exv10wcwii






Exhibit 10c(ii)




[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 The plan providing such benefits, as originally made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.



 









 







     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).



 









 






     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.



 









 






     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
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



 









 




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



 









 




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 (l) 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 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, 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  	 	 
	 	 	Richard A. Manoogian 	 
	 	 	Chief Executive Officer 	 
	 



	 	 	 
	 	 	 
	
 	 
	Donald J. DeMarie, Jr. 	 
	 	 


DATE:




 









 








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%.



 









 





     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. 	 
	 	 	 
	 




 











 





Form of Amendment for: Donald J. DeMarie, Jr.




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



 









 




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



 









 






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



 









 






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]





 









 





FORM OF AMENDMENT: DONALD J. DEMARIE



Dear:




     As you know, the Organization and Compensation Committee of the Company’s Board of Directors
has determined that benefit accruals under your Supplemental Executive Retirement Plan are to be
frozen effective January 1, 2010. In order to implement this change, the definitions of “Average
Compensation,” “Total Compensation,” and several other relevant definitions must be changed.



     In addition, language must be added to the definition of “Profit Sharing Conversion Factor”
and to Paragraphs 1, 4 and 5 to provide that the offsets to your SERP which are derived from
Company contributions to the Future Service Profit Sharing Plan and other similar sources are also
frozen, with provision for future account growth using imputed interest.



     Consequently, in order to implement this change, effective January 1, 2010, the following
provisions of your SERP are amended to read as follows:


     The definition of Average Compensation in paragraph (a) of your SERP Agreement is changed to read
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
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 Notwithstanding the foregoing, any base salary
paid after December 31, 2009, and any bonus earned (or maximum bonus opportunity for) any period
after that date, shall be disregarded.



     The definition of Profit Sharing Conversion Factor in clause (j) of your SERP Agreement shall
be amended to read as follows:



     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 of January, 2010 as reported in Federal Reserve Statistical
Release G.13 and H.15 (or, if such interest rate ceases to be so reported prior to January, 2010,
such other interest rate as the Board of Directors deems is an appropriate
substitute).




     The definition of Total Compensation in clause (n) of your SERP Agreement shall be amended to
read as follows:



     n. 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 earlier of the time of your Disability
or January 1, 2010.



     The definition of Year in clause (p) of your SERP Agreement shall be amended to read as
follows:



     p. “Year” shall mean twelve full consecutive months, and “year” shall mean a calendar year;
provided, however, to the extent required to determine your SERP Percentage, “year”
and “Year” shall include only time periods prior to and including January 1, 2010.



     The definition of Years of Service in clause (q) of your SERP Agreement shall be amended to
read as follows:



     q. “Years of Service” shall mean the number of Years during which you were employed by the
Company excluding Years of Service with any other corporation prior to the time it became a
subsidiary of or otherwise affiliated with Masco Corporation; provided, however, to
the extent required to determine your SERP Percentage, “Year of Service” shall include only time
periods prior to and including January 1, 2010.



     Paragraph 1 of your SERP Agreement shall be amended to read as follows:



     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 (x) 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 and (y) if Retirement
occurs on or after January 1, 2010, based on offsetting values as of January 1, 2010, except that
any defined contribution individual account values as of January 1, 2010 (including any pro forma,
rather than actual, account balance at such date, including imputed interest thereon with respect
to amounts previously withdrawn, and including any Company contribution or allocation with respect
to 2009 which is made on or after January 1, 2010) utilized under subsections (ii) and (iii) above
shall be projected to the date of determination at the imputed rate of 4% per annum prior to
application of the Profit Sharing Conversation Factor.




     Paragraph 4 of your SERP Agreement shall be amended to read as follows:



     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), (ii) and (iii) shall be determined (x) 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 and (y)
if termination occurs on or after January 1, 2010, based on offsetting values as of January 1,
2010, except that any defined contribution individual account values as of January 1, 2010
(including any pro forma, rather than actual, account balance at such date, including imputed
interest thereon with respect to amounts previously withdrawn, and including any Company
contribution or allocation with respect to 2009 which is made on or after January 1, 2010) utilized
under above subsections (ii) and (iii) shall be projected to the date of determination at the
imputed rate of 4% per annum prior to application of the Profit Sharing Conversation Factor. 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.




     Paragraph 5 of your SERP Agreement shall be amended to read as follows:



     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) 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 (x) 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 and (y) if death occurs on or after January
1, 2010, based on off-setting values as of January 1, 2010 except that any defined contribution
individual account values as of January 1, 2010 (including any pro forma, rather than actual,
account balance at such date, including imputed interest thereon with respect to amounts previously
withdrawn, and including any Company contribution or allocation with respect to 2009 which is made
on or after January 1, 2010) utilized under above subsections (ii) and (iii) shall be projected to
the date of determination at the imputed rate of 4% per annum prior to application of the Profit
Sharing Conversion Factor. No death benefits are payable except to your Surviving Spouse.




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



Sincerely yours,




Timothy Wadhams

President and Chief Executive Officer




I agree to the above-described amendments

to my Supplemental Executive Retirement

Plan with the Company.




	 	 	 	 	 
	 	 
	Donald J. DeMarie, Jr. 	 
	Date: