless  of
whether  the  record  date of the  dividend  is  before or after the date of the
forfeiture).  In the  event of the  death  of the  Participant,  his  Designated
Beneficiary  shall have the same right to receive cash  payments  equivalent  to
cash  dividends  and  other  cash  distributions  with  respect  to the units of
Performance  Shares which are not forfeited as the Participant would have had if
he had survived.  A Participant (or Designated  Beneficiary) shall have no right
to or  interest  in  any  specific  assets  of  the  Corporation  or  any of its
Subsidiaries by reason of the establishment of the bookkeeping account described
in this paragraph (c), and shall have only the right of an unsecured creditor of
the  Corporation  with respect to amounts  payable from such account  under this
Plan.

Section 8.   Payment

         (a) As soon as  practicable  after  the  end of a  Performance  Period,
except as  permitted in paragraph  (c) of this  Section 8, the  Committee  shall
determine  the  extent to which the  Performance  Goals  have been  achieved  or
exceeded  and,  on this  basis,  shall  certify  and  declare  in  writing  what
percentages,  if any,  of the granted  Performance  Shares have been earned with
respect to the Performance Period.

         (b) In accordance  with the procedures  specified by the Committee from
time to time,  payment of Performance Shares that have been earned shall be made
in Stock,  cash equivalent in value to the  corresponding  shares of Stock, or a
combination thereof as determined by the Committee.

         (c) For the first  Performance  Period  established under the Plan (but
not for any subsequent Performance Periods), the Committee may in its discretion
establish interim  Performance Goals applicable to a Fiscal Year or Years ending
prior to the end of the  Performance  Period,  and  provide for a portion of the
Performance  Shares granted for the Performance Period to be earned and paid out
as soon as  practicable  following  the end of each such Fiscal Year or Years to
the extent such interim Performance Goals are satisfied.

Section 9.   Termination of Employment and Forfeitures

         Subject to the provisions of Section 10:

         (a) Except as otherwise provided in paragraph (c) below, Performance 
Shares which are granted but not earned by a Participant with  respect  to  the
Performance Period shall be forfeited.

         (b) Except as otherwise provided in paragraph (c) below or in Section 8
(c), if a Participant ceases to be an Employee prior to the end of the 
Performance Period, all of such Participant's  Performance Shares for the 
Performance Period shall be forfeited.

         (c) If prior to the end of a Performance Period, a Participant  dies or
ceases to be an Employee by reason of (i) retirement from active employment with
a right to receive an immediate  pension  benefit under the  applicable  pension
plan of the  Corporation or any of its  Subsidiaries,  (ii) extended  disability
(such as entitles the  Participant  to long-term  disability  payments under the
applicable  pension plan or long-term  disability plan of the Corporation or any
of its  Subsidiaries),  or (iii) for any other reason  specified in each case by
the  Committee,  there shall be  forfeited as of the  cessation of  employment a
number of  Performance  Shares  equal to the  number  initially  granted  to the
Participant  for that  Performance  Period  multiplied  by a  fraction,  (i) the
numerator of which shall be the number of full calendar  months from the date of
the Participant's  cessation of employment to the end of the Performance Period,
and (ii) the denominator of which shall be the number of months representing the
entire Performance  Period;  provided,  that with respect to Performance Periods
beginning before January 1, 1996, the Committee is authorized to declare (before
or as soon as  practicable  after such  cessation of  employment)  that a lesser
number of Performance Shares shall be forfeited as of the date of such cessation
of employment.  With respect to the Performance Shares that are not so forfeited
as of the date of such cessation of  employment,  the  Performance  Period shall
continue and the percentage of such remaining Performance Shares that are earned
or forfeited  shall be determined  based upon the extent to which the applicable
Performance  Goals for such  Performance  Period have been  achieved or exceeded
(subject to the last two sentences of Section 6).

         (d) Transfer from the Corporation to a Subsidiary, from a Subsidiary to
the Corporation, or from one Subsidiary  to  another  Subsidiary  shall  not  be
considered a termination of employment. Nor shall it be considered a termination
of  employment  if an  Employee  is placed on military or sick leave or on other
leave of absence that is considered  by the  Committee as continuing  intact the
employment  relationship.  In those cases, the employment  relationship shall be
continued  until the later of the date when the leave equals 90 days or the date
when an Employee's right to reemployment shall no longer be guaranteed either by
law or by contract, except that in the event active employment is not renewed at
the end of the leave of absence, the employment  relationship shall be deemed to
have been terminated at the beginning of the leave of absence.

