Document:

exv10wc

 

Exhibit 10.c

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

 

 

Form for: Richard A. Manoogian

John R. Leekley

October 2, 2000

Dear :

          Our company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. You are currently a participant in
the Plan upon the terms of a letter agreement signed by you and dated                  , . This
Agreement amends and replaces in its entirety your previously signed letter agreement and describes
in full your benefits pursuant to the Plan and all of the Company’s obligations to you, and yours
to the Company. These benefits as described below are contractual obligations of the Company.

     For the purposes of this Agreement, words and terms are defined as follows:

          a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of (i) base salaries
and (ii) regular year-end cash bonuses paid with respect to the years in which such
salaries are paid, divided by three, provided, however, (x) if you have on
the date of determination less than three full years of employment the foregoing
calculation shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed, and (y) if the determination of Average Compensation
includes any year in which you volunteered to reduce your salary or, as part of a program
generally applicable to participants in the Plan, you did not receive an increase in salary
compared with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would have been
absent such salary reduction and absent such generally applicable program.

          b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose election
by the Board or approval by the Board for stockholder election occurred within one year
after any “person” or “group of persons” as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 commencing a tender offer for, or

 

 

					
	 
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becoming the beneficial owner of, voting securities representing 25 percent or more of
the combined voting power of all outstanding voting securities of the Company, other than
pursuant to a tender offer approved by the Board prior to its commencement or pursuant to
stock acquisitions approved by the Board prior to their representing 25 percent or more of
such combined voting power.

          c. “Code” means the Internal Revenue Code of 1986, as amended.

          d. “Company” shall mean Masco Corporation or any corporation in which Masco
Corporation owns directly or indirectly stock possessing in excess of 50% of the total
combined voting power of all classes of stock.

          e. The “Deferred Compensation Trust” shall mean any trust created by the Company to
receive the deposit referred to in clause (2) of paragraph 10.

          f. “Disability” and “Disabled” shall mean your being unable to perform your duties as
a Company executive by reason of your physical or mental condition, prior to your attaining
age 65, provided that you have been employed by the Company for two consecutive Years or
more at the time you first became Disabled.

          g. The “Gross-Up Amount” (i) shall be determined if any payment or distribution by
the Company to or for your benefit, whether paid, distributed, payable or distributed or
distributable pursuant to the terms of this Agreement, any stock option or stock award
plan, retirement plan or otherwise (such payment or distribution, other than an Excise Tax
Adjustment Payment under clause (ii), is referred to herein as a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor provision)
or any interest or penalties with respect to such excise tax (such excise tax together with
any such interest or penalties are referred to herein as the “Excise Tax”), and (ii) shall
mean an additional payment (the “Excise Tax Adjustment Payment”) in an amount such that
after subtracting from the Excise Tax Adjustment Payment your payment of all applicable
Federal, state and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Excise Tax Adjustment Payment, the balance will be equal to the Excise Tax imposed
upon the Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the amount of
such Excise Tax Adjustment Payment, shall be made by PricewaterhouseCoopers LLP, or such
national accounting firm as the Company may designate prior to a Change in Control, which
shall provide detailed supporting calculations to the Company and you. Except as provided
in clause (iv) of paragraph 10, all such determinations shall be binding upon you and the
Company.

          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.

          i. “Present Value” of future benefits means the discounted present value of those
benefits (including therein the benefits, if any, your Surviving Spouse would be entitled
to receive under this Agreement upon your death), using the UP-1984 Mortality Table and
discounted by the interest rate used, for purposes of determining the present value of a
lump sum distribution on plan termination, by the PBGC on the first day of the month which
is four months prior to the month in which a Change in Control occurs (or if the PBGC has
ceased publishing such interest rate, such other interest rate as the Board of Directors
deems is an appropriate substitute). The above PBGC interest rate is intended to

 

 

					
	 
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be determined based on PBGC methodology and regulations in effect on September 1, 1993 (as
contained in 29 CFR Part 2619).

          j. “Profit Sharing Conversion Factor” shall be a factor equal to the present value of
a life annuity payable at the later of age 65 or attained age based on the 1983 Group
Annuity Mortality Table using a blend of 50% of the male mortality rates and 50% of the
female mortality rates as set forth in Revenue Ruling 95-6 (or such other mortality table
that the Internal Revenue Service may prescribe in the future) and an interest rate equal
to the average yield for 30-year Treasury Constant Maturities, as reported in Federal
Reserve Statistical Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other interest rate
as the Board of Directors deems is an appropriate substitute).

          k. “Retirement” shall mean your termination of employment with the Company, on or
after you attain age 65. Your acting as a consultant shall not be considered employment.

          l. “SERP Percentage” of your Average Compensation is 60%.

          m. “Surviving Spouse” shall be the person to whom you shall be legally married (under the
law of the jurisdiction of your permanent residence) at the date of (i) your Retirement or
death after attaining age 65 (if death terminated employment with the Company) for the
purposes of paragraphs 1, 2 and 3, (ii) your death for the purposes of paragraph 5 and, if
paragraph 5 is applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6 or 7 are
applicable, for the purposes of paragraph 3, (iv) your termination of employment for the
purposes of paragraph 4 and, if paragraph 4 is applicable, for purposes of paragraph 3 and
(v) a “Change in Control” for the purposes of paragraph 10 if none of clauses (i) through
(iv) has become applicable prior to the Change in Control and, if this clause (v) is
applicable, for purposes of paragraph 3. For the purposes of paragraphs 11a, 11e, 11f,
11g, 11h, 11i and 11j, “Surviving Spouse” shall be any spouse entitled to any benefits
hereunder.

          n. If you become Disabled, “Total Compensation” shall mean your annual base salary
rate at the time of your Disability plus the regular year-end cash bonus paid to you for
the year immediately prior thereto, provided, however, if the determination
of Total Compensation is for a year in which you volunteered to reduce your salary or, as
part of a program generally applicable to participants in the Plan, you did not receive an
increase in salary compared with the immediately preceding year, the Committee referred to
in paragraph 11 shall make a good faith determination of what your Total Compensation would
have been absent such salary reduction and absent such generally applicable program.

          o. “Vested Percentage” shall mean the sum of the following percentages: (i) 2%
multiplied by your Years of Service, plus (ii) 8% multiplied by the number of Years you
have been designated a participant in the Plan; provided, however, (w)
prior to completing five Years of Service the Vested Percentage is 0,(x) on or prior to
your fiftieth birthday your Vested Percentage may not exceed 50%, (y) on or prior to each
of your birthdays following your fiftieth birthday your Vested Percentage may not exceed
the sum of 50% plus the product obtained by multiplying 5% by the number of birthdays that
have occurred

 

 

					
	 
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following your fiftieth birthday, and (z) your Vested Percentage in no event may
exceed 100%.

          p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.

          q. “Years of Service” shall mean the number of Years during which you were employed by
the Company (excluding, however, Years of Service with a corporation prior to the time it
became a subsidiary of or otherwise affiliated with Masco Corporation).

