SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
The Black & Decker Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
(Black & Decker logo)
NOTICE OF ANNUAL MEETING
The 1997 Annual Meeting of Stockholders of The Black & Decker Corporation
will be held at Black & Decker, 1758 South Fayetteville Street, Asheboro, North
Carolina 27204, on April 22, 1997, at 9:00 a.m., for the following purposes:
1. To elect nine directors to hold office until their successors are elected and
qualified;
2. To ratify the selection of Ernst & Young LLP as independent public
accountants for the Corporation for fiscal year 1997; and
3. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on February 18, 1997, as
the record date for the determination of stockholders who are entitled to notice
of and to vote at the meeting.
Please sign, date and return the enclosed Proxy, which is being solicited by the
Board of Directors of the Corporation.
By Order of the Board of Directors
/s/ Barbara B. Lucas
Barbara B. Lucas
Senior Vice President -- Public Affairs
and Corporate Secretary
February 28, 1997
PLEASE NOTE PROXY STATEMENT AND PROXY CARD
It is important to you and to the Corporation that your shares be represented at
the meeting, regardless of the number of shares you own. If you are unable to be
present in person, we ask that you SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN
FAVOR OF the election of the persons designated by the Board of Directors and
the ratification of the selection of Ernst & Young LLP as independent public
accountants.
<PAGE>
PROXY STATEMENT
The Notice of Annual Meeting, this Proxy Statement, and the enclosed Proxy
and Annual Report of The Black & Decker Corporation (the "Corporation"),
including the consolidated financial statements of the Corporation for the
fiscal year ended December 31, 1996, are first being mailed on or about February
28, 1997, to stockholders of record at the close of business on February 18,
1997 (the "Record Date"). The enclosed Proxy is being solicited by the Board of
Directors of the Corporation in connection with the 1997 Annual Meeting of
Stockholders to be held at Black & Decker, 1758 South Fayetteville Street,
Asheboro, North Carolina 27204, on April 22, 1997, at 9:00 a.m. A stockholder
giving a proxy may revoke it at any time prior to its exercise by signing
another proxy bearing a later date or by giving the Secretary of the Corporation
written notice prior to the meeting or oral or written notice at the meeting.
The Corporation will supply proxies and proxy materials as requested to
brokerage houses and other custodians, nominees, and fiduciaries for
distribution to the beneficial owners of shares of the Corporation's common
stock, par value $0.50 per share (the "Common Stock"), and will reimburse them
for their expenses in so doing. In addition to the use of the mails, proxy
solicitations may be made by telephone and telecopy by employees of the
Corporation and by representatives of D. F. King & Co., Inc., a proxy
solicitation firm engaged by the Corporation to assist in the solicitation of
proxies from brokers, institutional holders, nominees, and other stockholders.
The cost of the firm's services, which is expected to be approximately $13,000
plus reimbursement of expenses, will be borne by the Corporation. The principal
executive office of the Corporation is at 701 East Joppa Road, Towson, Maryland
21286 (telephone 410-716-3900).
VOTING SECURITIES
On the Record Date, there were 94,390,399 shares of Common Stock
outstanding held by 18,669 stockholders of record. No shares of any other class
of capital stock of the Corporation were outstanding. Each share of Common Stock
outstanding on the Record Date is entitled to one vote on each matter submitted
to the stockholders for a vote at the meeting. The election of directors and all
other matters submitted to a vote at the meeting will be decided by the vote of
a majority of all votes cast in person or by proxy at the meeting. Abstentions
will be treated as shares present and entitled to vote for purposes of
determining the presence of a quorum, but abstentions will not be considered as
votes cast in determining whether a matter has been approved by the
stockholders. If a broker or other record holder or nominee indicates on a proxy
that it does not have authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter.
As of the Record Date, to the best of the Corporation's knowledge, no
persons other than Newell Co. ("Newell"), FMR Corp., and Harris Associates L.P.
beneficially owned more than five percent of the outstanding shares of Common
Stock. Based on the Schedule 13D, as amended, filed with the Securities and
Exchange Commission (the "Commission") and other information provided by Newell,
the Schedule 13G, as amended, filed by FMR Corp. with the Commission, and the
Schedule 13G, as amended, filed by Harris Associates L.P. with the Commission,
as of the date of those filings, Newell and its wholly owned subsidiary, Newell
Investments Inc., FMR Corp., and Harris Associates L.P. beneficially owned the
following shares of Common Stock as of the Record Date:
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<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
TITLE OF AMOUNT OF PERCENT OF
NAME CLASS BENEFICIAL OWNERSHIP CLASS
- ----------------------------------------------------------------------------------------------------
<S><C>
Newell Co. Common Stock 7,862,300 shares 8.3%
Newell Investments Inc.
29 East Stephenson Street
Freeport, Illinois 61032
FMR Corp.(1) Common Stock 8,409,098 shares(2)(3) 8.9%
82 Devonshire Street
Boston, Massachusetts 02109
Harris Associates L.P.(4) Common Stock 9,015,450 shares(5) 9.6%
Two North LaSalle Street-Suite 500
Chicago, Illinois 60602-3790
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) The Schedule 13G filed by FMR Corp. included Edward C. Johnson 3d,
Chairman of FMR Corp., and Abigail P. Johnson, a director of FMR Corp., as
reporting persons.
(2) Includes 6,548,000 shares (or 6.9% of the Common Stock outstanding)
owned by Fidelity Magellan Fund, an investment company registered under Section
8 of the Investment Company Act of 1940.
(3) Includes 8,003,050 shares (or 8.5% of the Common Stock outstanding)
beneficially owned by Fidelity Management & Research Company, a wholly owned
subsidiary of FMR Corp. and an investment adviser registered under Section 203
of the Investment Advisers Act of 1940.
(4) The Schedule 13G, as amended, filed by Harris Associates L.P., an
investment adviser registered under Section 203 of the Investment Advisers Act
of 1940, included Harris Associates, Inc., the sole general partner of Harris
Associates L.P., as a reporting person. According to the Schedule 13G, as
amended, the reporting person has shared voting power with respect to all shares
and shared dispositive power with respect to 6,014,700 shares.
(5) Includes 5,925,000 shares (or 6.3% of the Common Stock outstanding)
owned by The Oakmark Fund, a series of Harris Associates Investment Trust.
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<PAGE>
ELECTION OF DIRECTORS
Nine directors will be elected to hold office until their successors are
elected and qualified. Unless otherwise specified, the proxies received will be
voted for the election of the following persons:
(picture herewith)
NOLAN D. ARCHIBALD
CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
THE BLACK & DECKER CORPORATION
Mr. Archibald received an undergraduate degree from Weber State University in
1968 and a master of business administration degree from the Harvard Graduate
School of Business in 1970. After serving in various executive positions with
Conroy, Inc., Mr. Archibald became vice president of marketing for the Airstream
Division of Beatrice Companies, Inc. in 1977. His subsequent positions at
Beatrice included president of Del Mar Window Coverings, president of Stiffel
Lamp Company, and president of the Home Products Division. In 1983, Mr.
Archibald was elected a senior vice president of Beatrice and president of the
Consumer & Commercial Products Group. He left Beatrice and was elected president
and chief operating officer of the Corporation in September 1985; he was elected
chief executive officer of the Corporation in March 1986. Since then, Mr.
Archibald has been elected to the additional position of chairman of the board
of the Corporation.
Mr. Archibald, who is 53, was first elected a director of the Corporation in
September 1985. He also serves as a director of ITT Corporation and Brunswick
Corporation and as a trustee of The Johns Hopkins University.
(picture herewith)
NORMAN R. AUGUSTINE
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
LOCKHEED MARTIN CORPORATION
Mr. Augustine received an undergraduate degree in 1957 and a master of
aeronautical engineering degree in 1959 from Princeton University. After serving
in various capacities with Douglas Aircraft Company and Vought Missiles and
Space Company and with the United States Department of Defense, Mr. Augustine
joined Martin Marietta Corporation, a predecessor of Lockheed Martin
Corporation, in 1977 as vice president of Aerospace Technical Operations, became
a director in 1986, and rose to the position of chairman and chief executive
officer in 1988. Following the merger of Martin Marietta and Lockheed
Corporation in 1995, he became president of Lockheed Martin Corporation and
currently serves as chairman and chief executive officer.
