Exhibit 10.c
The forms of the Masco Corporation Supplemental Executive Retirement and
Disability Plan for named executive officers are filed herewith. The specific
terms of individual arrangements for other executive officers vary, but none are
more favorable to an executive than those filed herewith.

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Form for: Richard A. Manoogian
John R. Leekley
October 2, 2000
Dear :
          Our company’s Board of Directors has adopted a plan whereby
supplemental retirement and other benefits, in addition to those provided under
the Company’s pension and other benefit plans, will be made available to those
Company and subsidiary executives as may be designated from time to time by the
company’s Chief Executive Officer. The plan providing such benefits, as
originally made available to designated executives in 1987 and as subsequently
amended from time to time heretofore or in the future, is referred to in this
letter as the “Plan”. You are currently a participant in the Plan upon the terms
of a letter agreement signed by you and dated                  , . This
Agreement amends and replaces in its entirety your previously signed letter
agreement and describes in full your benefits pursuant to the Plan and all of
the Company’s obligations to you, and yours to the Company. These benefits as
described below are contractual obligations of the Company.
     For the purposes of this Agreement, words and terms are defined as follows:
          a. “Average Compensation” shall mean the aggregate of your highest
three years’ total annual cash compensation paid to you by the Company,
consisting of (i) base salaries and (ii) regular year-end cash bonuses paid with
respect to the years in which such salaries are paid, divided by three,
provided, however, (x) if you have on the date of determination less than three
full years of employment the foregoing calculation shall be based on the average
base salaries and regular year-end cash bonuses paid to you while so employed,
and (y) if the determination of Average Compensation includes any year in which
you volunteered to reduce your salary or, as part of a program generally
applicable to participants in the Plan, you did not receive an increase in
salary compared with the immediately preceding year, the Committee referred to
in paragraph 11 shall make a good faith determination of what your Average
Compensation would have been absent such salary reduction and absent such
generally applicable program.
          b. A “Change in Control” shall be deemed to have occurred if, during
any period of twenty-four consecutive calendar months, the individuals who at
the beginning of such period constitute the Company’s Board of Directors, and
any new directors (other than Excluded Directors) whose election by such Board
or nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose
election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a
tender offer for, or

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    Page 2   October 2, 2000

becoming the beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of all outstanding voting securities of the
Company, other than pursuant to a tender offer approved by the Board prior to
its commencement or pursuant to stock acquisitions approved by the Board prior
to their representing 25 percent or more of such combined voting power.
          c. “Code” means the Internal Revenue Code of 1986, as amended.
          d. “Company” shall mean Masco Corporation or any corporation in which
Masco Corporation owns directly or indirectly stock possessing in excess of 50%
of the total combined voting power of all classes of stock.
          e. The “Deferred Compensation Trust” shall mean any trust created by
the Company to receive the deposit referred to in clause (2) of paragraph 10.
          f. “Disability” and “Disabled” shall mean your being unable to perform
your duties as a Company executive by reason of your physical or mental
condition, prior to your attaining age 65, provided that you have been employed
by the Company for two consecutive Years or more at the time you first became
Disabled.
          g. The “Gross-Up Amount” (i) shall be determined if any payment or
distribution by the Company to or for your benefit, whether paid, distributed,
payable or distributed or distributable pursuant to the terms of this Agreement,
any stock option or stock award plan, retirement plan or otherwise (such payment
or distribution, other than an Excise Tax Adjustment Payment under clause (ii),
is referred to herein as a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          i. “Present Value” of future benefits means the discounted present
value of those benefits (including therein the benefits, if any, your Surviving
Spouse would be entitled to receive under this Agreement upon your death), using
the UP-1984 Mortality Table and discounted by the interest rate used, for
purposes of determining the present value of a lump sum distribution on plan
termination, by the PBGC on the first day of the month which is four months
prior to the month in which a Change in Control occurs (or if the PBGC has
ceased publishing such interest rate, such other interest rate as the Board of
Directors deems is an appropriate substitute). The above PBGC interest rate is
intended to

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    Page 3   October 2, 2000

be determined based on PBGC methodology and regulations in effect on
September 1, 1993 (as contained in 29 CFR Part 2619).
          j. “Profit Sharing Conversion Factor” shall be a factor equal to the
present value of a life annuity payable at the later of age 65 or attained age
based on the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
          k. “Retirement” shall mean your termination of employment with the
Company, on or after you attain age 65. Your acting as a consultant shall not be
considered employment.
          l. “SERP Percentage” of your Average Compensation is 60%.
          m. “Surviving Spouse” shall be the person to whom you shall be legally
married (under the law of the jurisdiction of your permanent residence) at the
date of (i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of paragraphs 1, 2 and 3,
(ii) your death for the purposes of paragraph 5 and, if paragraph 5 is
applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6
or 7 are applicable, for the purposes of paragraph 3, (iv) your termination of
employment for the purposes of paragraph 4 and, if paragraph 4 is applicable,
for purposes of paragraph 3 and (v) a “Change in Control” for the purposes of
paragraph 10 if none of clauses (i) through (iv) has become applicable prior to
the Change in Control and, if this clause (v) is applicable, for purposes of
paragraph 3. For the purposes of paragraphs 11a, 11e, 11f, 11g, 11h, 11i and
11j, “Surviving Spouse” shall be any spouse entitled to any benefits hereunder.
          n. If you become Disabled, “Total Compensation” shall mean your annual
base salary rate at the time of your Disability plus the regular year-end cash
bonus paid to you for the year immediately prior thereto, provided, however, if
the determination of Total Compensation is for a year in which you volunteered
to reduce your salary or, as part of a program generally applicable to
participants in the Plan, you did not receive an increase in salary compared
with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Total Compensation would have
been absent such salary reduction and absent such generally applicable program.
          o. “Vested Percentage” shall mean the sum of the following
percentages: (i) 2% multiplied by your Years of Service, plus (ii) 8% multiplied
by the number of Years you have been designated a participant in the Plan;
provided, however, (w) prior to completing five Years of Service the Vested
Percentage is 0, (x) on or prior to your fiftieth birthday your Vested
Percentage may not exceed 50%, (y) on or prior to each of your birthdays
following your fiftieth birthday your Vested Percentage may not exceed the sum
of 50% plus the product obtained by multiplying 5% by the number of birthdays
that have occurred

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    Page 4   October 2, 2000

following your fiftieth birthday, and (z) your Vested Percentage in no event may
exceed 100%.
          p. “Year” shall mean twelve full consecutive months, and “year” shall
mean a calendar year.
          q. “Years of Service” shall mean the number of Years during which you
were employed by the Company (excluding, however, Years of Service with a
corporation prior to the time it became a subsidiary of or otherwise affiliated
with Masco Corporation).
     1. In accordance with the Plan, upon your Retirement the Company will pay
you annually during your lifetime, subject to paragraph 8 below, the SERP
Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to you upon your Retirement if benefits payable
to you under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan were converted to a life annuity, or if you are married
when you retire, to a 50% joint and spouse survivor life annuity, and (ii) a sum
equal to the annual benefit which would be payable to you upon Retirement if
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity in accordance with the Profit Sharing Conversion
Factor, provided, however, in all cases the amount offset pursuant to these
subsections (i) and (ii) shall be determined prior to the effect of any payments
from the plans and trusts referred to therein which are authorized pursuant to
any Qualified Domestic Relations Order under ERISA, or other comparable order
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans.
     2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
     3. The Company will provide, purchase or at its option provide
reimbursement for premiums paid for such supplemental medical insurance as the
Company in its sole discretion may deem advisable from time to time (i) for you
and your Surviving Spouse for the lifetime of each of you (A) following a
termination of your employment with the Company due to Retirement or Disability,
and (B) following any other termination of employment with the Company provided
(x) you and your Surviving Spouse are not covered by another medical insurance
program substantially all of the cost of which is paid by another employer,
(y) on the date of such termination your Vested Percentage is not less than 80%
and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving
Spouse, and (ii) for your Surviving Spouse for his or her lifetime upon a
termination of your employment with the Company due to your death.
     4. If your employment with the Company is for any reason terminated prior
to Retirement, other than as a result of circumstances described in paragraphs
2, 5 or 6 of this Agreement or following a Change in Control, and if prior to
the date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,
subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1) multiplying your SERP Percentage at the date your employment terminated by
your Average

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    Page 5   October 2, 2000

Compensation, less (2) the sum of the following: (i) a sum equal to the annual
benefit which would be payable to you upon your attaining age 65 if benefits
payable to you under the Company funded qualified pension plans and the defined
benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan were converted to a life annuity, or if
you are married when you attain age 65, to a 50% joint and spouse survivor life
annuity, (ii) a sum equal to the annual benefit which would be payable to you
upon your attaining age 65 if an amount equal to your vested accounts at the
date of your termination of employment with the Company in the Company’s
qualified defined contribution plans (excluding your contributions and earnings
thereon in the Company’s 401(k) Savings Plan) and the defined contribution
(profit sharing) provisions of the Company’s Retirement Benefits Restoration
Plan and any similar plan (in each case increased from the date of termination
to age 65 at the imputed rate of 4% per annum) were converted to a life annuity
in accordance with the Profit Sharing Conversion Factor, and (iii) to the extent
the annual payments described in this clause (iii) and the annual payments you
would otherwise be entitled to receive under this paragraph 4 would, in the
aggregate exceed (the “excess amount”) the annual payments you would have
received under paragraph 1 had you remained employed by the Company until
Retirement (assuming for purposes of this clause no compensation increases), any
retirement benefits paid or payable to you by reason of employment by all other
previous or future employers, but only to the extent of such excess amount (the
amount of such deduction, in the case of benefits paid or payable other than on
an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than your prior or future employers), provided,
however, in all cases the amount offset pursuant to these subsections (i) and
(ii) shall be determined prior to the effect of any payments from the plans and
trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating
marital or other rights under state law as applied to retirement benefits from
non-qualified plans. Upon your death on or after age 65 should you be survived
by your Surviving Spouse, your Surviving Spouse shall receive for life,
commencing upon the date of your death, 75% of the annual benefit payable to you
under the preceding sentence following your attainment of age 65; provided,
further, if your death should occur prior to age 65, your Surviving Spouse shall
receive for life, commencing upon the date of your death, 75% of the annual
benefit which would have been payable to you under the preceding sentence
following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the Present Value of the
aggregate payments to be received by your Surviving Spouse based on his or her
life expectancy as of the date of your death is equal to the discounted Present
Value, determined at the date of your death, of the aggregate payments estimated
to be received by your Surviving Spouse based on his or her life expectancy at
an age, and as if your Surviving Spouse had begun receiving payments, when you
would have attained age 65.
     5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation (assuming no compensation increases between the date
of your death and the date you would have attained age 65), less: (i) a sum
equal to the annual benefit which would be payable to your Surviving Spouse
under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan if such benefit were converted to a life annuity (such
deduction, however, only to commence on the date such benefit is first payable),
and (ii) a sum equal to the annual payments which would be received by your
Surviving Spouse as if your spouse were designated as the beneficiary of your
vested accounts in the Company’s qualified defined benefit contribution plans
(excluding your

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    Page 6   October 2, 2000

contributions and earnings thereon in the Company’s 401(k) Savings Plan) and the
defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan and such accounts were converted
to a life annuity at the time of your death in accordance with the Profit
Sharing Conversion Factor, provided, however, in all cases the amount offset
pursuant to these subsections (i) and (ii) shall be determined prior to the
effect of any payments from the plans and trusts referred to therein which are
authorized pursuant to any Qualified Domestic Relations Order under ERISA, or
other comparable order allocating marital or other rights under state law as
applied to retirement benefits from non-qualified plans. No death benefits are
payable except to your Surviving Spouse.
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining age
65, until the earlier of your death, termination of Disability or attaining age
65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled.
     7. If you die leaving a Surviving Spouse while receiving Disability
benefits pursuant to paragraph 6 of this Agreement, you will be deemed to have
retired on your death and your Surviving Spouse shall receive for life 75% of
the annual benefit which would have been payable to you if you had retired on
the date of your death and your benefit determined pursuant to paragraph 1,
based upon your Average Compensation as of the date you became Disabled.
     8. If the age of your Surviving Spouse is more than 20 years younger than
your age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
     9. If you or your Surviving Spouse is eligible to receive benefits
hereunder, unless otherwise specifically agreed by the Company in writing, you
and your Surviving Spouse will not be able to receive benefits under any other
Company sponsored non-qualified retirement plans other than the Company’s
Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be
considered to have been received under a Company sponsored non-qualified
retirement plan even though such benefits are received after retirement. Except
as provided in the last sentence of paragraph 4 and in paragraph 10 of this
Agreement, no benefits will be paid to your Surviving Spouse pursuant to this
Agreement unless upon your death you were employed by the Company, Disabled or
had taken Retirement from the Company.
     10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
          (1) If you are then employed by the Company, your Vested Percentage,
if not already 100%, shall be deemed for all purposes of this Agreement to be
100%.
          (2) If the Deferred Compensation Trust has theretofore been
established or is established within thirty days after the Change in Control,
the Company shall forthwith deposit to an account in your name (or that of your
Surviving Spouse if you are then

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    Page 7   October 2, 2000

deceased and your Surviving Spouse is entitled to benefits hereunder) in the
Deferred Compensation Trust 110% of the sum of the Gross-Up Amount plus:
          (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age
if greater, assuming for purposes of this clause, no compensation increases and
that if younger than age 65 you and your Surviving Spouse had attained such age;
          (B) If employment has previously been terminated but you or your
Surviving Spouse is then entitled in the future to receive benefits under
paragraph 4 of this Agreement, an amount equal to the discounted Present Value
of the benefits which would have been payable under such paragraph;
          (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present
Value of those benefits payable in the future to you and your Surviving Spouse;
and
          (D) If you are then receiving payments under paragraph 6 of this
Agreement, an amount equal to the Present Value of the benefits which would have
been payable under paragraphs 6 and 7 on the assumption you would have continued
to receive benefits under paragraph 6 until you had attained age 65 and
thereafter continued to receive benefits as though you were deemed to have
retired.
(3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(A) to you and your Surviving Spouse if you or your Surviving Spouse is then
receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if
you become Disabled if you are employed by the Company at the time of the Change
in Control, (C) to your Surviving Spouse upon your death if you are employed by
the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in
Control but only during the periods when you and your Surviving Spouse are not
covered by another medical insurance program substantially all of the cost of
which is paid by another employer. The obligations of the Company under this
clause (i)(3) shall remain in effect for the lifetime of both you and your
Surviving Spouse.
(4) If the Deferred Compensation Trust is not established prior to or within
thirty days after the Change in Control, all payments which would have otherwise
have been made to you or your Surviving Spouse from the Deferred Compensation
Trust shall immediately after such thirty day period be made to you or your
Surviving Spouse by the Company.
          (ii) Any deposit by the Company to an account in your name or that of
your Surviving Spouse in the Deferred Compensation Trust prior to the occurrence
of the Change in Control, together with all income then accrued thereon (but
only to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.
          (iii) At or prior to making the deposit required by clause (i)(2) of
this paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate

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    Page 8   October 2, 2000

specifying that portion, if any, of the amount in the trust account, after
giving effect to the deposit, which is represented by the Gross-Up Amount.
Payment of 90.91% of the amount required by clause (i)(2) of this paragraph 10
to be paid to the trust account, together with any income accrued thereon from
the date of the Change in Control, is to be made to you or your Surviving
Spouse, as applicable, under the terms of the Deferred Compensation Trust, at
the earlier of (1) immediately upon a Change in Control if you then are deceased
or have attained age 65 or are Disabled, (2) your death subsequent to the Change
in Control, or (3) the date which is one year after the Change in Control;
provided, however, that the Trustee under the Deferred Compensation Trust is
required promptly to pay to you or your Surviving Spouse, as applicable, from
the trust account from time to time amounts, not exceeding in the aggregate the
Gross-Up Amount, upon your or your Surviving Spouse’s certification to the
Trustee that the amount to be paid has been or within 60 days will be paid by
you or your Surviving Spouse to a Federal, state or local taxing authority as a
result of the Change in Control and the imposition of the excise tax under
Section 4999 of the Code (or any successor provision) on the receipt of any
portion of the Gross-Up Amount. All amounts in excess of the amount required to
be paid from the trust account by the preceding sentence, after all expenses of
the Deferred Compensation Trust have been paid, shall revert to the Company
provided that the Company has theretofore expressly affirmed its continuing
obligations under clause (i)(3) of this Paragraph 10.
          (iv) Subject to the next sentence of this clause (iv), the payment of
the Gross-Up Amount to you or your Surviving Spouse or the account in your or
your Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.
          (v) Prior to the occurrence of a Change in Control, any deposits made
by the Company to an account in the Deferred Compensation Trust may be withdrawn
by the Company. Upon the occurrence of a Change in Control, all further
obligations of the Company under this Agreement (other than under this
Paragraph 10 to the extent not theretofore performed) shall terminate in all
respects.
     11. We also agree upon the following:
          a. Prior to the occurrence of a Change in Control, the Compensation
Committee of the Company’s Board of Directors, or any other committee however
titled which shall be vested with authority with respect to the compensation of
the Company’s officers and executives (in either case, the “Committee”), shall
have the exclusive authority to make all determinations which may be necessary
in connection with this Agreement including the

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    Page 9   October 2, 2000

dates of and whether you are or continue to be Disabled, the amount of annual
benefits payable hereunder by reason of offsets hereunder due to employment by
other employers, the interpretation of this Agreement, and all other matters or
disputes arising under this Agreement. The determinations and findings of the
Committee shall be conclusive and binding, without appeal, upon both of us.
          b. You will not during your employment or Disability, and after
Retirement or the termination of your employment, for any reason disclose or
make use of for your own or another person’s benefit under any circumstances any
of the Company’s Proprietary Information. Proprietary Information shall include
trade secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or marketing plans, inventions, research
and development information or results, sales, pricing and financial data,
information relating to the management, operations or planning of the Company
and any other information treated as confidential or proprietary.
          c. You agree that you will not following your termination of
employment for any reason (whether on Retirement, Disability or termination
prior to attaining age 65) thereafter directly or indirectly engage in any
business activities, whether as a consultant, advisor or otherwise, in which the
Company is engaged in any geographic area in which the products or services of
the Company have been sold, distributed or provided during the five year period
prior to the date of your termination of employment. In light of ongoing
payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited
in duration provided no Change in Control has occurred and, in the event of a
Change in Control, all such restrictions shall terminate one year thereafter.
          In addition to the foregoing and provided no Change in Control has
occurred, if while you or your Surviving Spouse is receiving retirement or other
benefits pursuant to this Agreement, in the judgment of the Committee you or
your Surviving Spouse directly or indirectly engage in activity or act in a
manner which can be considered adverse to the interest of the Company or any of
its direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
          d. Except as may be provided to the contrary in a duly authorized
written agreement between you and the Company you acknowledge that the Company
has made no commitments to you of any kind with respect to the continuation of
your employment, which we expressly agree is an employment at will, and you or
the Company shall have the unrestricted right to terminate your employment with
or without cause, at any time in your or its discretion.
          e. At the Company’s request, expressed through a Company officer, you
agree to provide such information with respect to matters which may arise in
connection with this Agreement as may be deemed necessary by the Company or the
Committee, including for example only and not in limitation, information
concerning benefits payable to you from third parties, and you further agree to
submit to such medical examinations by duly licensed physicians as may be
requested by the Company from time to time. You also agree to direct third
parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits
under this Agreement.

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    Page 10   October 2, 2000

          f. To the extent permitted by law, no interest in this Agreement or
benefits payable to you or to your Surviving Spouse shall be subject to
anticipation, or to pledge, assignment, sale or transfer in any manner nor shall
you or your Surviving Spouse have the power in any manner to charge or encumber
such interest or benefits, nor shall such interest or benefits be liable or
subject in any manner for the liabilities of you or your Surviving Spouse’s
debts, contracts, torts or other engagements of any kind.
          g. No person other than you and your Surviving Spouse shall have any
rights or property interest of any kind whatsoever pursuant to this Agreement,
and neither you nor your Surviving Spouse shall have any rights hereunder other
than those expressly provided in this Agreement. Upon the death of you and your
Surviving Spouse no further benefits of whatsoever kind or nature shall accrue
or be payable pursuant to this Agreement.
          h. All benefits payable pursuant to this Agreement, other than
pursuant to paragraph 10, shall be paid in installments of one-twelfth of the
annual benefit, or at such shorter intervals as may be deemed advisable by the
Company in its discretion, upon receipt of your or your Surviving Spouse’s
written application, or by the applicant’s personal representative in the event
of any legal disability.
          i. Except as provided in paragraph 10, all benefits under this
Agreement shall be payable from the Company’s general assets, which assets
(including all funds in the Deferred Compensation Trust) are subject to the
claims of the Company’s general creditors, and are not set aside for your or
your Surviving Spouse’s benefit.
          j. You agree that, if the Company establishes the Deferred
Compensation Trust, the Company is entitled at any time prior to a Change in
Control to revoke such trust and withdraw all funds theretofore deposited in
such trust. You acknowledge that although this Agreement refers from time to
time to your or your Surviving Spouse’s trust account, no separate trust will be
created and all assets of any Deferred Compensation Trust will be commingled.
          k. This Agreement shall be governed by the laws of the State of
Michigan.
     12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes, claims or controversies which could be the subject of litigation
(hereafter referred to as “dispute”) involving or arising out of this Agreement.
It is our mutual intention that the arbitration award will be final and binding
and that a judgment on the award may be entered in any court of competent
jurisdiction and enforcement may be had according to its terms.
     The arbitrator shall be chosen in accordance with the commercial
arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be borne equally by the parties to the dispute. The place
of the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.
     The arbitrator’s sole authority shall be to apply the clauses of this
Agreement.

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    Page 11   October 2, 2000

     We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.
     We further agree that any demand for arbitration must be made within one
year of the time any claim accrues which you or any person claiming hereunder
may have against the Company; unless demand is made within such period, it is
forever barred.
     We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.

