Exhibit 10(w)


The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland  21286
410-716-3900
Telex 87-930





                                                                 January 1, 1997




Mr. Joseph Galli
c/o The Black & Decker Corporation
701 East Joppa Road, TW445
Towson, Maryland  21286

Dear Joe:

     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 which 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 yourself, 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 (the  "Agreement")  in the event your employment with the
Corporation is terminated subsequent to a "change in control of the Corporation"
(as defined in Section 2 hereof) 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, 2000; provided, however, that if a
change in control of the  Corporation  shall have occurred prior to December 31,
2000,  this Agreement  shall continue in effect for a period of 36 months beyond
the month in which such change in control occurred, at which time this Agreement
shall terminate. Notwithstanding the


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 2


foregoing,  and  provided  no change in  control of the  Corporation  shall have
occurred, this Agreement shall automatically terminate upon the earlier to occur
of (i)  your  termination  of  employment  with  the  Corporation,  or (ii)  the
Corporation's  furnishing you with notice of  termination,  irrespective  of the
effective date of such termination.

     2. CHANGE IN CONTROL.  No benefits shall be payable  hereunder unless there
shall have been a change in control of the Corporation,  as set forth below. For
purposes of this Agreement,  a "change in control of the Corporation" shall mean
a change in  control  of a nature  that  would be  required  to be  reported  in
response to Item 6(e) of Schedule 14A of Regulation  14A  promulgated  under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Corporation is in fact required to comply therewith,  provided that, without
limitation, such a change in control shall be deemed to have occurred if (A) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than a trustee or other  fiduciary  holding  securities  under an employee
benefit plan of the  Corporation  or any of its  subsidiaries  or a  corporation
owned,  directly  or  indirectly,  by the  stockholders  of the  Corporation  in
substantially   the  same  proportions  as  their  ownership  of  stock  of  the
Corporation,  is or becomes  the  "beneficial  owner" (as  defined in Rule 13d-3
under  the  Exchange  Act),  directly  or  indirectly,   of  securities  of  the
Corporation  representing  20% or  more  of the  combined  voting  power  of the
Corporation's  then  outstanding  securities;  (B)  during  any  period  of  two
consecutive  years,  individuals who at the beginning of such period  constitute
the Board and any new director (other than a director designated by a person who
has entered  into an  agreement  with the  Corporation  to effect a  transaction
described in clauses (A) or (D) of this 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 thereof; (C) the Corporation enters into an agreement, the consummation
of  which  would  result  in  the  occurrence  of a  change  in  control  of the
Corporation;  or (D) the stockholders of the Corporation approve a merger, share
exchange or consolidation of the Corporation with any other  corporation,  other
than a merger,  share exchange or consolidation which would result in the voting
securities of the Corporation  outstanding  immediately prior thereto continuing
to represent (either by remaining  outstanding or by being converted into voting
securities of the surviving entity) at least 60% of the combined voting power of
the voting  securities of the Corporation or such surviving  entity  outstanding
immediately  after  such  merger,  share  exchange  or  consolidation,   or  the
stockholders  of the Corporation  approve a plan of complete  liquidation of the
Corporation or an agreement for the sale or disposition by the


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 3


Corporation of all or substantially all the Corporation's assets.

     3. TERMINATION  FOLLOWING  CHANGE IN CONTROL OF THE CORPORATION.  If any of
the events described in Section 2 hereof constituting a change in control of the
Corporation shall have occurred,  you shall be entitled to the benefits provided
in Subsection  4(iii) hereof upon the subsequent  termination of your employment
during the term of this Agreement unless such termination is (A) because of your
death or Disability,  (B) by the Corporation for Cause, or (C) by you other than
for Good Reason.

     (i)  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 written  notice of termination is given you shall not have returned to the
full-time  performance  of your duties,  your  employment  may be terminated for
"Disability."

     (ii) 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 (as defined in Subsection  3(iv) hereof) for Good Reason (as defined
in Subsection 3(iii) hereof), 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 which is demonstrably
and  materially  injurious to the  Corporation,  monetarily  or  otherwise.  For
purposes  of this  Subsection,  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 such 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
Subsection and specifying the particulars thereof in detail.

