exv10wcwi






Exhibit 10.c(i)




[Form of SERP Agreement for Barry J. Silverman]





     October 2, 2000



[Name]

[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 The plan providing such benefits, as originally made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”. 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 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).




     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 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).



     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) 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 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)
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 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) 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) 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 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.




(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 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 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,
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 	 
	 



	 	 	 	 	 
	   	 	 
	     [Name]
	 	 	 	 
	 
	 	 	 	 
	DATE:

	 

	 	 






 









 






Form of SERP Amendment for Barry J. Silverman




November 18, 2002


Mr. Barry J. Silverman



Dear Barry:




     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 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




	 	 	 	 	 
	 	 	 
	[NAME]	 	 
	 
	DATE:
	 	 	 	 
	 

	 	 

	 	 





 












 





[Form of SERP Amendment for Barry J. Silverman]




December 5, 2003




[Name]

[Address]



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% 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.”



 









 





[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.





	 	 	 	 	 
	 	 	 
	[NAME]	 	 
	 
	DATE:
	 	 	 	 
	 

	 	 

	 	 




 









 





Form of SERP Amendment for Barry J. Silverman




November 3, 2008




Mr. Barry J. Silverman

[address]



Dear Barry:





     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 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 SERF 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.



 









 





     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 SERF 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 SERF 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
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.




	 	 	 
	   
	 


	 	 
	Barry J. Silverman
	 	 







5