            Sincerely,

MASCO CORPORATION
      By           Richard A. Manoogian        Chief Executive Officer     

                               DATE:              

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Form for: Eugene A. Gargaro, Jr.
October 2, 2000
Dear :
          Our company’s Board of Directors has adopted a plan whereby
supplemental retirement and other benefits, in addition to those provided under
the Company’s pension and other benefit plans, will be made available to those
Company and subsidiary executives as may be designated from time to time by the
company’s Chief Executive Officer. The plan providing such benefits, as
originally made available to designated executives in 1987 and as subsequently
amended from time to time heretofore or in the future, is referred to in this
letter as the “Plan”. You are currently a participant in the Plan upon the terms
of a letter agreement signed by you and dated      , . This Agreement amends and
replaces in its entirety your previously signed letter agreement and describes
in full your benefits pursuant to the Plan and all of the Company’s obligations
to you, and yours to the Company. These benefits as described below are
contractual obligations of the Company.
     For the purposes of this Agreement, words and terms are defined as follows:
     a. “Average Compensation” shall mean the aggregate of your highest three
years’ total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid, divided by three, provided, however,
(x) if you have on the date of determination less than three full years of
employment the foregoing calculation shall be based on the average base salaries
and regular year-end cash bonuses paid to you while so employed, and (y) if the
determination of Average Compensation includes any year in which you volunteered
to reduce your salary or, as part of a program generally applicable to
participants in the Plan, you did not receive an increase in salary compared
with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would
have been absent such salary reduction and absent such generally applicable
program.
     b. A “Change in Control” shall be deemed to have occurred if, during any
period of twenty-four consecutive calendar months, the individuals who at the
beginning of such period constitute the Company’s Board of Directors, and any
new directors (other than Excluded Directors) whose election by such Board or
nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose
election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than

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    Page 2   October 2, 2000

pursuant to a tender offer approved by the Board prior to its commencement or
pursuant to stock acquisitions approved by the Board prior to their representing
25 percent or more of such combined voting power.
          c. “Code” means the Internal Revenue Code of 1986, as amended.
          d. “Company” shall mean Masco Corporation or any corporation in which
Masco Corporation owns directly or indirectly stock possessing in excess of 50%
of the total combined voting power of all classes of stock.
          e. The “Deferred Compensation Trust” shall mean any trust created by
the Company to receive the deposit referred to in clause (2) of paragraph 10.
          f. “Disability” and “Disabled” shall mean your being unable to perform
your duties as a Company executive by reason of your physical or mental
condition, prior to your attaining age 65, provided that you have been employed
by the Company for two consecutive Years or more at the time you first became
Disabled.
          g. The “Gross-Up Amount” (i) shall be determined if any payment or
distribution by the Company to or for your benefit, whether paid, distributed,
payable or distributed or distributable pursuant to the terms of this Agreement,
any stock option or stock award plan, retirement plan or otherwise (such payment
or distribution, other than an Excise Tax Adjustment Payment under clause (ii),
is referred to herein as a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          i. “Present Value” of future benefits means the discounted present
value of those benefits (including therein the benefits, if any, your Surviving
Spouse would be entitled to receive under this Agreement upon your death), using
the UP-1984 Mortality Table and discounted by the interest rate used, for
purposes of determining the present value of a lump sum distribution on plan
termination, by the PBGC on the first day of the month which is four months
prior to the month in which a Change in Control occurs (or if the PBGC has
ceased publishing such interest rate, such other interest rate as the Board of
Directors deems is an appropriate substitute). The above PBGC interest rate is
intended to be determined based on PBGC methodology and regulations in effect on
September 1, 1993 (as contained in 29 CFR Part 2619).

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    Page 3   October 2, 2000

          j. “Profit Sharing Conversion Factor” shall be a factor equal to the
present value of a life annuity payable at the later of age 65 or attained age
based on the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
          k. “Retirement” shall mean your termination of employment with the
Company, on or after you attain age 65. Your acting as a consultant shall not be
considered employment.
          l. “SERP Percentage” of your Average Compensation is 60%.
          m. “Surviving Spouse” shall be the person to whom you shall be legally
married (under the law of the jurisdiction of your permanent residence) at the
date of (i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of paragraphs 1, 2 and 3,
(ii) your death for the purposes of paragraph 5 and, if paragraph 5 is
applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6
or 7 are applicable, for the purposes of paragraph 3, (iv) your termination of
employment for the purposes of paragraph 4 and, if paragraph 4 is applicable,
for purposes of paragraph 3 and (v) a “Change in Control” for the purposes of
paragraph 10 if none of clauses (i) through (iv) has become applicable prior to
the Change in Control and, if this clause (v) is applicable, for purposes of
paragraph 3. For the purposes of paragraphs 11a, 11e, 11f, 11g, 11h, 11i and
11j, “Surviving Spouse” shall be any spouse entitled to any benefits hereunder.
          n. If you become Disabled, “Total Compensation” shall mean your annual
base salary rate at the time of your Disability plus the regular year-end cash
bonus paid to you for the year immediately prior thereto, provided, however, if
the determination of Total Compensation is for a year in which you volunteered
to reduce your salary or, as part of a program generally applicable to
participants in the Plan, you did not receive an increase in salary compared
with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Total Compensation would have
been absent such salary reduction and absent such generally applicable program.
          o. “Vested Percentage” shall mean the sum of the following
percentages: (i) 2% multiplied by your Years of Service, plus (ii) 8% multiplied
by the number of Years you have been designated a participant in the Plan;
provided, however, (w) prior to completing five Years of Service the Vested
Percentage is 0,(x) on or prior to your fiftieth birthday your Vested Percentage
may not exceed 50%, (y) on or prior to each of your birthdays following your
fiftieth birthday your Vested Percentage may not exceed the sum of 50% plus the
product obtained by multiplying 5% by the number of birthdays that have occurred
following your fiftieth birthday, and (z) your Vested Percentage in no event may
exceed 100%.

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    Page 4   October 2, 2000

          p. “Year” shall mean twelve full consecutive months, and “year” shall
mean a calendar year.
          q. “Years of Service” shall mean the number of Years during which you
were employed by the Company (excluding, however, Years of Service with a
corporation prior to the time it became a subsidiary of or otherwise affiliated
with Masco Corporation).
     1. In accordance with the Plan, upon your Retirement the Company will pay
you annually during your lifetime, subject to paragraph 8 below, the SERP
Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to you upon your Retirement if benefits payable
to you under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan were converted to a life annuity, or if you are married
when you retire, to a 50% joint and spouse survivor life annuity, (ii) a sum
equal to the annual benefit which would be payable to you upon Retirement if
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity in accordance with the Profit Sharing Conversion
Factor, and (iii) any retirement benefits paid or payable to you by reason of
employment by all other employers (the amount of such deduction, in the case of
benefits paid or payable other than on an annual basis, to be determined on an
annualized basis by the Committee referred to in paragraph 11 and excluding from
such deduction any portion thereof, and earnings thereon, determined by such
Committee to have been contributed by you rather than such other employers),
provided, however, in all cases the amount offset pursuant to these subsections
(i) and (ii) shall be determined prior to the effect of any payments from the
plans and trusts referred to therein which are authorized pursuant to any
Qualified Domestic Relations Order under ERISA, or other comparable order
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans.
     2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
     3. The Company will provide, purchase or at its option provide
reimbursement for premiums paid for such supplemental medical insurance as the
Company in its sole discretion may deem advisable from time to time (i) for you
and your Surviving Spouse for the lifetime of each of you (A) following a
termination of your employment with the Company due to Retirement or Disability,
and (B) following any other termination of employment with the Company provided
(x) you and your Surviving Spouse are not covered by another medical insurance
program substantially all of the cost of which is paid by another employer,
(y) on the date of such termination your Vested Percentage is not less than 80%
and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving
Spouse, and (ii) for your Surviving Spouse for his or her lifetime upon a
termination of your employment with the Company due to your death.
     4. If your employment with the Company is for any reason terminated prior
to Retirement, other than as a result of circumstances described in paragraphs
2, 5 or 6 of this Agreement or following a Change in Control, and if prior to
the date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,

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    Page 5   October 2, 2000

subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1) multiplying your SERP Percentage at the date your employment terminated by
your Average Compensation, less (2) the sum of the following: (i) a sum equal to
the annual benefit which would be payable to you upon your attaining age 65 if
benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan were converted to a life annuity, or if
you are married when you attain age 65, to a 50% joint and spouse survivor life
annuity, (ii) a sum equal to the annual benefit which would be payable to you
upon your attaining age 65 if an amount equal to your vested accounts at the
date of your termination of employment with the Company in the Company’s
qualified defined contribution plans (excluding your contributions and earnings
thereon in the Company’s 401(k) Savings Plan) and the defined contribution
(profit sharing) provisions of the Company’s Retirement Benefits Restoration
Plan and any similar plan (in each case increased from the date of termination
to age 65 at the imputed rate of 4% per annum) were converted to a life annuity
in accordance with the Profit Sharing Conversion Factor, and (iii) to the extent
the annual payments described in this clause (iii) and the annual payments you
would otherwise be entitled to receive under this paragraph 4 would, in the
aggregate exceed (the “excess amount”) the annual payments you would have
received under paragraph 1 had you remained employed by the Company until
Retirement (assuming for purposes of this clause no compensation increases), any
retirement benefits paid or payable to you by reason of employment by all other
previous or future employers, but only to the extent of such excess amount (the
amount of such deduction, in the case of benefits paid or payable other than on
an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than your prior or future employers), provided,
however, in all cases the amount offset pursuant to these subsections (i) and
(ii) shall be determined prior to the effect of any payments from the plans and
trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating
marital or other rights under state law as applied to retirement benefits from
non-qualified plans. Upon your death on or after age 65 should you be survived
by your Surviving Spouse, your Surviving Spouse shall receive for life,
commencing upon the date of your death, 75% of the annual benefit payable to you
under the preceding sentence following your attainment of age 65; provided,
further, if your death should occur prior to age 65, your Surviving Spouse shall
receive for life, commencing upon the date of your death, 75% of the annual
benefit which would have been payable to you under the preceding sentence
following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the Present Value of the
aggregate payments to be received by your Surviving Spouse based on his or her
life expectancy as of the date of your death is equal to the discounted Present
Value, determined at the date of your death, of the aggregate payments estimated
to be received by your Surviving Spouse based on his or her life expectancy at
an age, and as if your Surviving Spouse had begun receiving payments, when you
would have attained age 65.
     5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation (assuming no compensation increases between the date
of your death and the date you would have attained age 65), less: (i) a sum
equal to the annual benefit which would be payable to your Surviving Spouse
under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan if such benefit were converted to a life annuity (such
deduction, however, only to commence on the date such benefit is first payable),
(ii) a sum equal to the annual payments which would be received by

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    Page 6   October 2, 2000

your Surviving Spouse as if your spouse were designated as the beneficiary of
your vested accounts in the Company’s qualified defined benefit contribution
plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan and such
accounts were converted to a life annuity at the time of your death in
accordance with the Profit Sharing Conversion Factor, and (iii) any retirement
benefits paid or payable to you or your Surviving Spouse by reason of your
employment by all other employers (the amount of such deduction, in the case of
benefits paid or payable other than on an annual basis, to be determined on an
annualized basis by the Committee referred to in paragraph 11 and excluding from
such deduction any portion thereof, and earnings thereon, determined by such
Committee to have been contributed by you rather than such other employers),
provided, however, in all cases the amount offset pursuant to these subsections
(i) and (ii) shall be determined prior to the effect of any payments from the
plans and trusts referred to therein which are authorized pursuant to any
Qualified Domestic Relations Order under ERISA, or other comparable order
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans. No death benefits are payable except to your
Surviving Spouse.
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining age
65, until the earlier of your death, termination of Disability or attaining age
65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled.
     7. If you die leaving a Surviving Spouse while receiving Disability
benefits pursuant to paragraph 6 of this Agreement, you will be deemed to have
retired on your death and your Surviving Spouse shall receive for life 75% of
the annual benefit which would have been payable to you if you had retired on
the date of your death and your benefit determined pursuant to paragraph 1,
based upon your Average Compensation as of the date you became Disabled.
     8. If the age of your Surviving Spouse is more than 20 years younger than
your age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
     9. If you or your Surviving Spouse is eligible to receive benefits
hereunder, unless otherwise specifically agreed by the Company in writing, you
and your Surviving Spouse will not be able to receive benefits under any other
Company sponsored non-qualified retirement plans other than the Company’s
Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be
considered to have been received under a Company sponsored non-qualified
retirement plan even though such benefits are received after retirement. Except
as provided in the last sentence of paragraph 4 and in paragraph 10 of this
Agreement, no benefits will be paid to your Surviving Spouse pursuant to this
Agreement unless upon your death you were employed by the Company, Disabled or
had taken Retirement from the Company.

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    Page 7   October 2, 2000

10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
     (1) If you are then employed by the Company, your Vested Percentage, if not
already 100%, shall be deemed for all purposes of this Agreement to be 100%.
     (2) If the Deferred Compensation Trust has theretofore been established or
is established within thirty days after the Change in Control, the Company shall
forthwith deposit to an account in your name (or that of your Surviving Spouse
if you are then deceased and your Surviving Spouse is entitled to benefits
hereunder) in the Deferred Compensation Trust 110% of the sum of the Gross-Up
Amount plus:
     (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age
if greater, assuming for purposes of this clause, no compensation increases and
that if younger than age 65 you and your Surviving Spouse had attained such age;
     (B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of
this Agreement, an amount equal to the discounted Present Value of the benefits
which would have been payable under such paragraph;
     (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present
Value of those benefits payable in the future to you and your Surviving Spouse;
and
     (D) If you are then receiving payments under paragraph 6 of this Agreement,
an amount equal to the Present Value of the benefits which would have been
payable under paragraphs 6 and 7 on the assumption you would have continued to
receive benefits under paragraph 6 until you had attained age 65 and thereafter
continued to receive benefits as though you were deemed to have retired.
(3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(A) to you and your Surviving Spouse if you or your Surviving Spouse is then
receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if
you become Disabled if you are employed by the Company at the time of the Change
in Control, (C) to your Surviving Spouse upon your death if you are employed by
the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in
Control but only during the periods when you and your Surviving Spouse are not
covered by another medical insurance program substantially all of the cost of
which is paid by another employer. The obligations of the Company under this
clause (i)(3) shall remain in effect for the lifetime of both you and your
Surviving Spouse.
(4) If the Deferred Compensation Trust is not established prior to or within
thirty days after the Change in Control, all payments which would have otherwise
have been made to you or your Surviving Spouse from the Deferred Compensation
Trust shall immediately after such thirty day period be made to you or your
Surviving Spouse by the Company.

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    Page 8   October 2, 2000

          (ii) Any deposit by the Company to an account in your name or that of
your Surviving Spouse in the Deferred Compensation Trust prior to the occurrence
of the Change in Control, together with all income then accrued thereon (but
only to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.
          (iii) At or prior to making the deposit required by clause (i)(2) of
this paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate specifying that portion, if any, of the amount
in the trust account, after giving effect to the deposit, which is represented
by the Gross-Up Amount. Payment of 90.91% of the amount required by clause
(i)(2) of this paragraph 10 to be paid to the trust account, together with any
income accrued thereon from the date of the Change in Control, is to be made to
you or your Surviving Spouse, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change in Control
if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the
Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse,
as applicable, from the trust account from time to time amounts, not exceeding
in the aggregate the Gross-Up Amount, upon your or your Surviving Spouse’s
certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local
taxing authority as a result of the Change in Control and the imposition of the
excise tax under Section 4999 of the Code (or any successor provision) on the
receipt of any portion of the Gross-Up Amount. All amounts in excess of the
amount required to be paid from the trust account by the preceding sentence,
after all expenses of the Deferred Compensation Trust have been paid, shall
revert to the Company provided that the Company has theretofore expressly
affirmed its continuing obligations under clause (i)(3) of this Paragraph 10.
          (iv) Subject to the next sentence of this clause (iv), the payment of
the Gross-Up Amount to you or your Surviving Spouse or the account in your or
your Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.

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    Page 9   October 2, 2000

          (v) Prior to the occurrence of a Change in Control, any deposits made
by the Company to an account in the Deferred Compensation Trust may be withdrawn
by the Company. Upon the occurrence of a Change in Control, all further
obligations of the Company under this Agreement (other than under this
Paragraph 10 to the extent not theretofore performed) shall terminate in all
respects.
     11. We also agree upon the following:
          a. Prior to the occurrence of a Change in Control, the Compensation
Committee of the Company’s Board of Directors, or any other committee however
titled which shall be vested with authority with respect to the compensation of
the Company’s officers and executives (in either case, the “Committee”), shall
have the exclusive authority to make all determinations which may be necessary
in connection with this Agreement including the dates of and whether you are or
continue to be Disabled, the amount of annual benefits payable hereunder by
reason of offsets hereunder due to employment by other employers, the
interpretation of this Agreement, and all other matters or disputes arising
under this Agreement. The determinations and findings of the Committee shall be
conclusive and binding, without appeal, upon both of us.
          b. You will not during your employment or Disability, and after
Retirement or the termination of your employment, for any reason disclose or
make use of for your own or another person’s benefit under any circumstances any
of the Company’s Proprietary Information. Proprietary Information shall include
trade secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or marketing plans, inventions, research
and development information or results, sales, pricing and financial data,
information relating to the management, operations or planning of the Company
and any other information treated as confidential or proprietary.
          c. You agree that you will not following your termination of
employment for any reason (whether on Retirement, Disability or termination
prior to attaining age 65) thereafter directly or indirectly engage in any
business activities, whether as a consultant, advisor or otherwise, in which the
Company is engaged in any geographic area in which the products or services of
the Company have been sold, distributed or provided during the five year period
prior to the date of your termination of employment. In light of ongoing
payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited
in duration provided no Change in Control has occurred and, in the event of a
Change in Control, all such restrictions shall terminate one year thereafter.
          In addition to the foregoing and provided no Change in Control has
occurred, if while you or your Surviving Spouse is receiving retirement or other
benefits pursuant to this Agreement, in the judgment of the Committee you or
your Surviving Spouse directly or indirectly engage in activity or act in a
manner which can be considered adverse to the interest of the Company or any of
its direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
          d. Except as may be provided to the contrary in a duly authorized
written agreement between you and the Company you acknowledge that the Company
has made no commitments to you of any kind with respect to the continuation of
your employment, which we expressly agree is an employment at will, and you or
the Company shall have the

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    Page 10   October 2, 2000

unrestricted right to terminate your employment with or without cause, at any
time in your or its discretion.
          e. At the Company’s request, expressed through a Company officer, you
agree to provide such information with respect to matters which may arise in
connection with this Agreement as may be deemed necessary by the Company or the
Committee, including for example only and not in limitation, information
concerning benefits payable to you from third parties, and you further agree to
submit to such medical examinations by duly licensed physicians as may be
requested by the Company from time to time. You also agree to direct third
parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits
under this Agreement.
          f. To the extent permitted by law, no interest in this Agreement or
benefits payable to you or to your Surviving Spouse shall be subject to
anticipation, or to pledge, assignment, sale or transfer in any manner nor shall
you or your Surviving Spouse have the power in any manner to charge or encumber
such interest or benefits, nor shall such interest or benefits be liable or
subject in any manner for the liabilities of you or your Surviving Spouse’s
debts, contracts, torts or other engagements of any kind.
          g. No person other than you and your Surviving Spouse shall have any
rights or property interest of any kind whatsoever pursuant to this Agreement,
and neither you nor your Surviving Spouse shall have any rights hereunder other
than those expressly provided in this Agreement. Upon the death of you and your
Surviving Spouse no further benefits of whatsoever kind or nature shall accrue
or be payable pursuant to this Agreement.
          h. All benefits payable pursuant to this Agreement, other than
pursuant to paragraph 10, shall be paid in installments of one-twelfth of the
annual benefit, or at such shorter intervals as may be deemed advisable by the
Company in its discretion, upon receipt of your or your Surviving Spouse’s
written application, or by the applicant’s personal representative in the event
of any legal disability.
          i. Except as provided in paragraph 10, all benefits under this
Agreement shall be payable from the Company’s general assets, which assets
(including all funds in the Deferred Compensation Trust) are subject to the
claims of the Company’s general creditors, and are not set aside for your or
your Surviving Spouse’s benefit.
          j. You agree that, if the Company establishes the Deferred
Compensation Trust, the Company is entitled at any time prior to a Change in
Control to revoke such trust and withdraw all funds theretofore deposited in
such trust. You acknowledge that although this Agreement refers from time to
time to your or your Surviving Spouse’s trust account, no separate trust will be
created and all assets of any Deferred Compensation Trust will be commingled.
          k. This Agreement shall be governed by the laws of the State of
Michigan.
     12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes,

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    Page 11   October 2, 2000

claims or controversies which could be the subject of litigation (hereafter
referred to as “dispute”) involving or arising out of this Agreement. It is our
mutual intention that the arbitration award will be final and binding and that a
judgment on the award may be entered in any court of competent jurisdiction and
enforcement may be had according to its terms.
     The arbitrator shall be chosen in accordance with the commercial
arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be borne equally by the parties to the dispute. The place
of the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.
     The arbitrator’s sole authority shall be to apply the clauses of this
Agreement.
     We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.
     We further agree that any demand for arbitration must be made within one
year of the time any claim accrues which you or any person claiming hereunder
may have against the Company; unless demand is made within such period, it is
forever barred.
     We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.

            Sincerely,

MASCO CORPORATION
      By           Richard A. Manoogian        Chief Executive Officer  

                                                    
DATE:                                        

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Form for: William T. Anderson
 

[name] April 12, 2002

 
[address]
 
Dear :
 
Our company’s Board of Directors has adopted a plan whereby supplemental
retirement and other benefits, in addition to those provided under the Company’s
pension and other benefit plans, will be made available to those Company and
subsidiary executives as may be designated from time to time by the company’s
Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time
to time heretofore or in the future, is referred to in this letter as the
“Plan”. I am pleased to inform you that I have designated you as a participant
in the Plan, and this Agreement describes in full your benefits pursuant to the
Plan and all of the Company’s obligations to you, and yours to the Company.
These benefits as described below are contractual obligations of the Company.
 