     1. In accordance with the Plan, upon your Retirement the Company will pay you annually
during your lifetime, subject to paragraph 8 below, the SERP Percentage of your Average
Compensation, less: (i) a sum equal to the annual benefit which would be payable to you upon your
Retirement if benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits Restoration Plan and
any similar plan were converted to a life annuity, or if you are married when you retire, to a 50%
joint and spouse survivor life annuity, and (ii) a sum equal to the annual benefit which would be
payable to you upon Retirement if your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan were converted to a life annuity in accordance with
the Profit Sharing Conversion Factor, provided, however, in all cases the amount
offset pursuant to these subsections (i) and (ii) shall be determined prior to the effect of any
payments from the plans and trusts referred to therein which are authorized pursuant to any
Qualified Domestic Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from non-qualified plans.

     2. Upon your death after Retirement or while employed by the Company after attaining age 65,
your Surviving Spouse shall receive for life 75% of the annual benefit pursuant to paragraph 1 of
this Agreement which was payable to you prior to your death (or, if death terminated employment
after attaining age 65, which would have been payable to you had your Retirement occurred
immediately prior to your death).

     3. The Company will provide, purchase or at its option provide reimbursement for premiums paid
for such supplemental medical insurance as the Company in its sole discretion may deem advisable
from time to time (i) for you and your Surviving Spouse for the lifetime of each of you (A)
following a termination of your employment with the Company due to Retirement or Disability, and
(B) following any other termination of employment with the Company provided (x) you and your
Surviving Spouse are not covered by another medical insurance program substantially all of the cost
of which is paid by another employer, (y) on the date of such termination your Vested Percentage is
not less than 80% and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving Spouse, and (ii)
for your Surviving Spouse for his or her lifetime upon a termination of your employment with the
Company due to your death.

     4. If your employment with the Company is for any reason terminated prior to Retirement,
other than as a result of circumstances described in paragraphs 2, 5 or 6 of this Agreement or
following a Change in Control, and if prior to the date of termination you have completed 5 or more
Years of Service, upon your attaining age 65 the Company will pay to you annually during your
lifetime, subject to paragraph 8 below, the Vested Percentage of the result obtained by (1)
multiplying your SERP Percentage at the date your employment terminated by your Average

 

 

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

     5. If while employed by the Company you die prior to your attaining age 65 leaving a
Surviving Spouse, and provided you shall have been employed by the Company for two consecutive
Years or more, your Surviving Spouse shall receive annually for life, subject to paragraph 8 below,
75% of the SERP Percentage of your Average Compensation (assuming no compensation increases between
the date of your death and the date you would have attained age 65), less: (i) a sum equal to the
annual benefit which would be payable to your Surviving Spouse under the Company funded qualified
pension plans and the defined benefit (pension) plan provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan if such benefit were converted to a life annuity
(such deduction, however, only to commence on the date such benefit is first payable), and
(ii) a sum equal to the annual payments which would be received by your Surviving Spouse as if your
spouse were designated as the beneficiary of your vested accounts in the Company’s qualified
defined benefit contribution plans (excluding your

 

 

					
	 
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contributions and earnings thereon in the Company’s 401(k) Savings Plan) and the defined
contribution (profit sharing) provisions of the Company’s Retirement Benefits Restoration Plan and
any similar plan and such accounts were converted to a life annuity at the time of your death in
accordance with the Profit Sharing Conversion Factor, provided, however, in all
cases the amount offset pursuant to these subsections (i) and (ii) shall be determined prior to the
effect of any payments from the plans and trusts referred to therein which are authorized pursuant
to any Qualified Domestic Relations Order under ERISA, or other comparable order allocating marital
or other rights under state law as applied to retirement benefits from non-qualified plans. No
death benefits are payable except to your Surviving Spouse.

     6. If you shall have been employed by the Company for two Years or more and while employed
by the Company you become Disabled prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual benefit, subject
to paragraph 8 below, equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the Company. If your
Disability continues until you attain age 65, you shall be considered retired and you shall receive
retirement benefits pursuant to paragraph 1 above, based upon your Average Compensation as of the
date it is determined you became Disabled.

     7. If you die leaving a Surviving Spouse while receiving Disability benefits pursuant to
paragraph 6 of this Agreement, you will be deemed to have retired on your death and your Surviving
Spouse shall receive for life 75% of the annual benefit which would have been payable to you if you
had retired on the date of your death and your benefit determined pursuant to paragraph 1, based
upon your Average Compensation as of the date you became Disabled.

     8. If the age of your Surviving Spouse is more than 20 years younger than your age, then the
annual benefit payable under paragraphs 1, 4, 5 and 6 of this Agreement and the benefit payable as
“the SERP Percentage of your Average Compensation”, as that phrase is used in paragraph 5 of this
Agreement, shall be reduced by the percentage obtained by multiplying 1.5% times the number of
Years or portion thereof by which your Surviving Spouse is more than 20 years younger than you.

     9. If you or your Surviving Spouse is eligible to receive benefits hereunder, unless otherwise
specifically agreed by the Company in writing, you and your Surviving Spouse will not be able to
receive benefits under any other Company sponsored non-qualified retirement plans other than the
Company’s Retirement Benefits Restoration Plan. For this purpose benefits received under the
Company’s non-qualified stock option or stock award plans will not be considered to have been
received under a Company sponsored non-qualified retirement plan even though such benefits are
received after retirement. Except as provided in the last sentence of paragraph 4 and in paragraph
10 of this Agreement, no benefits will be paid to your Surviving Spouse pursuant to this Agreement
unless upon your death you were employed by the Company, Disabled or had taken Retirement from the
Company.

     10. Change in Control. (i) Immediately upon the occurrence of any Change in Control:

          (1) If you are then employed by the Company, your Vested Percentage, if not already
100%, shall be deemed for all purposes of this Agreement to be 100%.