Mr. Augustine, who is 61, is proposed for election as a director of the
Corporation for the first time. In addition to his service as a director of
Lockheed Martin Corporation, he also serves as a director of Phillips Petroleum
Company and Procter & Gamble Co.
(picture herewith)
BARBARA L. BOWLES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE KENWOOD GROUP, INC.
Ms. Bowles received an undergraduate degree from Fisk University in 1968 and a
master of business administration degree from the University of Chicago in 1971.
Following graduation, she held various positions at First National Bank of
Chicago, including vice president of trust investments. From 1981 to 1984, Ms.
Bowles was assistant vice president and director of investor relations for
Beatrice Companies, Inc. In 1984, she joined Kraft, Inc., where she served as
corporate vice president until 1989. Ms. Bowles is currently president of The
Kenwood Group, Inc., an equity advisory firm that she founded in 1989.
Ms. Bowles, who is 49, was first elected a director of the Corporation in July
1993. She also serves as a director of Hyde Park Bank and Trust Company, the
Chicago Urban League, and the Children's Memorial Hospital of Chicago.
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<PAGE>
(picture herewith)
MALCOLM CANDLISH
CHAIRMAN
FIRST ALERT, INC.
Mr. Candlish received an undergraduate degree from the London School of
Economics in 1956. After holding marketing positions with the Beecham Group in
London and Brazil and with Colgate-Palmolive in New York, Mr. Candlish worked
for McKinsey & Company, Inc. from 1965 to 1977 in locations around the world,
including New York, Melbourne, Sydney, Cleveland, and Toronto. He was elected a
partner of McKinsey in 1971. From 1977 to 1983, he held various positions with
Wilson Sporting Goods, including vice president and general manager of the
International Division, senior vice president of marketing, and president. He
then served six years as president and chief executive officer of Samsonite
Corporation. In 1989, Mr. Candlish joined Sealy, Inc. as president and chief
operating officer, and shortly thereafter was named chief executive officer and
chairman of the board. In 1992, Mr. Candlish left Sealy, Inc. and was elected a
director, chairman of the board, and chief executive officer of First Alert,
Inc., a manufacturer of home safety products. He remains chairman of the Board
of First Alert, Inc., having relinquished the position of chief executive
officer late in 1996.
Mr. Candlish, who is 61, was first elected a director of the Corporation in
December 1991. He also serves as a director of American Mutual Life Assurance
Company.
(picture herewith)
ALONZO G. DECKER, JR.
HONORARY CHAIRMAN OF THE BOARD
THE BLACK & DECKER CORPORATION
Mr. Decker was first employed by the Corporation in 1922. In 1929, he received a
degree in electrical engineering (E.E.) from Cornell University and joined the
Corporation on a full-time basis in 1930, concentrating most of his activities
in engineering, research, and manufacturing. In 1940, Mr. Decker was elected a
director of the Corporation and became vice president of manufacturing. He
became executive vice president in 1956 and, in 1960, was elected president of
the Corporation. He became chief executive officer in 1964 and, in 1968 while
continuing as president and chief executive officer, was elected chairman of the
board. Mr. Decker relinquished his positions as president in 1972, as chief
executive officer in 1975, and as chairman of the board in 1979. He continues to
serve the Corporation on a part-time basis in an advisory and consulting
capacity.
Mr. Decker, who is 89, serves as a trustee of The Maryland Institute, College of
Art. He also serves as a member of the Board of Visitors and Governors of
Washington College and as a trustee emeritus of The Johns Hopkins University.
(picture herewith)
ANTHONY LUISO
FORMER CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
INTERNATIONAL MULTIFOODS CORPORATION
Mr. Luiso received an undergraduate degree from Iona College in 1967 and a
master of business administration degree in 1982 from the University of Chicago.
Upon graduation from college, he was employed by Arthur Andersen & Co. and, in
1971, joined Beatrice Companies, Inc. Mr. Luiso held various positions at
Beatrice, including president and chief operating officer of the International
Food Division and president and chief operating officer of Beatrice U.S. Food.
Mr. Luiso left Beatrice in 1986 to become group vice president and chief
operating officer of the Foodservice Group of International Multifoods
Corporation and served as chairman of the board, president, and chief executive
officer of that corporation until 1996.
Mr. Luiso, who is 53, was first elected a director of the Corporation in
November 1988. He also serves as a director of Mac Frugal's Bargains (Bullet)
Close-Outs Inc.
5
<PAGE>
(picture herewith)
LAWRENCE R. PUGH
CHAIRMAN
VF CORPORATION
Mr. Pugh received an undergraduate degree from Colby College in 1956. After
serving in various capacities with Hamilton Beach Company and Ampex Corporation,
Mr. Pugh joined the Samsonite Luggage division of Beatrice Companies, Inc. in
1972. He subsequently served as director of marketing and vice president of
marketing until his election as president of that division in 1975. In 1980, Mr.
Pugh joined VF Corporation, an international apparel company, as president and a
director. In 1982, Mr. Pugh was designated chief executive officer of VF
Corporation and, in 1983, was named to the additional post of chairman of the
board. He remains chairman of the board of VF Corporation, having relinquished
the position of chief executive officer in 1996.
Mr. Pugh, who is 64, was first elected a director of the Corporation in 1985. He
also serves as a director of Mercantile Stores Company, Inc., Milliken &
Company, and Unum Insurance Co., and is chairman of the board of trustees of
Colby College.
(picture herewith)
MARK H. WILLES
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE TIMES MIRROR COMPANY
Mr. Willes received an undergraduate degree from Columbia College in 1963 and a
doctorate from Columbia Graduate School of Business in 1967. He was Assistant
Professor of Finance and Visiting Lecturer at the Wharton School of Finance and
Commerce of the University of Pennsylvania from 1967 to 1971. In 1971, Mr.
Willes joined the Philadelphia Federal Reserve Bank, where he held a number of
positions, including director of research and first vice president. He was
president of the Federal Reserve Bank of Minneapolis from 1977 to 1980. He
joined General Mills, Inc. in 1980 as executive vice president and chief
financial officer, was elected president, chief operating officer, and a
director of General Mills in 1985, and was elected vice chairman of the board in
1992. Effective June 1995, Mr. Willes was elected a director, president, and
chief executive officer of The Times Mirror Company, a national news and
information company, and effective January 1996, was elected to the additional
post of chairman of the board.
Mr. Willes, who is 55, was first elected a director of the Corporation in 1990.
He also serves as a director of The Talbots, Inc. and Ryder System, Inc.
(picture herewith)
M. CABELL WOODWARD, JR.
RETIRED VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER
ITT CORPORATION
Mr. Woodward received an undergraduate degree from Princeton University in 1951
and a master of business administration degree from New York University in 1962.
He began his career as a financial officer at Hanover Bank. In 1961, he joined
Continental Baking Company as assistant treasurer and later was elected vice
president-finance and a director. He was elected executive vice president of
Continental in 1969 and later that year was named president and chief executive
officer. In 1978, Mr. Woodward became executive vice president and chief
financial officer of ITT Corporation. Two years later, he was elected a director
and, in 1985, was elected a vice chairman and served in that capacity until his
retirement in 1993.
Mr. Woodward, who is 68, was first elected a director of the Corporation in
April 1993. He also serves as a director of CVS Corporation and Footstar, Inc.,
and as a trustee of a management investment company sponsored by PaineWebber,
Incorporated.
6
<PAGE>
BOARD OF DIRECTORS
COMPENSATION OF DIRECTORS. Directors who are not officers of the
Corporation receive an annual retainer of $30,000 for service on the Board of
Directors, including service on Board committees. Directors also receive a fee
of $1,500 for each Board or Board committee meeting attended and are reimbursed
for expenses incurred in connection with attendance. In addition, the chairman
of each of the Board committees receives an annual retainer of $5,000. Each
director has the option to defer all or part of the annual retainer and meeting
attendance fees. During the deferral period, interest accrues monthly for the
benefit of the director on the deferred amount at the rate earned on employee
contributions under the Thrift Feature of The Black & Decker Retirement Savings
Plan. Under the Corporation's 1995 Stock Option Plan for Non-Employee Directors,
upon initial election to the Board of Directors each director (other than
directors who are full-time employees) receives a grant of options to purchase
2,000 shares of Common Stock and upon re-election each director receives an
option to purchase 1,500 shares of Common Stock. The option exercise price is
the market price on the date of grant. Options become exercisable one year from
the date of grant and remain exercisable for 10 years from the date of grant.