For the purposes of this Agreement, words and terms are defined as follows:
 
a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid, divided by three, provided, however,
(x) if you have on the date of determination less than three full years of
employment the foregoing calculation shall be based on the average base salaries
and regular year-end cash bonuses paid to you while so employed, and (y) if the
determination of Average Compensation includes any year in which you volunteered
to reduce your salary or, as part of a program generally applicable to
participants in the Plan, you did not receive an increase in salary compared
with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would
have been absent such salary reduction and absent such generally applicable
program.
 
b. A “Change in Control” shall be deemed to have occurred if, during any period
of twenty-four consecutive calendar months, the individuals who at the beginning
of such period constitute the Company’s Board of Directors, and any new
directors (other than Excluded Directors) whose election by such Board or
nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose
election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than pursuant to a tender offer approved
by the Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or more of such
combined voting power.
 
c. “Code” means the Internal Revenue Code of 1986, as amended.
 
d. “Company” shall mean Masco Corporation or any corporation in which Masco
Corporation owns directly or indirectly stock possessing in excess of 50% of the
total combined voting power of all classes of stock. For purposes of determining
“Average Compensation”, “Years of Service” and “Years” employed by the Company,
Company shall also include Metaldyne Corporation, a Delaware corporation
(formerly MascoTech, Inc.).
 
e. The “Deferred Compensation Trust” shall mean any trust created by the Company
to receive the deposit referred to in clause (2) of paragraph 10.
 
f. “Disability” and “Disabled” shall mean your being unable to perform your
duties as a Company executive by reason of your physical or mental condition,
prior to your attaining age 65,

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[name] Page  2 April 12, 2002

 
provided that you have been employed by the Company for two consecutive Years or
more at the time you first became Disabled.
 
g. The “Gross-Up Amount” (i) shall be determined if any payment or distribution
by the Company to or for your benefit, whether paid, distributed, payable or
distributed or distributable pursuant to the terms of this Agreement, any stock
option or stock award plan, retirement plan or otherwise (such payment or
distribution, other than an Excise Tax Adjustment Payment under clause (ii), is
referred to herein as a “Payment”), would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision) or any interest or
penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
 
h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
 
i. “Present Value” of future benefits means the discounted present value of
those benefits (including therein the benefits, if any, your Surviving Spouse
would be entitled to receive under this Agreement upon your death), using the
UP-1984 Mortality Table and discounted by the interest rate used, for purposes
of determining the present value of a lump sum distribution on plan termination,
by the PBGC on the first day of the month which is four months prior to the
month in which a Change in Control occurs (or if the PBGC has ceased publishing
such interest rate, such other interest rate as the Board of Directors deems is
an appropriate substitute). The above PBGC interest rate is intended to be
determined based on PBGC methodology and regulations in effect on September 1,
1993 (as contained in 29 CFR Part 2619).
 
j. “Profit Sharing Conversion Factor” shall be a factor equal to the present
value of a life annuity payable at the later of age 65 or attained age based on
the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
 
k. “Retirement” shall mean your termination of employment with the Company, on
or after you attain age 65. Your acting as a consultant shall not be considered
employment.
 
l. “SERP Percentage” of your Average Compensation is 60% if at the date of
determination you have completed 15 or more Years of Service, and decreases by
increments of four percentage points for each Year or portion thereof less than
15 that you have accumulated at the date of determination. The minimum SERP
Percentage is 20% after five Years of Service; prior to completing five Years of
Service the SERP Percentage is 0.
 
m. “Surviving Spouse” shall be the person to whom you shall be legally married
(under the law of the jurisdiction of your permanent residence) at the date of
(i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of

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[name] Page  3 April 12, 2002

 
paragraphs 1, 2 and 3, (ii) your death for the purposes of paragraph 5 and, if
paragraph 5 is applicable, for the purposes of paragraph 3,(iii) the
commencement of your Disability for the purposes of paragraphs 6 and 7 and, as
long as paragraphs 6 or 7 are applicable, for the purposes of paragraph 3,
(iv) your termination of employment for the purposes of paragraph 4 and, if
paragraph 4 is applicable, for purposes of paragraph 3 and (v) a “Change in
Control” for the purposes of paragraph 10 if none of clauses (i) through
(iv) has become applicable prior to the Change in Control and, if this
clause (v) is applicable, for purposes of paragraph 3. For the purposes of
paragraphs 11a, 11e, 11f, 11g, 11h, 11i and 11j, “Surviving Spouse” shall be any
spouse entitled to any benefits hereunder.
 
n. If you become Disabled, “Total Compensation” shall mean your annual base
salary rate at the time of your Disability plus the regular year-end cash bonus
paid to you for the year immediately prior thereto, provided, however, if the
determination of Total Compensation is for a year in which you volunteered to
reduce your salary or, as part of a program generally applicable to participants
in the Plan, you did not receive an increase in salary compared with the
immediately preceding year, the Committee referred to in paragraph 11 shall make
a good faith determination of what your Total Compensation would have been
absent such salary reduction and absent such generally applicable program.
 
o. “Vested Percentage” shall mean the sum of the following percentages: (i) 2%
multiplied by your Years of Service, plus (ii) 8% multiplied by the number of
Years you have been designated a participant in the Plan; provided, however,
(w) prior to completing five Years of Service the Vested Percentage is 0, (x) on
or prior to your fiftieth birthday your Vested Percentage may not exceed 50%,
(y) on or prior to each of your birthdays following your fiftieth birthday your
Vested Percentage may not exceed the sum of 50% plus the product obtained by
multiplying 5% by the number of birthdays that have occurred following your
fiftieth birthday, and (z) your Vested Percentage in no event may exceed 100%.
 
p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.
 
q. “Years of Service” shall mean the number of Years during which you were
employed by the Company (excluding, however, Years of Service with a corporation
prior to the time it became a subsidiary of or otherwise affiliated with Masco
Corporation).
 
r. “MascoTech” shall mean Metaldyne Corporation, a Delaware corporation,
formerly incorporated as MascoTech, Inc.
 
1. In accordance with the Plan, upon your Retirement the Company will pay you
annually during your lifetime, subject to paragraph 8 below, the SERP Percentage
of your Average Compensation, less: (i) a sum equal to the annual benefit which
would be payable to you upon your Retirement if benefits payable to you under
the Company funded qualified pension plans and the defined benefit (pension)
plan provisions of the Company’s Retirement Benefits Restoration Plan and any
similar plan were converted to a life annuity, or if you are married when you
retire, to a 50% joint and spouse survivor life annuity, (ii) a sum equal to the
annual benefit which would be payable to you upon Retirement if your vested
accounts in the Company’s qualified defined contribution plans (excluding your
contributions and earnings thereon in the Company’s 401(k) Savings Plan) and the
defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan were converted to a life annuity
in accordance with the Profit Sharing Conversion Factor, and (iii) any
retirement benefits paid or payable to you by reason of employment by all other
employers (the amount of such deduction, in the case of benefits paid or payable
other than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any
portion thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than such other employers), provided, however, in all
cases the amount offset pursuant to

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[name] Page  4 April 12, 2002

 
these subsections (i) and (ii) shall be determined prior to the effect of any
payments from the plans and trusts referred to therein which are authorized
pursuant to any Qualified Domestic Relations Order under ERISA, or other
comparable order allocating marital or other rights under state law as applied
to retirement benefits from non-qualified plans.
 
2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
 
3. The Company will provide, purchase or at its option provide reimbursement for
premiums paid for such supplemental medical insurance as the Company in its sole
discretion may deem advisable from time to time (i) for you and your Surviving
Spouse for the lifetime of each of you (A) following a termination of your
employment with the Company due to Retirement or Disability, and (B) following
any other termination of employment with the Company provided (x) you and your
Surviving Spouse are not covered by another medical insurance program
substantially all of the cost of which is paid by another employer, (y) on the
date of such termination your Vested Percentage is not less than 80% and (z) the
benefits under this paragraph 3 shall not commence until you have attained
age 60 or your earlier death to the extent you die leaving a Surviving Spouse,
and (ii) for your Surviving Spouse for his or her lifetime upon a termination of
your employment with the Company due to your death.
 
4. If your employment with the Company is for any reason terminated prior to
Retirement, other than as a result of circumstances described in paragraphs 2, 5
or 6 of this Agreement or following a Change in Control, and if prior to the
date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,
subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1) multiplying your SERP Percentage at the date your employment terminated by
your Average Compensation, less (2) the sum of the following: (i) a sum equal to
the annual benefit which would be payable to you upon your attaining age 65 if
benefits payable to you under the Company and MascoTech funded qualified pension
plans and the defined benefit (pension) plan provisions of the Company’s and
MascoTech’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity, or if you are married when you attain age 65, to a
50% joint and spouse survivor life annuity, (ii) a sum equal to the annual
benefit which would be payable to you upon your attaining age 65 if an amount
equal to your vested accounts at the date of your termination of employment with
the Company in the Company’s and MascoTech’s qualified defined contribution
plans (excluding your contributions and earnings thereon in the Company’s and
MascoTech’s 401(k) Savings Plans) and the defined contribution (profit sharing)
provisions of the Company’s and MascoTech’s Retirement Benefits Restoration Plan
and any similar plan (in each case increased from the date of termination to
age 65 at the imputed rate of 4% per annum) were converted to a life annuity in
accordance with the Profit Sharing Conversion Factor, and (iii) to the extent
the annual payments described in this clause (iii) and the annual payments you
would otherwise be entitled to receive under this paragraph 4 would, in the
aggregate exceed (the “excess amount”) the annual payments you would have
received under paragraph 1 had you remained employed by the Company until
Retirement (with your SERP Percentage determined as though you were given credit
for additional Years of Service until age 65 but no compensation increases), any
retirement benefits paid or payable to you by reason of employment by all other
previous or future employers (other than MascoTech), but only to the extent of
such excess amount (the amount of such deduction, in the case of benefits paid
or payable other than on an annual basis, to be determined on an annualized
basis by the Committee referred to in paragraph 11 and excluding from such
deduction any portion thereof, and earnings thereon, determined by such
Committee to have been contributed by you rather than your prior or future
employers), provided, however, in all cases the amount offset pursuant to these
subsections (i) and (ii) shall be determined prior to the effect of any payments
from the plans and trusts referred to therein which are authorized pursuant to
any Qualified Domestic Relations Order under ERISA, or other comparable order

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[name] Page  5 April 12, 2002

 
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans. Upon your death on or after age 65 should you
be survived by your Surviving Spouse, your Surviving Spouse shall receive for
life, commencing upon the date of your death, 75% of the annual benefit payable
to you under the preceding sentence following your attainment of age 65;
provided, further, if your death should occur prior to age 65, your Surviving
Spouse shall receive for life, commencing upon the date of your death, 75% of
the annual benefit which would have been payable to you under the preceding
sentence following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the discounted Present
Value of the aggregate payments to be received by your Surviving Spouse based on
his or her life expectancy as of the date of your death is equal to the
discounted Present Value, determined at the date of your death, of the aggregate
payments estimated to be received by your Surviving Spouse based on his or her
life expectancy at an age, and as if your Surviving Spouse had begun receiving
payments, when you would have attained age 65.
 
5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation (with your SERP Percentage determined as though you
were given credit for additional Years of Service but no compensation increases
between the date of your death and the date you would have attained age 65),
less: (i) a sum equal to the annual benefit which would be payable to your
Surviving Spouse under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan if such benefit were converted to a life
annuity (such deduction, however, only to commence on the date such benefit is
first payable), (ii) a sum equal to the annual payments which would be received
by your Surviving Spouse as if your spouse were designated as the beneficiary of
your vested accounts in the Company’s qualified defined benefit contribution
plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan and such
accounts were converted to a life annuity at the time of your death in
accordance with the Profit Sharing Conversion Factor, and (iii) any retirement
benefits paid or payable to you or your Surviving Spouse by reason of your
employment by all other employers (the amount of such deduction, in the case of
benefits paid or payable other than on an annual basis, to be determined on an
annualized basis by the Committee referred to in paragraph 11 and excluding from
such deduction any portion thereof, and earnings thereon, determined by such
Committee to have been contributed by you rather than such other employers),
provided, however, in all cases the amount offset pursuant to these
subsections (i) and (ii) shall be determined prior to the effect of any payments
from the plans and trusts referred to therein which are authorized pursuant to
any Qualified Domestic Relations Order under ERISA, or other comparable order
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans. No death benefits are payable except to your
Surviving Spouse.
 
6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining
age 65, until the earlier of your death, termination of Disability or attaining
age 65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled and with your SERP Percentage given credit for
Years of Service while you were Disabled.
 
7. If you die leaving a Surviving Spouse while receiving Disability benefits
pursuant to paragraph 6 of this Agreement, you will be deemed to have retired on
your death and your Surviving Spouse shall receive for life 75% of the annual
benefit which would have been payable to you if you had retired on the

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[name] Page  6 April 12, 2002

 
date of your death and your benefit determined pursuant to paragraph 1, based
upon your Average Compensation as of the date you became Disabled and with your
SERP Percentage given credit for Years of Service from the date you became
Disabled to the date you would have attained age 65.
 
8. If the age of your Surviving Spouse is more than 20 years younger than your
age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
 
9. If you or your Surviving Spouse is eligible to receive benefits hereunder,
unless otherwise specifically agreed by the Company in writing, you and your
Surviving Spouse will not be able to receive benefits under any other Company
sponsored non-qualified retirement plans other than the Company’s Retirement
Benefits Restoration Plan. For this purpose benefits received under the
Company’s non-qualified stock option or stock award plans will not be considered
to have been received under a Company sponsored non-qualified retirement plan
even though such benefits are received after retirement. Except as provided in
the last sentence of paragraph 4 and in paragraph 10 of this Agreement, no
benefits will be paid to your Surviving Spouse pursuant to this Agreement unless
upon your death you were employed by the Company, Disabled or had taken
Retirement from the Company.
 
10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
 
(1) If you are then employed by the Company, (i) your SERP Percentage, if not
already 60%, shall be deemed for all purposes of this Agreement to be the lesser
of 60% or the percentage resulting by adding to your SERP Percentage immediately
prior thereto the product obtained by multiplying 4% by the number of Years
which would then have to elapse prior to your attainment of age 65, and
(ii) your Vested Percentage, if not already 100%, shall be deemed for all
purposes of this Agreement to be 100%.
 
(2) If the Deferred Compensation Trust has theretofore been established or is
established within thirty days after the Change in Control, the Company shall
forthwith deposit to an account in your name (or that of your Surviving Spouse
if you are then deceased and your Surviving Spouse is entitled to benefits
hereunder) in the Deferred Compensation Trust 110% of the sum of the Gross-Up
Amount plus:
 
(A) If you are then employed by the Company, an amount equal to the discounted
Present Value of the benefits which would have been payable under paragraphs 1
and 2 of this Agreement upon Retirement at age 65 or attained age if greater,
assuming for purposes of this clause, no compensation increases and that if
younger than age 65 you and your Surviving Spouse had attained such age;
 
(B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of
this Agreement, an amount equal to the discounted Present Value of the benefits
which would have been payable under such paragraph;
 
(C) If you or your Surviving Spouse is then receiving payments under paragraphs
1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present Value of those
benefits payable in the future to you and your Surviving Spouse; and
 
(D) If you are then receiving payments under paragraph 6 of this Agreement, an
amount equal to the Present Value of the benefits which would have been payable
under paragraphs 6 and 7 on the assumption you would have continued to receive
benefits under paragraph 6 until you had attained age 65 and thereafter
continued to receive benefits as though you were deemed to have retired.

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[name] Page  7 April 12, 2002

 
(3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(A) to you and your Surviving Spouse if you or your Surviving Spouse is then
receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if
you become Disabled if you are employed by the Company at the time of the Change
in Control, (C) to your Surviving Spouse upon your death if you are employed by
the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in
Control but only during the periods when you and your Surviving Spouse are not
covered by another medical insurance program substantially all of the cost of
which is paid by another employer. The obligations of the Company under this
clause (i)(3) shall remain in effect for the lifetime of both you and your
Surviving Spouse.
 
(4) If the Deferred Compensation Trust is not established prior to or within
thirty days after the Change in Control, all payments which would have otherwise
have been made to you or your Surviving Spouse from the Deferred Compensation
Trust shall immediately after such thirty day period be made to you or your
Surviving Spouse by the Company.
 
(ii) Any deposit by the Company to an account in your name or that of your
Surviving Spouse in the Deferred Compensation Trust prior to the occurrence of
the Change in Control, together with all income then accrued thereon (but only
to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.
 
(iii) At or prior to making the deposit required by clause (i)(2) of this
paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate specifying that portion, if any, of the amount
in the trust account, after giving effect to the deposit, which is represented
by the Gross-Up Amount. Payment of 90.91% of the amount required by clause
(i)(2) of this paragraph 10 to be paid to the trust account, together with any
income accrued thereon from the date of the Change in Control, is to be made to
you or your Surviving Spouse, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change in Control
if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the
Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse,
as applicable, from the trust account from time to time amounts, not exceeding
in the aggregate the Gross-Up Amount, upon your or your Surviving Spouse’s
certification to the Trustee that the amount to be paid has been or within
60 days will be paid by you or your Surviving Spouse to a Federal, state or
local taxing authority as a result of the Change in Control and the imposition
of the excise tax under Section 4999 of the Code (or any successor provision) on
the receipt of any portion of the Gross-Up Amount. All amounts in excess of the
amount required to be paid from the trust account by the preceding sentence,
after all expenses of the Deferred Compensation Trust have been paid, shall
revert to the Company provided that the Company has theretofore expressly
affirmed its continuing obligations under clause (i)(3) of this Paragraph 10.
 
(iv) Subject to the next sentence of this clause (iv), the payment of the
Gross-Up Amount to you or your Surviving Spouse or the account in your or your
Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect

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[name] Page  8 April 12, 2002

 
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.
 
(v) Prior to the occurrence of a Change in Control, any deposits made by the
Company to an account in the Deferred Compensation Trust may be withdrawn by the
Company. Upon the occurrence of a Change in Control, all further obligations of
the Company under this Agreement (other than under this Paragraph 10 to the
extent not theretofore performed) shall terminate in all respects.
 
11. We also agree upon the following:
 
a. Prior to the occurrence of a Change in Control, the Compensation Committee of
the Company’s Board of Directors, or any other committee however titled which
shall be vested with authority with respect to the compensation of the Company’s
officers and executives (in either case, the “Committee”), shall have the
exclusive authority to make all determinations which may be necessary in
connection with this Agreement including the dates of and whether you are or
continue to be Disabled, the amount of annual benefits payable hereunder by
reason of offsets hereunder due to employment by other employers, the
interpretation of this Agreement, and all other matters or disputes arising
under this Agreement. The determinations and findings of the Committee shall be
conclusive and binding, without appeal, upon both of us.
 
b. You will not during your employment or Disability, and after Retirement or
the termination of your employment, for any reason disclose or make use of for
your own or another person’s benefit under any circumstances any of the
Company’s Proprietary Information. Proprietary Information shall include trade
secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or marketing plans, inventions, research
and development information or results, sales, pricing and financial data,
information relating to the management, operations or planning of the Company
and any other information treated as confidential or proprietary.
 
c. You agree that you will not following your termination of employment for any
reason (whether on Retirement, Disability or termination prior to attaining
age 65) thereafter directly or indirectly engage in any business activities,
whether as a consultant, advisor or otherwise, in which the Company is engaged
in any geographic area in which the products or services of the Company have
been sold, distributed or provided during the five year period prior to the date
of your termination of employment. In light of ongoing payments to be received
by you and your Surviving Spouse for your respective lives, the restrictions
contained in the preceding sentence shall be unlimited in duration provided no
Change in Control has occurred and, in the event of a Change in Control, all
such restrictions shall terminate one year thereafter.
 
In addition to the foregoing and provided no Change in Control has occurred, if
while you or your Surviving Spouse is receiving retirement or other benefits
pursuant to this Agreement, in the judgment of the Committee you or your
Surviving Spouse directly or indirectly engage in activity or act in a manner
which can be considered adverse to the interest of the Company or any of its
direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
 
d. Except as may be provided to the contrary in a duly authorized written
agreement between you and the Company you acknowledge that the Company has made
no commitments to you of any

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[name] Page  9 April 12, 2002

 
kind with respect to the continuation of your employment, which we expressly
agree is an employment at will, and you or the Company shall have the
unrestricted right to terminate your employment with or without cause, at any
time in your or its discretion.
 
e. At the Company’s request, expressed through a Company officer, you agree to
provide such information with respect to matters which may arise in connection
with this Agreement as may be deemed necessary by the Company or the Committee,
including for example only and not in limitation, information concerning
benefits payable to you from third parties, and you further agree to submit to
such medical examinations by duly licensed physicians as may be requested by the
Company from time to time. You also agree to direct third parties to provide
such information, and your Surviving Spouse’s cooperation in providing such
information is a condition to the receipt of survivor’s benefits under this
Agreement.
 
f. To the extent permitted by law, no interest in this Agreement or benefits
payable to you or to your Surviving Spouse shall be subject to anticipation, or
to pledge, assignment, sale or transfer in any manner nor shall you or your
Surviving Spouse have the power in any manner to charge or encumber such
interest or benefits, nor shall such interest or benefits be liable or subject
in any manner for the liabilities of you or your Surviving Spouse’s debts,
contracts, torts or other engagements of any kind.
 
g. No person other than you and your Surviving Spouse shall have any rights or
property interest of any kind whatsoever pursuant to this Agreement, and neither
you nor your Surviving Spouse shall have any rights hereunder other than those
expressly provided in this Agreement. Upon the death of you and your Surviving
Spouse no further benefits of whatsoever kind or nature shall accrue or be
payable pursuant to this Agreement.
 
h. All benefits payable pursuant to this Agreement, other than pursuant to
paragraph 10, shall be paid in installments of one-twelfth of the annual
benefit, or at such shorter intervals as may be deemed advisable by the Company
in its discretion, upon receipt of your or your Surviving Spouse’s written
application, or by the applicant’s personal representative in the event of any
legal disability.
 
i. Except as provided in paragraph 10, all benefits under this Agreement shall
be payable from the Company’s general assets, which assets (including all funds
in the Deferred Compensation Trust) are subject to the claims of the Company’s
general creditors, and are not set aside for your or your Surviving Spouse’s
benefit.
 
j. You agree that, if the Company establishes the Deferred Compensation Trust,
the Company is entitled at any time prior to a Change in Control to revoke such
trust and withdraw all funds theretofore deposited in such trust. You
acknowledge that although this Agreement refers from time to time to your or
your Surviving Spouse’s trust account, no separate trust will be created and all
assets of any Deferred Compensation Trust will be commingled.
 
k. For purposes of paragraphs 1, 4 and 5, benefits “payable” but not paid by a
former employer shall be disregarded in determining the company’s obligations to
you hereunder.
 
l. This Agreement shall be governed by the laws of the State of Michigan.
 
12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes, claims or controversies which could be the subject of litigation
(hereafter referred to as “dispute”) involving or arising out of this Agreement.
It is our mutual intention that the arbitration award will be final and binding
and that a judgment on the award may be entered in any court of competent
jurisdiction and enforcement may be had according to its terms.

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[name] Page  10 April 12, 2002

 
 
The arbitrator shall be chosen in accordance with the commercial arbitration
rules of the American Arbitration Association and the expenses of the
arbitration shall be borne equally by the parties to the dispute. The place of
the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.
 
The arbitrator’s sole authority shall be to apply the clauses of this Agreement.
 
We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.
 
We further agree that any demand for arbitration must be made within one year of
the time any claim accrues which you or any person claiming hereunder may have
against the Company; unless demand is made within such period, it is forever
barred.
 
We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.
 
Sincerely,
 
MASCO CORPORATION
 

  By 
    

Richard A. Manoogian
Chief Executive Officer
 

[name]
 
DATE: ­ ­

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Form of Amendment for:     William T. Anderson
 
John R. Leekley
Eugene A. Gargaro, Jr.
Richard A. Manoogian
 
November 18, 2002
 
Dear
 
As you know the Compensation Committee has approved a revised bonus program for
the executive group allowing year-end bonuses to fluctuate within a wide range
above and below the normal 50% bonus opportunity historically used by the
Company. This change is not, of course, intended to significantly increase or
decrease your retirement or disability benefits under our Supplemental Executive
Retirement Plan and to prevent such an effect a modification of your existing
SERP Agreement is necessary. The amendment to your SERP Agreement set forth
below limits the bonus paid with respect to any year included in the SERP
retirement calculation to 50% of the salary paid during that year. The amount
excluded, however, will be added to the bonus paid for any other year in the
SERP retirement calculation, as long as the amount added does not adjust the
bonus to an amount in excess of 50% of the salary paid during the year for which
the adjusted bonus is paid. In the case of disability payments, in order to
avoid a calculation based on a year for which the bonus was significantly higher
or lower than the historical 50% level, the amendment would define “Total
Compensation” as 150% of your then current salary and your overall disability
payments would equal 60% of that amount.
 