          (2) If the Deferred Compensation Trust has theretofore been established or is
established within thirty days after the Change in Control, the Company shall forthwith
deposit to an account in your name (or that of your Surviving Spouse if you are then

 

 

					
	 
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deceased and your Surviving Spouse is entitled to benefits hereunder) in the Deferred
Compensation Trust 110% of the sum of the Gross-Up Amount plus:

          (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age if
greater, assuming for purposes of this clause, no compensation increases and that
if younger than age 65 you and your Surviving Spouse had attained such age;

          (B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of this
Agreement, an amount equal to the discounted Present Value of the benefits which
would have been payable under such paragraph;

          (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present Value
of those benefits payable in the future to you and your Surviving Spouse; and

          (D) If you are then receiving payments under paragraph 6 of this Agreement,
an amount equal to the Present Value of the benefits which would have been payable
under paragraphs 6 and 7 on the assumption you would have continued to receive
benefits under paragraph 6 until you had attained age 65 and thereafter continued
to receive benefits as though you were deemed to have retired.

(3) The Company shall thereafter be obligated to provide such supplemental medical
insurance as has theretofore in the discretion of the Company been generally provided to
participants and their Surviving Spouses under the Plan (A) to you and your Surviving
Spouse if you or your Surviving Spouse is then receiving benefits under paragraph 3, (B)
to you and your Surviving Spouse if you become Disabled if you are employed by the Company
at the time of the Change in Control, (C) to your Surviving Spouse upon your death if you
are employed by the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in Control but
only during the periods when you and your Surviving Spouse are not covered by another
medical insurance program substantially all of the cost of which is paid by another
employer. The obligations of the Company under this clause (i)(3) shall remain in effect
for the lifetime of both you and your Surviving Spouse.

(4) If the Deferred Compensation Trust is not established prior to or within thirty days
after the Change in Control, all payments which would have otherwise have been made to you
or your Surviving Spouse from the Deferred Compensation Trust shall immediately after such
thirty day period be made to you or your Surviving Spouse by the Company.

          (ii) Any deposit by the Company to an account in your name or that of your Surviving Spouse
in the Deferred Compensation Trust prior to the occurrence of the Change in Control, together with
all income then accrued thereon (but only to the extent of the value of such deposited amount and
the income accrued thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the deposit required under
clause (i)(2) of this paragraph 10.

          (iii) At or prior to making the deposit required by clause (i)(2) of this paragraph 10, the
Company shall deliver to the Trustee under the Deferred Compensation Trust a certificate

 

 

					
	 
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specifying that portion, if any, of the amount in the trust account, after giving effect to
the deposit, which is represented by the Gross-Up Amount. Payment of 90.91% of the amount required
by clause (i)(2) of this paragraph 10 to be paid to the trust account, together with any income
accrued thereon from the date of the Change in Control, is to be made to you or your Surviving
Spouse, as applicable, under the terms of the Deferred Compensation Trust, at the earlier of (1)
immediately upon a Change in Control if you then are deceased or have attained age 65 or are
Disabled, (2) your death subsequent to the Change in Control, or (3) the date which is one year
after the Change in Control; provided, however, that the Trustee under the Deferred
Compensation Trust is required promptly to pay to you or your Surviving Spouse, as applicable, from
the trust account from time to time amounts, not exceeding in the aggregate the Gross-Up Amount,
upon your or your Surviving Spouse’s certification to the Trustee that the amount to be paid has
been or within 60 days will be paid by you or your Surviving Spouse to a Federal, state or local
taxing authority as a result of the Change in Control and the imposition of the excise tax under
Section 4999 of the Code (or any successor provision) on the receipt of any portion of the Gross-Up
Amount. All amounts in excess of the amount required to be paid from the trust account by the
preceding sentence, after all expenses of the Deferred Compensation Trust have been paid, shall
revert to the Company provided that the Company has theretofore expressly affirmed its continuing
obligations under clause (i)(3) of this Paragraph 10.

          (iv) Subject to the next sentence of this clause (iv), the payment of the Gross-Up Amount to
you or your Surviving Spouse or the account in your or your Surviving Spouse’s name in the Deferred
Compensation Trust will thereby discharge the Company from any obligations it may have under any
present or future stock option or stock award plan, retirement plan or otherwise, to make any other
payment as a result of your income becoming subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) or any interest or penalties with respect to such excise tax.
As a result of the uncertainty which will be present in the application of Section 4999 of the
Code (or any successor provision) at the time of the determination of the Gross-Up Amount and the
possibility that between the date of determination of the Gross-Up Amount and the dates payments
are to be made to you or your Surviving Spouse under this Agreement, changes in applicable tax laws
will result in an incorrect determination of the Gross-Up Amount having been made, it is possible
that (1) payment of a portion of the Gross-Up Amount will not have been made by the Company which
should have been made (an “Underpayment”), or (2) payment of a portion of the Gross-Up Amount will
have been made which should not have been made (an “Overpayment”), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such Underpayment shall be
promptly paid by the Company to or for your benefit. In the event that you or your Surviving
Spouse discover that an Overpayment shall have occurred, the amount thereof shall be promptly
repaid by you or your Surviving Spouse to the Company.

          (v) Prior to the occurrence of a Change in Control, any deposits made by the Company to an
account in the Deferred Compensation Trust may be withdrawn by the Company. Upon the occurrence of
a Change in Control, all further obligations of the Company under this Agreement (other than under
this Paragraph 10 to the extent not theretofore performed) shall terminate in all respects.

     11. We also agree upon the following:

          a. Prior to the occurrence of a Change in Control, the Compensation Committee of the
Company’s Board of Directors, or any other committee however titled which shall be vested
with authority with respect to the compensation of the Company’s officers and executives
(in either case, the “Committee”), shall have the exclusive authority to make all
determinations which may be necessary in connection with this Agreement including the

 

 

					
	 
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dates of and whether you are or continue to be Disabled, the amount of annual benefits
payable hereunder by reason of offsets hereunder due to employment by other employers, the
interpretation of this Agreement, and all other matters or disputes arising under this
Agreement. The determinations and findings of the Committee shall be conclusive and
binding, without appeal, upon both of us.

          b. You will not during your employment or Disability, and after Retirement or the
termination of your employment, for any reason disclose or make use of for your own or
another person’s benefit under any circumstances any of the Company’s Proprietary
Information. Proprietary Information shall include trade secrets, secret processes,
information concerning products, developments, manufacturing techniques, new product or
marketing plans, inventions, research and development information or results, sales,
pricing and financial data, information relating to the management, operations or planning
of the Company and any other information treated as confidential or proprietary.

          c. You agree that you will not following your termination of employment for any
reason (whether on Retirement, Disability or termination prior to attaining age 65)
thereafter directly or indirectly engage in any business activities, whether as a
consultant, advisor or otherwise, in which the Company is engaged in any geographic area in
which the products or services of the Company have been sold, distributed or provided
during the five year period prior to the date of your termination of employment. In light
of ongoing payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited in duration
provided no Change in Control has occurred and, in the event of a Change in Control, all
such restrictions shall terminate one year thereafter.