Section 10.  Mergers, Sales and Change of Control

         (a) In the case of (i) any  merger,  consolidation,  share  exchange or
combination of the corporation  with or into another  corporation  (other than a
merger, consolidation, share exchange or combination in which the Corporation is
the surviving  corporation  and which does not result in the  outstanding  Stock
being  converted  into or  exchanged  for  different  securities,  cash or other
property,  or any combination  thereof) or a sale of all or substantially all of
the  business  or assets of the  Corporation  or (ii) a Change of Control of the
Corporation, all Performance Periods shall be deemed to have ended as of the end
of the most recent quarterly  accounting period prior to the date of the merger,
consolidation, share exchange, combination, sale of assets, or Change of Control
and the maximum percentage of Performance Shares (150% of the number granted or,
with respect to Performance  Periods beginning on or after January 1, 1996, 100%
of the number  granted)  shall be deemed to have been earned.  In the event that
application  of  the  foregoing   provisions  results  in  more  than  1,500,000
Performance Shares being deemed to have been earned,  then  notwithstanding  any
other  provision of the Plan  (including  but not limited to the  provisions  of
Section 4) any  Performance  Shares in excess of  1,500,000  deemed to have been
earned shall be paid in cash equivalent in value to the corresponding  shares of
Stock.

         (b)  "Change  of  Control"  of the  Corporation  shall mean a change of
control of a nature  that would be  required  to be reported in response to Item
6(e) of Schedule 14A of  Regulation  14A  promulgated  under the  Exchange  Act,
whether or not the  Corporation  is in fact  required to do so,  provided  that,
without limitation, such a change of control shall be deemed to have occurred if
(A) any  "person"  (as such  term is used in  Sections  13(d)  and  14(d) of the
Exchange Act), other than a trustee or other fiduciary holding  securities under
an employee benefit plan of the Corporation or a corporation owned,  directly or
indirectly,  by the  stockholders of the Corporation in  substantially  the same
proportions as their  ownership of Stock of the  Corporation,  is or becomes the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly,  of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding  securities;  or (B)
during any period of two  consecutive  years (not  including any period prior to
the  adoption  of the  Plan),  individuals  who at the  beginning  of the period
constitute the Board and any new director (other than a director designated by a
person  who has  entered  into an  agreement  with the  Corporation  to effect a
transaction described in clauses (A) or (D) of this definition)  whose  election
by the Board or nomination for election by the  Corporation's  stockholders  was
approved by a vote of at least two-thirds of the directors then still in office 
who either were directors at the  beginning of the period or whose  election or 
nomination for election was previously  so  approved,  cease for any reason to  
constitute a majority of the Board; or (C) the  Corporation  enters into an 
agreement, the consummation of which would result in the occurrence of a change 
in control of the  Corporation; or (D) the  stockholders of the Corporation  
approve a merger, consolidation or share exchange between the Corporation and 
any other  corporation,  other than a merger or  consolidation  which  would  
result in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being 
converted into voting securities of the  surviving  entity) at least 60% of the 
combined voting power of the voting securities of the Corporation or such 
surviving entity outstanding immediately after such merger,  consolidation or 
share exchange, or the stockholders of the Corporation approve a plan of 
complete liquidation of the Corporation or an agreement for the sale or 
disposition by the Corporation of all or substantially all the Corporation's 
assets.

Section 11.  Adjustment of and Changes in Stock

         In the event of a reorganization,  recapitalization, stock split, stock
dividend,  combination of shares, merger, consolidation,  share exchange, rights
offering, distribution of assets, or any other change in the corporate structure
or capital stock of the Corporation,  the Committee shall make such adjustments,
if any, as it deems  appropriate in the number of  Performance  Shares that have
been or may be granted under the Plan,  the number of shares of Stock  available
for  issuance  under  the Plan,  and the  Performance  Goals  and the  number of
Performance  Shares  that  may  be  earned,  to  reflect  the  change,  and  any
adjustments so made shall be conclusive for all purposes of the Plan.