The amendments would consist of changing the definitions of “Average
Compensation” and “Total Compensation” in your SERP Agreement to read,
respectively, as follows:
 
Average Compensation
 
“Average Compensation shall mean the aggregate of your highest three years total
annual cash compensation, paid to you by the Company, consisting of (i) base
salaries and (ii) regular year-end cash bonuses paid with respect to the years
in which such salaries are paid (the bonus with respect to any such year,
however, only to be included in an amount not in excess of 50% of the base
salary paid during such year), divided by three, provided, however, (x) if any
portion of a bonus is excluded by the parenthetical contained in clause (ii)
above, the total amount excluded will be added to one or both of the other two
years included in the calculation as long as the amount so added does not result
in a bonus with respect to any year exceeding 50% of the base salary paid during
that year, (y) if you have on the date of determination less than three full
years of employment the foregoing calculation, including any adjustment required
by clause (x) above, shall be based on the average base salaries and regular
year-end cash bonuses paid to you while so employed, and (z) if the
determination of Average Compensation includes any year in which you volunteered
to reduce your salary or, as part of a program generally applicable to
participants in the Plan, you did not receive an increase in salary compared
with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would
have been absent such salary reduction and absent such generally applicable
program.”
 
Total Compensation
 
“If you become Disabled, “Total Compensation” shall mean 150% of your annual
base salary rate at the time of your Disability, provided, however, if the
determination of Total Compensation is for a year in which you volunteered to
reduce your salary or, as part of a program generally applicable to participants
in the Plan, you did not receive an increase in salary compared with the
immediately preceding year, the Committee referred to in paragraph 11 shall make
a good faith determination of what your Total Compensation would have been
absent such salary reduction and absent such generally applicable program.”
 
Should you have any questions regarding the proposed amendment, please feel free
to discuss them with Ray Kennedy, Dan Foley, John Leekley or me. If not, I would
appreciate your execution

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November 18, 2002
Page  2
 
and return of a copy of the enclosed amendment to Gene Gargaro, at which time
the above-described amendment will become effective.
 
Sincerely yours,
 
Richard A. Manoogian
Chairman
 
I agree to the above amendment of
my SERP Agreement
changing the definition of
“Average Compensation” and
“Total Compensation” as set
forth above
 

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  Form of Amendment for:   William T. Anderson
Eugene A. Gargaro, Jr.
John R. Leekley

         
 
  December 5, 2003    

[Participant’s Address]
[Dear Participant]
          Masco’s Organization and Compensation Committee over the past several
years has approved a number of major improvements to the benefits for our
executives covered by Masco’s program for supplemental retirement and other
benefits (the “SERP Plan”). At its October meeting this Committee authorized a
significant additional enhancement under your agreement pursuant to the SERP
Plan (the “SERP Agreement”) by increasing the percentage of your bonus eligible
for inclusion in the SERP calculation from 50% to 60% of your base salary. (A
corresponding change would be made in the calculation of disability payments by
changing the definition of “Total Compensation” to 160% from 150% of your then
current salary.) The provisions in your SERP Agreement, allowing certain
carry-forwards or carry-backs of bonus payments in excess of what was 50% and is
now 60%, would be retained.
          This enhancement was, in part, approved to partially offset the effect
of the current freeze on your salary. Accordingly, the existing provision in
your SERP Agreement, which requires a calculation of benefits on the assumption
that all compensation freezes are disregarded, would be eliminated.
          In order for these changes to be implemented in your SERP Agreement,
the definitions of “Average Compensation” and “Total Compensation” in your SERP
Agreement would be amended to read as follows:
Average Compensation
          “Average Compensation shall mean the aggregate of your highest three
years total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of the base
salary paid during such year), divided by three, provided, however, (x) if any
portion of a bonus is excluded by the parenthetical contained in clause
(ii) above, the total amount excluded will be added to one or both of the other
two years included in the calculation as long as the amount so added does not
result in a bonus with respect to any year exceeding 60% of the base salary paid
during that year, (y) if you have on the date of determination less than three
full years of employment, the foregoing calculation, including any adjustment
required by clause (x) above, shall be based on the average base salaries and
regular year-end cash bonuses paid to you while so employed.”

 

--------------------------------------------------------------------------------

 

[Participant’s Name]
December 5, 2003
Page Two
Total Compensation
‘If you become Disabled, “Total Compensation” shall mean 160% of your annual
base salary rate at the time of your Disability.”
Should you have any questions regarding this proposed amendment, please feel
free to discuss them with Dan Foley, John Leekley or me. If not, I would
appreciate your execution and return of a copy of this letter to Gene Gargaro,
at which time the above described amendment will become effective.

            Sincerely yours,
               Richard A. Manoogian      Chairman     

I agree to the above amendment
of my SERP Agreement changing
definition of “Average Compensation”
and “Total Compensation” as set
forth above.

               

 

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    Form of Amendment for: Richard A. Manoogian
         

March 31, 2004
 
Dear                ,
 
          Masco’s Organization and Compensation Committee over the past several
years has approved a number of major improvements to the benefits for our
executives covered by Masco’s program for supplemental retirement and other
benefits (the “SERP Plan”). At its October meeting this Committee authorized a
significant additional enhancement under your agreement pursuant to the SERP
Plan (the “SERP Agreement”) by increasing the percentage of your bonus eligible
for inclusion in the SERP calculation from 50% of your base salary to 60% of
your maximum bonus opportunity. An additional change would be made in the
calculation of disability payments by changing the definition of “Total
Compensation” from 150% of your then current salary to the sum of your then
current salary and 60% of your then current bonus opportunity.) The provisions
in your SERP Agreement, allowing certain carry-forwards or carry-backs of bonus
payments in excess of what was 50% of your base salary would also be modified.
          This enhancement was, in part, approved to partially offset the effect
of the current freeze on your salary. Accordingly, the existing provision in
your SERP Agreement, which requires a calculation of benefits on the assumption
that all compensation freezes are disregarded, would be eliminated.
          In order for these changes to be implemented in your SERP Agreement,
the definitions of “Average Compensation” and “Total Compensation” in your SERP
Agreement would be amended to read as follows:
Average Compensation
          “Average Compensation shall mean the aggregate of your highest three
years total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of your
maximum bonus opportunity for such year), divided by three, provided, however,
(x) if any portion of a bonus is excluded by the parenthetical contained in
clause (ii) above, the total amount excluded will be added to one or both of the
other two years included in the calculation as long as the amount so added does
not result in a bonus with respect to any year exceeding 60% of your maximum
bonus opportunity for such year, (y) if you have on the date of determination
less than three full years of employment, the foregoing calculation, including
any adjustment required by clause (x) above, shall be based on the average base
salaries and regular year-end cash bonuses paid to you while so employed.”

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[Participant]
March 31, 2004
Page Two
Total Compensation
          If you become Disabled, “Total Compensation” shall mean the sum of
your annual base salary rate and 60% of your then effective bonus opportunity at
the time of your Disability.”
          Should you have any questions regarding this proposed amendment,
please feel free to discuss them with Dan Foley, John Leekley or me. If not, I
would appreciate your execution and return of a copy of this letter to Gene
Gargaro, at which time the above described amendment will become effective.
          This letter supersedes the letter agreement of December 5, 2003
between you and the Company.
Sincerely yours,
I agree to the above amendment
of my SERP Agreement changing
definition of “Average Compensation”
and “Total Compensation” as set
forth above.
                                                            

 

--------------------------------------------------------------------------------

 

[Form]
March 15, 2005
Mr. Timothy Wadhams
Dear Mr. Wadhams:
          Our Company’s Board of Directors has adopted a plan whereby
supplemental retirement and other benefits, in addition to those provided under
the Company’s pension and other benefit plans, will be made available to those
Company and subsidiary executives as may be designated from time to time by the
Company’s Chief Executive Officer. The plan providing such benefits, as
originally made available to designated executives in 1987 and as subsequently
amended from time to time heretofore or in the future, is referred to in this
letter as the “Plan”. You are currently a participant in a similar plan
maintained by Metaldyne Corporation (formerly known as MascoTech, Inc.)
(“Metaldyne”) upon the terms of a letter agreement signed by you and dated
November 21, 2000 as modified by paragraph 6 of an employment, release and
consulting agreement (“the November 22 Agreement”) dated November 22, 2000 (such
plan as so modified referred to herein as the “Existing Agreement”).
Concurrently with your execution of this Agreement you have waived and released
Metaldyne Corporation from all rights to which you were previously entitled
under the Existing Agreement. The agreements contained in this letter, once
accepted by you, establish your participation in the Plan as of the date hereof
and describe in full your benefits pursuant to the Plan and all of the Company’s
obligations to you, and yours to the Company with respect to the Plan. These
benefits as described below are contractual obligations of the Company.
For the purposes of this Agreement, words and terms are defined as follows:
     a. “Average Compensation” shall mean the aggregate of your highest three
year’s total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of the base
salary in effect at the end of such year), divided by three, provided, however,
(x) if any portion of a bonus is excluded by the parenthetical contained in
clause (ii) above, the total amount excluded will be added to one or both of the
other two years included in the calculation as long as the amount so added does
not result in a bonus with respect to any year exceeding 60% of the base salary
in effect at the end of that year, and (y) if you have on the date of
determination less than three full years of employment the foregoing
calculation, including any adjustment required by clause (x) above, shall be
based on the average base salaries and regular year-end cash bonuses paid to you
while so employed.
     b. A “Change in Control” shall be deemed to have occurred if, during any
period of twenty-four consecutive calendar months, the individuals who at the
beginning of such period constitute the Company’s Board of Directors, and any
new directors (other than Excluded Directors) whose election by such Board or
nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors

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Mr. Timothy Wadhams   Page 2   March 15, 2005

whose election by the Board or approval by the Board for stockholder election
occurred within one year after any “person” or “group of persons” as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
commencing a tender offer for, or becoming the beneficial owner of, voting
securities representing 25 percent or more of the combined voting power of all
outstanding voting securities of the Company, other than pursuant to a tender
offer approved by the Board prior to its commencement or pursuant to stock
acquisitions approved by the Board prior to their representing 25 percent or
more of such combined voting power.
     c. “Code” means the Internal Revenue Code of 1986, as amended.
     d. “Company” shall mean Masco Corporation or any corporation in which Masco
Corporation owns directly or indirectly stock possessing in excess of 50% of the
total combined voting power of all classes of stock.
     e. The “Deferred Compensation Trust” shall mean any trust created by the
Company to receive the deposit referred to in clause (2) of paragraph 10.
     f. “Disability” and “Disabled” shall mean your being unable to perform your
duties as a Company executive by reason of your physical or mental condition,
prior to your attaining age 65, provided that you have been employed by the
Company for two consecutive Years or more at the time you first became Disabled.
     g. The “Gross-Up Amount” (i) shall be determined if any payment or
distribution by the Company to or for your benefit, whether paid, distributed,
payable or distributed or distributable pursuant to the terms of this Agreement,
any stock option or stock award plan, retirement plan or otherwise (such payment
or distribution, other than an Excise Tax Adjustment Payment under clause (ii),
is referred to herein as a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
     h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
     i. “Present Value” of future benefits means the discounted present value of
those benefits (including therein the benefits, if any, your Surviving Spouse
would be entitled to receive under this Agreement upon your death), using the
UP-1984 Mortality Table and discounted by the interest rate used, for purposes
of determining the present value of a lump sum distribution on plan termination,
by the PBGC on the first day of the month

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Mr. Timothy Wadhams   Page 3   March 15, 2005

which is (i) four months prior to the month in which a Change in Control occurs
or (ii) the month in which your death occurs if the Present Value is being
calculated under the proviso in the last sentence of paragraph 4 (or if the PBGC
has ceased publishing such interest rate, such other interest rate as the Board
of Directors deems is an appropriate substitute). The above PBGC interest rate
is intended to be determined based on PBGC methodology and regulations in effect
on September 1, 1993 (as contained in 29 CFR Part 2619).
     j. “Profit Sharing Conversion Factor” shall be a factor equal to the
present value of a life annuity payable at the later of age 65 or attained age
based on the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
     k. “Retirement” shall mean your termination of employment with the Company,
on or after you attain age 65. Your acting as a consultant shall not be
considered employment.
     l. “SERP Percentage” of your Average Compensation is 60%.
     m. “Surviving Spouse” shall be the person to whom you shall be legally
married (under the law of the jurisdiction of your permanent residence) at the
date of (i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of paragraphs 1, 2 and 3,
(ii) your death for the purposes of paragraph 5 and, if paragraph 5 is
applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6
or 7 are applicable, for the purposes of paragraph 3, (iv) your termination of
employment for the purposes of paragraph 4 and, if paragraph 4 is applicable,
for purposes of paragraph 3 and (v) a “Change in Control” for the purposes of
paragraph 10 if none of clauses (i) through (iv) has become applicable prior to
the Change in Control and, if this clause (v) is applicable, for purposes of
paragraph 3. For the purposes of paragraphs 11a, 11e, 11f, 11g, 11h, 11i and
11j, “Surviving Spouse” shall be any spouse entitled to any benefits hereunder.
     n. If you become Disabled, “Total Compensation” shall mean 160% of your
annual base salary rate at the time of your Disability.
     o. “Vested Percentage” shall mean 100%.
     p. “Year” shall mean twelve full consecutive months, and “year” shall mean
a calendar year.
     q. “Years of Service” shall mean the number of Years during which you were
employed by the Company (including Years of Service for the time you were
employed by Metaldyne and its predecessors but excluding Years of Service with
any other corporation prior to the time it became a subsidiary of or otherwise
affiliated with Masco Corporation).

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Mr. Timothy Wadhams   Page 4   March 15, 2005
       

     1. In accordance with the Plan, upon your Retirement the Company will pay
you annually during your lifetime, subject to paragraph 8 below, the SERP
Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to you upon your Retirement if benefits payable
to you under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan were converted to a life annuity, or if you are married
when you retire, to a 50% joint and spouse survivor life annuity, (ii) a sum
equal to the annual benefit which would be payable to you upon Retirement if
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity in accordance with the Profit Sharing Conversion
Factor, and (iii) any retirement benefits paid or payable to you by reason of
employment by all other employers (the amount of such deduction, in the case of
benefits paid or payable other than on an annual basis, to be determined on an
annualized basis by the Committee referred to in paragraph 11 and excluding from
such deduction any portion thereof, and earnings thereon, determined by such
Committee to have been contributed by you rather than such other employers);
provided, however, in all cases the amount offset pursuant to these subsections
(i), (ii) and (iii) shall be determined prior to the effect of any payments from
the plans and trusts referred to therein which are authorized pursuant to any
Qualified Domestic Relations Order under ERISA, or other comparable order
allocating marital or other rights under state law as applied to retirement
benefits from non-qualified plans.
     2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
     3. The Company will provide, purchase or at its option provide
reimbursement for premiums paid for such supplemental medical insurance as the
Company in its sole discretion may deem advisable from time to time (i) for you
and your Surviving Spouse for the lifetime of each of you (A) following a
termination of your employment with the Company due to Retirement or Disability,
and (B) following any other termination of employment with the Company provided
you and your Surviving Spouse are not covered by another medical insurance
program substantially all of the cost of which is paid by another employer and
(ii) for your Surviving Spouse for his or her lifetime upon a termination of
your employment with the Company due to your death. In addition to the
foregoing, the Company guarantees the performance by Metaldyne of its
obligations under clause (ii) of paragraph 4(b) of the November 22 Agreement.
     4. If your employment with the Company is for any reason terminated prior
to Retirement, other than as a result of circumstances described in paragraphs
2, 5 or 6 of this Agreement or following a Change in Control, and if prior to
the date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,
subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1) multiplying your SERP Percentage at the date your employment terminated by
your Average Compensation, less (2) the sum of the following: (i) a sum equal to
the annual benefit which would be payable to you upon your attaining age 65 if
benefits payable to you under the Company and Metaldyne funded qualified pension
plans and the defined benefit (pension) plan provisions of the Company’s and
Metaldyne’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity, or if you are married when you attain age 65, to a
50% joint and spouse

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Mr. Timothy Wadhams   Page 5   March 15, 2005

survivor life annuity, (ii) a sum equal to the annual benefit which would be
payable to you upon your attaining age 65 if an amount equal to your vested
accounts at the date of your termination of employment with the Company in the
Company’s and Metaldyne’s qualified defined contribution plans (excluding your
contributions and earnings thereon in the Company’s 401(k) Savings Plan) and the
defined contribution (profit sharing) provisions of the Company’s and
Metaldyne’s Retirement Benefits Restoration Plan and any similar plan (in each
case increased from the date of termination to age 65 at the imputed rate of 4%
per annum) were converted to a life annuity in accordance with the Profit
Sharing Conversion Factor, and (iii) to the extent the annual payments described
in this clause (iii) and the annual payments you would otherwise be entitled to
receive under this paragraph 4 would, in the aggregate exceed (the “excess
amount”) the annual payments you would have received under paragraph 1 had you
remained employed by the Company until Retirement (assuming for purposes of this
clause no compensation increases), any retirement benefits paid or payable to
you by reason of employment by all other previous or future employers (other
than Metaldyne), but only to the extent of such excess amount (the amount of
such deduction, in the case of benefits paid or payable other than on an annual
basis, to be determined on an annualized basis by the Committee referred to in
paragraph 11 and excluding from such deduction any portion thereof, and earnings
thereon, determined by such Committee to have been contributed by you rather
than your prior or future employers); provided, however, in all cases the amount
offset pursuant to these subsections (i), (ii) and (iii) shall be determined
prior to the effect of any payments from the plans and trusts referred to
therein which are authorized pursuant to any Qualified Domestic Relations Order
under ERISA, or other comparable order allocating marital or other rights under
state law as applied to retirement benefits from non-qualified plans. Upon your
death on or after age 65 should you be survived by your Surviving Spouse, your
Surviving Spouse shall receive for life, commencing upon the date of your death,
75% of the annual benefit payable to you under the preceding sentence following
your attainment of age 65; provided, further, if your death should occur prior
to age 65, your Surviving Spouse shall receive for life, commencing upon the
date of your death, 75% of the annual benefit which would have been payable to
you under the preceding sentence following your attainment of age 65, reduced by
a factor of actuarial equivalence as determined by the Committee, such that the
Present Value of the aggregate payments to be received by your Surviving Spouse
based on his or her life expectancy as of the date of your death is equal to the
Present Value, determined at the date of your death, of the aggregate payments
estimated to be received by your Surviving Spouse based on his or her life
expectancy at an age, and as if your Surviving Spouse had begun receiving
payments, when you would have attained age 65.
     5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation, less: (i) a sum equal to the annual benefit which
would be payable to your Surviving Spouse under the Company funded qualified
pension plans and the defined benefit (pension) plan provisions of the Company’s
Retirement Benefits Restoration Plan and any similar plan if such benefit were
converted to a life annuity (such deduction, however, only to commence on the
date such benefit is first payable), (ii) a sum equal to the annual payments
which would be received by your Surviving Spouse as if your spouse were
designated as the beneficiary of your vested accounts in the Company’s qualified
defined contribution plans (excluding your contributions and earnings thereon in
the Company’s 401(k) Savings Plan) and the defined contribution (profit sharing)
provisions of the Company’s Retirement Benefits Restoration Plan and any similar
plan and such accounts were converted to a life annuity at the time of your
death in accordance with the Profit Sharing Conversion Factor, and (iii) any
retirement benefits paid or payable to you or your Surviving Spouse by reason of
your employment by all other employers (the amount of such deduction, in the
case of benefits paid or

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Mr. Timothy Wadhams   Page 6   March 15, 2005

payable other than on an annual basis, to be determined on an annualized basis
by the Committee referred to in paragraph 11 and excluding from such deduction
any portion thereof, and earnings thereon, determined by such Committee to have
been contributed by you rather than such other employers); provided, however, in
all cases the amount offset pursuant to these subsections (i),(ii) and
(iii) shall be determined prior to the effect of any payments from the plans and
trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating
marital or other rights under state law as applied to retirement benefits from
non-qualified plans. No death benefits are payable except to your Surviving
Spouse.
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining age
65, until the earlier of your death, termination of Disability or attaining age
65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled.
     7. If you die leaving a Surviving Spouse while receiving Disability
benefits pursuant to paragraph 6 of this Agreement, you will be deemed to have
retired on your death and your Surviving Spouse shall receive for life 75% of
the annual benefit which would have been payable to you if you had retired on
the date of your death and your benefit determined pursuant to paragraph 1,
based upon your Average Compensation as of the date you became Disabled.
     8. If the age of your Surviving Spouse is more than 20 years younger than
your age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
     9. If you or your Surviving Spouse is eligible to receive benefits
hereunder, unless otherwise specifically agreed by the Company in writing, you
and your Surviving Spouse will not be able to receive benefits under any other
Company sponsored non-qualified retirement plans other than the Company’s
Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be
considered to have been received under a Company sponsored non-qualified
retirement plan even though such benefits are received after retirement. Except
as provided in the last sentence of paragraph 3, the last sentence of paragraph
4 and in paragraph 10 of this Agreement, no benefits will be paid to your
Surviving Spouse pursuant to this Agreement unless upon your death you were
employed by the Company, Disabled or had taken Retirement from the Company.
     10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
     (1) If you are then employed by the Company, your Vested Percentage, if not
already 100%, shall be deemed for all purposes of this Agreement to be 100%.
     (2) If the Deferred Compensation Trust has theretofore been established or
is established within thirty days after the Change in Control, the Company shall
forthwith deposit to an account in your name (or that of your Surviving Spouse
if you are then

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Mr. Timothy Wadhams   Page 7   March 15, 2005

deceased and your Surviving Spouse is entitled to benefits hereunder) in the
Deferred Compensation Trust 110% of the sum of the Gross-Up Amount plus:
     (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age
if greater, assuming for purposes of this clause, no compensation increases and
that if younger than age 65 you and your Surviving Spouse had attained such age;
     (B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of
this Agreement, an amount equal to the discounted Present Value of the benefits
which would have been payable under such paragraph;
     (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present
Value of those benefits payable in the future to you and your Surviving Spouse;
and
     (D) If you are then receiving payments under paragraph 6 of this Agreement,
an amount equal to the Present Value of the benefits which would have been
payable under paragraphs 6 and 7 on the assumption you would have continued to
receive benefits under paragraph 6 until you had attained age 65 and thereafter
continued to receive benefits as though you were deemed to have retired.
     (3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(after giving effect to the last sentence of paragraph 3 and the provisions of
clause (ii) of paragraph 4(b) of the November 22 Agreement)(A) to you and your
Surviving Spouse if you or your Surviving Spouse is then receiving benefits
under paragraph 3, (B) to you and your Surviving Spouse if you become Disabled
if you are employed by the Company at the time of the Change in Control, (C) to
your Surviving Spouse upon your death if you are employed by the Company at the
time of the Change in Control and (D) to you and your Surviving Spouse upon any
termination of employment following any Change in Control but only during the
periods when you and your Surviving Spouse are not covered by another medical
insurance program substantially all of the cost of which is paid by another
employer. The obligations of the Company under this clause (i)(3) shall remain
in effect for the lifetime of both you and your Surviving Spouse.
     (4) If the Deferred Compensation Trust is not established prior to or
within thirty days after the Change in Control, all payments which would have
otherwise have been made to you or your Surviving Spouse from the Deferred
Compensation Trust shall immediately after such thirty day period be made to you
or your Surviving Spouse by the Company.
          (ii) Any deposit by the Company to an account in your name or that of
your Surviving Spouse in the Deferred Compensation Trust prior to the occurrence
of the Change in Control, together with all income then accrued thereon (but
only to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.