          In addition to the foregoing and provided no Change in Control has occurred, if while
you or your Surviving Spouse is receiving retirement or other benefits pursuant to this
Agreement, in the judgment of the Committee you or your Surviving Spouse directly or
indirectly engage in activity or act in a manner which can be considered adverse to the
interest of the Company or any of its direct or indirect subsidiaries or affiliated
companies, the Committee may terminate rights to any further benefits hereunder.

          d. Except as may be provided to the contrary in a duly authorized written agreement
between you and the Company you acknowledge that the Company has made no commitments to you
of any kind with respect to the continuation of your employment, which we expressly agree
is an employment at will, and you or the Company shall have the unrestricted right to
terminate your employment with or without cause, at any time in your or its discretion.

          e. At the Company’s request, expressed through a Company officer, you agree to
provide such information with respect to matters which may arise in connection with this
Agreement as may be deemed necessary by the Company or the Committee, including for example
only and not in limitation, information concerning benefits payable to you from third
parties, and you further agree to submit to such medical examinations by duly licensed
physicians as may be requested by the Company from time to time. You also agree to direct
third parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits under this
Agreement.

 

 

					
	 
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          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.

 

 

					
	 
	 	Page 11
	 	October 2, 2000

     We agree that the provisions of this paragraph 12, and the decision of the arbitrator with
respect to any dispute, with only the exceptions provided in the first paragraph of this paragraph
12, shall be the sole and exclusive remedy for any alleged cause of action in any manner based upon
or arising out of this Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under this Agreement has
the right to resort to any federal, state or local court or administrative agency concerning any
matters dealt with by this Agreement and that the decision of the arbitrator shall be a complete
defense to any action or proceeding instituted in any tribunal or agency with respect to any
dispute. The arbitration provisions contained in this paragraph shall survive the termination or
expiration of this Agreement, and shall be binding on our respective successors, personal
representatives and any other party asserting a claim based upon this Agreement.

     We further agree that any demand for arbitration must be made within one year of the time any
claim accrues which you or any person claiming hereunder may have against the Company; unless
demand is made within such period, it is forever barred.

     We are pleased to be able to make this supplemental plan available to you. Please examine the
terms of this Agreement carefully and at your earliest convenience indicate your assent to all of
its terms and conditions by signing and dating where provided below and returning a signed copy to
me.

	 	 	 	 	 
	 	Sincerely,

MASCO CORPORATION

 	 
	 	By  	 	 
	 	 	Richard A. Manoogian 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 	 
	 	 	 
	 	  	 	 
	 	 	DATE:  	 	 
	 	 	 	 

 

 

	 	 	 	 	 

					
	 	 	Form of Amendment for: Richard A. Manoogian

	 
	 	 	 	Alan Barry

March 31, 2004

[Participant]

Dear [Participant],

          Masco’s Organization and Compensation Committee over the past several years has approved a
number of major improvements to the benefits for our executives covered by Masco’s program for
supplemental retirement and other benefits (the “SERP Plan”). At its October meeting this
Committee authorized a significant additional enhancement under your agreement pursuant to the SERP
Plan (the “SERP Agreement”) by increasing the percentage of your bonus eligible for inclusion in
the SERP calculation from 50% of your base salary to 60% of your maximum bonus opportunity. An
additional change would be made in the calculation of disability payments by changing the
definition of “Total Compensation” from 150% of your then current salary to the sum of your then
current salary and 60% of your then current bonus opportunity.) The provisions in your SERP
Agreement, allowing certain carry-forwards or carry-backs of bonus payments in excess of what was
50% of your base salary would also be modified.

          This enhancement was, in part, approved to partially offset the effect of the current freeze
on your salary. Accordingly, the existing provision in your SERP Agreement, which requires a
calculation of benefits on the assumption that all compensation freezes are disregarded, would be
eliminated.

          In order for these changes to be implemented in your SERP Agreement, the definitions of
“Average Compensation” and “Total Compensation” in your SERP Agreement would be amended to read as
follows:

Average Compensation

          “Average Compensation shall mean the aggregate of your highest three years total annual cash
compensation paid to you by the Company, consisting of (i) base salaries and (ii) regular year-end
cash bonuses paid with respect to the years in which such salaries are paid (the bonus with respect
to any such year, however, only to be included in an amount not in excess of 60% of your maximum
bonus opportunity for such year), divided by three, provided, however,  (x) if any portion
of a bonus is excluded by the parenthetical contained in clause (ii) above, the total amount
excluded will be added to one or both of the other two years included in the calculation as long as
the amount so added does not result in a bonus with respect to any year exceeding 60% of your
maximum bonus opportunity for such year, (y) if you have on the date of determination less than
three full years of employment, the foregoing calculation, including any adjustment required by
clause (x) above, shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed.”

 

 

[Participant]

March 31, 2004

Page Two

Total Compensation

          If you become Disabled, “Total Compensation” shall mean the sum of your annual base salary
rate and 60% of your then effective bonus opportunity at the time of your Disability.”

          Should you have any questions regarding this proposed amendment, please feel free to discuss
them with Dan Foley, John Leekley or me. If not, I would appreciate your execution and return of a
copy of this letter to Gene Gargaro, at which time the above described amendment will become
effective.

          This letter supersedes the letter agreement of December 5, 2003 between you and the Company.

Sincerely yours,

I agree to the above amendment

of my SERP Agreement changing

definition of “Average Compensation”

and “Total Compensation” as set

forth above.

                                                            

 

 

Form for: Alan Barry 

October 2, 2000

Dear :

          Our company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. You are currently a participant in
the Plan upon the terms of a letter agreement signed by you and dated               , . This
Agreement amends and replaces in its entirety your previously signed letter agreement and describes
in full your benefits pursuant to the Plan and all of the Company’s obligations to you, and yours
to the Company. These benefits as described below are contractual obligations of the Company.

