BLACK & DECKER CORP
EXHIBIT 10(D)
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<TYPE>EX-10
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<FILENAME>0005.txt
<DESCRIPTION>EXHIBIT 10(D)
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Exhibit 10(d)

                                                     August 2, 2000



Mr. Paul A. Gustafson
The Black & Decker Corporation
701 East Joppa Road
Towson, 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 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, 2005; provided,  however, that
if a change in control of the Corporation  shall have occurred prior to December
31,  2005,  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 and
then 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 (i) your  termination of employment  with
the  Corporation,  or (ii) the  Corporation's  giving you notice of termination,
regardless 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  that would be  reportable  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"), 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,  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. 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 the  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 failure resulting from your incapacity due to physical or mental illness or
any  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) your willfully  engaging in conduct that 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 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  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  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), the  circumstances  are fully
corrected  prior  to  the  Date  of  Termination  specified  in  the  Notice  of
Termination,  as those 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  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
         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 that 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;
         and  (v)  Supplemental  Executive  Retirement  Plan  ("SERP");  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 a  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;

                           (F) the  failure by the  Corporation  to  continue to
         provide to you 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 to you an  automobile or allowance in lieu thereof,
         if an  automobile  or  allowance in lieu thereof was provided to you at
         the time of the change in control of the Corporation, 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  fringe
         benefit  enjoyed  by you at the time of the  change in  control  of the
         Corporation,  or 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;

                           (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 that
         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 party in accordance  with Section 6 hereof.
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
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 the 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 from
the date that the Notice of  Termination  is given);  provided that if within 15
days after Notice of  Termination is given,  or, if later,  prior to the Date of
Termination (as determined without regard to this proviso),  the party receiving
the  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  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 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  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  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  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 the period,  together with all amounts payable to
you under any compensation plan of the Corporation during the 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 those 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 the 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 those 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,  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 2000 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 the
         subsequent year. The provisions of this 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 New York  Stock  Exchange  ("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  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 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 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") so that the net amount retained by you,
         after  deduction of any Excise Tax on the  Contract  Payments and 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 other Total Payments.  For purposes
         of  determining  whether  any of the  payments  will be  subject to the
         Excise Tax and the amount of the 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  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 the 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 that could be obtained from deduction of the state
         and local taxes.  If 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 the  reduction  in Excise  Tax is  finally
         determined,  the portion of the Gross-Up  Payment  attributable  to the
         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 the  repayment  results in a
         reduction  in Excise  Tax or a federal  and state and local  income tax
         deduction)  plus  interest on the amount of the  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 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 the excess (plus any  interest  payable
         with  respect to the  excess) at the time that the amount of the 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 the
         payments  cannot  be  finally  determined  on or before  that day,  the
         Corporation shall pay to you on that day an estimate,  as determined in
         good faith by the  Corporation,  of the minimum  amount of the payments
         and shall pay the remainder of the 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.  If the
         amount  of the  estimated  payments  exceeds  the  amount  subsequently
         determined to have been due, the 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 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 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 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 (subject to Section
2.3 of  that  plan),  the  SERP,  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 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  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 the 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 or assets
as  described  above  that  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 representatives, 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)  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.

          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 a notice of change of address shall be effective only upon
receipt.

          7.  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, or  compliance  with,  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 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 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 and 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.

         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, President and
                                        Chief Executive Officer


Agreed to as of the 15th
day of August 2000


/s/ PAUL A. GUSTAFSON
-------------------------------------
Paul A. Gustafson

</TEXT>
</DOCUMENT>
