EXHIBIT 10(aa)(2)

February 10, 2006

Mr.  
          Paul A. Gustafson c/o The Black & Decker Corporation 701 East Joppa RoadTowson, Maryland 21286

Dear Paul:

The
Black & Decker Corporation (the Corporation) considers it essential to the
best interests of its stockholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Corporation (the
Board) recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control of the Corporation may exist and that such
possibility, and the uncertainty and questions that it may raise among management, may
result in the departure or distraction of management personnel to the detriment of the
Corporation and its stockholders. The Board has determined that appropriate steps should
be taken to reinforce and encourage the continued attention and dedication of members of
the Corporations management, including you, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Corporation, although no such change is now
contemplated.

In
order to induce you to remain in the employ of the Corporation, the Corporation agrees
that you shall receive the severance benefits set forth in this letter agreement (this
Agreement) in the event of a Change in Control of the Corporation
(as defined in Section 2) under the circumstances described below.

1.       
          Term of Agreement. This Agreement shall commence on the date hereof and
          shall continue in effect through December 31, 2011; provided, however, that
          if a Change in Control of the Corporation shall have occurred prior to
          December 31, 2011, this Agreement shall continue in effect for a period of
          36 months beyond the month in which the Change in Control of the Corporation
          occurred, at which time this Agreement shall terminate. Notwithstanding the
          foregoing, and provided no Change in Control of the Corporation shall have
          occurred, this Agreement shall automatically terminate upon the earlier to occur
          of (a) your termination of employment with the Corporation, or (b) the
          Corporations giving you notice of termination of this Agreement,
          regardless of the effective date of such termination.

2.       
          Change in Control. No benefits shall be payable under this Agreement
          unless there shall have been a Change in Control of the Corporation. For
          purposes of this Agreement, a Change in Control of the Corporation
          shall mean a change in control of a nature that would be

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Mr. Paul A. GustafsonFebruary 10, 2006Page 2

required to be reported
          in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
          under the Securities Exchange Act of 1934, as amended (the Exchange
          Act), whether or not the Corporation is in fact required to comply
          therewith, provided that, without limitation, such a change in control shall be
          deemed to have occurred if (A) any person (as that term is used in
          Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other
          fiduciary holding securities under an employee benefit plan of the Corporation
          or any of its subsidiaries or a corporation owned, directly or indirectly, by
          the stockholders of the Corporation in substantially the same proportions as
          their ownership of stock of the Corporation, is or becomes the beneficial
          owner (as defined in Rule 13d-3 under the Exchange Act), directly or
          indirectly, of securities of the Corporation representing 20% or more of the
          combined voting power of the Corporations then outstanding securities; (B)
          during any period of two consecutive years, individuals who at the beginning of
          that period constitute the Board and any new director (other than a director
          designated by a person who has entered into an agreement with the Corporation to
          effect a transaction described in clauses (A) or (D) of this Section) whose
          election by the Board or nomination for election by the Corporations
          stockholders was approved by a vote of at least two-thirds of the directors then
          still in office who either were directors at the beginning of the period or
          whose election or nomination for election was previously so approved cease for
          any reason to constitute a majority of the Board; (C) the Corporation enters
          into an agreement, the consummation of which would result in the occurrence of a
          Change in Control of the Corporation; or (D) the stockholders of the Corporation
          approve a merger, share exchange or consolidation of the Corporation with any
          other corporation or entity, other than a merger, share exchange or
          consolidation that would result in the voting securities of the Corporation
          outstanding immediately prior thereto continuing to represent (either by
          remaining outstanding or by being converted into voting securities of the
          surviving entity) at least 60% of the combined voting power of the voting
          securities of the Corporation or the surviving entity outstanding immediately
          after the merger, share exchange or consolidation, or the stockholders of the
          Corporation approve a plan of complete liquidation of the Corporation or an
          agreement for the sale or disposition by the Corporation of all or substantially
          all the Corporations assets.