Section 12.  Miscellaneous Provisions

         (a) The rights or interest of a Participant  or Designated  Beneficiary
under the Plan may not be assigned, encumbered or transferred until such time as
payment is made in accordance with Section 8(b), except to the extent rights may
pass upon the death of the Participant to a Designated  Beneficiary  pursuant to
the terms of this Plan.

         (b) No  Employee  or other  person  shall have any claim or right to be
granted Performance Shares under the Plan. Neither the Plan nor any action taken
thereunder  shall be  construed as giving any Employee or other person any right
to be retained in the employ of the Corporation or any of its Subsidiaries.

         (c)      Performance Shares granted or earned and cash dividends
or other cash distribution paid under the Plan shall not be deemed compensation 
in determining the amount of any entitlement under any retirement or other 
employee benefit plan of the Corporation or any of its Subsidiaries.

         (d) The  Committee  may adopt and apply rules that will ensure that the
Corporation  and  its  Subsidiaries  will  be able  to  comply  with  applicable
provisions  of any Federal,  state or local law relating to the  withholding  of
tax,  including but not limited to the  withholding  of tax on dividends paid on
Performance  Shares  and on the  amount,  if  any,  includable  in  income  of a
Participant after the expiration of the Performance  Period. The Committee shall
have the  right in its  discretion  to  satisfy  withholding  tax  liability  by
retaining or purchasing Performance Shares.

         (e)      The Plan shall be construed in accordance with and
governed by the laws of the State of Maryland.

         (f) In this Plan,  whenever  the  context so  requires,  the  masculine
gender includes the feminine and a singular number includes the plural.

Section 13.  Amendment or Termination

         The  Board of  Directors  of the  Corporation  may  amend,  suspend  or
terminate the Plan at any time and in such manner and to such extent as it deems
advisable,  but no amendment shall be made without the approval of a majority of
the  shares  represented  and  entitled  to vote  at a duly  called  meeting  of
stockholders  at which a quorum is present that would (i) increase the number of
Performance  Shares  that may be granted  under the Plan  (except as provided in
Section 11), (ii) increase the maximum  number of shares of Stock  available for
issuance  under the Plan  (except as provided in Section 11),  (iii)  materially
increase  the 50%  limitation  set forth in Section 6, or (iv) change the Plan's
eligibility requirements.  No amendment,  suspension or termination shall impair
any right  theretofore  granted to any  Participant,  without the consent of the
Participant.

Section 14.  Effective Date and Term of Plan

         This Plan shall become  effective  only if approved by the  affirmative
vote of the holders of a majority of the shares represented and entitled to vote
at the Annual Meeting of  Stockholders  of the Corporation to be held on January
29, 1990, or any adjournment thereof, and, if so approved, shall be effective as
of  January  1, 1990.  Performance  Shares  may be granted  under the Plan after
December 31, 1995,  only if the  amendments to the Plan approved by the Board of
Directors  of  the  Corporation  on  February  14,  1996,  are  approved  by the
affirmative vote of the holders of a majority of the shares present and entitled
to vote at the Annual Meeting of  Stockholders  of the Corporation to be held on
April 23, 1996,  or any  adjournment  thereof.  No  Performance  Shares shall be
granted under the Plan after December 31, 2000.

Section 15.  Indemnification of Committee

         In addition to such other rights of indemnification as they may have as
members of the Corporation's  Board of Directors or as members of the Committee,
each member of the Committee shall be indemnified by the Corporation against the
reasonable  expenses,   including  attorney's  fees,  actually  and  necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein,  to which he may be a party by reason of any
action  taken or failure  to act under or in  connection  with the Plan,  or any
Performance  Shares granted  thereunder,  and against all amounts paid by him in
settlement  thereof,  provided such settlement is approved by independent  legal
counsel  selected  by the  Corporation,  or  paid  by him in  satisfaction  of a
judgment in any such action, suit or proceeding except in relation to matters as
to which it shall be  adjudged  in such  action,  suit or  proceeding  that such
Committee  member is liable for gross  negligence  or  misconduct in his duties;
provided  that  within 60 days after the  institution  of such  action,  suit or
proceeding,  the  Committee  member shall in writing offer the  Corporation  the
opportunity, at its own expense, to handle and defend the same.