The Corporation provides $100,000 of term life insurance for each director who
is not an employee of the Corporation and $200,000 of accident insurance
coverage during each day that a director is traveling in connection with the
Corporation's business. The Corporation also has an agreement with Mr. Decker
pursuant to which Mr. Decker is employed as a part-time employee/consultant at
an annual rate of $150,000 to provide such consulting and advisory services as
the Board of Directors or the president of the Corporation may request.
The Board of Directors may designate a retired director as a director
emeritus for a period of one year for each of the first three years following
the director's retirement. A director emeritus generally is a director for all
purposes, except that he or she (a) is not counted for quorum purposes, (b) may
not vote, and (c) receives an annual retainer fee of $15,000 instead of $30,000.
The Corporation provides retirement benefits, in an amount equal to one-half of
the annual retainer on the date the director's service terminates, to a director
who retires after having served for five or more years and who has not accepted
election as a director emeritus. The retirement benefit is paid in monthly
installments to the director or the director's surviving spouse until (a) the
number of monthly payments made equals the number of months of service by the
director, (b) 120 monthly payments have been made, or (c) the last day of the
month following the death of the individual entitled to the payments, whichever
occurs first. The retirement benefit is based only on service as a non-employee
director.
During 1996, the Board of Directors met six times in person or by
telephone, and all directors, except Barbara L. Bowles, attended more than 75%
of the total number of meetings of the Board and Board committees on which they
served.
COMMITTEES. The Board of Directors currently has four standing committees:
Executive, Organization, Audit, and Finance.
EXECUTIVE COMMITTEE. The Executive Committee, which is currently composed
of Alonzo G. Decker, Jr. (Chairman), Nolan D. Archibald, Malcolm Candlish,
Anthony Luiso, and Lawrence R. Pugh, did not meet during 1996. The Executive
Committee meets when required on short notice during intervals between meetings
of the Board of Directors and has authority to exercise all of the powers of the
Board of Directors in the management and direction of the affairs of the
Corporation, subject to specific directions of the Board of Directors and
subject to specific limitations of the Maryland General Corporation Law.
ORGANIZATION COMMITTEE. The Organization Committee, which is currently
composed of Lawrence R. Pugh (Chairman), Anthony Luiso, and Mark H. Willes, met
five times during 1996. Its functions include reviewing on a continuing basis
the Corporation's management structure and performance, nominating annually a
slate of officers and members of the standing committees of the Board of
Directors, recommending the election and removal of officers, reviewing annually
the job performance of the elected officers, reviewing and recommending salaries
and benefits for key corporate officers, administering the Corporation's
incentive compensation plans, and acting as the stock option committee to
administer the Corporation's stock option plans.
7
<PAGE>
The Organization Committee also reviews and recommends changes in Board
composition, handles problems of continuing fitness of individual directors,
recommends candidates for election to the Board of Directors to fill vacancies
between annual meetings of stockholders, and proposes to the Board of Directors
a slate of nominees for submission to the stockholders for election as directors
at the annual meeting of stockholders. In performing its nominating function,
the Organization Committee will consider nominees recommended by stockholders.
Recommendations should be submitted in writing to the Secretary of the
Corporation before October 1 of each year and must include a description of the
proposed nominee's qualifications, other relevant biographical data, and an
indication of the consent of the proposed nominee to serve as a director of the
Corporation if elected.
AUDIT COMMITTEE. The Audit Committee, which is currently composed of
Malcolm Candlish (Chairman), Barbara L. Bowles, and M. Cabell Woodward, Jr., met
four times during 1996. Its functions include making recommendations to the
Board of Directors regarding the selection of independent accountants, approving
the selection of and change in the independent accountants selected by the
Corporation's subsidiaries, conferring with the independent accountants and
reviewing the scope of and the fees for their prospective annual audit and the
results of their work, reviewing the Corporation's consolidated financial
statements, serving as a channel of communications between the Board of
Directors, management and the independent accountants, reviewing the adequacy of
the Corporation's internal auditing, accounting, and financial controls and
procedures, and approving the nature and scope of non-audit services performed
by the independent accountants.
FINANCE COMMITTEE. The Finance Committee, which is currently composed of
Anthony Luiso (Chairman), Malcolm Candlish, Mark H. Willes, and M. Cabell
Woodward, Jr., met five times during 1996. Its functions include reviewing the
financial policies and procedures of the Corporation, reviewing operating and
financial results, considering corporate financing and the issuance and sale of
the Corporation's securities, reviewing capital expenditure and operating
budgets, approving borrowings having a term in excess of one year, making
recommendations to the Board of Directors on dividends, reviewing certain
acquisitions, divestitures and dispositions of real estate, reviewing foreign
currency movements and exposures, considering mergers and the acquisition or
disposition of major assets, and generally overseeing the pension plans of the
Corporation and its subsidiaries.
NOMINATION OF DIRECTORS. The Corporation's By-laws provide that only
persons nominated in accordance with the following procedures shall be eligible
for election as directors at the meeting. Nominations of persons for election as
directors may be made at the meeting at the direction of the Board of Directors
by any nominating committee or person appointed by the Board, or by any
stockholder of the Corporation entitled to vote for the election of directors at
the meeting who complies with the notice procedures set forth below.
Nominations, other than those made by or at the direction of the Board,
shall be made pursuant to written notice delivered to or mailed and received by
the Secretary of the Corporation at the principal executive office of the
Corporation not less than 70 days nor more than 90 days prior to the meeting;
provided, however, that, in the event less than 80 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder must be so received not later than the close of business on
the 10th day following the day on which the notice of the date of the meeting
was mailed or the public disclosure was made, whichever first occurred. The
notice to the Secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director, (i)
the name, age, business address, and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and number of
shares of capital stock of the Corporation that are beneficially owned by the
person, and (iv) any other information relating to the person that is required
to be disclosed in solicitations for proxies for election of directors pursuant
to Rule 14a under the Securities Exchange Act of 1934; and (b) as to the
stockholder giving the notice (i) the name and record address of the stockholder
and (ii) the class and number of shares of capital stock of the Corporation that
are beneficially owned by the stockholder. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be required
by the Corporation to determine the eligibility of the proposed nominee to serve
as a director of the Corporation.
8
<PAGE>
The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and the defective nomination shall be disregarded.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934 requires the Corporation's officers and
directors and persons who own more than 10% of a registered class of the
Corporation's equity securities to file reports of ownership and changes in
ownership with the Commission, the New York Stock Exchange, and the Corporation.
Based solely on its review of the copies of the forms received by it, or written
representations from certain reporting persons that they were not required to
file a Form 5, the Corporation believes that, with respect to transactions
required to have been reported in 1996 or on a Form 5 for the year ended
December 31, 1996, all filing requirements were complied with on a timely basis,
except that Mr. Schoewe inadvertently failed to include an aggregate of 3.853
shares of Common Stock acquired in four dividend reinvestment plan transactions
during fiscal year 1995 on his Form 5 for the year ended December 31, 1995.
SECURITY OWNERSHIP OF MANAGEMENT
The following table presents information, as of the Record Date, about the
number of shares of Common Stock beneficially owned by each of the directors,
nominees, and named executive officers of the Corporation, and by all current
directors and executive officers of the Corporation as a group. Other than Mr.
Archibald, who beneficially owns 2.4% of the shares of Common Stock, each of the
named directors and executive officers beneficially owns less than 1% of the
shares of Common Stock, and all current directors and executive officers as a
group beneficially own 3.3% of the shares of Common Stock. These figures include
shares of Common Stock that the executive officers have the right to acquire
within 60 days of the Record Date pursuant to the exercise of stock options.
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED
- ---------------------------------------------------------------
Nolan D. Archibald 2,288,761(1)
Norman R. Augustine 5,000
Barbara L. Bowles 3,000(2)
Malcolm Candlish 6,650(2,3)
Alonzo G. Decker, Jr. 328,370(2,4)
Charles E. Fenton 62,564(5)
Joseph Galli 106,532(6)
Dennis G. Heiner 132,952(7)
Anthony Luiso 7,000(2)
Lawrence R. Pugh 2,500(2)
Thomas M. Schoewe 81,549(8)
Mark H. Willes 6,330(2,9)
M. Cabell Woodward, Jr. 6,000(2)
All Directors and Executive
Officers as a Group (24 persons) 3,204,506(10)
- ---------------------------------------------------------------
(1) Of the total number of shares shown as owned by Mr. Archibald,
2,110,000 shares represent the number of shares Mr. Archibald has the right to
acquire within 60 days of the Record Date upon the exercise of options granted
under the Corporation's stock option plans. Mr. Archibald owns 178,761 shares,
of which 2,418 shares are held under The Black & Decker Retirement Savings Plan
and 15,240 shares are held by a family partnership over which Mr. Archibald has
voting and investment power.