     For the purposes of this Agreement, words and terms are defined as follows:

     a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of (i) base salaries
and (ii) regular year-end cash bonuses paid with respect to the years in which such
salaries are paid, divided by three, provided, however, (x) if you have on
the date of determination less than three full years of employment the foregoing
calculation shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed, and (y) if the determination of Average Compensation
includes any year in which you volunteered to reduce your salary or, as part of a program
generally applicable to participants in the Plan, you did not receive an increase in salary
compared with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would have been
absent such salary reduction and absent such generally applicable program.

     b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose election
by the Board or approval by the Board for stockholder election occurred within one year
after any “person” or “group of persons” as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or more of the

 

 

					
	 	 	 	 	 
	 
	 	Page 2
	 	October 2, 2000

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

 

 

					
	 	 	 	 	 
	 
	 	Page 3
	 	October 2, 2000

be determined based on PBGC methodology and regulations in effect on September 1, 1993 (as
contained in 29 CFR Part 2619).

     j. “Profit Sharing Conversion Factor” shall be a factor equal to the present value of
a life annuity payable at the later of age 65 or attained age based on the 1983 Group
Annuity Mortality Table using a blend of 50% of the male mortality rates and 50% of the
female mortality rates as set forth in Revenue Ruling 95-6 (or such other mortality table
that the Internal Revenue Service may prescribe in the future) and an interest rate equal
to the average yield for 30-year Treasury Constant Maturities, as reported in Federal
Reserve Statistical Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other interest rate
as the Board of Directors deems is an appropriate substitute).

     k. “Retirement” shall mean your termination of employment with the Company, on or
after you attain age 65. Your acting as a consultant shall not be considered employment.

     l. “SERP Percentage” of your Average Compensation is 60% 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

 

 

					
	 	 	 	 	 
	 
	 	Page 4
	 	October 2, 2000

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

 

 

					
	 	 	 	 	 
	 
	 	Page 5
	 	October 2, 2000

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.

 

 

					
	 	 	 	 	 
	 
	 	Page 6
	 	October 2, 2000

     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

 

 

					
	 	 	 	 	 
	 
	 	Page 7
	 	October 2, 2000

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.

 

 

					
	 	 	 	 	 
	 
	 	Page 8
	 	October 2, 2000

(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

 

 

					
	 	 	 	 	 
	 
	 	Page 9
	 	October 2, 2000

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

 

 

					
	 	 	 	 	 
	 
	 	Page 10
	 	October 2, 2000

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.

 

 

					
	 	 	 	 	 
	 
	 	Page 11
	 	October 2, 2000

     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.

 

 

					
	 	 	 	 	 
	 
	 	Page 12
	 	October 2, 2000

     We are pleased to be able to make this supplemental plan available to you. Please examine the
terms of this Agreement carefully and at your earliest convenience indicate your assent to all of
its terms and conditions by signing and dating where provided below and returning a signed copy to
me.

	 	 	 	 	 	 	 	 
	 	 	 	 	Sincerely,

MASCO CORPORATION

 	 
	 	 	 	 	By  	 	 
	 	 	 	 	 	Richard A. Manoogian 	 
	 	 	 	 	 	Chief Executive Officer 	 
	 	 	 	 	 
	DATE: 	 	 	 	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 

	 	Form of Amendment for:
	 	Eugene A. Gargaro, Jr.

John R. Leekley

	 	 	 	 	 
	 

	 	December 5, 2003
	 	 

[Participant’s Address]

[Dear Participant]

          Masco’s Organization and Compensation Committee over the past several years has approved a
number of major improvements to the benefits for our executives covered by Masco’s program for
supplemental retirement and other benefits (the “SERP Plan”). At its October meeting this
Committee authorized a significant additional enhancement under your agreement pursuant to the SERP
Plan (the “SERP Agreement”) by increasing the percentage of your bonus eligible for inclusion in
the SERP calculation from 50% to 60% of your base salary. (A corresponding change would be made in
the calculation of disability payments by changing the definition of “Total Compensation” to 160%
from 150% of your then current salary.) The provisions in your SERP Agreement, allowing certain
carry-forwards or carry-backs of bonus payments in excess of what was 50% and is now 60%, would be
retained.

          This enhancement was, in part, approved to partially offset the effect of the current freeze
on your salary. Accordingly, the existing provision in your SERP Agreement, which requires a
calculation of benefits on the assumption that all compensation freezes are disregarded, would be
eliminated.

          In order for these changes to be implemented in your SERP Agreement, the definitions of
“Average Compensation” and “Total Compensation” in your SERP Agreement would be amended to read as
follows:

Average Compensation

          “Average Compensation shall mean the aggregate of your highest three years total annual cash
compensation paid to you by the Company, consisting of (i) base salaries and (ii) regular year-end
cash bonuses paid with respect to the years in which such salaries are paid (the bonus with respect
to any such year, however, only to be included in an amount not in excess of 60% of the base salary
paid during such year), divided by three, provided, however,  (x) if any portion of a bonus
is excluded by the parenthetical contained in clause (ii) above, the total amount excluded will be
added to one or both of the other two years included in the calculation as long as the amount so
added does not result in a bonus with respect to any year exceeding 60% of the base salary paid
during that year, (y) if you have on the date of determination less than three full years of
employment, the foregoing calculation, including any adjustment required by clause (x) above, shall
be based on the average base salaries and regular year-end cash bonuses paid to you while so
employed.”

 

 

[Participant’s Name]

December 5, 2003

Page Two

Total Compensation

‘If you become Disabled, “Total Compensation” shall mean 160% of your annual base salary rate at
the time of your Disability.”

Should you have any questions regarding this proposed amendment, please feel free to discuss them
with Dan Foley, John Leekley or me. If not, I would appreciate your execution and return of a copy
of this letter to Gene Gargaro, at which time the above described amendment will become effective.

	 	 	 	 	 
	 	Sincerely yours,

 	 
	 	  	 	 
	 	Richard A. Manoogian 	 
	 	Chairman 	 
	 

I agree to the above amendment

of my SERP Agreement changing

definition of “Average Compensation”

and “Total Compensation” as set

forth above.

	 	 	 	 	 
	 	 	 

 

 

Form for: Eugene A. Gargaro, Jr.

October 2, 2000

Dear :

          Our company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. You are currently a participant in
the Plan upon the terms of a letter agreement signed by you and dated      , . This
Agreement amends and replaces in its entirety your previously signed letter agreement and describes
in full your benefits pursuant to the Plan and all of the Company’s obligations to you, and yours
to the Company. These benefits as described below are contractual obligations of the Company.