3.       
          Vesting of Stock Options. Upon a Change in Control of the Corporation,
          you shall fully vest in all outstanding stock options granted to you under the
          Corporations stock option plans. Each stock option shall continue to be
          exercisable for the term of that stock option. In accordance with the terms of
          The Black & Decker Performance Equity Plan (the PEP) and The
          Black & Decker Corporation 2004 Restricted Stock Plan, respectively, the
          maximum number (150% of the target award for each performance period) of
          Performance Shares (as defined in the PEP) held by you shall be deemed to have
          been earned (and shall be paid in accordance with the payment provisions of the
          PEP) and all shares of restricted stock held by you shall become fully vested
          and no longer subject to forfeiture upon the occurrence of a Change in Control
          of the Corporation.

4.       
          Termination Following Change in Control of the Corporation. If a Change
          in Control of the Corporation shall have occurred, you shall be entitled to the
          benefits provided in Section 5.2 upon the subsequent termination of your
          employment during the term of this Agreement unless the termination is (A)
          because of your death or Disability (as defined in

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Mr. Paul A. GustafsonFebruary 10, 2006Page 3

Section 4.1), (B) by the
          Corporation for Cause (as defined in Section 4.2), or (C) by you other than for
          Good Reason (as defined in Section 4.3).

4.1
Disability. If, as a result of your incapacity due to physical or mental illness,
you shall have been absent from the full-time performance of your duties with the
Corporation for six consecutive months and, within 30 days after a Notice of Termination
(as defined in Section 4.4) is given to you, shall not have returned to the full-time
performance of your duties, your employment may be terminated for Disability.

4.2
Cause. Termination by the Corporation of your employment for Cause
shall mean termination upon (a) the willful and continued failure by you to substantially
perform your duties with the Corporation (other than any such failure resulting from your
incapacity due to physical or mental illness or any such actual or anticipated failure
after the issuance by you of a Notice of Termination for Good Reason) after a written
demand for substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, or (b) the willful engaging by you in conduct that is
demonstrably and materially injurious to the Corporation, monetarily or otherwise. For
purposes of this Section 4.2, no act or failure to act on your part shall be deemed
willful unless done, or omitted to be done, by you not in good faith and
without reasonable belief that your action or omission was in the best interest of the
Corporation. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for that purpose
(after reasonable notice to you and an opportunity for you, together with your counsel, to
be heard before the Board), finding that in the good faith opinion of the Board you were
guilty of conduct set forth above in clauses (a) or (b) of the first sentence of this
Section 4.2 and specifying the particulars thereof in detail.

4.3
Good Reason. You shall be entitled to terminate your employment for Good Reason.
For purposes of this Agreement, Good Reason shall mean, without your express
written consent, the occurrence after a Change in Control of the Corporation of any of the
following circumstances unless the circumstances are fully corrected prior to the Date of
Termination specified in the Notice of Termination given in respect thereof:

| | (a)       
               the assignment to you of any duties inconsistent with your current status as an
               executive of the Corporation or a substantial adverse alteration in the nature
               or status of your responsibilities from those in effect immediately prior to the
               Change in Control of the Corporation;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)       
               a reduction by the Corporation in your annual base salary as in effect on the
               date of this Agreement or any subsequently established higher annual base
               salary, except for across-the-board salary reductions similarly affecting all
               senior executives of the Corporation and all senior executives of any person in
               control of the Corporation;
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Mr. Paul A. GustafsonFebruary 10, 2006Page 4