(2) Of the total number of shares shown as owned by each referenced
director, 2,000 shares represent the number of shares each has the right to
acquire within 60 days of the Record Date upon the exercise of options granted
under The Black & Decker 1995 Stock Option Plan for Non-Employee Directors. In
addition, each of the referenced directors has the right to acquire 1,500 shares
of Common Stock within 60 days of the date of this Proxy Statement.
(3) The shares shown as owned by Mr. Candlish are owned by a revocable
trust over which Mr. Candlish has voting and investment power in his capacity as
a settlor and a trustee.
(4) Of the total number of shares shown as owned by Mr. Decker, 120 shares
are held under The Black & Decker Retirement Savings Plan, 3,339 shares are held
directly by Mr. Decker's spouse, and 150,000 shares are held by two trusts of
which Mr. Decker is one of two trustees.
9
<PAGE>
(5) Of the total number of shares shown as owned by Mr. Fenton, 1,284
shares are held under The Black & Decker Retirement Savings Plan and 50,750
shares represent the number of shares Mr. Fenton has the right to acquire within
60 days of the Record Date upon the exercise of options granted under the
Corporation's stock option plans.
(6) Of the total number of shares shown as owned by Mr. Galli, 1,360 shares
are held under The Black & Decker Retirement Savings Plan and 95,000 shares
represent the number of shares Mr. Galli has the right to acquire within 60 days
of the Record Date upon the exercise of options granted under the Corporation's
stock option plans.
(7) Of the total number of shares shown as owned by Mr. Heiner, 1,822
shares are held under The Black & Decker Retirement Savings Plan and 100,000
shares represent the number of shares Mr. Heiner has the right to acquire within
60 days of the Record Date upon the exercise of options granted under the
Corporation's stock option plans.
(8) Of the total number of shares shown as owned by Mr. Schoewe, 1,490
shares are held under The Black & Decker Retirement Savings Plan, 69,400 shares
represent the number of shares Mr. Schoewe has the right to acquire within 60
days upon the exercise of options granted under the Corporation's stock option
plans, and one share is held by Mr. Schoewe's spouse.
(9) Of the total number of shares shown as owned by Mr. Willes, 4,230
shares are owned jointly with his spouse and 100 shares are owned by Mr. Willes'
son, who shares his same household.
(10) Of the total number of shares shown as owned by all directors and
executive officers as a group, 19,469 shares are held for the account of the
executive officers under The Black & Decker Retirement Savings Plan and
2,556,055 shares represent the number of shares executive officers and directors
have the right to acquire within 60 days of the Record Date upon the exercise of
options granted under the Corporation's stock option plans. The total number of
shares reported does not include the shares held by Mr. Augustine who is not
currently a director of the Corporation.
The information provided in the above chart is based on information
received from the directors, nominee, and executive officers. The inclusion of
shares in the table is not an admission of beneficial ownership by the director,
nominee, or executive officer next to whose name the shares appear. Unless
otherwise indicated in a footnote to the table, the named director, nominee, or
executive officer held sole voting and investment power over the shares.
In 1993, the Board of Directors adopted a stock ownership policy for the
Corporation's executive officers. The primary purpose of the policy is to strike
a balance between the objectives of stock ownership and individual financial
planning. The policy provides for a minimum share ownership target that ranges
from shares having a market value of one times an executive officer's base
salary to four times the base salary of the chairman, president, and chief
executive officer. Until the minimum share ownership target is met, an executive
officer is expected to retain at least 50% of the net shares received under The
Black & Decker Performance Equity Plan (the "PEP") and upon exercise of stock
options under the Corporation's stock option plans. The policy does not apply to
executive officers who have attained the age of 60.
10
<PAGE>
EXECUTIVE COMPENSATION
The following tables and related text summarize, in accordance with
regulations of the Commission, the Corporation's compensation of its executive
officers.
SUMMARY COMPENSATION
The following table summarizes certain information regarding the
Corporation's compensation of its chief executive officer and the four other
most highly compensated executive officers whose total annual salary and bonus
(excluding unusual and non-recurring items) for fiscal year 1996 exceeded
$100,000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- ----------------------
AWARDS PAYOUTS
------ -------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
COMPEN- OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION SARS LTIP PAYOUTS SATION
- ------------------------------------------------------------------------------------------------------------------------
<S><C>
Nolan D. Archibald 1996 $900,000 $1,422,000 $2,894,345(A) -- $1,391,250 $74,088(B)
Chairman, President, and 1995 838,942 810,000 922,015(C) -- 1,135,011 23,558(D)
Chief Executive Officer 1994 825,000 740,000 123,157(E) -- 494,759 20,444(F)
Charles E. Fenton 1996 315,000 200,000 28,761(G) 30,000 315,615 23,418(H)
Senior Vice President and 1995 298,333 300,000 22,861(G) 25,000 257,457 8,801(I)
General Counsel 1994 280,000 187,000 22,208(G) 9,000 102,818 6,711(J)
Joseph Galli 1996 350,000 155,000 34,158(K) 330,000 197,558 21,042(L)
Executive Vice President 1995 252,308 262,500 19,956(K) 100,000 127,342 5,964(M)
1994 217,500 205,000 19,910(K) 50,000 46,881 4,213(N)
Dennis G. Heiner 1996 333,333 255,000 31,989(O) 35,000 477,000 23,826(P)
Executive Vice President 1995 330,000 184,000 26,119(O) -- 389,114 12,123(Q)
1994 330,000 200,000 26,598(O) -- 169,643 9,959(R)
Thomas M. Schoewe 1996 304,167 212,000 29,088(S) 100,000 289,082 21,475(T)
Senior Vice President 1995 275,000 206,250 22,005(S) 12,000 139,158 7,207(U)
and Chief Financial Officer 1994 240,000 205,000 19,651(S) 12,000 56,548 5,046(V)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) In addition, the Corporation provides certain perquisites and other
personal benefits. The aggregate dollar cost to the Corporation of the
perquisites and other personal benefits received by Mr. Archibald in fiscal year
1996 did not exceed the lesser of $50,000 or 10% of the total amounts reported
in the Salary and Bonus columns. The referenced amount includes $2,797,704 paid
to Mr. Archibald in connection with his exercise of 150,000 cash appreciation
rights to cover the income tax liability incurred upon exercise of stock options
in 1996 in accordance with the terms of options granted to Mr. Archibald in 1986
and commitments made when Mr. Archibald was hired in 1985. Mr. Archibald's
remaining stock options do not carry this benefit.
(B) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan, $22,788 in life insurance premiums paid by the
Corporation, and $46,800 in contributions by the Corporation to The Black &
Decker Supplemental Retirement Savings Plan.
(C) Includes perquisites and other personal benefits of $56,978. The
perquisites and other personal benefits included personal use of the
Corporation's plane at an approximate cost to the Corporation of $31,222 and
reimbursement for financial counseling fees of $16,000. In addition, the
referenced amount includes $768,885 paid to Mr. Archibald in connection with his
exercise of 60,000 cash appreciation rights to cover the income tax liability
incurred upon exercise of stock options in 1995 in accordance with the terms of
the options granted to Mr. Archibald when he was hired in 1985. Mr. Archibald's
remaining stock options do not carry this benefit.
(D) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $19,058 in life insurance premiums paid by
the Corporation.
(E) Includes perquisites and other personal benefits of $59,087. The
perquisites and other personal benefits included personal use of the
Corporation's plane at an approximate cost to the Corporation of $31,832 and
reimbursement for financial counseling fees of $18,578.
(F) Includes $2,970 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $17,474 in life insurance premiums paid by
the Corporation.
(G) In addition, the Corporation provides certain perquisites and other
personal benefits. The aggregate dollar cost to the Corporation of the
perquisites and other personal benefits received by Mr. Fenton did not exceed
the lesser of $50,000 or 10% of the total amounts reported in the Salary and
Bonus columns in any of the three fiscal years reported.
(H) Includes $3,250 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan, $4,968 in life insurance premiums paid by the
Corporation, and $15,200 in contributions by the Corporation to The Black &
Decker Supplemental Retirement Savings Plan.