     For the purposes of this Agreement, words and terms are defined as follows:

     a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of (i) base salaries
and (ii) regular year-end cash bonuses paid with respect to the years in which such
salaries are paid, divided by three, provided, however, (x) if you have on
the date of determination less than three full years of employment the foregoing
calculation shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed, and (y) if the determination of Average Compensation
includes any year in which you volunteered to reduce your salary or, as part of a program
generally applicable to participants in the Plan, you did not receive an increase in salary
compared with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would have been
absent such salary reduction and absent such generally applicable program.

     b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose election
by the Board or approval by the Board for stockholder election occurred within one year
after any “person” or “group of persons” as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or more of the combined
voting power of all outstanding voting securities of the Company, other than

 

					
	 
	 	Page 2
	 	October 2, 2000

pursuant to a tender offer approved by the Board prior to its commencement or pursuant
to stock acquisitions approved by the Board prior to their representing 25 percent or more
of such combined voting power.

          c. “Code” means the Internal Revenue Code of 1986, as amended.

          d. “Company” shall mean Masco Corporation or any corporation in which Masco
Corporation owns directly or indirectly stock possessing in excess of 50% of the total
combined voting power of all classes of stock.

          e. The “Deferred Compensation Trust” shall mean any trust created by the Company to
receive the deposit referred to in clause (2) of paragraph 10.

          f. “Disability” and “Disabled” shall mean your being unable to perform your duties as
a Company executive by reason of your physical or mental condition, prior to your attaining
age 65, provided that you have been employed by the Company for two consecutive Years or
more at the time you first became Disabled.

          g. The “Gross-Up Amount” (i) shall be determined if any payment or distribution by
the Company to or for your benefit, whether paid, distributed, payable or distributed or
distributable pursuant to the terms of this Agreement, any stock option or stock award
plan, retirement plan or otherwise (such payment or distribution, other than an Excise Tax
Adjustment Payment under clause (ii), is referred to herein as a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor provision)
or any interest or penalties with respect to such excise tax (such excise tax together with
any such interest or penalties are referred to herein as the “Excise Tax”), and (ii) shall
mean an additional payment (the “Excise Tax Adjustment Payment”) in an amount such that
after subtracting from the Excise Tax Adjustment Payment your payment of all applicable
Federal, state and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Excise Tax Adjustment Payment, the balance will be equal to the Excise Tax imposed
upon the Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the amount of
such Excise Tax Adjustment Payment, shall be made by PricewaterhouseCoopers LLP, or such
national accounting firm as the Company may designate prior to a Change in Control, which
shall provide detailed supporting calculations to the Company and you. Except as provided
in clause (iv) of paragraph 10, all such determinations shall be binding upon you and the
Company.

          h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.

          i. “Present Value” of future benefits means the discounted present value of those
benefits (including therein the benefits, if any, your Surviving Spouse would be entitled
to receive under this Agreement upon your death), using the UP-1984 Mortality Table and
discounted by the interest rate used, for purposes of determining the present value of a
lump sum distribution on plan termination, by the PBGC on the first day of the month which
is four months prior to the month in which a Change in Control occurs (or if the PBGC has
ceased publishing such interest rate, such other interest rate as the Board of Directors
deems is an appropriate substitute). The above PBGC interest rate is intended to be
determined based on PBGC methodology and regulations in effect on September 1, 1993 (as
contained in 29 CFR Part 2619).

 

					
	 
	 	Page 3
	 	October 2, 2000

          j. “Profit Sharing Conversion Factor” shall be a factor equal to the present value of
a life annuity payable at the later of age 65 or attained age based on the 1983 Group
Annuity Mortality Table using a blend of 50% of the male mortality rates and 50% of the
female mortality rates as set forth in Revenue Ruling 95-6 (or such other mortality table
that the Internal Revenue Service may prescribe in the future) and an interest rate equal
to the average yield for 30-year Treasury Constant Maturities, as reported in Federal
Reserve Statistical Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other interest rate
as the Board of Directors deems is an appropriate substitute).

          k. “Retirement” shall mean your termination of employment with the Company, on or
after you attain age 65. Your acting as a consultant shall not be considered employment.

          l. “SERP Percentage” of your Average Compensation is 60%.

          m. “Surviving Spouse” shall be the person to whom you shall be legally married (under
the law of the jurisdiction of your permanent residence) at the date of (i) your Retirement
or death after attaining age 65 (if death terminated employment with the Company) for the
purposes of paragraphs 1, 2 and 3, (ii) your death for the purposes of paragraph 5 and, if
paragraph 5 is applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6 or 7 are
applicable, for the purposes of paragraph 3, (iv) your termination of employment for the
purposes of paragraph 4 and, if paragraph 4 is applicable, for purposes of paragraph 3 and
(v) a “Change in Control” for the purposes of paragraph 10 if none of clauses (i) through
(iv) has become applicable prior to the Change in Control and, if this clause (v) is
applicable, for purposes of paragraph 3. For the purposes of paragraphs 11a, 11e, 11f,
11g, 11h, 11i and 11j, “Surviving Spouse” shall be any spouse entitled to any benefits
hereunder.

          n. If you become Disabled, “Total Compensation” shall mean your annual base salary
rate at the time of your Disability plus the regular year-end cash bonus paid to you for
the year immediately prior thereto, provided, however, if the determination
of Total Compensation is for a year in which you volunteered to reduce your salary or, as
part of a program generally applicable to participants in the Plan, you did not receive an
increase in salary compared with the immediately preceding year, the Committee referred to
in paragraph 11 shall make a good faith determination of what your Total Compensation would
have been absent such salary reduction and absent such generally applicable program.

          o. “Vested Percentage” shall mean the sum of the following percentages: (i) 2%
multiplied by your Years of Service, plus (ii) 8% multiplied by the number of Years you
have been designated a participant in the Plan; provided, however, (w)
prior to completing five Years of Service the Vested Percentage is 0,(x) on or prior to
your fiftieth birthday your Vested Percentage may not exceed 50%, (y) on or prior to each
of your birthdays following your fiftieth birthday your Vested Percentage may not exceed
the sum of 50% plus the product obtained by multiplying 5% by the number of birthdays that
have occurred following your fiftieth birthday, and (z) your Vested Percentage in no event
may exceed 100%.

 

					
	 
	 	Page 4
	 	October 2, 2000

          p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.

          q. “Years of Service” shall mean the number of Years during which you were employed by
the Company (excluding, however, Years of Service with a corporation prior to the time it
became a subsidiary of or otherwise affiliated with Masco Corporation).