| | (c)       
               your relocation to a location not within 25 miles of your office or job location
               immediately prior to the Change in Control of the Corporation, except for
               required travel on the Corporations business to an extent substantially
               consistent with your business travel obligations immediately prior to the Change
               in Control of the Corporation;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)       
               the failure by the Corporation, without your consent, to pay to you any portion
               of your compensation to which you are entitled when such compensation is due;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)       
               the failure by the Corporation to continue in effect any compensation plan in
               which you participated immediately prior to the Change in Control of the
               Corporation that is material to your total compensation, including but not
               limited to the Corporations (i) Executive Annual Incentive Plan
               (EAIP), Annual Incentive Plan (AIP) or other comparable
               annual compensation plan, (ii) stock option and restricted stock plans, and
               (iii) PEP or other comparable medium- or long-term compensation plan, or any
               substitute plan or plans adopted prior to the Change in Control of the
               Corporation; unless an equitable arrangement (embodied in an ongoing substitute
               or alternative plan) has been made with respect to the plan and the equitable
               arrangement provides substantially equivalent benefits not materially less
               favorable to you (both in terms of the amount of benefits provided and the level
               of your participation relative to other participants), or the failure by the
               Corporation to continue your participation therein (or in such substitute or
               alternative plan) on a basis not materially less favorable (both in terms of the
               amount of benefits provided and the level of your participation relative to
               other participants) than those you enjoyed immediately prior to the Change in
               Control of the Corporation;
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| | (f)       
               the failure by the Corporation to continue in effect any material benefit
               available to you immediately prior to the Change in Control of the Corporation,
               including without limitation (i) the failure to provide to you benefits
               substantially similar to those enjoyed by you under any of the
               Corporations retirement, savings, life insurance, medical, dental, health
               and accident, or disability plans in which you were participating at the time of
               the Change in Control of the Corporation, (ii) the failure to continue to
               provide to you any material perquisite provided to you at the time of the Change
               in Control of the Corporation, (iii) the failure by the Corporation to provide
               to you the number of paid vacation days to which you are entitled on the basis
               of years of service with the Corporation in accordance with the
               Corporations normal vacation policy in effect at the time of the Change in
               Control of the Corporation, or (iii) the taking of any action by the Corporation
               that would directly or indirectly materially reduce any of these benefits or
               deprive you of any material benefit or perquisite enjoyed by you at the time of
               the Change in Control of the Corporation;
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Mr. Paul A. GustafsonFebruary 10, 2006Page 5

| | (g)       
               the failure of the Corporation to obtain a satisfactory agreement from any
               successor to assume and agree to perform this Agreement, as contemplated in
               Section 7.1; or
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| | (h)       
               any purported termination of your employment that is not effected pursuant to a
               Notice of Termination satisfying the requirements of Section 4.4 (and, if
               applicable, the requirements of Section 4.2), which purported termination shall
               not be effective for purposes of this Agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Your rights to terminate your
employment pursuant to this Section 4.3 shall not be affected by your incapacity due to
physical or mental illness. Your continued employment shall not constitute consent to, or
a waiver of rights with respect to, any circumstance constituting Good Reason under this
Section 4.3.

4.4
Notice of Termination. Any purported termination of your employment by the
Corporation for Cause or Disability or by you for Good Reason shall be communicated by
written Notice of Termination to the other party in accordance with Section 8. For
purposes of this Agreement, a Notice of Termination shall mean a notice that
indicates the specific termination provision in this Agreement relied upon and that sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

4.5
Date of Termination. Subject to the following sentence, Date of
Termination shall mean (a) if your employment is terminated by your death, the date
of your death; (b) if your employment is terminated for Disability, 30 days after Notice
of Termination is given (provided that you shall not have returned to the full-time
performance of your duties during the 30-day period); and (c) if your employment is
terminated for any reason other than death or Disability, the date specified in the Notice
of Termination. For purposes of clause (c) in the immediately preceding sentence, the date
specified in the Notice of Termination shall not be less than 30 days from the date the
Notice of Termination is given, except in the case of a termination pursuant to Section
4.3 such date shall not be less than 15 nor more than 60 days from the date that the
Notice of Termination is given. If the party receiving the Notice of Termination notifies
the other party within 15 days of receiving the Notice of Termination or, if later, prior
to the Date of Termination (as determined without regard to this sentence) that a dispute
exists concerning the termination, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has
expired and no appeal has been perfected). The Date of Termination shall be extended by a
notice of dispute only if the notice is given in good faith and the party giving the
notice pursues the resolution of the dispute with reasonable diligence. Notwithstanding
the pendency of the dispute, the Corporation will continue to pay you your full
compensation in effect when the Notice of Termination giving rise to the dispute was given
(including, but not limited to, base salary) and continue you as a participant in all
compensation, benefit and insurance plans in which you were participating

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Mr. Paul A. GustafsonFebruary 10, 2006Page 6

when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance
with this Section 4.5. Amounts paid under this Section 4.5 are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.

