<PAGE>

                                                                 Exhibit 10.a.iv

                                     [Date]

Name
Address1
Address2
Address3
Address4

Dear Salutation:

      On behalf of the Company, I am pleased to inform you that on [date], the
Board of Directors granted you a non-qualified stock option pursuant to the
Company's 1991 Long Term Stock Incentive Plan (the "Plan"), subject to the
conditions set forth below and in the Appendix attached hereto. This letter and
the attached Appendix (the "Agreement") state the terms of the option and
contain other provisions which on your acceptance commit the Company and you, so
I urge you to read them carefully. You should also read the copies of the Plan
and Prospectus which accompany this Agreement.

      This option, if accepted by you, grants you the right to purchase [no. of
shares] shares of the Company's $1.00 par value Common Stock at a price of
[$_____] per share, which the Board has determined is the fair market value of a
share of the Company's Common Stock on the date of grant as reflected by trades
reported on the New York Stock Exchange.

WHEN THE OPTION IS EXERCISABLE AND TERMINATION

      This option is exercisable cumulatively in installments of 20% commencing
as of [date], 20% as of [date], 20% as of [date], 20% as of [date] and 20% as of
[date]; provided that, subject to the last sentence of this paragraph, on each
date of exercise you are an Eligible Director, as hereinafter defined. An
Eligible Director is any Director of the Company who is not an employee of the
Company and who receives a fee for services as a Director. All installments of
the option as above described must be exercised no later than [date]; all
unexercised installments or portions thereof shall lapse and the right to
purchase shares pursuant to this option shall be of no further effect after such
date. If during the option exercise periods your term as an Eligible Director is
terminated for any reason, this option shall terminate in accordance with
Section 6 of the Plan.

      Enclosed please find a Prospectus dated September 25, 2003 covering the
shares which are the subject of this option, and a copy of the Plan, as amended
and restated February 10, 2004. I suggest that you review the federal income tax
attributes of non-qualified stock options which are discussed in the Prospectus.
This option does not qualify for the federal tax benefits of an "incentive stock
option" under the Internal Revenue Code, as described in the Prospectus.

ACCEPTANCE

      We agree that all of the terms and conditions of this option are reflected
in this Agreement and the Plan, and that there are no other commitments or
understandings currently outstanding with respect to any other awards of stock
options or restricted stock except as may be evidenced by agreements duly
executed by you and the Company.

<PAGE>

                                  Page 2                        [Date]

      By accepting this option you: (a) represent that you are familiar with the
provisions of the Plan and agree to its incorporation in this Agreement; (b)
agree to provide promptly such information with respect to shares acquired
pursuant to this option as may be requested by the Company and to comply with
any requirements of applicable federal and other laws with respect to
withholding or providing for the payment of required taxes; and (c) acknowledge
that all of your rights to this option are embodied herein and in the Plan.

      Section 3 of the Plan provides that the Organization and Compensation
Committee shall have the authority to make all determinations which may arise in
connection with the Plan. It further provides that the Organization and
Compensation Committee's interpretation of the terms and provisions of the Plan
shall be final and conclusive.

      This Agreement shall be governed by and interpreted in accordance with
Michigan law.

      Please complete your mailing address and Social Security number as
indicated below and sign, date and return the copy of this Agreement to Eugene
A. Gargaro, Jr., our Secretary, as soon as possible in order that this option
grant may become effective.

                                            Very truly yours,

                                            MASCO CORPORATION

                                            Richard A. Manoogian
                                            Chairman of the Board
                                            and Chief Executive Officer

I accept and agree to all the foregoing terms and conditions.

                                            ______________________________
                                            (Signature of Recipient)

                                            ______________________________

                                            ______________________________
                                            (Mailing Address)

                                            ______________________________
                                            (Social Security Number)

                                            Dated:________________________

<PAGE>

                          APPENDIX TO OPTION AGREEMENT

      Masco Corporation (the "Company") and you agree that all of the terms and
conditions of the option (the "Option") contained in the foregoing letter
agreement into which this Appendix is incorporated (the "Agreement") are
reflected in the Agreement and in the Company's 1991 Long Term Stock Incentive
Plan (the "Plan"), and that there are no other commitments or understandings
currently outstanding with respect to any other grants of options and restricted
stock except as may be evidenced by agreements duly executed by you and the
Company.

      By signing the Agreement you acknowledge acceptance of the Option and
receipt of the documents referred to in the Agreement and represent that you
have read the Plan, are familiar with its provisions, and agree to its
incorporation in the Agreement and all of the other terms and conditions of the
Agreement. Such acceptance, moreover, evidences your agreement promptly to
provide such information with respect to shares acquired pursuant to the Option,
as may be requested by the Company.

      If your term is terminated for any reason other than death, permanent and
total disability or following a Change in Control, and if any installments of
the Option granted upon any exercise of the Option became exercisable within the
two year period prior to the date of such termination (such installments being
referred to as the "Subject Options"), by accepting the Option you agree that
the following provisions will apply:

      (1)   Upon the demand of the Company you will pay to the Company in cash
            within 30 days after the date of such termination the amount of
            income realized for income tax purposes from the exercise of any
            Subject Options, net of all federal, state and other taxes payable
            on the amount of such income, plus all costs and expenses of the
            Company in any effort to enforce its rights hereunder; and

      (2)   Any right you would otherwise have, pursuant to the terms of the
            Plan and this Agreement, to exercise any Subject Options on or after
            the date of such termination, shall be extinguished as of the date
            of such termination.