11
<PAGE>
(I) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $4,301 in life insurance premiums paid by the
Corporation.
(J) Includes $2,970 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $3,741 in life insurance premiums paid by the
Corporation.
(K) In addition, the Corporation provides certain perquisites and other
personal benefits. The aggregate dollar cost to the Corporation of the
perquisites and other personal benefits received by Mr. Galli did not exceed the
lesser of $50,000 or 10% of the total amounts reported in the Salary and Bonus
columns in any of the three fiscal years reported.
(L) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan, $2,667 in life insurance premiums paid by the
Corporation, and $13,875 in contributions by the Corporation to The Black &
Decker Supplemental Retirement Savings Plan.
(M) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $1,464 in life insurance premiums paid by the
Corporation.
(N) Includes $2,970 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $1,243 in life insurance premiums paid by the
Corporation.
(O) In addition, the Corporation provides certain perquisites and other
personal benefits. The aggregate dollar cost to the Corporation of the
perquisites and other personal benefits received by Mr. Heiner did not exceed
the lesser of $50,000 or 10% of the total amounts reported in the Salary and
Bonus columns in any of the three fiscal years reported.
(P) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan, $8,356 in life insurance premiums paid by the
Corporation, and $10,970 in contributions by the Corporation to The Black &
Decker Supplemental Retirement Savings Plan.
(Q) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $7,623 in life insurance premiums paid by the
Corporation.
(R) Includes $2,970 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $6,989 in life insurance premiums paid by the
Corporation.
(S) In addition, the Corporation provides certain perquisites and other
personal benefits. The aggregate dollar cost to the Corporation of the
perquisites and other personal benefits received by Mr. Schoewe did not exceed
the lesser of $50,000 or 10% of the total amounts reported in the Salary and
Bonus columns in any of the three fiscal years reported.
(T) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan, $3,350 in life insurance premiums paid by the
Corporation, and $13,625 in contributions by the Corporation to The Black &
Decker Supplemental Retirement Savings Plan.
(U) Includes $4,500 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $2,707 in life insurance premiums paid by the
Corporation.
(V) Includes $2,970 in contributions by the Corporation to The Black &
Decker Retirement Savings Plan and $2,076 in life insurance premiums paid by the
Corporation.
12
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to grants
made by the Corporation of stock options to named executive officers pursuant to
the Corporation's stock option plans during fiscal year 1996. No stock
appreciation rights ("SARs") were granted to executive officers during fiscal
year 1996.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZED VALUE
INDIVIDUAL GRANTS AT
NUMBER OF ASSUMED ANNUAL
SECURITIES % OF TOTAL RATES OF
UNDERLYING OPTIONS/SARS GRANTED EXERCISE STOCK PRICE APPRECIATION
OPTIONS/SARS TO EMPLOYEES OR BASE EXPIRATION FOR OPTION TERM
NAME GRANTED IN FISCAL YEAR PRICE DATE 5% 10%
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Nolan D. Archibald -- -- -- -- -- --
Charles E. Fenton 30,000(A) 2.1% $30.500 12/11/06 $ 575,439 $ 1,458,275
Joseph Galli 300,000(B) 21.3 39.875 4/22/06 7,523,151 19,065,144
30,000(A) 2.1 30.500 12/11/06 575,439 1,458,275
Dennis G. Heiner 35,000(A) 2.5 30.500 12/11/06 671,345 1,701,320
Thomas M. Schoewe 50,000(A) 3.5 40.4375 7/17/06 1,271,547 3,222,348
50,000(A) 3.5 30.500 12/11/06 959,065 2,430,458
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) The referenced stock options have an exercise price equal to the fair
market value of Common Stock on the date of grant as defined in the underlying
stock option plan, and become exercisable in four equal annual installments
commencing 12 months after the date of grant. The referenced stock options
include a limited stock appreciation right entitling the holder to a cash
payment equal to the spread between the market value of Common Stock and the
exercise price of each of the outstanding options in cancellation of those stock
options upon a change in control.
(B) The referenced stock options have an exercise price equal to the fair
market value of Common Stock on the date of grant as defined in the underlying
stock option plan, and become exercisable in full on the fifth anniversary of
the date of the grant. The referenced stock options include a limited stock
appreciation right entitling Mr. Galli to a cash payment equal to the spread
between the market value of Common Stock and the exercise price of each of the
outstanding options in cancellation of those stock options upon a change in
control.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/SAR VALUES
The following table sets forth certain information with respect to the
exercise of stock options and SARs by the Corporation's named executive officers
during fiscal year 1996 and information concerning the number and value of
unexercised stock options at December 31, 1996. The value of unexercised stock
options is based on the closing price per share of Common Stock of $30.125 on
December 31, 1996, the last trading day of fiscal year 1996. As of that date, no
SARs were outstanding.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES ACQUIRED VALUE DECEMBER 31, 1996 DECEMBER 31, 1996
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
<S><C>
Nolan D. Archibald 90,000 $1,698,750(A)
60,000 1,147,500(A) 2,110,000 -- $25,436,250 --
Charles E. Fenton -- -- 50,750 53,250 477,156 $ 34,031
Joseph Galli 1,400 37,625 95,000 455,000 688,550 418,125
Dennis G. Heiner 50,000 951,125 100,000 35,000 925,000 --
Thomas M. Schoewe 10,000 188,750
2,000 30,125 67,800 134,200 753,225 234,775
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) As reported in the Other Annual Compensation column of the Summary
Compensation Table, Mr. Archibald received a cash payment of $2,797,704 in
connection with the exercise of 150,000 related cash appreciation rights.
13
<PAGE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NUMBER OF PERFORMANCE OR
SHARES, OTHER PERIOD UNTIL ESTIMATED FUTURE PAYOUTS UNDER
UNITS OR OTHER MATURATION OR NON-STOCK PRICE-BASED PLANS(B)
NAME RIGHTS(A) PAYOUT THRESHOLD TARGET MAXIMUM
- -----------------------------------------------------------------------------------------------------
<S><C>
Nolan D. Archibald 21,356 3 years $321,675 $643,350 $965,025
Charles E. Fenton 5,424 3 years 81,699 163,398 245,097
Joseph Galli 8,644 3 years 130,200 260,401 390,601
Dennis G. Heiner 7,119 3 years 107,230 214,460 321,690
Thomas M. Schoewe 5,254 3 years 79,138 158,277 237,415
- -----------------------------------------------------------------------------------------------------
</TABLE>
(A) Each of the referenced awards constitutes a grant under the PEP of
Performance Units equivalent to shares of Common Stock in December 1996 for the
three-year period commencing January 1, 1997. Cash amounts paid under the PEP
during fiscal year 1996 for outstanding Performance Units in amounts equal to
the dividends that would have been paid if the Performance Units were granted in
the form of shares of Common Stock are included in the Other Annual Compensation
column of the Summary Compensation Table.
(B) In accordance with the performance goals established under the PEP for
the three-year period ending December 31, 1999, the threshold, target, and
maximum awards are equal to 50%, 100%, and 150%, respectively, of the
Performance Units granted. The various levels of future payouts will be based
upon the Corporation's achievement at the end of the three-year performance
period of established earnings per share targets. The amounts shown for each
named executive officer are based on the closing price per share of Common Stock
of $30.125 on December 31, 1996, the last trading day of fiscal year 1996. The
value of any payouts ultimately received by each of the named executive officers
will vary depending, among other things, on the price per share of Common Stock
on the date the payouts are made.
PENSION BENEFITS
The following table shows the estimated annual retirement benefits payable
under the Corporation's pension plans to participating employees, including the
executive officers named in the Summary Compensation Table, in the remuneration
and years of service classifications indicated. The Corporation maintains
tax-qualified defined benefit plans, which cover most officers and salaried
employees on a non-contributory basis. Certain tax code provisions limit the
annual benefits that may be paid from tax-qualified retirement plans. As
permitted by the Employee Retirement Income Security Act of 1974, as amended,
the Corporation also maintains supplemental plans that authorize payment out of
the general funds of the Corporation of benefits in excess of amounts permitted
to be paid under the tax-qualified plans. The following table reflects benefits
payable under both the tax-qualified plans and the applicable supplemental
plans.