5.       
          Compensation Upon Termination. Upon termination of your employment
          following a Change in Control of the Corporation, you shall be entitled to the
          following benefits:

5.1
Termination for Cause or Without Good Reason or upon Disability or Death. If your
employment shall be terminated by your death, by the Corporation for Cause or Disability,
or by you without Good Reason, the Corporation shall pay you your full base salary through
the Date of Termination at the rate in effect at the time of your death or Notice of
Termination is given, as the case may be, plus all other amounts to which you are entitled
under any retirement, insurance and other compensation programs of the Corporation at the
time the payments are due, and the Corporation shall have no further obligations to you
under this Agreement.

5.2
Termination Without Cause or Disability or for Good Reason. If your employment by
the Corporation shall be terminated (A) by the Corporation other than for Cause or
Disability or (B) by you for Good Reason, then you shall be entitled to the benefits
provided below:

| | (a)       
               The Corporation shall pay you your full base salary through the Date of
               Termination at the rate in effect at the time Notice of Termination is given,
               plus all other amounts to which you are entitled under any compensation plan of
               the Corporation, at the time those payments are due, except as otherwise
               provided below.
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| | (b)       
               In lieu of any further salary payments to you for periods subsequent to the Date
               of Termination, the Corporation shall pay as severance pay to you a lump sum
               severance payment (the Severance Payment) in an amount equal to:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)       
               three times the sum of your (x) annual base salary in effect immediately prior
to the occurrence of the circumstance giving rise to the Notice of Termination, and (y)
Maximum Participant Award (as defined below); plus
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| | (2)       
               150% of the product of (A) your annual base salary in effect immediately prior
to your Date of Termination multiplied by (B) the percentage target used to
calculate the number of Performance Shares awarded to you with respect to the most recent
award under the PEP.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Maximum Participant Award
means the maximum award that could be payable to you under the terms of the EAIP (if you
were a participant in the EAIP immediately prior to the occurrence of the circumstances
giving rise to the Notice of Termination), the AIP (if you were a participant in the AIP
immediately prior to the occurrence of the circumstances giving rise to the Notice of

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Mr. Paul A. GustafsonFebruary 10, 2006Page 7

Termination), or other comparable or substitute annual compensation plan for the year in
which the Date of Termination occurs, determined as if you remained a participant until
the end of the year and all performance goals for that year that would entitle you to a
maximum payment were met or exceeded.

| | (c)       
               The Corporation shall also pay to you all legal fees and expenses incurred by
               you as a result of the termination (including all legal fees and expenses, if
               any, incurred in contesting or disputing the termination or in seeking to obtain
               or enforce any right or benefit provided by this Agreement or in connection with
               any tax audit or proceeding to the extent attributable to the application of
               Section 4999 of the Internal Revenue Code (the Code) to any payment
               or benefit provided under this Agreement).
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| | (d)       
               The Severance Payment plus interest shall be made on the date that is six months
               and one day following your separation from service as defined in
               Section 409A of the Code and the regulations promulgated thereunder. The
               Severance Payment shall bear interest at an annualized rate of 4.5% from and
               after your Separation from Service until paid pursuant to this
               Section 5.2(d).
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5.3
Additional Benefits. If your employment shall be terminated (a) by the Corporation
other than for Cause or Disability or (b) by you for Good Reason, then for a 36-month
period after such termination, the Corporation shall arrange to provide to you life,
disability, accident, medical, dental and health insurance benefits substantially similar
to those that you are receiving immediately prior to the Notice of Termination. Benefits
otherwise receivable by you pursuant to this Section 5.3 shall be reduced to the extent
comparable benefits are actually received by you from another employer during the 36-month
period following your termination, and any such benefits actually received by you shall be
reported to the Corporation.

5.4
Mitigation. You shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise. The Corporation
shall not be entitled to set off against the amount of any payment or benefit provided for
in this Agreement any amounts owed to the Corporation by you, any compensation earned by
you as the result of employment by another employer, or any retirement benefits to which
you may be entitled under the Corporations retirement or savings plans.