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Mr. Timothy Wadhams   Page 8   March 15, 2005

          (iii) At or prior to making the deposit required by clause (i)(2) of
this paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate specifying that portion, if any, of the amount
in the trust account, after giving effect to the deposit, which is represented
by the Gross-Up Amount. Payment of 90.91% of the amount required by clause
(i)(2) of this paragraph 10 to be paid to the trust account, together with any
income accrued thereon from the date of the Change in Control, is to be made to
you or your Surviving Spouse, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change in Control
if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the
Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse,
as applicable, from the trust account from time to time amounts, not exceeding
in the aggregate the Gross-Up Amount, upon your or your Surviving Spouse’s
certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local
taxing authority as a result of the Change in Control and the imposition of the
excise tax under Section 4999 of the Code (or any successor provision) on the
receipt of any portion of the Gross-Up Amount. All amounts in excess of the
amount required to be paid from the trust account by the preceding sentence,
after all expenses of the Deferred Compensation Trust have been paid, shall
revert to the Company provided that the Company has theretofore expressly
affirmed its continuing obligations under clause (i)(3) of this Paragraph 10.
          (iv) Subject to the next sentence of this clause (iv), the payment of
the Gross-Up Amount to you or your Surviving Spouse or the account in your or
your Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.
          (v) Prior to the occurrence of a Change in Control, any deposits made
by the Company to an account in the Deferred Compensation Trust may be withdrawn
by the Company. Upon the occurrence of a Change in Control, all further
obligations of the Company under this Agreement (other than under this
Paragraph 10 to the extent not theretofore performed) shall terminate in all
respects.
     11. We also agree upon the following:
     a. Prior to the occurrence of a Change in Control, the Compensation
Committee of the Company’s Board of Directors, or any other committee however
titled which shall be

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Mr. Timothy Wadhams   Page 9   March 15, 2005

vested with authority with respect to the compensation of the Company’s officers
and executives (in either case, the “Committee”), shall have the exclusive
authority to make all determinations which may be necessary in connection with
this Agreement including the dates of and whether you are or continue to be
Disabled, the amount of annual benefits payable hereunder by reason of offsets
hereunder due to employment by other employers, the interpretation of this
Agreement, and all other matters or disputes arising under this Agreement. The
determinations and findings of the Committee shall be conclusive and binding,
without appeal, upon both of us.
     b. You will not during your employment or Disability, and after Retirement
or the termination of your employment, for any reason disclose or make use of
for your own or another person’s benefit under any circumstances any of the
Company’s Proprietary Information. Proprietary Information shall include trade
secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or marketing plans, inventions, research
and development information or results, sales, pricing and financial data,
information relating to the management, operations or planning of the Company
and any other information treated as confidential or proprietary.
     c. You agree that you will not following your termination of employment for
any reason (whether on Retirement, Disability or termination prior to attaining
age 65) thereafter directly or indirectly engage in any business activities,
whether as a consultant, advisor or otherwise, in which the Company is engaged
in any geographic area in which the products or services of the Company have
been sold, distributed or provided during the five year period prior to the date
of your termination of employment. In light of ongoing payments to be received
by you and your Surviving Spouse for your respective lives, the restrictions
contained in the preceding sentence shall be unlimited in duration provided no
Change in Control has occurred and, in the event of a Change in Control, all
such restrictions shall terminate one year thereafter.
     In addition to the foregoing and provided no Change in Control has
occurred, if while you or your Surviving Spouse is receiving retirement or other
benefits pursuant to this Agreement, in the judgment of the Committee you or
your Surviving Spouse directly or indirectly engage in activity or act in a
manner which can be considered adverse to the interest of the Company or any of
its direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
     d. Except as may be provided to the contrary in a duly authorized written
agreement between you and the Company you acknowledge that the Company has made
no commitments to you of any kind with respect to the continuation of your
employment, which we expressly agree is an employment at will, and you or the
Company shall have the unrestricted right to terminate your employment with or
without cause, at any time in your or its discretion.
     e. At the Company’s request, expressed through a Company officer, you agree
to provide such information with respect to matters which may arise in
connection with this Agreement as may be deemed necessary by the Company or the
Committee, including for example only and not in limitation, information
concerning benefits payable to you from third parties, and you further agree to
submit to such medical examinations by duly licensed physicians as may be
requested by the Company from time to time. You also agree to direct third
parties to provide such information, and your Surviving Spouse’s

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Mr. Timothy Wadhams   Page 10   March 15, 2005

cooperation in providing such information is a condition to the receipt of
survivor’s benefits under this Agreement.
     f. To the extent permitted by law, no interest in this Agreement or
benefits payable to you or to your Surviving Spouse shall be subject to
anticipation, or to pledge, assignment, sale or transfer in any manner nor shall
you or your Surviving Spouse have the power in any manner to charge or encumber
such interest or benefits, nor shall such interest or benefits be liable or
subject in any manner for the liabilities of you or your Surviving Spouse’s
debts, contracts, torts or other engagements of any kind.
     g. No person other than you and your Surviving Spouse shall have any rights
or property interest of any kind whatsoever pursuant to this Agreement, and
neither you nor your Surviving Spouse shall have any rights hereunder other than
those expressly provided in this Agreement. Upon the death of you and your
Surviving Spouse no further benefits of whatsoever kind or nature shall accrue
or be payable pursuant to this Agreement.
     h. All benefits payable pursuant to this Agreement, other than pursuant to
paragraph 10, shall be paid in installments of one-twelfth of the annual
benefit, or at such shorter intervals as may be deemed advisable by the Company
in its discretion, upon receipt of your or your Surviving Spouse’s written
application, or by the applicant’s personal representative in the event of any
legal disability.
     i. Except as provided in paragraph 10, all benefits under this Agreement
shall be payable from the Company’s general assets, which assets (including all
funds in the Deferred Compensation Trust) are subject to the claims of the
Company’s general creditors, and are not set aside for your or your Surviving
Spouse’s benefit.
     j. You agree that, if the Company establishes the Deferred Compensation
Trust, the Company is entitled at any time prior to a Change in Control to
revoke such trust and withdraw all funds theretofore deposited in such trust.
You acknowledge that although this Agreement refers from time to time to your or
your Surviving Spouse’s trust account, no separate trust will be created and all
assets of any Deferred Compensation Trust will be commingled.
     k. This Agreement shall be governed by the laws of the State of Michigan.
     12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes, claims or controversies which could be the subject of litigation
(hereafter referred to as “dispute”) involving or arising out of this Agreement.
It is our mutual intention that the arbitration award will be final and binding
and that a judgment on the award may be entered in any court of competent
jurisdiction and enforcement may be had according to its terms.
     The arbitrator shall be chosen in accordance with the commercial
arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be borne equally by the parties to the dispute. The place
of the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.

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Mr. Timothy Wadhams   Page 11   March 15, 2005

     The arbitrator’s sole authority shall be to apply the clauses of this
Agreement.
     We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.
     We further agree that any demand for arbitration must be made within one
year of the time any claim accrues which you or any person claiming hereunder
may have against the Company; unless demand is made within such period, it is
forever barred.
     We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.

            Sincerely,

MASCO CORPORATION
      By           Richard A. Manoogian        Chief Executive Officer     

                                                                       
         
DATE:                                                                     

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[Form]
July 1, 2006
Mr. Donald J. DeMarie, Jr.
[Address]
Dear Donny:
          Our Company’s Board of Directors has adopted a plan whereby
supplemental retirement and other benefits, in addition to those provided under
the Company’s pension and other benefit plans, will be made available to those
Company and subsidiary executives as may be designated from time to time by the
Company’s Chief Executive Officer. The plan providing such benefits, as
originally made available to designated executives in 1987 and as subsequently
amended from time to time heretofore or in the future, is referred to in this
letter as the “Plan”. I am pleased to inform you that I have designated you as a
participant in the Plan, and this Agreement describes in full your benefits
pursuant to the Plan and all of the Company’s obligations to you, and yours to
the Company with respect to the Plan. These benefits as described below are
contractual obligations of the Company.
          For the purposes of this Agreement, words and terms are defined as
follows:
          a. “Average Compensation” shall mean the aggregate of your highest
three years’ total annual cash compensation paid to you by the Company,
consisting of (i) base salaries and (ii) regular year-end cash bonuses paid with
respect to the years in which such salaries are paid (the bonus with respect to
any such year, however, only to be included in an amount not in excess of 60% of
the base salary in effect at the end of such year), divided by three, provided,
however, (x) if any portion of a bonus is excluded by the parenthetical
contained in clause (ii) above, the total amount excluded will be added to one
or both of the other two years included in the calculation as long as the amount
so added does not result in a bonus with respect to any year exceeding 60% of
the base salary in effect at the end of that year, and (y) if you have on the
date of determination less than three full years of employment the foregoing
calculation, including any adjustment required by clause (x) above, shall be
based on the average base salaries and regular year-end cash bonuses paid to you
while so employed.
          b. A “Change in Control” shall be deemed to have occurred if, during
any period of twenty-four consecutive calendar months, the individuals who at
the beginning of such period constitute the Company’s Board of Directors, and
any new directors (other than Excluded Directors) whose election by such Board
or nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose
election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than pursuant to a tender offer approved
by the Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or more of such
combined voting power.

 

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          c. “Code” means the Internal Revenue Code of 1986, as amended.
          d. “Company” shall mean Masco Corporation or any corporation in which
Masco Corporation owns directly or indirectly stock possessing in excess of 50%
of the total combined voting power of all classes of stock.
          e. The “Deferred Compensation Trust” shall mean any trust created by
the Company to receive the deposit referred to in clause (2) of paragraph 10.
          f. “Disability” and “Disabled” shall mean your being unable to perform
your duties as a Company executive by reason of your physical or mental
condition, prior to your attaining age 65, provided that you have been employed
by the Company for two consecutive Years or more at the time you first became
Disabled.
          g. The “Gross-Up Amount” (i) shall be determined if any payment or
distribution by the Company to or for your benefit, whether paid, distributed,
payable or distributed or distributable pursuant to the terms of this Agreement,
any stock option or stock award plan, retirement plan or otherwise (such payment
or distribution, other than an Excise Tax Adjustment Payment under clause (ii),
is referred to herein as a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          i. “Present Value” of future benefits means the discounted present
value of those benefits (including therein the benefits, if any, your Surviving
Spouse would be entitled to receive under this Agreement upon your death), using
the UP-1984 Mortality Table and discounted by the interest rate used, for
purposes of determining the present value of a lump sum distribution on plan
termination, by the PBGC on the first day of the month which is (i) four months
prior to the month in which a Change in Control occurs or (ii) the month in
which your death occurs if the Present Value is to be calculated under the
proviso in the last sentence of paragraph 4(or if the PBGC has ceased publishing
such interest rate, such other interest rate as the Board of Directors deems is
an appropriate substitute). The above PBGC interest rate is intended to be
determined based on PBGC methodology and regulations in effect on September 1,
1993 (as contained in 29 CFR Part 2619).

 

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          j. “Profit Sharing Conversion Factor” shall be a factor equal to the
present value of a life annuity payable at the later of age 65 or attained age
based on the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
          k. “Retirement” shall mean your termination of employment with the
Company, on or after you attain age 65. Your acting as a consultant shall not be
considered employment.
          l. “SERP Percentage” of your Average Compensation is 60% if at the
date of determination you have completed 15 or more Years of Service, and
decreases by increments of four percentage points for each Year or portion
thereof less than 15 that you have accumulated at the date of determination. The
minimum SERP Percentage is 20% after five Years of Service; prior to completing
five Years of Service the SERP Percentage is 0.
          m. “Surviving Spouse” shall be the person to whom you shall be legally
married (under the law of the jurisdiction of your permanent residence) at the
date of (i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of paragraphs 1, 2 and 3,
(ii) your death for the purposes of paragraph 5 and, if paragraph 5 is
applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6
or 7 are applicable, for the purposes of paragraph 3, (iv) your termination of
employment for the purposes of paragraph 4 and, if paragraph 4 is applicable,
for purposes of paragraph 3 and (v) a “Change in Control” for the purposes of
paragraph 10 if none of clauses (i) through (iv) has become applicable prior to
the Change in Control and, if this clause (v) is applicable, for purposes of
paragraph 3. For the purposes of paragraphs 11a, 11e, 11f, 11g, 11h, 11i and
11j, “Surviving Spouse” shall be any spouse entitled to any benefits hereunder.
          n. If you become Disabled, “Total Compensation” shall mean 160% of
your annual base salary rate at the time of your Disability.
          o. “Vested Percentage” shall mean the sum of the following
percentages: (i) 2% multiplied by your Years of Service, plus (ii) 8% multiplied
by the number of Years, while an employee of the Company, you have been
designated a participant in the Plan; provided, however, (w) prior to your
fiftieth birthday the Vested Percentage is 0,(x) on your fiftieth birthday your
Vested Percentage may not exceed 50%, (y) on or prior to each of your birthdays
following your fiftieth birthday your Vested Percentage may not exceed the sum
of 50% plus the product obtained by multiplying 10% by the number of birthdays
that have occurred following your fiftieth birthday, and (z) your Vested
Percentage in no event may exceed 100%.
          p. “Year” shall mean twelve full consecutive months, and “year” shall
mean a calendar year.

 

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          q. “Years of Service” shall mean the number of Years during which you
were employed by the Company (excluding, however, Years of Service with a
corporation prior to the time it became a subsidiary of or otherwise affiliated
with Masco Corporation).
     1. In accordance with the Plan, upon your Retirement the Company will pay
you annually during your lifetime, subject to paragraph 8 below, the SERP
Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to you upon your Retirement if benefits payable
to you under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan were converted to a life annuity, or if you are married
when you retire, to a 50% joint and spouse survivor life annuity, (ii) a sum
equal to the annual benefit which would be payable to you upon Retirement if
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity in accordance with the Profit Sharing Conversion
Factor, and (iii) unless you have at least 25 Years of Service, any retirement
benefits paid or payable to you by reason of employment by all other employers
(the amount of such deduction, in the case of benefits paid or payable other
than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any
portion thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than such other employers), provided, however, in all
cases the amount offset pursuant to these subsections (i),(ii) and (iii) shall
be determined prior to the effect of any payments from the plans and trusts
referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from
non-qualified plans.
     2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
     3. The Company will provide, purchase or at its option provide
reimbursement for premiums paid for such supplemental medical insurance as the
Company in its sole discretion may deem advisable from time to time (i) for you
and your Surviving Spouse for the lifetime of each of you (A) following a
termination of your employment with the Company due to Retirement or Disability,
and (B) following any other termination of employment with the Company provided
(x) you and your Surviving Spouse are not covered by another medical insurance
program substantially all of the cost of which is paid by another employer,
(y) on the date of such termination your Vested Percentage is not less than 80%
and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving
Spouse, and (ii) for your Surviving Spouse for his or her lifetime upon a
termination of your employment with the Company due to your death.
     4. If your employment with the Company is for any reason terminated prior
to Retirement, other than as a result of circumstances described in paragraphs
2, 5 or 6 of this Agreement or following a Change in Control, and if prior to
the date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,
subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1)

 

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multiplying your SERP Percentage at the date your employment terminated by your
Average Compensation, less (2) the sum of the following: (i) a sum equal to the
annual benefit which would be payable to you upon your attaining age 65 if
benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan were converted to a life annuity, or if
you are married when you attain age 65, to a 50% joint and spouse survivor life
annuity, (ii) a sum equal to the annual benefit which would be payable to you
upon your attaining age 65 if an amount equal to your vested accounts at the
date of your termination of employment with the Company in the Company’s
qualified defined contribution plans (excluding your contributions and earnings
thereon in the Company’s 401(k) Savings Plan) and the defined contribution
(profit sharing) provisions of the Company’s Retirement Benefits Restoration
Plan and any similar plan (in each case increased from the date of termination
to age 65 at the imputed rate of 4% per annum) were converted to a life annuity
in accordance with the Profit Sharing Conversion Factor, and (iii) to the extent
the annual payments described in this clause (iii) and the annual payments you
would otherwise be entitled to receive under this paragraph 4 would, in the
aggregate exceed (the “excess amount”) the annual payments you would have
received under paragraph 1 had you remained employed by the Company until
Retirement (with your SERP Percentage determined as though you were given credit
for additional Years of Service until age 65 but no compensation increases), any
retirement benefits paid or payable to you by reason of employment by all other
previous or future employers, but only to the extent of such excess amount (the
amount of such deduction, in the case of benefits paid or payable other than on
an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than your prior or future employers), provided,
however, in all cases the amount offset pursuant to these subsections (i),(ii)
and (iii) shall be determined prior to the effect of any payments from the plans
and trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating
maritalor other rights under state law as applied to retirement benefits from
non-qualified plans. Upon your death on or after age 65 should you be survived
by your Surviving Spouse, your Surviving Spouse shall receive for life,
commencing upon the date of your death, 75% of the annual benefit payable to you
under the preceding sentence following your attainment of age 65; provided,
further, if your death should occur prior to age 65, your Surviving Spouse shall
receive for life, commencing upon the date of your death, 75% of the annual
benefit which would have been payable to you under the preceding sentence
following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the Present Value of the
aggregate payments to be received by your Surviving Spouse based on his or her
life expectancy as of the date of your death is equal to the Present Value,
determined at the date of your death, of the aggregate payments estimated to be
received by your Surviving Spouse based on his or her life expectancy at an age,
and as if your Surviving Spouse had begun receiving payments, when you would
have attained age 65.
     5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation (with your SERP Percentage determined as though you
were given credit for additional Years of Service but no compensation increases
between the date of your death and the date you would have attained age 65),
less: (i) a sum equal to the annual benefit which would be payable to your
Surviving Spouse under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan if such benefit were converted to a life
annuity (such deduction, however, only to commence on the date

 

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such benefit is first payable), (ii) a sum equal to the annual payments which
would be received by your Surviving Spouse as if your spouse were designated as
the beneficiary of your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the
Company’s 401(k) Savings Plan) and the defined contribution (profit sharing)
provisions of the Company’s Retirement Benefits Restoration Plan and any similar
plan and such accounts were converted to a life annuity at the time of your
death in accordance with the Profit Sharing Conversion Factor, and (iii) unless
you have at least 25 Years of Service, any retirement benefits paid or payable
to you or your Surviving Spouse by reason of your employment by all other
employers (the amount of such deduction, in the case of benefits paid or payable
other than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any
portion thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than such other employers), provided, however, in all
cases the amount offset pursuant to these subsections (i),(ii) and (iii) shall
be determined prior to the effect of any payments from the plans and trusts
referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from
non-qualified plans. No death benefits are payable except to your Surviving
Spouse.
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining age
65, until the earlier of your death, termination of Disability or attaining age
65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled and with your SERP Percentage given credit for
Years of Service while you were Disabled.
     7. If you die leaving a Surviving Spouse while receiving Disability
benefits pursuant to paragraph 6 of this Agreement, you will be deemed to have
retired on your death and your Surviving Spouse shall receive for life 75% of
the annual benefit which would have been payable to you if you had retired on
the date of your death and your benefit determined pursuant to paragraph 1,
based upon your Average Compensation as of the date you became Disabled and with
your SERP Percentage given credit for Years of Service from the date you became
Disabled to the date you would have attained age 65.
     8. If the age of your Surviving Spouse is more than 20 years younger than
your age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
     9. If you or your Surviving Spouse is eligible to receive benefits
hereunder, unless otherwise specifically agreed by the Company in writing, you
and your Surviving Spouse will not be able to receive benefits under any other
Company sponsored non-qualified retirement plans other than the Company’s
Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be
considered to have been received under a Company sponsored non-qualified
retirement plan even though such benefits are received after retirement. Except
as provided in Paragraph 3, the last sentence of paragraph 4 and in paragraph 10
of this Agreement, no benefits will be paid to your Surviving Spouse pursuant to

 

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this Agreement unless upon your death you were employed by the Company, Disabled
or had taken Retirement from the Company.
     10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
          (1) If you are then employed by the Company, (i) your SERP Percentage,
if not already 60%, shall be deemed for all purposes of this Agreement to be the
lesser of 60% or the percentage resulting by adding to your SERP Percentage
immediately prior thereto the product obtained by multiplying 4% by the number
of Years which would then have to elapse prior to your attainment of age 65, and
(ii) your Vested Percentage, if not already 100%, shall be deemed for all
purposes of this Agreement to be 100%.
          (2) If the Deferred Compensation Trust has theretofore been
established or is established within thirty days after the Change in Control,
the Company shall forthwith deposit to an account in your name (or that of your
Surviving Spouse if you are then deceased and your Surviving Spouse is entitled
to benefits hereunder) in the Deferred Compensation Trust 110% of the sum of the
Gross-Up Amount plus:
               (A) If you are then employed by the Company, an amount equal to
the discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age
if greater, assuming for purposes of this clause, no compensation increases and
that if younger than age 65 you and your Surviving Spouse had attained such age;
               (B) If employment has previously been terminated but you or your
Surviving Spouse is then entitled in the future to receive benefits under
paragraph 4 of this Agreement, an amount equal to the discounted Present Value
of the benefits which would have been payable under such paragraph;

 

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               (C) If you or your Surviving Spouse is then receiving payments
under paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the
Present Value of those benefits payable in the future to you and your Surviving
Spouse; and
               (D) If you are then receiving payments under paragraph 6 of this
Agreement, an amount equal to the Present Value of the benefits which would have
been payable under paragraphs 6 and 7 on the assumption you would have continued
to receive benefits under paragraph 6 until you had attained age 65 and
thereafter continued to receive benefits as though you were deemed to have
retired.
(3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(A) to you and your Surviving Spouse if you or your Surviving Spouse is then
receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if
you become Disabled if you are employed by the Company at the time of the Change
in Control, (C) to your Surviving Spouse upon your death if you are employed by
the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in
Control but only during the periods when you and your Surviving Spouse are not
covered by another medical insurance program substantially all of the cost of
which is paid by another employer. The obligations of the Company under this
clause (i)(3) shall remain in effect for the lifetime of both you and your
Surviving Spouse.
(4) If the Deferred Compensation Trust is not established prior to or within
thirty days after the Change in Control, all payments which would have otherwise
have been made to you or your Surviving Spouse from the Deferred Compensation
Trust shall immediately after such thirty day period be made to you or your
Surviving Spouse by the Company.
          (ii) Any deposit by the Company to an account in your name or that of
your Surviving Spouse in the Deferred Compensation Trust prior to the occurrence
of the Change in Control, together with all income then accrued thereon (but
only to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.
          (iii) At or prior to making the deposit required by clause (i)(2) of
this paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate specifying that portion, if any, of the amount
in the trust account, after giving effect to the deposit, which is represented
by the Gross-Up Amount. Payment of 90.91% of the amount required by clause
(i)(2) of this paragraph 10 to be paid to the trust account, together with any
income accrued thereon from the date of the Change in Control, is to be made to
you or your Surviving Spouse, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change in Control
if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the
Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse,
as applicable, from the trust account from time to time amounts, not exceeding
in the aggregate the Gross-Up Amount, upon your or your Surviving Spouse’s
certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local
taxing authority as a result of the Change in Control and the imposition of the
excise tax under Section 4999 of the Code (or any

 