     1. In accordance with the Plan, upon your Retirement the Company will pay you annually
during your lifetime, subject to paragraph 8 below, the SERP Percentage of your Average
Compensation, less: (i) a sum equal to the annual benefit which would be payable to you upon your
Retirement if benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits Restoration Plan and
any similar plan were converted to a life annuity, or if you are married when you retire, to a 50%
joint and spouse survivor life annuity, (ii) a sum equal to the annual benefit which would be
payable to you upon Retirement if your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan were converted to a life annuity in accordance with
the Profit Sharing Conversion Factor, and (iii) any retirement benefits paid or payable to you by
reason of employment by all other employers (the amount of such deduction, in the case of benefits
paid or payable other than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any portion thereof, and
earnings thereon, determined by such Committee to have been contributed by you rather than such
other employers), provided, however, in all cases the amount offset pursuant to
these subsections (i) and (ii) shall be determined prior to the effect of any payments from the
plans and trusts referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or other rights under
state law as applied to retirement benefits from non-qualified plans.

     2. Upon your death after Retirement or while employed by the Company after attaining age 65,
your Surviving Spouse shall receive for life 75% of the annual benefit pursuant to paragraph 1 of
this Agreement which was payable to you prior to your death (or, if death terminated employment
after attaining age 65, which would have been payable to you had your Retirement occurred
immediately prior to your death).

     3. The Company will provide, purchase or at its option provide reimbursement for premiums paid
for such supplemental medical insurance as the Company in its sole discretion may deem advisable
from time to time (i) for you and your Surviving Spouse for the lifetime of each of you (A)
following a termination of your employment with the Company due to Retirement or Disability, and
(B) following any other termination of employment with the Company provided (x) you and your
Surviving Spouse are not covered by another medical insurance program substantially all of the cost
of which is paid by another employer, (y) on the date of such termination your Vested Percentage is
not less than 80% and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving Spouse, and (ii)
for your Surviving Spouse for his or her lifetime upon a termination of your employment with the
Company due to your death.

     4. If your employment with the Company is for any reason terminated prior to Retirement,
other than as a result of circumstances described in paragraphs 2, 5 or 6 of this Agreement or
following a Change in Control, and if prior to the date of termination you have completed 5 or more
Years of Service, upon your attaining age 65 the Company will pay to you annually during your
lifetime,

 

					
	 
	 	Page 5
	 	October 2, 2000

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

     5. If while employed by the Company you die prior to your attaining age 65 leaving a
Surviving Spouse, and provided you shall have been employed by the Company for two consecutive
Years or more, your Surviving Spouse shall receive annually for life, subject to paragraph 8 below,
75% of the SERP Percentage of your Average Compensation (assuming no compensation increases between
the date of your death and the date you would have attained age 65), less: (i) a sum equal to the
annual benefit which would be payable to your Surviving Spouse under the Company funded qualified
pension plans and the defined benefit (pension) plan provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan if such benefit were converted to a life annuity
(such deduction, however, only to commence on the date such benefit is first payable), (ii)
a sum equal to the annual payments which would be received by

 

					
	 
	 	Page 6
	 	October 2, 2000

your Surviving Spouse as if your spouse were designated as the beneficiary of your vested accounts in the Company’s qualified
defined benefit contribution plans (excluding your contributions and earnings thereon in the
Company’s 401(k) Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan and such accounts were
converted to a life annuity at the time of your death in accordance with the Profit Sharing
Conversion Factor, and (iii) any retirement benefits paid or payable to you or your Surviving
Spouse by reason of your employment by all other employers (the amount of such deduction, in the
case of benefits paid or payable other than on an annual basis, to be determined on an annualized
basis by the Committee referred to in paragraph 11 and excluding from such deduction any portion
thereof, and earnings thereon, determined by such Committee to have been contributed by you rather
than such other employers), provided, however, in all cases the amount offset
pursuant to these subsections (i) and (ii) shall be determined prior to the effect of any payments
from the plans and trusts referred to therein which are authorized pursuant to any Qualified
Domestic Relations Order under ERISA, or other comparable order allocating marital or other rights
under state law as applied to retirement benefits from non-qualified plans. No death benefits are
payable except to your Surviving Spouse.

     6. If you shall have been employed by the Company for two Years or more and while employed
by the Company you become Disabled prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual benefit, subject
to paragraph 8 below, equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the Company. If your
Disability continues until you attain age 65, you shall be considered retired and you shall receive
retirement benefits pursuant to paragraph 1 above, based upon your Average Compensation as of the
date it is determined you became Disabled.

     7. If you die leaving a Surviving Spouse while receiving Disability benefits pursuant to
paragraph 6 of this Agreement, you will be deemed to have retired on your death and your Surviving
Spouse shall receive for life 75% of the annual benefit which would have been payable to you if you
had retired on the date of your death and your benefit determined pursuant to paragraph 1, based
upon your Average Compensation as of the date you became Disabled.

     8. If the age of your Surviving Spouse is more than 20 years younger than your age, then the
annual benefit payable under paragraphs 1, 4, 5 and 6 of this Agreement and the benefit payable as
“the SERP Percentage of your Average Compensation”, as that phrase is used in paragraph 5 of this
Agreement, shall be reduced by the percentage obtained by multiplying 1.5% times the number of
Years or portion thereof by which your Surviving Spouse is more than 20 years younger than you.

     9. If you or your Surviving Spouse is eligible to receive benefits hereunder, unless
otherwise specifically agreed by the Company in writing, you and your Surviving Spouse will not be
able to receive benefits under any other Company sponsored non-qualified retirement plans other
than the Company’s Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be considered to have been
received under a Company sponsored non-qualified retirement plan even though such benefits are
received after retirement. Except as provided in the last sentence of paragraph 4 and in paragraph
10 of this Agreement, no benefits will be paid to your Surviving Spouse pursuant to this Agreement
unless upon your death you were employed by the Company, Disabled or had taken Retirement from the
Company.

 

					
	 
	 	Page 7
	 	October 2, 2000

10. Change in Control. (i) Immediately upon the occurrence of any Change in Control:

     (1) If you are then employed by the Company, your Vested Percentage, if not already
100%, shall be deemed for all purposes of this Agreement to be 100%.

     (2) If the Deferred Compensation Trust has theretofore been established or is
established within thirty days after the Change in Control, the Company shall forthwith
deposit to an account in your name (or that of your Surviving Spouse if you are then
deceased and your Surviving Spouse is entitled to benefits hereunder) in the Deferred
Compensation Trust 110% of the sum of the Gross-Up Amount plus:

     (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age if
greater, assuming for purposes of this clause, no compensation increases and that
if younger than age 65 you and your Surviving Spouse had attained such age;

     (B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of this
Agreement, an amount equal to the discounted Present Value of the benefits which
would have been payable under such paragraph;

     (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present Value
of those benefits payable in the future to you and your Surviving Spouse; and

     (D) If you are then receiving payments under paragraph 6 of this Agreement,
an amount equal to the Present Value of the benefits which would have been payable
under paragraphs 6 and 7 on the assumption you would have continued to receive
benefits under paragraph 6 until you had attained age 65 and thereafter continued
to receive benefits as though you were deemed to have retired.