5.5
Other Benefit Plans. In addition to all other amounts payable to you under this
Section 5, you shall be entitled to receive all benefits payable to you under any plan or
agreement sponsored by the Corporation or any of its subsidiaries relating to retirement
or other benefits in accordance with the terms of such plans or arrangements.

6.
       Gross-Up Payment.

6.1
Calculation of Gross-Up Payment. If the Severance Payment or any other portion of
the Total Payments (as defined below) will be subject to the tax imposed by Section 4999
of the Code (the Excise Tax), the Corporation shall pay to you at the time
specified in

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Mr. Paul A. GustafsonFebruary 10, 2006Page 8

Section 6.2 an additional amount (the Gross-Up Payment) such that
the net amount retained by you, after deduction of any Excise Tax on the Severance Payment
and such other Total Payments and any federal and state and local income tax and Excise
Tax upon the Gross-Up Payment, shall be equal to the Severance Payment and such other
Total Payments. For purposes of determining whether any of the payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits
received or to be received by you in connection with a Change in Control of the
Corporation or your termination of employment (whether payable pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Corporation, its
successors, any person whose actions result in a Change in Control of the Corporation or
any corporation affiliated (or which, as a result of the completion of a transaction
causing a Change in Control of the Corporation, will become affiliated) with the
Corporation within the meaning of Section 1504 of the Code) (together with the Severance
Payment, the Total Payments) shall be treated as parachute
payments within the meaning of Section 280G(b)(2) of the Code, and all excess
parachute payments within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected by the
Corporation and acceptable to you (Tax Counsel) the Total Payments (in whole
or in part) do not constitute parachute payments, or such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually rendered within
the meaning of Section 280G(b)(4)(B) of the Code either to the extent such reasonable
compensation is in excess of the base amount within the meaning of Section 280G(b)(3) of
the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total
Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser
of (A) the total amount of the Total Payments or (B) the amount of excess parachute
payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and
(iii) the value of any non-cash benefits or any deferred payment or benefit shall be
determined by Tax Counsel in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code. For purposes of determining the amount of the Gross-Up Payment, you shall be
deemed to pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality of your
residence on the Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. If the Excise Tax is
subsequently determined to be less than the amount taken into account under this Section
6.1 at the time of payment of the Gross-Up Payment, you shall repay to the Corporation at
the time that the amount of such reduction in the Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by you if such repayment results in a
reduction in Excise Tax and/or a federal and state and local income tax deduction) plus
interest on the amount of such repayment at the rate provided in Section 1274(d) of the
Code. If the Excise Tax is determined to exceed the amount taken into account hereunder at
the time of payment of the Gross-Up Payment (including by reason of any payment resulting
from the existence or amount of which cannot be determined at the time of the payment of
the Gross-Up Payment), the Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties, and professional fees

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Mr. Paul A. GustafsonFebruary 10, 2006Page 9

incurred by
you with respect to such excess, including all such taxes with respect to such additional
amount) at the time that the amount of such excess is finally determined.

6.2
Payment of Gross-Up Payments. The payments provided for in Section 6.1 shall be
made on the date that is six months and one day following your separation of
service as defined in Section 409A of the Code and the regulations promulgated
thereunder.

7.       
          Successors; Binding Agreement.

7.1
Successors. The Corporation will require any successor to all or substantially all
of the business or assets of the Corporation (whether direct or indirect, by purchase,
merger, share exchange, consolidation or otherwise) to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the Corporation
would be required to perform it if the succession had not taken place. Failure of the
Corporation to obtain the assumption and agreement prior to the effectiveness of the
succession shall be a breach of this Agreement and shall entitle you to terminate your
employment for Good Reason following a Change in Control of the Corporation. As used in
this Agreement, Corporation shall mean the Corporation as hereinbefore defined
and any successor to its business or assets as described above that assumes and agrees to
perform this Agreement by operation of law or otherwise.

7.2
Binding Agreement. This Agreement shall inure to the benefit of and be enforceable
by your personal or legal representatives, executors, administrators, heirs, distributees,
and legatees. Any amount payable to you under this Agreement at the time of your death,
unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to your legatee or other designee or, if there is no such designee, to your
estate.