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successor provision) on the receipt of any portion of the Gross-Up Amount. All
amounts in excess of the amount required to be paid from the trust account by
the preceding sentence, after all expenses of the Deferred Compensation Trust
have been paid, shall revert to the Company provided that the Company has
theretofore expressly affirmed its continuing obligations under clause (i)(3) of
this Paragraph 10.
          (iv) Subject to the next sentence of this clause (iv), the payment of
the Gross-Up Amount to you or your Surviving Spouse or the account in your or
your Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.
          (v) Prior to the occurrence of a Change in Control, any deposits made
by the Company to an account in the Deferred Compensation Trust may be withdrawn
by the Company. Upon the occurrence of a Change in Control, all further
obligations of the Company under this Agreement (other than under this
Paragraph 10 to the extent not theretofore performed) shall terminate in all
respects.
11. We also agree upon the following:
          a. Prior to the occurrence of a Change in Control, the Organization
and Compensation Committee of the Company’s Board of Directors, or any other
committee however titled which shall be vested with authority with respect to
the compensation of the Company’s officers and executives (in either case, the
“Committee”), shall have the exclusive authority to make all determinations
which may be necessary in connection with this Agreement including the dates of
and whether you are or continue to be Disabled, the amount of annual benefits
payable hereunder by reason of offsets hereunder due to employment by other
employers, the interpretation of this Agreement, and all other matters or
disputes arising under this Agreement. The determinations and findings of the
Committee shall be conclusive and binding, without appeal, upon both of us.
          b. You will not during your employment or Disability, and after
Retirement or the termination of your employment, for any reason disclose or
make use of for your own or another person’s benefit under any circumstances any
of the Company’s Proprietary Information. Proprietary Information shall include
trade secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or

 

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marketing plans, inventions, research and development information or results,
sales, pricing and financial data, information relating to the management,
operations or planning of the Company and any other information treated as
confidential or proprietary.
          c. You agree that you will not following your termination of
employment for any reason (whether on Retirement, Disability or termination
prior to attaining age 65) thereafter directly or indirectly engage in any
business activities, whether as a consultant, advisor or otherwise, in which the
Company is engaged in any geographic area in which the products or services of
the Company have been sold, distributed or provided during the five year period
prior to the date of your termination of employment. In light of ongoing
payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited
in duration provided no Change in Control has occurred and, in the event of a
Change in Control, all such restrictions shall terminate one year thereafter.
          In addition to the foregoing and provided no Change in Control has
occurred, if while you or your Surviving Spouse is receiving retirement or other
benefits pursuant to this Agreement, in the judgment of the Committee you or
your Surviving Spouse directly or indirectly engage in activity or act in a
manner which can be considered adverse to the interest of the Company or any of
its direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
          d. Except as may be provided to the contrary in a duly authorized
written agreement between you and the Company you acknowledge that the Company
has made no commitments to you of any kind with respect to the continuation of
your employment, which we expressly agree is an employment at will, and you or
the Company shall have the unrestricted right to terminate your employment with
or without cause, at any time in your or its discretion.
          e. At the Company’s request, expressed through a Company officer, you
agree to provide such information with respect to matters which may arise in
connection with this Agreement as may be deemed necessary by the Company or the
Committee, including for example only and not in limitation, information
concerning benefits payable to you from third parties, and you further agree to
submit to such medical examinations by duly licensed physicians as may be
requested by the Company from time to time. You also agree to direct third
parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits
under this Agreement.
          f. To the extent permitted by law, no interest in this Agreement or
benefits payable to you or to your Surviving Spouse shall be subject to
anticipation, or to pledge, assignment, sale or transfer in any manner nor shall
you or your Surviving Spouse have the power in any manner to charge or encumber
such interest or benefits, nor shall such interest or benefits be liable or
subject in any manner for the liabilities of you or your Surviving Spouse’s
debts, contracts, torts or other engagements of any kind.
          g. No person other than you and your Surviving Spouse shall have any
rights or property interest of any kind whatsoever pursuant to this Agreement,
and neither you nor your Surviving Spouse shall have any rights hereunder other
than those expressly provided in this Agreement. Upon the death of you and your
Surviving Spouse no further benefits of whatsoever kind or nature shall accrue
or be payable pursuant to this Agreement.

 

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          h. All benefits payable pursuant to this Agreement, other than
pursuant to paragraph 10, shall be paid in installments of one-twelfth of the
annual benefit, or at such shorter intervals as may be deemed advisable by the
Company in its discretion, upon receipt of your or your Surviving Spouse’s
written application, or by the applicant’s personal representative in the event
of any legal disability.
          i. Except as provided in paragraph 10, all benefits under this
Agreement shall be payable from the Company’s general assets, which assets
(including all funds in the Deferred Compensation Trust) are subject to the
claims of the Company’s general creditors, and are not set aside for your or
your Surviving Spouse’s benefit.
          j. You agree that, if the Company establishes the Deferred
Compensation Trust, the Company is entitled at any time prior to a Change in
Control to revoke such trust and withdraw all funds theretofore deposited in
such trust. You acknowledge that although this Agreement refers from time to
time to your or your Surviving Spouse’s trust account, no separate trust will be
created and all assets of any Deferred Compensation Trust will be commingled.
          k. This Agreement shall be governed by the laws of the State of
Michigan.
     12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes, claims or controversies which could be the subject of litigation
(hereafter referred to as “dispute”) involving or arising out of this Agreement.
It is our mutual intention that the arbitration award will be final and binding
and that a judgment on the award may be entered in any court of competent
jurisdiction and enforcement may be had according to its terms.
     The arbitrator shall be chosen in accordance with the commercial
arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be borne equally by the parties to the dispute. The place
of the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.
     The arbitrator’s sole authority shall be to apply the clauses of this
Agreement.
     We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.

 

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     We further agree that any demand for arbitration must be made within one
year of the time any claim accrues which you or any person claiming hereunder
may have against the Company; unless demand is made within such period, it is
forever barred.
          13. This Agreement shall be administered so as to be compliant with
Section 409K of the Code including the six-month waiting period for payments to
begin following a separation of employment, if applicable. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments deferred under this provision.
     We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.

            Sincerely,

MASCO CORPORATION
      By           Richard A. Manoogian        Chief Executive Officer     

 
Donald J. DeMarie, Jr.
DATE:

 

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[FORM]
December 4, 2007
Mr. John G. Sznewajs
[Address]
Dear John:
          Our Company’s Board of Directors has adopted a plan whereby
supplemental retirement and other benefits, in addition to those provided under
the Company’s pension and other benefit plans, will be made available to those
Company and subsidiary executives as may be designated from time to time by the
Company’s Chief Executive Officer. The plan providing such benefits, as
originally made available to designated executives in 1987 and as subsequently
amended from time to time heretofore or in the future, is referred to in this
letter as the “Plan”. I am pleased to inform you that I have designated you as a
participant in the Plan, and this Agreement describes in full your benefits
pursuant to the Plan and all of the Company’s obligations to you, and yours to
the Company with respect to the Plan. These benefits as described below are
contractual obligations of the Company.
     For the purposes of this Agreement, words and terms are defined as follows:
          a. “Average Compensation” shall mean the aggregate of your highest
three years’ total annual cash compensation paid to you by the Company,
consisting of (i) base salaries and (ii) regular year-end cash bonuses paid with
respect to the years in which such salaries are paid (the bonus with respect to
any such year, however, only to be included in an amount not in excess of 60% of
the base salary in effect at the end of such year), divided by three, provided,
however, (x) if any portion of a bonus is excluded by the parenthetical
contained in clause (ii) above, the total amount excluded will be added to one
or both of the other two years included in the calculation as long as the amount
so added does not result in a bonus with respect to any year exceeding 60% of
the base salary in effect at the end of that year, and (y) if you have on the
date of determination less than three full years of employment the foregoing
calculation, including any adjustment required by clause (x) above, shall be
based on the average base salaries and regular year-end cash bonuses paid to you
while so employed.
          b. A “Change in Control” shall be deemed to have occurred if, during
any period of twenty-four consecutive calendar months, the individuals who at
the beginning of such period constitute the Company’s Board of Directors, and
any new directors (other than Excluded Directors) whose election by such Board
or nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose
election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than pursuant to a tender offer approved
by the Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or more of such
combined voting power.

 

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          c. “Code” means the Internal Revenue Code of 1986, as amended.
          d. “Company” shall mean Masco Corporation or any corporation in which
Masco Corporation owns directly or indirectly stock possessing in excess of 50%
of the total combined voting power of all classes of stock.
          e. The “Deferred Compensation Trust” shall mean any trust created by
the Company to receive the deposit referred to in clause (2) of paragraph 10.
          f. “Disability” and “Disabled” shall mean your being unable to perform
your duties as a Company executive by reason of your physical or mental
condition, prior to your attaining age 65, provided that you have been employed
by the Company for two consecutive Years or more at the time you first became
Disabled.
          g. The “Gross-Up Amount” (i) shall be determined if any payment or
distribution by the Company to or for your benefit, whether paid, distributed,
payable or distributed or distributable pursuant to the terms of this Agreement,
any stock option or stock award plan, retirement plan or otherwise (such payment
or distribution, other than an Excise Tax Adjustment Payment under clause (ii),
is referred to herein as a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax (such excise tax together with any
such interest or penalties are referred to herein as the “Excise Tax”), and
(ii) shall mean an additional payment (the “Excise Tax Adjustment Payment”) in
an amount such that after subtracting from the Excise Tax Adjustment Payment
your payment of all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Excise Tax
Adjustment Payment, the balance will be equal to the Excise Tax imposed upon the
Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the
amount of such Excise Tax Adjustment Payment, shall be made by
PricewaterhouseCoopers LLP, or such national accounting firm as the Company may
designate prior to a Change in Control, which shall provide detailed supporting
calculations to the Company and you. Except as provided in clause (iv) of
paragraph 10, all such determinations shall be binding upon you and the Company.
          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          i. “Present Value” of future benefits means the discounted present
value of those benefits (including therein the benefits, if any, your Surviving
Spouse would be entitled to receive under this Agreement upon your death), using
the UP-1984 Mortality Table and discounted by the interest rate used, for
purposes of determining the present value of a lump sum distribution on plan
termination, by the PBGC on the first day of the month which is (i) four months
prior to the month in which a Change in Control occurs or (ii) the month in
which your death occurs if the Present Value is to be calculated under the
proviso in the last sentence of paragraph 4(or if the PBGC has ceased publishing
such interest rate, such other interest rate as the Board of Directors deems is
an appropriate substitute). The above PBGC interest rate is intended to be
determined based on PBGC methodology and regulations in effect on September 1,
1993 (as contained in 29 CFR Part 2619).

 

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          j. “Profit Sharing Conversion Factor” shall be a factor equal to the
present value of a life annuity payable at the later of age 65 or attained age
based on the 1983 Group Annuity Mortality Table using a blend of 50% of the male
mortality rates and 50% of the female mortality rates as set forth in Revenue
Ruling 95-6 (or such other mortality table that the Internal Revenue Service may
prescribe in the future) and an interest rate equal to the average yield for
30-year Treasury Constant Maturities, as reported in Federal Reserve Statistical
Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other
interest rate as the Board of Directors deems is an appropriate substitute).
          k. “Retirement” shall mean your termination of employment with the
Company, on or after you attain age 65. Your acting as a consultant shall not be
considered employment.
          l. “SERP Percentage” of your Average Compensation is 60% if at the
date of determination you have completed 15 or more Years of Service, and
decreases by increments of four percentage points for each Year or portion
thereof less than 15 that you have accumulated at the date of determination. The
minimum SERP Percentage is 20% after five Years of Service; prior to completing
five Years of Service the SERP Percentage is 0.
          m. “Surviving Spouse” shall be the person to whom you shall be legally
married (under the law of the jurisdiction of your permanent residence) at the
date of (i) your Retirement or death after attaining age 65 (if death terminated
employment with the Company) for the purposes of paragraphs 1, 2 and 3,
(ii) your death for the purposes of paragraph 5 and, if paragraph 5 is
applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6
or 7 are applicable, for the purposes of paragraph 3, (iv) your termination of
employment for the purposes of paragraph 4 and, if paragraph 4 is applicable,
for purposes of paragraph 3 and (v) a “Change in Control” for the purposes of
paragraph 10 if none of clauses (i) through (iv) has become applicable prior to
the Change in Control and, if this clause (v) is applicable, for purposes of
paragraph 3. For the purposes of paragraphs 11a, 11e, 11f, 11g, 11h, 11i and
11j, “Surviving Spouse” shall be any spouse entitled to any benefits hereunder.
          n. If you become Disabled, “Total Compensation” shall mean 160% of
your annual base salary rate at the time of your Disability.
          o. “Vested Percentage” shall mean the sum of the following
percentages: (i) 2% multiplied by your Years of Service, plus (ii) 8% multiplied
by the number of Years, while an employee of the Company, you have been
designated a participant in the Plan; provided, however, (w) prior to completing
five Years of Service the Vested Percentage is 0,(x) on your fiftieth birthday
your Vested Percentage may not exceed 50%, (y) on or prior to each of your
birthdays following your fiftieth birthday your Vested Percentage may not exceed
the sum of 50% plus the product obtained by multiplying 10% by the number of
birthdays that have occurred following your fiftieth birthday, and (z) your
Vested Percentage in no event may exceed 100%.
          p. “Year” shall mean twelve full consecutive months, and “year” shall
mean a calendar year.

 

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          q. “Years of Service” shall mean the number of Years during which you
were employed by the Company (excluding, however, Years of Service with a
corporation prior to the time it became a subsidiary of or otherwise affiliated
with Masco Corporation).
     1. In accordance with the Plan, upon your Retirement the Company will pay
you annually during your lifetime, subject to paragraph 8 below, the SERP
Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to you upon your Retirement if benefits payable
to you under the Company funded qualified pension plans and the defined benefit
(pension) plan provisions of the Company’s Retirement Benefits Restoration Plan
and any similar plan were converted to a life annuity, or if you are married
when you retire, to a 50% joint and spouse survivor life annuity, (ii) a sum
equal to the annual benefit which would be payable to you upon Retirement if
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan were
converted to a life annuity in accordance with the Profit Sharing Conversion
Factor, and (iii) unless you have at least 25 Years of Service, any retirement
benefits paid or payable to you by reason of employment by all other employers
(the amount of such deduction, in the case of benefits paid or payable other
than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any
portion thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than such other employers), provided, however, in all
cases the amount offset pursuant to these subsections (i),(ii) and (iii) shall
be determined prior to the effect of any payments from the plans and trusts
referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from
non-qualified plans.
     2. Upon your death after Retirement or while employed by the Company after
attaining age 65, your Surviving Spouse shall receive for life 75% of the annual
benefit pursuant to paragraph 1 of this Agreement which was payable to you prior
to your death (or, if death terminated employment after attaining age 65, which
would have been payable to you had your Retirement occurred immediately prior to
your death).
     3. The Company will provide, purchase or at its option provide
reimbursement for premiums paid for such supplemental medical insurance as the
Company in its sole discretion may deem advisable from time to time (i) for you
and your Surviving Spouse for the lifetime of each of you (A) following a
termination of your employment with the Company due to Retirement or Disability,
and (B) following any other termination of employment with the Company provided
(x) you and your Surviving Spouse are not covered by another medical insurance
program substantially all of the cost of which is paid by another employer,
(y) on the date of such termination your Vested Percentage is not less than 80%
and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving
Spouse, and (ii) for your Surviving Spouse for his or her lifetime upon a
termination of your employment with the Company due to your death.
     4. If your employment with the Company is for any reason terminated prior
to Retirement, other than as a result of circumstances described in paragraphs
2, 5 or 6 of this Agreement or following a Change in Control, and if prior to
the date of termination you have completed 5 or more Years of Service, upon your
attaining age 65 the Company will pay to you annually during your lifetime,
subject to paragraph 8 below, the Vested Percentage of the result obtained by
(1) multiplying your SERP Percentage at the date your employment terminated by
your Average

 

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Compensation, less (2) the sum of the following: (i) a sum equal to the annual
benefit which would be payable to you upon your attaining age 65 if benefits
payable to you under the Company funded qualified pension plans and the defined
benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan were converted to a life annuity, or if
you are married when you attain age 65, to a 50% joint and spouse survivor life
annuity, (ii) a sum equal to the annual benefit which would be payable to you
upon your attaining age 65 if an amount equal to your vested accounts at the
date of your termination of employment with the Company in the Company’s
qualified defined contribution plans (excluding your contributions and earnings
thereon in the Company’s 401(k) Savings Plan) and the defined contribution
(profit sharing) provisions of the Company’s Retirement Benefits Restoration
Plan and any similar plan (in each case increased from the date of termination
to age 65 at the imputed rate of 4% per annum) were converted to a life annuity
in accordance with the Profit Sharing Conversion Factor, and (iii) to the extent
the annual payments described in this clause (iii) and the annual payments you
would otherwise be entitled to receive under this paragraph 4 would, in the
aggregate exceed (the “excess amount”) the annual payments you would have
received under paragraph 1 had you remained employed by the Company until
Retirement (with your SERP Percentage determined as though you were given credit
for additional Years of Service until age 65 but no compensation increases), any
retirement benefits paid or payable to you by reason of employment by all other
previous or future employers, but only to the extent of such excess amount (the
amount of such deduction, in the case of benefits paid or payable other than on
an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than your prior or future employers), provided,
however, in all cases the amount offset pursuant to these subsections (i),(ii)
and (iii) shall be determined prior to the effect of any payments from the plans
and trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating
marital or other rights under state law as applied to retirement benefits from
non-qualified plans. Upon your death on or after age 65 should you be survived
by your Surviving Spouse, your Surviving Spouse shall receive for life,
commencing upon the date of your death, 75% of the annual benefit payable to you
under the preceding sentence following your attainment of age 65; provided,
further, if your death should occur prior to age 65, your Surviving Spouse shall
receive for life, commencing upon the date of your death, 75% of the annual
benefit which would have been payable to you under the preceding sentence
following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the Present Value of the
aggregate payments to be received by your Surviving Spouse based on his or her
life expectancy as of the date of your death is equal to the Present Value,
determined at the date of your death, of the aggregate payments estimated to be
received by your Surviving Spouse based on his or her life expectancy at an age,
and as if your Surviving Spouse had begun receiving payments, when you would
have attained age 65.
     5. If while employed by the Company you die prior to your attaining age 65
leaving a Surviving Spouse, and provided you shall have been employed by the
Company for two consecutive Years or more, your Surviving Spouse shall receive
annually for life, subject to paragraph 8 below, 75% of the SERP Percentage of
your Average Compensation (with your SERP Percentage determined as though you
were given credit for additional Years of Service but no compensation increases
between the date of your death and the date you would have attained age 65),
less: (i) a sum equal to the annual benefit which would be payable to your
Surviving Spouse under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan if such benefit were converted to a life
annuity (such deduction, however, only to commence on the date such benefit is
first payable), (ii) a sum equal to the annual payments which would be received
by

 

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your Surviving Spouse as if your spouse were designated as the beneficiary of
your vested accounts in the Company’s qualified defined contribution plans
(excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan and such
accounts were converted to a life annuity at the time of your death in
accordance with the Profit Sharing Conversion Factor, and (iii) unless you have
at least 25 Years of Service, any retirement benefits paid or payable to you or
your Surviving Spouse by reason of your employment by all other employers (the
amount of such deduction, in the case of benefits paid or payable other than on
an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been
contributed by you rather than such other employers), provided, however, in all
cases the amount offset pursuant to these subsections (i),(ii) and (iii) shall
be determined prior to the effect of any payments from the plans and trusts
referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from
non-qualified plans. No death benefits are payable except to your Surviving
Spouse.
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled prior to your attaining age
65, until the earlier of your death, termination of Disability or attaining age
65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled and with your SERP Percentage given credit for
Years of Service while you were Disabled.
     7. If you die leaving a Surviving Spouse while receiving Disability
benefits pursuant to paragraph 6 of this Agreement, you will be deemed to have
retired on your death and your Surviving Spouse shall receive for life 75% of
the annual benefit which would have been payable to you if you had retired on
the date of your death and your benefit determined pursuant to paragraph 1,
based upon your Average Compensation as of the date you became Disabled and with
your SERP Percentage given credit for Years of Service from the date you became
Disabled to the date you would have attained age 65.
     8. If the age of your Surviving Spouse is more than 20 years younger than
your age, then the annual benefit payable under paragraphs 1, 4, 5 and 6 of this
Agreement and the benefit payable as “the SERP Percentage of your Average
Compensation”, as that phrase is used in paragraph 5 of this Agreement, shall be
reduced by the percentage obtained by multiplying 1.5% times the number of Years
or portion thereof by which your Surviving Spouse is more than 20 years younger
than you.
     9. If you or your Surviving Spouse is eligible to receive benefits
hereunder, unless otherwise specifically agreed by the Company in writing, you
and your Surviving Spouse will not be able to receive benefits under any other
Company sponsored non-qualified retirement plans other than the Company’s
Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be
considered to have been received under a Company sponsored non-qualified
retirement plan even though such benefits are received after retirement. Except
as provided in Paragraph 3, the last sentence of paragraph 4 and in paragraph 10
of this Agreement, no benefits will be paid to your Surviving Spouse pursuant to
this Agreement unless upon your death you were employed by the Company, Disabled
or had taken

 

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Retirement from the Company.
     10. Change in Control. (i) Immediately upon the occurrence of any Change in
Control:
          (1) If you are then employed by the Company, (i) your SERP Percentage,
if not already 60%, shall be deemed for all purposes of this Agreement to be the
lesser of 60% or the percentage resulting by adding to your SERP Percentage
immediately prior thereto the product obtained by multiplying 4% by the number
of Years which would then have to elapse prior to your attainment of age 65, and
(ii) your Vested Percentage, if not already 100%, shall be deemed for all
purposes of this Agreement to be 100%.
          (2) If the Deferred Compensation Trust has theretofore been
established or is established within thirty days after the Change in Control,
the Company shall forthwith deposit to an account in your name (or that of your
Surviving Spouse if you are then deceased and your Surviving Spouse is entitled
to benefits hereunder) in the Deferred Compensation Trust 110% of the sum of the
Gross-Up Amount plus:
          (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age
if greater, assuming for purposes of this clause, no compensation increases and
that if younger than age 65 you and your Surviving Spouse had attained such age;
          (B) If employment has previously been terminated but you or your
Surviving Spouse is then entitled in the future to receive benefits under
paragraph 4 of this Agreement, an amount equal to the discounted Present Value
of the benefits which would have been payable under such paragraph;
          (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present
Value of those benefits payable in the future to you and your Surviving Spouse;
and
          (D) If you are then receiving payments under paragraph 6 of this
Agreement, an amount equal to the Present Value of the benefits which would have
been payable under paragraphs 6 and 7 on the assumption you would have continued
to receive benefits under paragraph 6 until you had attained age 65 and
thereafter continued to receive benefits as though you were deemed to have
retired.
(3) The Company shall thereafter be obligated to provide such supplemental
medical insurance as has theretofore in the discretion of the Company been
generally provided to participants and their Surviving Spouses under the Plan
(A) to you and your Surviving Spouse if you or your Surviving Spouse is then
receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if
you become Disabled if you are employed by the Company at the time of the Change
in Control, (C) to your Surviving Spouse upon your death if you are employed by
the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in
Control but only during the periods when you and your Surviving Spouse are not
covered by another medical insurance program substantially all of the cost of
which is paid by another employer. The obligations of the Company under this
clause (i)(3) shall remain in effect for the lifetime of both you and your
Surviving Spouse.

