Exhibit 10.b.ii

 

MASCO CORPORATION

2004 RESTRICTED STOCK AWARD PROGRAM

(a program established under the

1991 long term stock incentive plan)

 

To Qualify Grants of Restricted Stock Under Section 162(m) of the Internal
Revenue Code

 

Section 1.                                          Purpose

 

The Masco Corporation 2004 Restricted Stock Award Program (the “Stock Award
Program”) continues the practice of Masco Corporation (the “Company”) of
granting performance-based compensation to executive officers and other key
employees pursuant to the Masco Corporation 1991 Long Term Stock Incentive Plan
(the “1991 Plan”). Compensation paid hereunder to executive officers is intended
to satisfy the requirements for deductibility under Section 162(m) of the
Internal Revenue Code.

 

Section 2.                                          Eligibility

 

The individuals eligible to participate in the Stock Award Program (the
“Participants”) are the executive officers and such other key employees of the
Company as may be designated by the Organization and Compensation Committee of
the Board of Directors of the Company (the “Committee”).

 

Section 3.                                          Performance Period

 

Each Performance Period for purposes of the Stock Award Program shall have a
duration of one calendar year, commencing January 1 and ending December 31,
unless determined otherwise by the Committee.

 

Section 4.                                          Administration

 

The Stock Award Program shall be subject to the terms and conditions of the 1991
Plan, and shall be administered by the Committee, which shall have the full
power and authority to administer and interpret the Plan and to establish
rules for its administration in accordance with the 1991 Plan. Compensation
earned by a Participant under the Stock Award Program in accordance with
Section 6 shall be paid in the form of one or more Restricted Stock Awards
granted under, and out of the shares available under, the 1991 Plan.

 

Section 5.                                          Performance Goals

 

On or before the 90th day of each Performance Period, the Committee shall
establish in writing one or more performance criteria for the Performance Period
and the weighting of the performance criteria if more than one. The performance
criteria shall consist of one or more of the following: net income, earnings per
common share, cash flow, revenues, return on assets, return on invested capital
or total shareholder return. The following shall be excluded in determining
whether any performance criterion has been attained: losses resulting from
discontinued operations, extraordinary losses (in accordance with generally
accepted accounting principles, as currently in effect), the cumulative effect
of changes in accounting principles and other unusual, non-recurring items of
loss that are separately identified and quantified in the Company’s audited
financial statements.

 

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

 

Section 6.              Awards

 

On or before the 90th day of each Performance Period, the Committee shall
establish in writing target performance criteria and the corresponding
compensation amounts for Participants, as designated by the Committee. No
Participant may receive grants of restricted stock hereunder in any year having
an aggregate value greater than $10 million, which value shall be determined by
multiplying the number of shares granted by the fair market value of the shares
at the time of grant. The Committee shall have the power and authority to reduce
or eliminate for any reason the amount of the restricted stock awards that would
otherwise be granted to a Participant based on the performance criteria.

 

Section 7.              Certification and Payment

 

With respect to any compensation intended to constitute performance-based
compensation for deductibility under Section 162(m) of the Internal Revenue
Code, as soon as practicable after release of the Company’s financial results
for the Performance Period, the Committee will certify the Company’s attainment
of the criteria established for such Performance Period pursuant to Section 5,
and will calculate and certify the amount of the restricted stock award(s) to be
granted to each Participant for such Performance Period.

 

Section 8.              Other Plans and Programs

 

Nothing contained in this Stock Award Program shall prevent the Company from
adopting or continuing in effect any other or additional compensation
arrangements or making other compensatory awards or grants to its employees,
including employees eligible under this Stock Award Program and including awards
relating to shares of the Company.

 

Section 9.              Amendment

 

The Committee shall have the right to suspend or terminate this Stock Award
Program at any time and may amend or modify the Stock Award Program at any time.

 

Section 10.            Adoption and Duration

 

The Stock Award Program was approved by the Committee on March 30, 2004 subject
to the approval of the stockholders of the Company at the 2004 Annual Meeting of
Stockholders. The effective date of the Stock Award Program shall be January 1,
2004. No grants of restricted stock may be made pursuant hereto after May 17,
2010.

 

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