     (iii) 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


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 4


consent,  the occurrence  after a change in control of the Corporation of any of
the following circumstances unless, in the case of paragraphs (A), (E), (F), (G)
or (H), such  circumstances are fully corrected prior to the Date of Termination
specified in the Notice of Termination, as such terms are defined in Subsections
3(v) and 3(iv) hereof, respectively, 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  hereof  or as the same may be
         increased  from  time  to  time,  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;

                           (C) your relocation to a location not within 25 miles
         of your present office or job location,  except for required  travel on
         the Corporation's  business to an extent substantially  consistent with
         your present business travel obligations;

                           (D) the  failure  by the  Corporation,  without  your
         consent, to pay to you any portion of your current compensation,  or to
         pay to you any portion of an installment of deferred compensation under
         any deferred compensation program of the Corporation, within seven days
         of the date such compensation is due;

                           (E) the  failure by the  Corporation  to  continue in
         effect any bonus to which you were entitled,  or any compensation  plan
         in which you participated immediately prior to the change in control of
         the Corporation which is material to your total compensation, including
         but not limited to the  Corporation's  (i) Executive  Annual  Incentive
         Plan  or  other  annual  incentive   compensation  plan  ("AIP");  (ii)
         Performance Equity Plan or other long-term incentive  compensation plan
         ("PEP");  (iii) stock option plans;  (iv) retirement and savings plans;
         (v) Supplemental Executive Retirement Plan ("SERP");  (vi) Supplemental
         Pension Plan; (vii)  Supplemental  Retirement  Savings Plan; and (viii)
         Executive  Deferred  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 such  plan and such  equitable
         arrangement provides substantially


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 5


         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) as existed at the time of
         the change in control of the Corporation;

                           (F) the  failure by the  Corporation  to  continue to
         provide you with benefits substantially similar to those enjoyed by you
         under any of the Corporation's 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,  the  failure to
         continue to provide you with a  Corporation  automobile or allowance in
         lieu thereof, if you were provided with such an automobile or allowance
         in  lieu  thereof  at  the  time  of  the  change  in  control  of  the
         Corporation,  the taking of any action by the  Corporation  which would
         directly  or  indirectly  materially  reduce  any of such  benefits  or
         deprive you of any material  fringe benefit  enjoyed by you at the time
         of the  change in  control of the  Corporation,  or the  failure by the
         Corporation  to provide  you with 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;

                           (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 5 hereof; or

                           (H) any  purported  termination  of  your  employment
         which is not effected  pursuant to a Notice of  Termination  satisfying
         the  requirements of Subsection  3(iv) hereof (and, if applicable,  the
         requirements  of  Subsection  3(ii)  hereof);   for  purposes  of  this
         Agreement, no such purported termination shall be effective.

Your rights to terminate your employment  pursuant to this Subsection  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 hereunder.

     (iv) Notice of Termination. Any purported termination of your employment by
the Corporation or by you shall be communicated by written Notice of Termination
to the other


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 6


party  hereto  in  accordance  with  Section  6  hereof.  For  purposes  of this
Agreement,  a "Notice of  Termination"  shall mean a notice which shall indicate
the specific  termination  provision in this Agreement relied upon and shall set
forth in  reasonable  detail  the facts and  circumstances  claimed to provide a
basis for termination of your employment under the provision so indicated.

     (v) Date of Termination,  Etc. "Date of Termination" shall mean (A) 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 such 30-day period), and (B) if your employment is terminated
pursuant to  Subsections  3(ii) or 3(iii)  hereof or for any other reason (other
than Disability), the date specified in the Notice of Termination (which, in the
case of a termination pursuant to Subsection 3(ii) hereof shall not be less than
30 days, and in the case of a termination  pursuant to Subsection  3(iii) hereof
shall  not be less than 15 nor more  than 60 days,  respectively,  from the date
such Notice of Termination is given);  provided that if within 15 days after any
Notice of Termination is given,  or, if later,  prior to the Date of Termination
(as determined without regard to this proviso),  the party receiving such Notice
of  Termination  notifies the other party 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  therefrom  has  expired  and no  appeal  has been  perfected);
provided  further that the Date of Termination  shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding the pendency of any such dispute,  the Corporation will continue
to pay you your full  compensation  in effect when the notice 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  when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under  this  Subsection  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.

     4. COMPENSATION UPON TERMINATION OR DURING  DISABILITY.  Following a change
in control of the Corporation,  as defined by Section 2 hereof, upon termination
of your employment or during a period of Disability you shall be entitled to the
following benefits:

     (i) During any period that you fail to perform


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 7


your  full-time  duties with the  Corporation  as a result of incapacity  due to
physical or mental  illness,  you shall  continue to receive your base salary at
the rate in effect at the  commencement  of any such period,  together  with all
amounts payable to you under any  compensation  plan of the  Corporation  during
such period,  until this  Agreement is terminated  pursuant to  Subsection  3(i)
hereof.  Thereafter,  or in the event your employment shall be terminated by you
other than for Good Reason or by reason of your death,  your  benefits  shall be
determined under the Corporation's retirement,  insurance and other compensation
programs then in effect in accordance with the terms of such programs.

     (ii) If your  employment  shall be terminated by the Corporation for Cause,
Disability or death, or by you other than for Good Reason, 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  retirement,  insurance and other  compensation
programs  of the  Corporation  at the  time  such  payments  are  due,  and  the
Corporation shall have no further obligations to you under this Agreement.