 

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(4) If the Deferred Compensation Trust is not established prior to or within
thirty days after the Change in Control, all payments which would have otherwise
have been made to you or your Surviving Spouse from the Deferred Compensation
Trust shall immediately after such thirty day period be made to you or your
Surviving Spouse by the Company.
          (ii) Any deposit by the Company to an account in your name or that of
your Surviving Spouse in the Deferred Compensation Trust prior to the occurrence
of the Change in Control, together with all income then accrued thereon (but
only to the extent of the value of such deposited amount and the income accrued
thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the
deposit required under clause (i)(2) of this paragraph 10.
          (iii) At or prior to making the deposit required by clause (i)(2) of
this paragraph 10, the Company shall deliver to the Trustee under the Deferred
Compensation Trust a certificate specifying that portion, if any, of the amount
in the trust account, after giving effect to the deposit, which is represented
by the Gross-Up Amount. Payment of 90.91% of the amount required by clause
(i)(2) of this paragraph 10 to be paid to the trust account, together with any
income accrued thereon from the date of the Change in Control, is to be made to
you or your Surviving Spouse, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change in Control
if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the
Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse,
as applicable, from the trust account from time to time amounts, not exceeding
in the aggregate the Gross-Up Amount, upon your or your Surviving Spouse’s
certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local
taxing authority as a result of the Change in Control and the imposition of the
excise tax under Section 4999 of the Code (or any successor provision) on the
receipt of any portion of the Gross-Up Amount. All amounts in excess of the
amount required to be paid from the trust account by the preceding sentence,
after all expenses of the Deferred Compensation Trust have been paid, shall
revert to the Company provided that the Company has theretofore expressly
affirmed its continuing obligations under clause (i)(3) of this Paragraph 10.
          (iv) Subject to the next sentence of this clause (iv), the payment of
the Gross-Up Amount to you or your Surviving Spouse or the account in your or
your Surviving Spouse’s name in the Deferred Compensation Trust will thereby
discharge the Company from any obligations it may have under any present or
future stock option or stock award plan, retirement plan or otherwise, to make
any other payment as a result of your income becoming subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision) or any interest
or penalties with respect to such excise tax. As a result of the uncertainty
which will be present in the application of Section 4999 of the Code (or any
successor provision) at the time of the determination of the Gross-Up Amount and
the possibility that between the date of determination of the Gross-Up Amount
and the dates payments are to be made to you or your Surviving Spouse under this
Agreement, changes in applicable tax laws will result in an incorrect
determination of the Gross-Up Amount having been made, it is possible that
(1) payment of a portion of the Gross-Up Amount will not have been made by the
Company which should have been made (an “Underpayment”), or (2) payment of a
portion of the Gross-Up Amount will have been made which should not have been
made (an “Overpayment”), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be promptly
paid by the Company to or for your benefit. In the event that you or your
Surviving Spouse discover that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by you or your Surviving Spouse to the Company.

 

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          (v) Prior to the occurrence of a Change in Control, any deposits made
by the Company to an account in the Deferred Compensation Trust may be withdrawn
by the Company. Upon the occurrence of a Change in Control, all further
obligations of the Company under this Agreement (other than under this
Paragraph 10 to the extent not theretofore performed) shall terminate in all
respects.
     11. We also agree upon the following:
          a. Prior to the occurrence of a Change in Control, the Organization
and Compensation Committee of the Company’s Board of Directors, or any other
committee however titled which shall be vested with authority with respect to
the compensation of the Company’s officers and executives (in either case, the
“Committee”), shall have the exclusive authority to make all determinations
which may be necessary in connection with this Agreement including the dates of
and whether you are or continue to be Disabled, the amount of annual benefits
payable hereunder by reason of offsets hereunder due to employment by other
employers, the interpretation of this Agreement, and all other matters or
disputes arising under this Agreement. The determinations and findings of the
Committee shall be conclusive and binding, without appeal, upon both of us.
          b. You will not during your employment or Disability, and after
Retirement or the termination of your employment, for any reason disclose or
make use of for your own or another person’s benefit under any circumstances any
of the Company’s Proprietary Information. Proprietary Information shall include
trade secrets, secret processes, information concerning products, developments,
manufacturing techniques, new product or marketing plans, inventions, research
and development information or results, sales, pricing and financial data,
information relating to the management, operations or planning of the Company
and any other information treated as confidential or proprietary.
          c. You agree that you will not following your termination of
employment for any reason (whether on Retirement, Disability or termination
prior to attaining age 65) thereafter directly or indirectly engage in any
business activities, whether as a consultant, advisor or otherwise, in which the
Company is engaged in any geographic area in which the products or services of
the Company have been sold, distributed or provided during the five year period
prior to the date of your termination of employment. In light of ongoing
payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited
in duration provided no Change in Control has occurred and, in the event of a
Change in Control, all such restrictions shall terminate one year thereafter.
          In addition to the foregoing and provided no Change in Control has
occurred, if while you or your Surviving Spouse is receiving retirement or other
benefits pursuant to this Agreement, in the judgment of the Committee you or
your Surviving Spouse directly or indirectly engage in activity or act in a
manner which can be considered adverse to the interest of the Company or any of
its direct or indirect subsidiaries or affiliated companies, the Committee may
terminate rights to any further benefits hereunder.
          d. Except as may be provided to the contrary in a duly authorized
written agreement between you and the Company you acknowledge that the Company
has made no commitments to you of any kind with respect to the continuation of
your employment, which we expressly agree is an employment at will, and you or
the Company shall have the

 

--------------------------------------------------------------------------------

 

unrestricted right to terminate your employment with or without cause, at any
time in your or its discretion.
          e. At the Company’s request, expressed through a Company officer, you
agree to provide such information with respect to matters which may arise in
connection with this Agreement as may be deemed necessary by the Company or the
Committee, including for example only and not in limitation, information
concerning benefits payable to you from third parties, and you further agree to
submit to such medical examinations by duly licensed physicians as may be
requested by the Company from time to time. You also agree to direct third
parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits
under this Agreement.
          f. To the extent permitted by law, no interest in this Agreement or
benefits payable to you or to your Surviving Spouse shall be subject to
anticipation, or to pledge, assignment, sale or transfer in any manner nor shall
you or your Surviving Spouse have the power in any manner to charge or encumber
such interest or benefits, nor shall such interest or benefits be liable or
subject in any manner for the liabilities of you or your Surviving Spouse’s
debts, contracts, torts or other engagements of any kind.
          g. No person other than you and your Surviving Spouse shall have any
rights or property interest of any kind whatsoever pursuant to this Agreement,
and neither you nor your Surviving Spouse shall have any rights hereunder other
than those expressly provided in this Agreement. Upon the death of you and your
Surviving Spouse no further benefits of whatsoever kind or nature shall accrue
or be payable pursuant to this Agreement.
          h. All benefits payable pursuant to this Agreement, other than
pursuant to paragraph 10, shall be paid in installments of one-twelfth of the
annual benefit, or at such shorter intervals as may be deemed advisable by the
Company in its discretion, upon receipt of your or your Surviving Spouse’s
written application, or by the applicant’s personal representative in the event
of any legal disability.
          i. Except as provided in paragraph 10, all benefits under this
Agreement shall be payable from the Company’s general assets, which assets
(including all funds in the Deferred Compensation Trust) are subject to the
claims of the Company’s general creditors, and are not set aside for your or
your Surviving Spouse’s benefit.
          j. You agree that, if the Company establishes the Deferred
Compensation Trust, the Company is entitled at any time prior to a Change in
Control to revoke such trust and withdraw all funds theretofore deposited in
such trust. You acknowledge that although this Agreement refers from time to
time to your or your Surviving Spouse’s trust account, no separate trust will be
created and all assets of any Deferred Compensation Trust will be commingled.
          k. This Agreement shall be governed by the laws of the State of
Michigan.
     12. We have agreed that the determinations of the Committee described in
paragraph 11a shall be conclusive as provided in such paragraph, but if for any
reason a claim is asserted which subverts the provisions of paragraph 11a, we
agree that, except for causes of action which may arise under paragraph 11b and
the first paragraph of paragraph 11c and provided no Change in Control has
occurred, arbitration shall be the sole and exclusive remedy to resolve all
disputes,

 

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claims or controversies which could be the subject of litigation (hereafter
referred to as “dispute”) involving or arising out of this Agreement. It is our
mutual intention that the arbitration award will be final and binding and that a
judgment on the award may be entered in any court of competent jurisdiction and
enforcement may be had according to its terms.
     The arbitrator shall be chosen in accordance with the commercial
arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be borne equally by the parties to the dispute. The place
of the arbitration shall be the principal offices of the American Arbitration
Association in the metropolitan Detroit area.
     The arbitrator’s sole authority shall be to apply the clauses of this
Agreement.
     We agree that the provisions of this paragraph 12, and the decision of the
arbitrator with respect to any dispute, with only the exceptions provided in the
first paragraph of this paragraph 12, shall be the sole and exclusive remedy for
any alleged cause of action in any manner based upon or arising out of this
Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under
this Agreement has the right to resort to any federal, state or local court or
administrative agency concerning any matters dealt with by this Agreement and
that the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute. The
arbitration provisions contained in this paragraph shall survive the termination
or expiration of this Agreement, and shall be binding on our respective
successors, personal representatives and any other party asserting a claim based
upon this Agreement.
     We further agree that any demand for arbitration must be made within one
year of the time any claim accrues which you or any person claiming hereunder
may have against the Company; unless demand is made within such period, it is
forever barred.
          13. This Agreement shall be administered so as to be compliant with
Section 409K of the Code including the six-month waiting period for payments to
begin following a separation of employment, if applicable. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments deferred under this provision.
     We are pleased to be able to make this supplemental plan available to you.
Please examine the terms of this Agreement carefully and at your earliest
convenience indicate your assent to all of its terms and conditions by signing
and dating where provided below and returning a signed copy to me.

            Sincerely,

MASCO CORPORATION
      By   /s/ Timothy Wadhams         President and Chief Executive Officer   
         

          /s/ John G. Sznewajs       John G. Sznewajs            DATE: December
21, 2007       

 

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February 6, 2008
Mr. Timothy Wadhams
[Address]
Dear Tim:
          In light of the recent increase in your annual cash bonus opportunity
from 100% of your base salary, the Organization and Compensation Committee of
our Board of Directors has approved a change in your Supplemental Executive
Retirement Plan to increase the amount of your annual bonus which is includible
in “Average Compensation”, as that term is used in your SERP Agreement. In order
to implement this change, the definition of “Average Compensation” in your SERP
Agreement would be changed to read as follows:
Average Compensation
          “Average Compensation” shall mean the aggregate of your highest three
years total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of your
maximum bonus opportunity for such year), divided by three, provided, however,
(x) if any portion of a bonus is excluded by the parenthetical contained in
clause (ii) above, the total amount excluded will be added to one or both of the
other two years included in the calculation as long as the amount so added does
not result in a bonus with respect to any year exceeding 60% of your maximum
bonus opportunity for such year, (y) if you have on the date of determination
less than three full years of employment, the foregoing calculation, including
any adjustment required by clause (x) above, shall be based on the average base
salaries and regular year-end cash bonuses paid to you while so employed.
          In order to make this change effective, please sign the enclosed copy
of this letter agreement and return it to Gene Gargaro.

            Sincerely yours,
      /s/ Richard A. Manoogian
      Richard A. Manoogian      Executive Chairman     

I agree to the above-described amendment
to my Supplemental Executive Retirement
Plan with the Company

          /s/ Timothy Wadhams     

 

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February 6, 2008
Mr. Donald J. DeMarie, Jr.
[Address]
Dear Donny:
          In light of the recent increase in your annual cash bonus opportunity
from 100% of your base salary, the Organization and Compensation Committee of
our Board of Directors has approved a change in your Supplemental Executive
Retirement Plan to increase the amount of your annual bonus which is includible
in “Average Compensation”, as that term is used in your SERP Agreement. In order
to implement this change, the definition of “Average Compensation” in your SERP
Agreement would be changed to read as follows:
Average Compensation
          “Average Compensation” shall mean the aggregate of your highest three
years total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of your
maximum bonus opportunity for such year), divided by three, provided, however,
(x) if any portion of a bonus is excluded by the parenthetical contained in
clause (ii) above, the total amount excluded will be added to one or both of the
other two years included in the calculation as long as the amount so added does
not result in a bonus with respect to any year exceeding 60% of your maximum
bonus opportunity for such year, (y) if you have on the date of determination
less than three full years of employment, the foregoing calculation, including
any adjustment required by clause (x) above, shall be based on the average base
salaries and regular year-end cash bonuses paid to you while so employed.
          In addition, the Organization and Compensation Committee has also
determined that it is no longer appropriate to prevent any vesting of benefits
from occurring until your fiftieth birthday. In order to implement this change,
the definition of “Vested Percentage” in your SERP Agreement would be changed to
read as follows:
Vested Percentage
          “Vested Percentage” shall mean the sum of the following percentages:
(i) 2% multiplied by your Years of Service, plus (ii) 8% multiplied by the
number of Years, while an employee of the Company, you have been designated a
participant in the Plan; provided, however, (w) prior to completing five Years
of Service the Vested Percentage is 0, (x) on your fiftieth birthday your Vested
Percentage may not exceed 50%, (y) on or prior to each of your birthdays
following your fiftieth birthday your Vested Percentage may not exceed the sum
of 50% plus the product obtained by multiplying 10% by the number of birthdays
that have occurred following your fiftieth birthday, and (z) your Vested
Percentage in no event may exceed 100%.

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          In order to make these changes effective, please sign the enclosed
copy of this letter agreement and return it to Gene Gargaro.

         
 
  Sincerely yours,    
 
       
 
  /s/ Timothy Wadhams    
 
       
 
  Timothy Wadhams
President and Chief Executive Officer    
 
       
I agree to the above-described amendments
       
to my Supplemental Executive Retirement
       
Plan with the Company
       
 
       
/s/ Donald J. DeMarie, Jr.
 
Donald J. DeMarie, Jr.
       

 

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Form of Amendment for: Richard A. Manoogian
November 3, 2008
Dear :
     Section 409A of the Internal Revenue Code contains complex provisions
regulating the payment of deferred compensation under non-qualified retirement
programs, including your agreement (the “SERP Agreement”) under Masco’s
supplemental executive retirement plan (the “Plan”). Under recently issued
regulations of the Internal Revenue Service, non-complying payments under the
Plan will result in serious adverse tax consequences to recipients, which
include an increase in your marginal tax rate by 20 percentage points on all
Plan payments not in compliance with Section 409A and an increase in applicable
late-payment penalty rates by a full percentage point. The amendments to your
SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with
Section 409A.
     The principal changes under Section 409A described in this letter apply
only to benefits accrued or vested after December 31, 2004 (“Covered Benefits”).
Covered Benefits therefore include those under post 2004 SERP Agreements, post
2004 amendments to SERP Agreements and any increase in benefits resulting from
higher compensation paid after 2004. Benefits, to the extent they were accrued
and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid
without regard to Section 409A provisions. As a result of Section 409A, Masco
will be required under the Plan to determine for each participant the portion of
SERP payments attributable to Grandfathered Benefits and the portion
attributable to Covered Benefits and, at times, treat these payments differently
as described in this letter agreement.
     No payment, however, of benefits under your SERP may be made under
Section 409A unless a “separation from service” has occurred. Since it is
unclear under the Plan if a “separation from service” has occurred if a
participant is rendering services to Masco following retirement or during a
disability, this letter agreement clarifies that a “separation from service”
will have occurred, thereby allowing the commencement of SERP payments, even if
a participant following retirement or during disability is providing services to
Masco which do not exceed 49% of the individual’s prior services as a full-time
employee.
     Initial monthly payments for Covered Benefits under the Plan must be
delayed until six months have elapsed following a separation from service, after
which time the delayed payments would be paid in a lump sum without interest.
Any portion of your SERP payments represented by Grandfathered Benefits will not
be delayed by Section 409A.
     In the unlikely event of a change in control, if such a change satisfies
the requirements of your existing SERP Agreement but not the more stringent
requirements in Section 409A for a change in control, the same seriously adverse
tax consequences to you could occur. In order to eliminate these consequences if
a change in control does not satisfy both tests, this letter

2

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agreement would provide that any Grandfathered Benefits under your SERP
Agreement will be paid in a lump sum as currently provided in the existing SERP
Agreement with the Covered Benefits subject to Section 409A paid to the Deferred
Compensation Trust and thereafter distributed by the Trust as though no change
in control has occurred. A new change in control trigger, included in this
letter agreement in clause (iii) of Paragraph 13, has been added to ensure that
if the requirements of Section 409A have been met, payments of your SERP
benefits will be made as currently scheduled in your SERP Agreement.
     In order to assure ongoing compliance with these new statutory provisions
and to avoid potentially severe tax consequences to you, we are requesting that
you agree to the amendments to your SERP Agreement set forth below.
     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement
shall be amended by substituting for the words “the commencement of your
Disability” the words “the termination of your employment as a result of
Disability”.
     The definition of “Retirement” in clause (1) of your SERP Agreement shall
be amended to read as follows:
     “Retirement” shall mean your termination of employment with the Company on
or after you attain age 65. Termination of employment for all purposes under
this Agreement shall mean a “separation from service” under Section 409A of the
Code which shall only occur if any services which you may continue to provide to
the Company as an employee or as a consultant after termination of employment
are not in excess of 49% of your prior service level, all as determined in
accordance with the regulations under Section 409A of the Code.
     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase
“resulting in a termination of employment” following the first occurrence of the
word “Disabled” and thereby read as follows:
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled resulting in a termination of
employment prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual
benefit, subject to paragraph 8 below, equal to 60% of your Total Compensation
less any benefits payable to you pursuant to long-term disability insurance
under programs provided by the Company. If your Disability continues until you
attain age 65, you shall be considered retired and you shall receive retirement
benefits pursuant to paragraph 1 above, based upon your Average Compensation as
of the date it is determined you became Disabled and with your SERP Percentage
given credit for Years of Service while you were Disabled.
     Paragraph 9 of your SERP Agreement shall be amended by substituting for the
word “Disabled” in the last sentence thereof the words “terminated from
employment by reason of Disability”.

3

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     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the
word “Disabled” in clause (1) thereof and substituting therefore the phrase “are
terminated as a result of Disability”.
     A new or modified Paragraph 13 for your SERP Agreement shall read as
follows and replace any existing Paragraph 13 in your SERP Agreement:
     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the
Code) a six-month waiting period for payments of Covered Benefits (hereinafter
defined), to begin following your termination of employment. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments (with no payment for interest) delayed under this
provision.
     (ii) If a “Change in Control” has occurred which is also a “Change of
Control” as defined in Section 13(iii) below, then all of the provisions of the
Agreement, including the provisions of Paragraph 10, shall apply without change.
However, if there is a “Change in Control” which is not a “Change of Control” as
defined in Section 13(iii) then (A) as to that portion of your benefits under
this Agreement which is not subject to the provisions of Section 409A of the
Code (the “Grandfathered Benefits”), all of the provisions of this Agreement,
including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code
(the “Covered Benefits”), the only provisions of Paragraph 10 which shall be
applicable thereto are clauses (1), (2) and (3) of Paragraph 10(i) and
Paragraphs 10(ii), 10(iv) and 10(v). The amount deposited in the Deferred
Compensation Trust representing 110% of the Gross-Up Amount attributable to the
Grandfathered Benefits, the Covered Benefits or otherwise shall be held in and
distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered
Benefits shall be held and invested by the Deferred Compensation Trust and paid
to you or your Surviving Spouse as an annuity under the applicable circumstances
of Paragraphs 1, 2, 4 (disregarding the inapplicability of Paragraph 4 in the
event of a “Change in Control”), 5, 6 or 7 of this Agreement. If, for any
reason, the monthly benefit paid by the Deferred Compensation Trust to you or
your Surviving Spouse is less than the monthly benefit used to calculate the
amount deposited under the next preceding sentence, the Company shall pay the
deficiency directly to you or your Surviving Spouse.
     (iii) A “Change of Control” for purposes of Section 409A of the Code shall
be deemed to have occurred if during any period of twelve consecutive calendar
months, the individuals who at the beginning of such period constitute the
Company’s Board of Directors, and any new directors (other than Excluded
Directors) whose election by such Board or nomination for election by
stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the
period or whose election or nomination for election as directors was previously
so approved, for any reason cease to constitute at least a majority of the

4

--------------------------------------------------------------------------------

 

members thereof. Excluded Directors are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year after
any “person” or “group of persons” as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 commencing a tender offer for, or
becoming the beneficial owner of, voting securities representing 30 percent or
more of the combined voting power of all outstanding voting securities of the
Company, other than pursuant to a tender offer approved by the Board prior to
its commencement or pursuant to stock acquisitions approved by the Board prior
to their representing 30 percent or more of such combined voting power.
     Should you have any questions regarding these proposed amendments, please
feel free to discuss them with Chuck Greenwood, John Leekley or me. If not, I
would appreciate your execution and return of a copy of this letter to Gene
Gargaro, at which time the above-described amendments will become effective.

            Sincerely yours,

Timothy Wadhams
President and Chief Executive Officer
                       

I agree to the above-described
Amendments to my SERP
Agreement.

     
 
[Name]
   

5

--------------------------------------------------------------------------------

 

Form of Amendment for: William Anderson
Eugene Gargaro, Jr.
John Leekley
John Sznewajs
November 3, 2008
Dear :
     Section 409A of the Internal Revenue Code contains complex provisions
regulating the payment of deferred compensation under non-qualified retirement
programs, including your agreement (the “SERP Agreement”) under Masco’s
supplemental executive retirement plan (the “Plan”). Under recently issued
regulations of the Internal Revenue Service, non-complying payments under the
Plan will result in serious adverse tax consequences to recipients, which
include an increase in your marginal tax rate by 20 percentage points on all
Plan payments not in compliance with Section 409A and an increase in applicable
late-payment penalty rates by a full percentage point. The amendments to your
SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with
Section 409A.
     The principal changes under Section 409A described in this letter apply
only to benefits accrued or vested after December 31, 2004 (“Covered Benefits”).
Covered Benefits therefore include those under post 2004 SERP Agreements, post
2004 amendments to SERP Agreements and any increase in benefits resulting from
higher compensation paid after 2004. Benefits, to the extent they were accrued
and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid
without regard to Section 409A provisions. As a result of Section 409A, Masco
will be required under the Plan to determine for each participant the portion of
SERP payments attributable to Grandfathered Benefits and the portion
attributable to Covered Benefits and, at times, treat these payments differently
as described in this letter agreement.
     No payment, however, of benefits under your SERP may be made under
Section 409A unless a “separation from service” has occurred. Since it is
unclear under the Plan if a “separation from service” has occurred if a
participant is rendering services to Masco following retirement or during a
disability, this letter agreement clarifies that a “separation from service”
will have occurred, thereby allowing the commencement of SERP payments, even if
a participant following retirement or during disability is providing services to
Masco which do not exceed 49% of the individual’s prior services as a full-time
employee.