PENSION PLAN TABLE
- -------------------------------------------------------------------------------
YEARS OF SERVICE
------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- -------------------------------------------------------------------------------
$ 300,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000
500,000 250,000 250,000 250,000 250,000 250,000
750,000 375,000 375,000 375,000 375,000 375,000
1,000,000 500,000 500,000 500,000 500,000 500,000
1,250,000 625,000 625,000 625,000 625,000 625,000
1,500,000 750,000 750,000 750,000 750,000 750,000
1,750,000 875,000 875,000 875,000 875,000 875,000
2,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
2,500,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000
3,000,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
- -------------------------------------------------------------------------------
Compensation used under the tax-qualified defined benefit plans and the
applicable supplemental plans in calculating the annual normal retirement
benefit amounts reflected in the Pension Plan Table is the highest three-year
average out of the executive's last five years of employment with the
Corporation of base annual salary and bonuses (as reported in the Summary
Compensation Table). However, in the case of executives covered by certain
severance benefits agreements, compensation used under the applicable
supplemental plans in calculating the annual normal retirement benefit amounts
reflected in the Pension Plan Table may be the highest three-year average
compensation out of the executive's last five years of
14
<PAGE>
employment with the Corporation before the date of a change in control, if that
average is higher. The normal retirement age for pension plan purposes is age 65
and for supplemental plan purposes is age 60 with five years of service.
The respective years of service credited for pension purposes as of
December 31, 1996, and the estimated years of service at age 60 for each of the
persons named in the Summary Compensation Table are as follows:
- -------------------------------------------------------------------------------
YEARS OF SERVICE YEARS OF SERVICE
NAME AT DECEMBER 31, 1996 AT NORMAL RETIREMENT
- -------------------------------------------------------------------------------
Nolan D. Archibald 11.25 17.75
Charles E. Fenton 7.67 19.08
Joseph Galli 16.50 37.75
Dennis G. Heiner 11.08 17.75
Thomas M. Schoewe 10.92 26.67
- -------------------------------------------------------------------------------
The Pension Plan Table reflects the annual benefit payable commencing at
the participant's 60th birthday in the form of an annuity for the participant's
life with a 50% contingent annuity payable in favor of his or her spouse. Under
this pension benefit option, if a participant dies while receiving benefits, his
or her surviving spouse receives 50% of the monthly benefits for the spouse's
life.
The benefits reflected in the Pension Plan Table are offset or reduced by
100% of the participant's Social Security benefits, certain severance benefits,
and any retirement, disability, death, and similar benefits received from the
Corporation or any other employer.
SEVERANCE BENEFITS AND OTHER AGREEMENTS
Certain of the terms and conditions of employment of Nolan D. Archibald,
the Corporation's chairman, president, and chief executive officer, are governed
by a written employment contract. Mr. Archibald's contract currently provides
for an annual salary of $900,000, severance payments to Mr. Archibald on
substantially the same terms and conditions set forth below in respect of the
severance benefits agreements, and the continuation of substantially all
benefits and perquisites for a three-year period or until Mr. Archibald obtains
substantially equivalent employment.
In addition to the severance benefits agreements discussed below, the
Corporation has an executive salary continuance plan covering certain officers
of the Corporation, including Messrs. Fenton, Galli, Heiner, and Schoewe. In the
event any of those officers is terminated other than for cause, his compensation
and benefits will be continued for a specified period of up to two years or
until another position of employment is obtained, whichever occurs first. The
compensation and benefits payable to the executive under the salary continuance
plan will be offset by the compensation and benefits paid to, or credited for
the account of, the executive by another employer; provided, however, that the
Corporation will continue to pay the difference between the executive's new
compensation and benefits and his or her base salary and benefits with the
Corporation at the time of termination, if higher, for the remainder of the
period.
In 1986, the Corporation entered into severance benefits agreements that
provided for payments to be made to certain key management employees who are
terminated following a change in control of the Corporation. These agreements
have been amended and restated from time to time, and currently cover
approximately 18 employees, including each of the named executive officers. The
severance benefits agreements expire on December 31, 2000, unless a change in
control shall have occurred prior to that date, in which case the agreements
expire 36 months after the date of the change in control. The severance benefits
agreements provide for the payment by the Corporation of specified benefits in
the event the employment of the employee terminates under certain circumstances
during a period of three years following any change in control of the
Corporation. For purposes of these agreements, a change in control shall be
deemed to take place whenever (i) a person, group of persons, or other entity
becomes the beneficial owner, directly or indirectly, of securities of the
Corporation having 20% or more of the combined voting
15
<PAGE>
power of the Corporation's then-outstanding securities, (ii) certain significant
changes in the composition of the Board of Directors occur, (iii) the
Corporation enters into an agreement that would result in a change of control,
or (iv) the stockholders of the Corporation approve certain extraordinary
transactions.
Circumstances triggering payment of severance benefits under these
agreements include (i) involuntary termination of employment for reasons other
than death, disability, or cause, or (ii) voluntary termination by the employee
in the event of certain significant changes in the nature of his or her
employment, including certain reductions in compensation and changes in
responsibilities and powers.
Benefits under the severance benefits agreements generally include (i) a
lump sum severance payment equal to three times the sum of (a) the employee's
annual base salary and (b) the employee's Annual Incentive Plan maximum payment,
(ii) payment of deferred compensation, (iii) maintenance for a period of three
additional years of all life, disability, accident, medical, dental and health
insurance benefits substantially similar to those benefits to which the employee
was entitled immediately prior to termination, (iv) certain additional payments
to cover any excise tax imposed by Section 4999 of the Internal Revenue Code,
(v) reimbursement of legal fees and expenses, if any, incurred as a result of
such termination, and (vi) certain cash payments in lieu of Common Stock
issuable under the Corporation's stock option plans. For purposes of the
foregoing, Annual Incentive Plan maximum payment shall mean the higher of the
employee's maximum potential award under the applicable annual incentive plan
for 1995 or any greater maximum potential award provided for in any subsequent
year.
The Board of Directors believes that these severance benefits agreements
encourage the commitment and availability of its key management employees and
ensure that they will be able to devote their full attention and energies to the
Corporation's affairs in the face of potentially disruptive and distracting
circumstances that may arise in the event of an attempted or actual change in
control or an unsolicited takeover of the Corporation. In any such event, key
management employees will be able to analyze and evaluate proposals objectively
with a view to the best interests of the Corporation and its stockholders and to
take such other action as the Board of Directors may deem to be appropriate. The
severance benefits agreements, however, may have the incidental effect of
discouraging takeovers and protecting the employees from removal, since the
agreements increase the cost that would be incurred by an acquiring company
seeking to replace current management.
ORGANIZATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Recommendations regarding the annual salaries of the Corporation's
executive officers are made by the Organization Committee and submitted to the
Board of Directors for approval. The Board of Directors did not reject or modify
in any material way any of the recommendations of the Committee during 1996.
Awards of incentive compensation are made by the Committee pursuant to the terms
of incentive plans described below and reported to the Board.
PHILOSOPHY AND OBJECTIVES. The Corporation seeks to attract and retain top
quality executives by providing a competitive, performance-based executive
compensation program. The fixed compensation element of the program is intended
to be, in the aggregate with other compensation, competitive with the market.
The incentive compensation element is designed to focus management on annual and
long-term financial performance and on long-term stock price performance, with
both annual and long-term objectives and both cash and stock-based rewards. The
program reflects the Corporation's pay-for-performance philosophy and is
intended to provide pay commensurate with performance.
Total payouts under the incentive compensation element of the program vary
with the Corporation's annual and long-term performance against the objectives
and targets established under each of the incentive compensation plans and,
subject to certain limitations, with the Committee's and the Board of Directors'
subjective evaluation of individual performance.
Once it is determined that a participant is eligible for payment under the
Executive Annual Incentive Plan ("EAIP") because the Corporation reached its
threshold earnings per share ("EPS") and, if applicable, the participant's
particular business unit reached its financial targets, the exact amount of the
payment is
16
<PAGE>
determined by multiplying the target payment by a payout factor and an
individual performance factor. Although the payout factor is determined by a
mathematical formula calculated against preestablished objectives, the actual
payment is determined following a subjective evaluation of the participant's
performance and success in areas deemed to be significant to the Corporation as
a whole or to the particular business unit. This evaluation may result in a
payment less than (but not greater than) the amount otherwise payable under the
plan.