     (iii) If your employment by the Corporation shall
be terminated (a) by the Corporation  other than for Cause,  Disability or death
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 such payments are due, except as otherwise provided below.

                           (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 (together with
         the  payments  provided in  paragraphs  (C) and (D) of this  Subsection
         4(iii), the "Severance  Payments") equal to three times the sum of your
         (a) annual base salary in effect immediately prior to the occurrence of
         the  circumstance  giving  rise to the Notice of  Termination  given in
         respect thereof,  and (b) AIP Maximum Payment for the year in which the
         Date of Termination  occurs.  AIP Maximum Payment shall mean the higher
         of (1) the award you would be entitled to receive for 1995 based on the
         maximum payout factor for the AIP or (2) any greater award you would be
         entitled  to receive for any  subsequent  year  (including  the year in
         which your employment is terminated) based on the maximum payout factor
         for the AIP for such subsequent year. The provisions of this


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 8


         Section  4(iii)(B)  shall not in any way affect your  rights  under the
         Corporation's stock option plans or the PEP.

                           (C)  In  lieu  of  shares  of  common  stock  of  the
         Corporation  (the  "Shares")  issuable  upon  exercise  of  outstanding
         options,  if any, granted to you under the  Corporation's  stock option
         plans  ("Options"),  which  Options  (and  any  related  limited  stock
         appreciation  rights) shall be cancelled upon the making of the payment
         referred  to below,  you shall  receive  an amount in cash equal to the
         product  of (i) the excess of the  higher of the  closing  price of the
         Shares as reported on the NYSE on or nearest to the Date of Termination
         (or, if not listed on the NYSE, on a nationally  recognized exchange or
         quotation system on which trading volume in the Shares is highest), and
         the highest per share price for the Shares  actually paid in connection
         with any  change  in  control  of the  Corporation,  over the per share
         exercise  price of each Option  held by you  (whether or not then fully
         exercisable)   plus  the  amount,   if  any,  of  any  applicable  cash
         appreciation  rights,  times (ii) the  number of the Shares  covered by
         each such Option.

                           (D) The  Corporation  shall  pay to you any  deferred
         compensation, including but not limited to deferred bonuses and amounts
         deferred under the Executive Deferred  Compensation Plan,  allocated or
         credited to you or your account as of the Date of Termination.

                           (E) The  Corporation  shall also pay to you all legal
         fees  and  expenses  incurred  by you as a result  of such  termination
         (including all such fees and expenses,  if any,  incurred in contesting
         or disputing  any such  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 Code to any  payment  or  benefit
         provided hereunder).

                           (F) If the payments  provided under  paragraphs  (B),
         (C) and (D) above (the "Contract Payments") 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  paragraph  (G) below,  an  additional
         amount (the "Gross-Up  Payment")  such that the net amount  retained by
         you,  after  deduction of any Excise Tax on the  Contract  Payments and
         such other Total  Payments  and any federal and state and local  income
         tax and Excise Tax upon the  payment  provided  for by this  paragraph,
         shall be equal to the Contract  Payments 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,


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 9


         (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 Contract  Payments,  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's  independent
         auditors and acceptable to you 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  as  determined  by  the  Corporation's   independent   auditors  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. In the event that the Excise Tax is subsequently
         determined  to be less than the amount taken into account  hereunder at
         the time of  termination  of your  employment,  you shall  repay to the
         Corporation at the time that the amount of such reduction in 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


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 10


         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.  In the  event  that the  Excise  Tax is
         determined  to exceed the amount  taken into  account  hereunder at the
         time of the termination of your employment  (including by reason of any
         payment the  existence or amount of which cannot be  determined  at the
         time of the Gross-Up Payment), the Corporation shall make an additional
         Gross-Up  Payment in respect of such excess (plus any interest  payable
         with respect to such excess) at the time that the amount of such excess
         is finally determined.

                           (G) The payments provided for in paragraphs (B), (C),
         (D) and (F) above, shall be made not later than the fifth day following
         the Date of Termination, provided, however, that if the amounts of such
         payments  cannot  be  finally  determined  on or before  such day,  the
         Corporation shall pay to you on such day an estimate,  as determined in
         good faith by the  Corporation,  of the minimum amount of such payments
         and shall pay the remainder of such payments (together with interest at
         a rate equal to 120% of the rate  provided  in  Section  1274(d) of the
         Code) as soon as the amount  thereof can be determined  but in no event
         later  than the  thirtieth  day after the Date of  Termination.  In the
         event  that the amount of the  estimated  payments  exceeds  the amount
         subsequently  determined to have been due, such excess shall constitute
         a loan by the  Corporation to you payable on the fifth day after demand
         by the  Corporation  (together with interest at a rate equal to 120% of
         the rate  provided  in  Section  1274(d)  of the  Code).  The  payments
         provided for in paragraph (E) above shall be made from time to time, in
         each instance not later than the fifth day following a written  request
         for payment by you.