The Company shall have the right to set off or withhold any amount owed to you
by the Company or any of its subsidiaries or affiliates for any amount owed to
the Company by you hereunder.

      In addition you agree, in consideration for the grant of the Option and
regardless of whether the Option becomes exercisable or is exercised, while you
are a Director of the Company and for a period of one year following the
termination of your term as a Director of the Company, other than a termination
following a Change in Control, not to engage in, and not to become associated in
a "Prohibited Capacity" (as hereinafter defined) with any other entity engaged
in, any "Business Activities" (as hereinafter defined) and not to encourage or
assist others in encouraging any employee of the Company or any of its
subsidiaries to terminate employment or to become engaged in any such Prohibited
Capacity with an entity engaged in any Business Activities. "Business
Activities" shall mean the design, development, manufacture, sale, marketing or
servicing of any product or providing of services competitive with the products
or services of the Company or any subsidiary at any time the Option is
outstanding, to the extent such competitive products or services are distributed
or provided either (1) in the same geographic area as are such products or
services of the Company or any of its subsidiaries, or (2) to any of the same
customers as such products or services of the Company or any of its subsidiaries
are distributed or provided. "Prohibited Capacity" shall mean being associated
with an entity as a director, employee, consultant, investor or another capacity
where (1) confidential business information of the Company or any of its
subsidiaries could be used in fulfilling any of your duties or responsibilities
with such other entity, or (2) an investment by you in such other entity
represents more than 1% of such other entity's capital stock, partnership or
other ownership interests.

<PAGE>

      Should you either breach or challenge in judicial or arbitration
proceedings the validity of any of the restrictions contained in the preceding
paragraph, by accepting the Option you agree, independent of any equitable or
legal remedies that the Company may have and without limiting the Company's
right to any other equitable or legal remedies, to pay to the Company in cash
immediately upon the demand of the Company (1) the amount of income realized for
income tax purposes from the exercise of any portion of the Option, net of all
federal, state and other taxes payable on the amount of such income (and reduced
by any amount already paid to the Company under the second preceding paragraph),
but only to the extent such exercises occurred on or after the termination of
your term as a Director of the Company or within the two year period prior to
the date of such termination, plus (2) all costs and expenses of the Company in
any effort to enforce its rights under this or the preceding paragraph. The
Company shall have the right to set off or withhold any amount owed to you by
the Company or any of its subsidiaries or affiliates for any amount owed to the
Company by you hereunder.

      By accepting the Option you: (a) agree to comply with the requirements of
applicable federal and other laws with respect to withholding or providing for
the payment of required taxes; and (b) acknowledge that all of your rights to
the Option are embodied in the Agreement and in the Plan.

      Section 3 of the Plan provides, in part, that the Committee appointed by
the Company's Board of Directors to administer the Plan shall have the authority
to interpret the Plan and award agreements, and decide all questions and settle
all controversies and disputes relating thereto. It further provides that the
determinations, interpretations and decisions of the Committee are within its
sole discretion and are final, conclusive and binding on all persons. In
addition, you and the Company agree that if for any reason a claim is asserted
against the Company or any of its subsidiaries or affiliated companies or any
officer, employee or agent of the foregoing which (1) is within the scope of the
Dispute Resolution Policy (the terms of which are incorporated herein); (2)
subverts the provisions of Section 3 of the Plan; or (3) involves any of the
provisions of the Agreement or the Plan or the provisions of any other option
agreements relating to Company common stock or restricted stock awards or other
awards or the claims of yourself or any persons to the benefits thereof, in
order to provide a more speedy and economical resolution, the Dispute Resolution
Policy shall be the sole and exclusive remedy to resolve all disputes, claims or
controversies which are set forth above, and you shall be deemed to be an
employee within the scope of the Dispute Resolution Policy and you and the
Company shall be bound as if you were an employee for all claims within the
scope of the Dispute Resolution Policy, except as otherwise agreed in writing by
you and the Company. It is our mutual intention that any arbitration award
entered under the Dispute Resolution Policy will be final and binding and that a
judgment on the award may be entered in any court of competent jurisdiction.
Notwithstanding the provisions of the Dispute Resolution Policy, however, the
parties specifically agree that any mediation or arbitration required by this
paragraph shall take place at the offices of the American Arbitration
Association located in the metropolitan Detroit area or such other location in
the metropolitan Detroit area as the parties might agree. The provisions of this
paragraph: (a) shall survive the termination or expiration of this Agreement,
(b) shall be binding upon the Company's and your respective successors, heirs,
personal representatives, designated beneficiaries and any other person
asserting a claim based upon the Agreement, (c) shall supersede the provisions
of any prior agreement between you and the Company with respect to any of the
Company's option or restricted stock incentive plans or other awards to the
extent the provisions of such other agreement requires arbitration between you
and the Company, and (d) may not be modified without the consent of the Company.
Subject to the exception set forth above, you and the Company acknowledge that
neither of us nor any other person asserting a claim described above has the
right to resort to any federal, state or local court or administrative agency
concerning any such claim and 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 Agreement shall be governed by and interpreted in accordance with
Michigan law.