In 1993, the United States Internal Revenue Code was amended to limit
deductions for certain compensation in excess of $1 million annually paid to
specified executive officers of public companies such as the Corporation. The
Committee continues to monitor its executive compensation plans and policies
with a view toward preserving the deductibility of executive compensation while
maintaining an ability to attract and retain those executives necessary to
assist the Corporation in reaching its goals and objectives. Because the
Committee believes that the prudent use of discretion in determining pay level
is in the best interest of the Corporation and its stockholders, under some
circumstances (other than in the context of the EAIP and the Performance Equity
Plan ("PEP")) the Committee may continue to exercise both positive and negative
discretion in determining appropriate amounts of compensation. In those
situations, the compensation paid may not be deductible.
PRINCIPAL COMPONENTS OF EXECUTIVE COMPENSATION. The principal components of
the executive compensation program are base salary, annual and long-term
incentive compensation, and stock option incentives.
The Corporation's objective is to pay its executive officers base salaries
that are sufficient to attract and retain individuals with the qualities
believed to be necessary for the long-term financial success of the Corporation
and otherwise are competitive in the marketplace. An individual executive
officer's salary level generally is based on tenure, an evaluation of the
executive officer's performance during the period in which he or she has been
employed by the Corporation or its subsidiaries, and other special circumstances
such as the international nature of the Corporation's business, overseas
assignments, and direct competition for the executive officer's services. The
Committee and the Board of Directors generally consider increases in base salary
at 14-month intervals for executive officers other than the chief executive
officer and at 18-month intervals for the chief executive officer. The Committee
and the Board of Directors from time to time also consider increases in base
salary in connection with significant promotions or increases in the
responsibilities of executive officers and when, in their opinion, it is
necessary to respond to competitive pressures.
Historically, the Committee has approved annual bonuses based upon a number
of factors, including but not limited to EPS performance against established
targets. Individual awards generally have been based upon corporate financial
performance (as measured by corporate EPS), business unit performance (as
measured by operating income and working capital management against budget, each
determined at the business unit level), and a subjective evaluation of
individual performance. Target incentive awards then have been multiplied by a
payout factor and an individual performance factor. In 1996, for executive
officers who were members of the corporate staff, the payout factor was entirely
dependent upon actual EPS measured against target EPS. For executive officers
with operating responsibility for individual units, 25% of the payout factor was
determined by comparing actual EPS to target EPS, and 75% was determined by
comparing business unit operating income and working capital management to
target business unit performance in these areas.
The Corporation's 1996 EPS exceeded the EPS target established by the
Committee at the beginning of the year for purposes of awards under the EAIP.
Target incentive awards for 1996 ranged from 35% to 100% of base salary, with
maximum awards of 52.5% to 200% of base salary reflecting the extent to which
the Corporation exceeded the EPS target for the year and the Committee's
evaluation of each individual's performance and the performance of the business
unit or units for which the individual was responsible. In 1996, 17 individuals
participated in the EAIP.
The Corporation's long-term incentive program comprises the PEP and stock
option plans. The PEP is a stock-unit based performance plan adopted in 1989 to
replace the former cash-based long-term
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incentive compensation plan. PEP units and stock options are granted annually to
eligible participants, except that in the case of stock options approximately 50
executive officers and other key employees have received from time to time
multi-year grants rather than annual grants. The PEP units provide a potential
award, generally payable in stock, based on the Corporation's three-year
performance against an established EPS target. The EPS target under the PEP is
established by the Committee at the beginning of each three-year period after
consideration of the Corporation's long-term operating plan. Stock options
generally have a 10-year term, are granted at fair market value on the date of
grant, include limited stock appreciation rights exercisable in the event of a
change in control of the Corporation as defined in the plans, and become
exercisable over a four-year period (or, in the case of certain multi-year
grants previously made to senior executive officers, a five-year period). The
number of PEP units or stock options granted to an executive officer for a given
period generally is a function of the individual's base salary, in that the
dollar value of the shares underlying the PEP unit or stock option grant ranges
from 25% to 70% of base salary. To maximize the incentive aspects of these
programs and focus on those individuals who are in a position to have the
greatest effect on the Corporation's performance, the percentages of base salary
increase as the level of responsibility of the executive officer increases.
The number of PEP units or stock options is not tied to past corporate
performance, since the ultimate value of the stock option or performance unit
depends on future corporate performance and the future market values of the
Corporation's stock.
Approximately 430 individuals received stock options in 1996 and 28
individuals received payouts for the three-year PEP performance period that
ended on December 31, 1996.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. Archibald's base salary
was increased to $900,000 in 1995. Since Mr. Archibald's salary had been
$825,000 since 1989, the increase was approximately 1.35% on an annualized
basis. No change was made in 1996.
Mr. Archibald's annual incentive award of $1,422,000 for fiscal year 1996
was based on the Corporation's EPS (after adjustments for non-recurring charges
and credits) of $2.32. Under the EAIP criteria established at the beginning of
1996, Mr. Archibald was eligible for a target award of 100% of his base salary
with a maximum award of 200% of his base salary. The award is 158% of his base
salary.
Stock options and PEP awards represent Mr. Archibald's primary long-term
incentive opportunity. Coupled with the Corporation's stock ownership policy for
executive officers, which is discussed above under the caption "Security
Ownership of Management," these components of the Corporation's long-term
incentive award program are intended to create a strong motivation to develop
and implement strategies that lead to consistent and lasting increases in the
Corporation's return to its stockholders.
Mr. Archibald did not receive any stock options during fiscal year 1996.
During the year Mr. Archibald exercised stock options for 150,000 shares granted
to him in 1986. Under the terms of the options, which were exercisable at
$16.125 per share, Mr. Archibald was reimbursed for his tax costs associated
with the option exercise and the related tax reimbursement pursuant to
commitments made when Mr. Archibald was hired in 1985. Mr. Archibald's remaining
stock options do not carry this benefit.
For the three-year performance period ended December 31, 1996, Mr.
Archibald had been granted 28,000 PEP units. Under the terms of the PEP,
participants are entitled to receive up to 150% of the original grant if the
established target EPS is exceeded. Because the Corporation exceeded the
established EPS target for this performance period, 42,000 shares were awarded
to Mr. Archibald for the period. This number of shares represented an award of
150% of the PEP units initially granted to Mr. Archibald for this performance
period because the actual EPS entitled Mr. Archibald to the maximum award
established at the beginning of the performance period. For the three-year
performance period beginning January 1, 1996, the Committee granted Mr.
Archibald 21,356 PEP units which, if earned, would equal approximately 70% of
his current salary based on the stock price on the date of grant.
COMPENSATION OF OTHER EXECUTIVE OFFICERS. With the exception of executive
officers who received salary increases in connection with their initial election
as executive officers or substantial promotions in
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1996, the named and other executive officers of the Corporation received salary
increases ranging from no raise to a raise of 12.7% during fiscal year 1996.
The named and other executive officers of the Corporation (other than Mr.
Archibald) received annual incentive awards ranging from zero to $255,000. The
incentive awards were determined in a manner consistent with the plans and
philosophy described above.
For the three-year performance period beginning January 1, 1997, the
Committee granted PEP units to executive officers (other than Mr. Archibald)
based on target percentages of base salary of approximately 40% to 60% in a
manner consistent with the philosophy described above. For the three-year
performance period ended December 31, 1996, the Committee awarded shares to
those executive officers participating in the PEP at a level of approximately
150% of the PEP units initially granted for this performance period in a manner
consistent with the philosophy described above.
A number of named and other executive officers of the Corporation (other
than Mr. Archibald) received stock option grants during 1996. The level of the
stock option grants was determined based on the Corporation's long-term
incentive compensation philosophy described above. Generally the options have a
10-year term, are exercisable at the fair market value of the shares of Common
Stock on the date of grant, include limited stock appreciation rights
exercisable in the event of a change in control of the Corporation as defined in
the plans, and become exercisable ratably over a four-year period.
ACCESS TO COMPETITIVE COMPENSATION DATA. The Committee reviews with
management competitive data from recognized national surveys concerning
executive compensation levels and practices as part of the process of
establishing an appropriate level of overall executive compensation. These
surveys include some of the companies that are included in the Peer Group used
by the Corporation in the comparison of five-year cumulative total return set
forth below as well as many other companies not in the Peer Group. The Committee
has chosen not to limit the survey information to companies in the Peer Group
because the search to attract new executives is not limited to companies within
the same industry, and the competition the Corporation faces to retain existing
executives comes from companies in many different industries. After reviewing
the available competitive data, the Committee evaluates the executive's
performance and considers the particular needs of the Corporation to arrive at
individual compensation decisions, which involve an overall appraisal of the
executive.