7.3
Employment by a Subsidiary. If you are employed by a subsidiary of the Corporation,
wherever in this Agreement reference is made to the Corporation, unless the
context otherwise requires, the reference shall also include the subsidiary. The
Corporation shall cause the subsidiary to carry out the terms of this Agreement insofar as
they relate to the employment relationship between you and the subsidiary, and the
Corporation shall indemnify you and save you harmless from and against all liability and
damage that you may suffer as a consequence of the subsidiarys failure to perform
and carry out such terms. Wherever reference is made to any benefit program of the
Corporation, the reference shall include, where appropriate, the corresponding benefit
program of the subsidiary if you were a participant in the benefit program on the date a
Change in Control of the Corporation has occurred.

8.       
          Notice. For the purpose of this Agreement, notices and all other
          communications provided for in the Agreement shall be in writing and shall be
          deemed to have been duly given when delivered or mailed by United States
          registered mail, return receipt requested, postage prepaid. All notices to the
          Corporation shall be sent to the Corporation at 701 East Joppa Road, Towson,
          Maryland 21286 and directed to the attention of the Board with a copy to the
          Secretary of the Corporation and to you at your address listed on the
          Corporations payroll, or to such other

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Mr. Paul A. GustafsonFebruary 10, 2006Page 10

address as either party may have
          furnished to the other in writing in accordance herewith, except that notice of
          change of address shall be effective only upon receipt.

9.       
          Miscellaneous. No provision of this Agreement may be modified, waived or
          discharged unless the waiver, modification or discharge is agreed to in writing
          and signed by you and an officer of the Corporation specifically designated by
          the Board. No waiver by either party at any time of any breach by the other
          party of any condition or provision of this Agreement to be performed by the
          other party shall be deemed a waiver of similar or dissimilar provisions or
          conditions at the same or at any prior or subsequent time. This Agreement
          constitutes the entire agreement between the parties hereto in respect of the
          matters set forth herein, and all prior negotiations, writings and
          understandings relating to the subject matter of this Agreement are superseded
          and cancelled by this Agreement. The validity, interpretation, construction and
          performance of this Agreement shall be governed by the laws of the State of
          Maryland, without regard to its principles of conflicts of laws. All references
          to sections of the Exchange Act or the Code shall be deemed also to refer to any
          successor provisions to such sections. Any payments provided for hereunder shall
          be paid net of any applicable withholding required under federal, state or local
          law. The obligations of the Corporation under Sections 5 and 6 shall survive the
          expiration of the term of this Agreement, provided that the Date of Termination
          occurred prior to such expiration.

10.       
          Validity. The invalidity or unenforceability of any provision of this
          Agreement shall not affect the validity or enforceability of any other provision
          of this Agreement, which shall remain in full force and effect.

11.       
          Counterparts. This Agreement may be executed in several counterparts,
          each of which shall be deemed to be an original but all of which together will
          constitute one and the same instrument.

12.       
          Arbitration. Any dispute or controversy arising under or in connection
          with this Agreement shall be settled exclusively by arbitration in the State of
          Maryland, in accordance with the Commercial Arbitration Rules of the American
          Arbitration Association then in effect. Judgment may be entered on the
          arbitrators award in any court having jurisdiction; provided, however,
          that you shall be entitled to seek specific performance of your right to be paid
          until the Date of Termination during the pendency of any dispute or controversy
          arising under or in connection with this Agreement.

13.       
          Section Headings. The Section headings contained in this Agreement are
          for convenience of reference only and shall not limit or otherwise affect the
          meaning or interpretation of this Agreement or any of its terms and conditions.
          All references to Sections in this Agreement are to Sections of this Agreement.

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Mr. Paul A. GustafsonFebruary 10, 2006Page 11

If
you agree to the terms of this letter, please sign and return to the Corporation the
enclosed copy which will then constitute our agreement on this subject.

| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Sincerely,THE BLACK & DECKER CORPORATION

By: /s/ NOLAN D. ARCHIBALD                          
      Nolan D. Archibald, Chairman

|                                                                                     | 
|------------------------------------------------------------------------------------ | 
|Agreed to as of the 10th day of February, 2006/s/ PAUL A. GUSTAFSONPaul A. Gustafson | 

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