14

--------------------------------------------------------------------------------

 

     Initial monthly payments for Covered Benefits under the Plan must be
delayed until six months have elapsed following a separation from service, after
which time the delayed payments would be paid in a lump sum without interest.
Any portion of your SERP payments represented by Grandfathered Benefits will not
be delayed by Section 409A.
     In the unlikely event of a change in control, if such a change satisfies
the requirements of your existing SERP Agreement but not the more stringent
requirements in Section 409A for a change in control, the same seriously adverse
tax consequences to you could occur. In order to eliminate these consequences if
a change in control does not satisfy both tests, this letter agreement would
provide that any Grandfathered Benefits under your SERP Agreement will be paid
in a lump sum as currently provided in the existing SERP Agreement with the
Covered Benefits subject to Section 409A paid to the Deferred Compensation Trust
and thereafter distributed by the Trust as though no change in control has
occurred. A new change in control trigger, included in this letter agreement in
clause (iii) of Paragraph 13, has been added to ensure that if the requirements
of Section 409A have been met, payments of your SERP benefits will be made as
currently scheduled in your SERP Agreement.
     Finally, in light of the recent increase in your annual cash bonus
opportunity from 100% of your base salary, the Organization and Compensation
Committee of our Board of Directors has approved a change in your SERP Agreement
to increase the amount of your annual bonus which is includible in “Average
Compensation”, as that term is used in your SERP Agreement. A conforming change
would also be made in the definition of ‘Total Compensation” for purposes of
disability payments. As noted above, the increased portion of your benefit
attributable to these changes will be a Covered Benefit under Section 409A.
     In order to assure ongoing compliance with these new statutory provisions,
to avoid potentially severe tax consequences to you and to increase the amount
of any bonuses includible in determining payments to be made under your SERP
Agreement, we are requesting that you agree to the amendments to your SERP
Agreement set forth below.
     The definition of “Average Compensation” in clause (a) of your SERP
Agreement shall be amended to read as follows:
     “Average Compensation” shall mean the aggregate of your highest three years
total annual cash compensation paid to you by the Company, consisting of
(i) base salaries and (ii) regular year-end cash bonuses paid with respect to
the years in which such salaries are paid (the bonus with respect to any such
year, however, only to be included in an amount not in excess of 60% of your
maximum bonus opportunity for such year), divided by three, provided, however,
(x) if any portion of a bonus is excluded by the parenthetical contained in
clause (ii) above, the total amount excluded will be added to one or both of the
other two years included in the calculation as long as the amount so added does
not result in a bonus with respect to any year exceeding 60% of your maximum
bonus opportunity for such year, (y) if you have on the date of determination
less than three full years of employment, the foregoing calculation, including
any adjustment required by clause (x) above, shall be based on the average base
salaries and regular year-end cash bonuses paid to you while so employed.

15

--------------------------------------------------------------------------------

 

     The definition of Total Compensation in clause (n) of your SERP Agreement
shall be amended to read as follows:
     “If you become Disabled, “Total Compensation” shall mean the sum of your
annual base salary rate and 60% of your then effective bonus opportunity at the
time of your Disability”.
     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement
shall be amended by substituting for the words “the commencement of your
Disability” the words “the termination of your employment as a result of
Disability”.
     The definition of “Retirement” in clause (1) of your SERP Agreement shall
be amended to read as follows:
     “Retirement” shall mean your termination of employment with the Company on
or after you attain age 65. Termination of employment for all purposes under
this Agreement shall mean a “separation from service” under Section 409A of the
Code which shall only occur if any services which you may continue to provide to
the Company as an employee or as a consultant after termination of employment
are not in excess of 49% of your prior service level, all as determined in
accordance with the regulations under Section 409A of the Code.
     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase
“resulting in a termination of employment” following the first occurrence of the
word “Disabled” and thereby read as follows:
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled resulting in a termination of
employment prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual
benefit, subject to paragraph 8 below, equal to 60% of your Total Compensation
less any benefits payable to you pursuant to long-term disability insurance
under programs provided by the Company. If your Disability continues until you
attain age 65, you shall be considered retired and you shall receive retirement
benefits pursuant to paragraph 1 above, based upon your Average Compensation as
of the date it is determined you became Disabled and with your SERP Percentage
given credit for Years of Service while you were Disabled.
     Paragraph 9 of your SERP Agreement shall be amended by substituting for the
word “Disabled” in the last sentence thereof the words “terminated from
employment by reason of Disability”.
     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the
word “Disabled” in clause (1) thereof and substituting therefore the phrase “are
terminated as a result of Disability”.

16

--------------------------------------------------------------------------------

 

     A new or modified Paragraph 13 for your SERP Agreement shall read as
follows and replace any existing Paragraph 13 in your SERP Agreement:
     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the
Code) a six-month waiting period for payments of Covered Benefits (hereinafter
defined), to begin following your termination of employment. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments (with no payment for interest) delayed under this
provision.
     (ii) If a “Change in Control” has occurred which is also a “Change of
Control” as defined in Section 13(iii) below, then all of the provisions of the
Agreement, including the provisions of Paragraph 10, shall apply without change.
However, if there is a “Change in Control” which is not a “Change of Control” as
defined in Section 13(iii) then (A) as to that portion of your benefits under
this Agreement which is not subject to the provisions of Section 409A of the
Code (the “Grandfathered Benefits”), all of the provisions of this Agreement,
including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code
(the “Covered Benefits”), the only provisions of Paragraph 10 which shall be
applicable thereto are clauses (1), (2) and (3) of Paragraph 10(i) and
Paragraphs 10(ii), 10(iv) and 10(v). The amount deposited in the Deferred
Compensation Trust representing 110% of the Gross-Up Amount attributable to the
Grandfathered Benefits, the Covered Benefits or otherwise shall be held in and
distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered
Benefits shall be held and invested by the Deferred Compensation Trust and paid
to you or your Surviving Spouse as an annuity under the applicable circumstances
of Paragraphs 1, 2, 4 (disregarding the inapplicability of Paragraph 4 in the
event of a “Change in Control”), 5, 6 or 7 of this Agreement. If, for any
reason, the monthly benefit paid by the Deferred Compensation Trust to you or
your Surviving Spouse is less than the monthly benefit used to calculate the
amount deposited under the next preceding sentence, the Company shall pay the
deficiency directly to you or your Surviving Spouse.
     (iii) A “Change of Control” for purposes of Section 409A of the Code shall
be deemed to have occurred if during any period of twelve consecutive calendar
months, the individuals who at the beginning of such period constitute the
Company’s Board of Directors, and any new directors (other than Excluded
Directors) whose election by such Board or nomination for election by
stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the
period or whose election or nomination for election as directors was previously
so approved, for any reason cease to constitute at least a majority of the
members thereof. Excluded Directors are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year after
any “person” or “group of persons” as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 commencing a tender offer for, or
becoming the

17

--------------------------------------------------------------------------------

 

beneficial owner of, voting securities representing 30 percent or more of the
combined voting power of all outstanding voting securities of the Company, other
than pursuant to a tender offer approved by the Board prior to its commencement
or pursuant to stock acquisitions approved by the Board prior to their
representing 30 percent or more of such combined voting power.
     Should you have any questions regarding these proposed amendments, please
feel free to discuss them with Chuck Greenwood, John Leekley or me. If not, I
would appreciate your execution and return of a copy of this letter to Gene
Gargaro, at which time the above-described amendments will become effective.
Sincerely yours,
Timothy Wadhams
President and Chief Executive Officer
I agree to the above-described
Amendments to my SERP
Agreement.

     
 
[Name]
   

18

--------------------------------------------------------------------------------

 

Form of Amendment for: Timothy Wadhams
November 3, 2008
Dear :
     Section 409A of the Internal Revenue Code contains complex provisions
regulating the payment of deferred compensation under non-qualified retirement
programs, including your agreement (the “SERP Agreement”) under Masco’s
supplemental executive retirement plan (the “Plan”). Under recently issued
regulations of the Internal Revenue Service, non-complying payments under the
Plan will result in serious adverse tax consequences to recipients, which
include an increase in your marginal tax rate by 20 percentage points on all
Plan payments not in compliance with Section 409A and an increase in applicable
late-payment penalty rates by a full percentage point. The amendments to your
SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with
Section 409A.
     The principal changes under Section 409A described in this letter apply
only to benefits accrued or vested after December 31, 2004 (“Covered Benefits”).
Covered Benefits therefore include those under post 2004 SERP Agreements, post
2004 amendments to SERP Agreements and any increase in benefits resulting from
higher compensation paid after 2004. Benefits, to the extent they were accrued
and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid
without regard to Section 409A provisions. As a result of Section 409A, Masco
will be required under the Plan to determine for each participant the portion of
SERP payments attributable to Grandfathered Benefits and the portion
attributable to Covered Benefits and, at times, treat these payments differently
as described in this letter agreement.
     No payment, however, of benefits under your SERP may be made under
Section 409A unless a “separation from service” has occurred. Since it is
unclear under the Plan if a “separation from service” has occurred if a
participant is rendering services to Masco following retirement or during a
disability, this letter agreement clarifies that a “separation from service”
will have occurred, thereby allowing the commencement of SERP payments, even if
a participant following retirement or during disability is providing services to
Masco which do not exceed 49% of the individual’s prior services as a full-time
employee.
     Initial monthly payments for Covered Benefits under the Plan must be
delayed until six months have elapsed following a separation from service, after
which time the delayed payments would be paid in a lump sum without interest.
Any portion of your SERP payments represented by Grandfathered Benefits will not
be delayed by Section 409A.
     In the unlikely event of a change in control, if such a change satisfies
the requirements of your existing SERP Agreement but not the more stringent
requirements in Section 409A for a change in control, the same seriously adverse
tax consequences to you could occur. In order to eliminate these consequences if
a change in control does not satisfy both tests, this letter

10

--------------------------------------------------------------------------------

 

agreement would provide that any Grandfathered Benefits under your SERP
Agreement will be paid in a lump sum as currently provided in the existing SERP
Agreement with the Covered Benefits subject to Section 409A paid to the Deferred
Compensation Trust and thereafter distributed by the Trust as though no change
in control has occurred. A new change in control trigger, included in this
letter agreement in clause (iii) of Paragraph 13, has been added to ensure that
if the requirements of Section 409A have been met, payments of your SERP
benefits will be made as currently scheduled in your SERP Agreement.
     Finally, in light of the recent increase in your annual cash bonus
opportunity, the amount of your annual bonus includible in “Average
Compensation” was increased earlier this year. A conforming change, which should
then have been made in the definition of “Total Compensation” for purposes of
disability payments, is being made in this letter agreement.
     In order to assure ongoing compliance with these new statutory provisions
and to avoid potentially severe tax consequences to you, we are requesting that
you agree to the amendments to your SERP Agreement set forth below.
     The definition of Total Compensation in clause (n) of your SERP Agreement
shall be amended to read as follows:
     “If you become Disabled, “Total Compensation” shall mean the sum of your
annual base salary rate and 60% of your then effective bonus opportunity at the
time of your Disability”.
     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement
shall be amended by substituting for the words “the commencement of your
Disability” the words “the termination of your employment as a result of
Disability”.
     The definition of “Retirement” in clause (1) of your SERP Agreement shall
be amended to read as follows:
     “Retirement” shall mean your termination of employment with the Company on
or after you attain age 65. Termination of employment for all purposes under
this Agreement shall mean a “separation from service” under Section 409A of the
Code which shall only occur if any services which you may continue to provide to
the Company as an employee or as a consultant after termination of employment
are not in excess of 49% of your prior service level, all as determined in
accordance with the regulations under Section 409A of the Code.
     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase
“resulting in a termination of employment” following the first occurrence of the
word “Disabled” and thereby read as follows:
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled resulting in a termination of
employment prior to your attaining age 65, until the earlier of your death,
termination of

11

--------------------------------------------------------------------------------

 

Disability or attaining age 65 the Company will pay you an annual benefit,
subject to paragraph 8 below, equal to 60% of your Total Compensation less any
benefits payable to you pursuant to long-term disability insurance under
programs provided by the Company. If your Disability continues until you attain
age 65, you shall be considered retired and you shall receive retirement
benefits pursuant to paragraph 1 above, based upon your Average Compensation as
of the date it is determined you became Disabled and with your SERP Percentage
given credit for Years of Service while you were Disabled.
     Paragraph 9 of your SERP Agreement shall be amended by substituting for the
word “Disabled” in the last sentence thereof the words “terminated from
employment by reason of Disability”.
     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the
word “Disabled” in clause (1) thereof and substituting therefore the phrase “are
terminated as a result of Disability”.
     A new or modified Paragraph 13 for your SERP Agreement shall read as
follows and replace any existing Paragraph 13 in your SERP Agreement:
     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the
Code) a six-month waiting period for payments of Covered Benefits (hereinafter
defined), to begin following your termination of employment. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments (with no payment for interest) delayed under this
provision.
     (ii) If a “Change in Control” has occurred which is also a “Change of
Control” as defined in Section 13(iii) below, then all of the provisions of the
Agreement, including the provisions of Paragraph 10, shall apply without change.
However, if there is a “Change in Control” which is not a “Change of Control” as
defined in Section 13(iii) then (A) as to that portion of your benefits under
this Agreement which is not subject to the provisions of Section 409A of the
Code (the “Grandfathered Benefits”), all of the provisions of this Agreement,
including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code
(the “Covered Benefits”), the only provisions of Paragraph 10 which shall be
applicable thereto are clauses (1), (2) and (3) of Paragraph 10(i) and
Paragraphs 10(ii), 10(iv) and 10(v). The amount deposited in the Deferred
Compensation Trust representing 110% of the Gross-Up Amount attributable to the
Grandfathered Benefits, the Covered Benefits or otherwise shall be held in and
distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered
Benefits shall be held and invested by the Deferred Compensation Trust and paid
to you or your Surviving Spouse as an annuity under the applicable circumstances
of Paragraphs 1, 2, 4 (disregarding the inapplicability of Paragraph 4 in the
event of a “Change in Control”), 5, 6 or 7 of this Agreement. If, for any
reason, the monthly benefit paid by the Deferred Compensation Trust to you or
your

12

--------------------------------------------------------------------------------

 

Surviving Spouse is less than the monthly benefit used to calculate the amount
deposited under the next preceding sentence, the Company shall pay the
deficiency directly to you or your Surviving Spouse.
     (iii) A “Change of Control” for purposes of Section 409A of the Code shall
be deemed to have occurred if during any period of twelve consecutive calendar
months, the individuals who at the beginning of such period constitute the
Company’s Board of Directors, and any new directors (other than Excluded
Directors) whose election by such Board or nomination for election by
stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the
period or whose election or nomination for election as directors was previously
so approved, for any reason cease to constitute at least a majority of the
members thereof. Excluded Directors are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year after
any “person” or “group of persons” as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 commencing a tender offer for, or
becoming the beneficial owner of, voting securities representing 30 percent or
more of the combined voting power of all outstanding voting securities of the
Company, other than pursuant to a tender offer approved by the Board prior to
its commencement or pursuant to stock acquisitions approved by the Board prior
to their representing 30 percent or more of such combined voting power.
     Should you have any questions regarding these proposed amendments, please
feel free to discuss them with Chuck Greenwood, John Leekley or me. If not, I
would appreciate your execution and return of a copy of this letter to Gene
Gargaro, at which time the above-described amendments will become effective.
Sincerely yours,
Richard A. Manoogian
Executive Chairman
I agree to the above-described
Amendments to my SERP
Agreement.

     
 
[Name]
   

13

--------------------------------------------------------------------------------

 

Form of Amendment for: Donald DeMarie
November 3, 2008
Dear :
     Section 409A of the Internal Revenue Code contains complex provisions
regulating the payment of deferred compensation under non-qualified retirement
programs, including your agreement (the “SERP Agreement”) under Masco’s
supplemental executive retirement plan (the “Plan”). Under recently issued
regulations of the Internal Revenue Service, non-complying payments under the
Plan will result in serious adverse tax consequences to recipients, which
include an increase in your marginal tax rate by 20 percentage points on all
Plan payments not in compliance with Section 409A and an increase in applicable
late-payment penalty rates by a full percentage point. The amendments to your
SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with
Section 409A.
     The principal changes under Section 409A described in this letter apply
only to benefits accrued or vested after December 31, 2004 (“Covered Benefits”).
Covered Benefits therefore include those under post 2004 SERP Agreements, post
2004 amendments to SERP Agreements and any increase in benefits resulting from
higher compensation paid after 2004. Benefits, to the extent they were accrued
and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid
without regard to Section 409A provisions. As a result of Section 409A, Masco
will be required under the Plan to determine for each participant the portion of
SERP payments attributable to Grandfathered Benefits and the portion
attributable to Covered Benefits and, at times, treat these payments differently
as described in this letter agreement.
     No payment, however, of benefits under your SERP may be made under
Section 409A unless a “separation from service” has occurred. Since it is
unclear under the Plan if a “separation from service” has occurred if a
participant is rendering services to Masco following retirement or during a
disability, this letter agreement clarifies that a “separation from service”
will have occurred, thereby allowing the commencement of SERP payments, even if
a participant following retirement or during disability is providing services to
Masco which do not exceed 49% of the individual’s prior services as a full-time
employee.
     Initial monthly payments for Covered Benefits under the Plan must be
delayed until six months have elapsed following a separation from service, after
which time the delayed payments would be paid in a lump sum without interest.
Any portion of your SERP payments represented by Grandfathered Benefits will not
be delayed by Section 409A.
     In the unlikely event of a change in control, if such a change satisfies
the requirements of your existing SERP Agreement but not the more stringent
requirements in Section 409A for a change in control, the same seriously adverse
tax consequences to you could occur. In order to eliminate these consequences if
a change in control does not satisfy both tests, this letter agreement would
provide that any Grandfathered Benefits under your SERP Agreement will be paid
in a lump sum as currently provided in the existing SERP Agreement with the
Covered

6

--------------------------------------------------------------------------------

 

Benefits subject to Section 409A paid to the Deferred Compensation Trust and
thereafter distributed by the Trust as though no change in control has occurred.
A new change in control trigger, included in this letter agreement in clause
(iii) of Paragraph 13, has been added to ensure that if the requirements of
Section 409A have been met, payments of your SERP benefits will be made as
currently scheduled in your SERP Agreement.
     Finally, in light of the recent increase in your annual cash bonus
opportunity, the amount of your annual bonus includible in “Average
Compensation” was increased earlier this year. A conforming change, which should
then have been made in the definition of “Total Compensation” for purposes of
disability payments, is being made in this letter agreement.
     In order to assure ongoing compliance with these new statutory provisions
and to avoid potentially severe tax consequences to you, we are requesting that
you agree to the amendments to your SERP Agreement set forth below.
     The definition of Total Compensation in clause (n) of your SERP Agreement
shall be amended to read as follows:
     “If you become Disabled, “Total Compensation” shall mean the sum of your
annual base salary rate and 60% of your then effective bonus opportunity at the
time of your Disability”.
     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement
shall be amended by substituting for the words “the commencement of your
Disability” the words “the termination of your employment as a result of
Disability”.
     The definition of “Retirement” in clause (1) of your SERP Agreement shall
be amended to read as follows:
     “Retirement” shall mean your termination of employment with the Company on
or after you attain age 65. Termination of employment for all purposes under
this Agreement shall mean a “separation from service” under Section 409A of the
Code which shall only occur if any services which you may continue to provide to
the Company as an employee or as a consultant after termination of employment
are not in excess of 49% of your prior service level, all as determined in
accordance with the regulations under Section 409A of the Code.
     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase
“resulting in a termination of employment” following the first occurrence of the
word “Disabled” and thereby read as follows:
     6. If you shall have been employed by the Company for two Years or more and
while employed by the Company you become Disabled resulting in a termination of
employment prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual
benefit, subject to paragraph 8 below, equal to 60% of your Total Compensation
less any benefits payable

7

--------------------------------------------------------------------------------

 

to you pursuant to long-term disability insurance under programs provided by the
Company. If your Disability continues until you attain age 65, you shall be
considered retired and you shall receive retirement benefits pursuant to
paragraph 1 above, based upon your Average Compensation as of the date it is
determined you became Disabled and with your SERP Percentage given credit for
Years of Service while you were Disabled.
     Paragraph 9 of your SERP Agreement shall be amended by substituting for the
word “Disabled” in the last sentence thereof the words “terminated from
employment by reason of Disability”.
     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the
word “Disabled” in clause (1) thereof and substituting therefore the phrase “are
terminated as a result of Disability”.
     A new or modified Paragraph 13 for your SERP Agreement shall read as
follows and replace any existing Paragraph 13 in your SERP Agreement:
     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the
Code) a six-month waiting period for payments of Covered Benefits (hereinafter
defined), to begin following your termination of employment. If such waiting
period is applicable, the first payment following the waiting period shall
include any payments (with no payment for interest) delayed under this
provision.
     (ii) If a “Change in Control” has occurred which is also a “Change of
Control” as defined in Section 13(iii) below, then all of the provisions of the
Agreement, including the provisions of Paragraph 10, shall apply without change.
However, if there is a “Change in Control” which is not a “Change of Control” as
defined in Section 13(iii) then (A) as to that portion of your benefits under
this Agreement which is not subject to the provisions of Section 409A of the
Code (the “Grandfathered Benefits”), all of the provisions of this Agreement,
including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code
(the “Covered Benefits”), the only provisions of Paragraph 10 which shall be
applicable thereto are clauses (1), (2) and (3) of Paragraph 10(i) and
Paragraphs 10(ii), 10(iv) and 10(v). The amount deposited in the Deferred
Compensation Trust representing 110% of the Gross-Up Amount attributable to the
Grandfathered Benefits, the Covered Benefits or otherwise shall be held in and
distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered
Benefits shall be held and invested by the Deferred Compensation Trust and paid
to you or your Surviving Spouse as an annuity under the applicable circumstances
of Paragraphs 1, 2, 4 (disregarding the inapplicability of Paragraph 4 in the
event of a “Change in Control”), 5, 6 or 7 of this Agreement. If, for any
reason, the monthly benefit paid by the Deferred Compensation Trust to you or
your Surviving Spouse is less than the monthly benefit used to calculate the
amount deposited

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under the next preceding sentence, the Company shall pay the deficiency directly
to you or your Surviving Spouse.
     (iii) A “Change of Control” for purposes of Section 409A of the Code shall
be deemed to have occurred if during any period of twelve consecutive calendar
months, the individuals who at the beginning of such period constitute the
Company’s Board of Directors, and any new directors (other than Excluded
Directors) whose election by such Board or nomination for election by
stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the
period or whose election or nomination for election as directors was previously
so approved, for any reason cease to constitute at least a majority of the
members thereof. Excluded Directors are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year after
any “person” or “group of persons” as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 commencing a tender offer for, or
becoming the beneficial owner of, voting securities representing 30 percent or
more of the combined voting power of all outstanding voting securities of the
Company, other than pursuant to a tender offer approved by the Board prior to
its commencement or pursuant to stock acquisitions approved by the Board prior
to their representing 30 percent or more of such combined voting power.
     Should you have any questions regarding these proposed amendments, please
feel free to discuss them with Chuck Greenwood, John Leekley or me. If not, I
would appreciate your execution and return of a copy of this letter to Gene
Gargaro, at which time the above-described amendments will become effective.

     
 
  Sincerely yours,
 
   
 
  Timothy Wadhams
 
  President and Chief Executive Officer
I agree to the above-described
   
Amendments to my SERP
   
Agreement.
   
 
   
 
[Name]
   

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