The Committee's and the Board of Directors' eligibility criteria for
membership on the Committee provides that a director may not serve on the
Committee if, among other things, the director is or was an employee of the
Corporation, is receiving compensation from the Corporation in any capacity
other than as a director, or is an employee or principal of an advisor or
consultant or of a significant customer or supplier.
Lawrence R. Pugh (Chairman)
Anthony Luiso
Mark H. Willes
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COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Cumulative Total Return
--------------------------------------------------------
12/91 12/92 12/93 12/94 12/95 12/96
Black & Decker 100 109 121 148 222 193
PEER GROUP 100 109 149 146 186 227
S&P 500 100 108 118 120 165 203
Assumes $100 invested at the close of business on December 31, 1991, in
Black & Decker Common Stock, Standard & Poor's (S&P) 500 Index, and Peer Group.
Cumulative total return assumes reinvestment of dividends.
Peer Group consists of the companies in S&P Hardware and Tools, Value Line
Home Appliances, Business Week Machine and Hand Tools, and Fortune Industrial
and Farm Equipment. Total return was weighted according to market capitalization
of each company at the beginning of each year. The Corporation will provide a
list of each of the companies in its Peer Group upon request. Requests should be
directed to the Corporation at its principal offices, Attention: Corporate
Secretary.
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RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
It is the practice of the Board of Directors of the Corporation to
designate the accounting firm that will serve as independent public accountants
for the Corporation. The Audit Committee has recommended that Ernst & Young LLP,
who served during the past fiscal year, be selected to audit the Corporation's
books for fiscal year 1997, and the Board of Directors of the Corporation has
approved the selection. Unless a contrary vote is indicated, the Proxies
solicited hereby will be voted for the ratification of the selection of Ernst &
Young LLP as independent public accountants for fiscal year 1997. If the
selection of Ernst & Young LLP is not ratified at the meeting, the Board of
Directors will consider the selection of other independent public accountants
for fiscal year 1997.
The Audit Committee reviews and approves the audit and non-audit services
to be provided by the Corporation's independent public accountants during the
year, considers the effect that performing those services might have on audit
independence, and approves management's engagement of the Corporation's
independent public accountants to perform those services. At its February 1997
meeting, the Audit Committee reviewed the fiscal 1996 non-audit services
described above and concluded that they have not impaired the independence of
Ernst & Young LLP.
A representative of Ernst & Young LLP is expected to be present at the 1997
Annual Meeting of Stockholders, will be given the opportunity to make a
statement if he or she so desires, and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
CORPORATION FOR FISCAL YEAR 1997.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
Proper subjects for and the form of stockholder proposals are regulated by
Rule 14a-8, promulgated pursuant to Section 14(a) of the Securities Exchange Act
of 1934. Each stockholder proposal submitted to the Corporation must be received
in a timely fashion and should indicate the full and correct registered name and
address of the stockholder making the proposal and the number of shares of
Common Stock owned by the proponent. If beneficial ownership is claimed,
documentary proof of ownership should be submitted with the proposal. In
addition, a proponent must notify the Corporation in writing of his or her
intention to appear personally or by proxy at the meeting to present the
proposal for action.
Stockholder proposals to be considered for inclusion in the proxy statement
for the 1998 Annual Meeting of Stockholders must be received by the Corporation
on or before October 31, 1997. It is expected that the 1998 Annual Meeting of
Stockholders will be held on April 28, 1998.
OTHER MATTERS
Management does not know of any other matters that will come before the
meeting. If any other matters should come properly before the meeting or if any
of the persons named above as nominees for election as directors should decline
or be unable to serve as a director, the holders of the proxies are authorized
to vote the shares as they deem advisable. It is intended that the holders of
the proxies will act according to their best judgment.
The Corporation's By-laws provide that, to be properly brought before the
meeting, business must be either (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
stockholder. In addition to any other applicable requirements, for business to
be properly brought before the meeting by a stockholder, the stockholder must
have given written notice thereof delivered to or mailed and received by the
Secretary of the Corporation at the principal executive offices of the
Corporation, not less than 70 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 80 days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder must be so received not later than the close of
business on the 10th day following the day on which the
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<PAGE>
notice of the date of the meeting was mailed or the public disclosure was made,
whichever first occurred. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the meeting (a)
a brief description of the business desired to be brought before the meeting and
the reasons for conducting such business at the meeting, (b) the name and record
address of the stockholder proposing such business, (c) the number of shares of
Common Stock that are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business.
Notwithstanding anything in the By-laws to the contrary, no business shall
be conducted at the meeting except in accordance with the procedures set forth
in the preceding paragraph; provided, however, that nothing in that paragraph
shall be deemed to preclude discussion by any stockholder of any business
properly brought before the meeting. The Chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of the
Corporation's By-laws, and if the Chairman should so determine, he shall so
declare to the meeting, and any such business not properly brought before the
meeting shall not be transacted.
By Order of the Board of Directors
/s/ Barbara B. Lucas
Barbara B. Lucas
Senior Vice President -- Public Affairs and
Corporate Secretary
February 28, 1997
Towson, Maryland
22
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(Black & Decker logo)
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
- ------------------------
ANNUAL MEETING
OF STOCKHOLDERS
APRIL 22, 1997
THE BLACK & DECKER
CORPORATION
701 East Joppa Road
Towson, Maryland 21286
HAVE YOU MOVED?
THE BLACK & DECKER
CORPORATION
MAIL STOP TW-266
701 EAST JOPPA ROAD
TOWSON, MARYLAND 21286
Please change my address on the books of The Black & Decker Corporation.
Name of Owner:
- -------------------------------------------------------------------------------
(PRINT NAME EXACTLY AS IT APPEARS ON STOCK CERTIFICATE)
From (Old Address):
- -------------------------------------------------------------------------------
(PLEASE PRINT)
To (New Address):
- -------------------------------------------------------------------------------
Street Address City or Town State Zip Code
Date: Signature:
- -------------------------------------------------------------------------------
Owner should sign name exactly as it appears on Stock Certificate.
If this form is signed by a representative, evidence of authority should be
supplied.
THIS FORM MAY BE ENCLOSED IN ENVELOPE WITH PROXY CARD
<PAGE>
THE BLACK & DECKER CORPORATION
701 East Joppa Road, Towson, Maryland 21286
This Proxy Is Solicited on Behalf of the Board of Directors
P
The undersigned hereby appoints Nolan D. Archibald, Alonzo G. Decker, Jr.,
R and Lawrence R. Pugh, and each of them, Proxies of the undersigned, with
power of substitution, to vote all shares of capital stock of the Corporation
O that the undersigned could vote if present at the 1997 Annual Meeting of
Stockholders to be held April 22, 1997, and at any adjournment or
X adjournments thereof. The undersigned further gives the Proxies authority to
vote according to their best judgment in respect of any other matters
Y properly coming before the meeting.
Election of Directors. Nominees:
N.D. Archibald, N.R. Augustine, B.L. Bowles, M. Candlish, A.G. Decker, Jr.,
A. Luiso, L.R. Pugh, M.H. Willes, and M.C. Woodward, Jr.
You are encouraged to specify your choices by marking the appropriate boxes (SEE
REVERSE SIDE), but you NEED NOT MARK any boxes if you wish to VOTE IN ACCORDANCE
with the Board of Directors' recommendations. Please mark, sign, date, and
return this Proxy promptly using the enclosed envelope.
SEE REVERSE
(caret) Detach Here (caret) SIDE
(X) Please mark your vote as in this example.
This Proxy when properly executed will be voted in the manner directed
herein. If no direction is given, this Proxy will be voted FOR all of the Board
of Directors' nominees and FOR proposal 2.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR its nominees and FOR proposal 2.
- --------------------------------------------------------------------------------
For Against For Against Abstain
1. Election of 2. Ratification of Ernst
Directors ( ) ( ) & Young LLP as ( ) ( ) ( )
(see reverse) Independent
Vote FOR all nominees, except: Accountant
- --------------------------------
Please sign name(s) exactly as printed hereon. If signing
as attorney, administrator, executor, guardian, or trustee,
please give full title as such.
-----------------------------------------------------------
-----------------------------------------------------------
SIGNATURE(S) DATE
(caret) Detach Here (caret)