     (iv) If your employment  shall be terminated (A) by the  Corporation  other
than for Cause,  Disability  or death or (B) by you for Good Reason,  then for a
36-month period after such termination, the Corporation shall arrange to provide
you with 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  Subsection  4(iv) 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.

     (v) You  shall not be  required  to  mitigate  the  amount  of any  payment
provided for in this Section 4 by seeking other  employment  or  otherwise,  nor
shall the amount of any  payment or benefit  provided  for in this  Section 4 be
reduced by any compensation earned by you as the result of employment by


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 11


another employer,  by retirement benefits,  by offset against any amount claimed
to be  owed by you to the  Corporation,  or  otherwise  except  as  specifically
provided in this Section 4.

     (vi) In addition to all other amounts  payable to you under this Section 4,
you shall be entitled to receive all  benefits  payable to you under The Black &
Decker  Executive  Salary  Continuance  Plan,  the  SERP,  The  Black  &  Decker
Supplemental Pension Plan, or any plan or agreement sponsored by the Corporation
or any of its subsidiaries relating to retirement benefits.

     5. SUCCESSORS; BINDING AGREEMENT.

     (i) The Corporation will require any successor (whether direct or indirect,
by purchase,  merger,  share  exchange,  consolidation  or  otherwise) to all or
substantially  all of the business  and/or assets of the  Corporation  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 no  such
succession had taken place. Failure of the Corporation to obtain such assumption
and  agreement  prior to the  effectiveness  of any such  succession  shall be a
breach  of this  Agreement  and  shall  entitle  you to  compensation  from  the
Corporation in the same amount and on the same terms as you would be entitled to
hereunder if you terminate your employment for Good Reason following a change in
control  of the  Corporation,  except  that for  purposes  of  implementing  the
foregoing,  the date on which any such  succession  becomes  effective  shall be
deemed the Date of Termination.  As used in this Agreement,  "Corporation" shall
mean the Corporation as  hereinbefore  defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
your  personal  or  legal  representatives,  executors,  administrators,  heirs,
distributees,  and  legatees.  If you should die while any amount would still be
payable to you hereunder if you had continued to live, all such amounts,  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.

     (iii)  In  the  event  that  you  are  employed  by  a  subsidiary  of  the
Corporation,  wherever in this Agreement reference is made to the "Corporation,"
unless the context  otherwise  requires,  such reference shall also include such
subsidiary.  The Corporation  shall cause such subsidiary to carry out the terms
of this Agreement insofar as they relate to the employment  relationship between
you and such  subsidiary,  and the Corporation  shall indemnify you and save you
harmless from and


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 12


against  all  liability  and  damage  you may  suffer as a  consequence  of such
subsidiary's failure to perform and carry out such terms.  Wherever reference is
made to any benefit  program of the  Corporation,  such reference shall include,
where appropriate,  the corresponding  benefit program of such subsidiary if you
were a  participant  in such benefit  program on the date a change in control of
the Corporation has occurred.

     6.  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,  addressed to the
respective  addresses  set forth on the first page of this  Agreement,  provided
that all notices to the  Corporation  shall be directed to the  attention of the
Board with a copy to the Secretary of the Corporation,  or to such other 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.

     7. MISCELLANEOUS.  This Agreement amends and restates the agreement between
the parties  dated  October 25,  1995.  No provision  of this  Agreement  may be
modified, waived or discharged unless such waiver,  modification or discharge is
agreed to in writing and signed by you and such  officer as may be  specifically
designated  by the Board.  No waiver by either  party  hereto at any time of any
breach by the other  party  hereto of, or  compliance  with,  any  condition  or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or  representations,  oral or otherwise,
express or implied,  with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Maryland. 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  Section  4  hereof  shall  survive  the
expiration of the term of this Agreement.

     8. 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.

     9.  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


<PAGE>


Mr. Joseph Galli
January 1, 1997
Page 13

same instrument.

     10. 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 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.

     If this  letter sets forth our  agreement  on the  subject  matter  hereof,
kindly sign and return to the Corporation the enclosed copy of this letter which
will then constitute our agreement on this subject.

                                                 Sincerely,

                                                 THE BLACK & DECKER CORPORATION


                                                 By  /S/  NOLAN D. ARCHIBALD
                                                     Nolan D. Archibald
                                                     Chairman, President and
                                                     Chief Executive Officer


Agreed to as of the 1st
day of January 1997


/S/  JOSEPH GALLI
Joseph Galli