(3) The Company shall thereafter be obligated to provide such supplemental medical
insurance as has theretofore in the discretion of the Company been generally provided to
participants and their Surviving Spouses under the Plan (A) to you and your Surviving
Spouse if you or your Surviving Spouse is then receiving benefits under paragraph 3, (B)
to you and your Surviving Spouse if you become Disabled if you are employed by the Company
at the time of the Change in Control, (C) to your Surviving Spouse upon your death if you
are employed by the Company at the time of the Change in Control and (D) to you and your
Surviving Spouse upon any termination of employment following any Change in Control but
only during the periods when you and your Surviving Spouse are not covered by another
medical insurance program substantially all of the cost of which is paid by another
employer. The obligations of the Company under this clause (i)(3) shall remain in effect
for the lifetime of both you and your Surviving Spouse.

(4) If the Deferred Compensation Trust is not established prior to or within thirty days
after the Change in Control, all payments which would have otherwise have been made to you
or your Surviving Spouse from the Deferred Compensation Trust shall immediately after such
thirty day period be made to you or your Surviving Spouse by the Company.

 

					
	 
	 	Page 8
	 	October 2, 2000

          (ii) Any deposit by the Company to an account in your name or that of your Surviving Spouse
in the Deferred Compensation Trust prior to the occurrence of the Change in Control, together with
all income then accrued thereon (but only to the extent of the value of such deposited amount and
the income accrued thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the deposit required under
clause (i)(2) of this paragraph 10.

          (iii) At or prior to making the deposit required by clause (i)(2) of this paragraph 10, the
Company shall deliver to the Trustee under the Deferred Compensation Trust a certificate specifying
that portion, if any, of the amount in the trust account, after giving effect to the deposit, which
is represented by the Gross-Up Amount. Payment of 90.91% of the amount required by clause (i)(2) of
this paragraph 10 to be paid to the trust account, together with any income accrued thereon from
the date of the Change in Control, is to be made to you or your Surviving Spouse, as applicable,
under the terms of the Deferred Compensation Trust, at the earlier of (1) immediately upon a Change
in Control if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the Change in Control;
provided, however, that the Trustee under the Deferred Compensation Trust is
required promptly to pay to you or your Surviving Spouse, as applicable, from the trust account
from time to time amounts, not exceeding in the aggregate the Gross-Up Amount, upon your or your
Surviving Spouse’s certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local taxing authority as
a result of the Change in Control and the imposition of the excise tax under Section 4999 of the
Code (or any successor provision) on the receipt of any portion of the Gross-Up Amount. All
amounts in excess of the amount required to be paid from the trust account by the preceding
sentence, after all expenses of the Deferred Compensation Trust have been paid, shall revert to the
Company provided that the Company has theretofore expressly affirmed its continuing obligations
under clause (i)(3) of this Paragraph 10.

          (iv) Subject to the next sentence of this clause (iv), the payment of the Gross-Up Amount to
you or your Surviving Spouse or the account in your or your Surviving Spouse’s name in the Deferred
Compensation Trust will thereby discharge the Company from any obligations it may have under any
present or future stock option or stock award plan, retirement plan or otherwise, to make any other
payment as a result of your income becoming subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) or any interest or penalties with respect to such excise tax.
As a result of the uncertainty which will be present in the application of Section 4999 of the
Code (or any successor provision) at the time of the determination of the Gross-Up Amount and the
possibility that between the date of determination of the Gross-Up Amount and the dates payments
are to be made to you or your Surviving Spouse under this Agreement, changes in applicable tax laws
will result in an incorrect determination of the Gross-Up Amount having been made, it is possible
that (1) payment of a portion of the Gross-Up Amount will not have been made by the Company which
should have been made (an “Underpayment”), or (2) payment of a portion of the Gross-Up Amount will
have been made which should not have been made (an “Overpayment”), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such Underpayment shall be
promptly paid by the Company to or for your benefit. In the event that you or your Surviving
Spouse discover that an Overpayment shall have occurred, the amount thereof shall be promptly
repaid by you or your Surviving Spouse to the Company.

 

					
	 
	 	Page 9
	 	October 2, 2000

          (v) Prior to the occurrence of a Change in Control, any deposits made by the Company to an
account in the Deferred Compensation Trust may be withdrawn by the Company. Upon the occurrence of
a Change in Control, all further obligations of the Company under this Agreement (other than under
this Paragraph 10 to the extent not theretofore performed) shall terminate in all respects.

     11. We also agree upon the following:

          a. Prior to the occurrence of a Change in Control, the Compensation Committee of the
Company’s Board of Directors, or any other committee however titled which shall be vested
with authority with respect to the compensation of the Company’s officers and executives
(in either case, the “Committee”), shall have the exclusive authority to make all
determinations which may be necessary in connection with this Agreement including the dates
of and whether you are or continue to be Disabled, the amount of annual benefits payable
hereunder by reason of offsets hereunder due to employment by other employers, the
interpretation of this Agreement, and all other matters or disputes arising under this
Agreement. The determinations and findings of the Committee shall be conclusive and
binding, without appeal, upon both of us.

          b. You will not during your employment or Disability, and after Retirement or the
termination of your employment, for any reason disclose or make use of for your own or
another person’s benefit under any circumstances any of the Company’s Proprietary
Information. Proprietary Information shall include trade secrets, secret processes,
information concerning products, developments, manufacturing techniques, new product or
marketing plans, inventions, research and development information or results, sales,
pricing and financial data, information relating to the management, operations or planning
of the Company and any other information treated as confidential or proprietary.

          c. You agree that you will not following your termination of employment for any
reason (whether on Retirement, Disability or termination prior to attaining age 65)
thereafter directly or indirectly engage in any business activities, whether as a
consultant, advisor or otherwise, in which the Company is engaged in any geographic area in
which the products or services of the Company have been sold, distributed or provided
during the five year period prior to the date of your termination of employment. In light
of ongoing payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited in duration
provided no Change in Control has occurred and, in the event of a Change in Control, all
such restrictions shall terminate one year thereafter.

          In addition to the foregoing and provided no Change in Control has occurred, if while
you or your Surviving Spouse is receiving retirement or other benefits pursuant to this
Agreement, in the judgment of the Committee you or your Surviving Spouse directly or
indirectly engage in activity or act in a manner which can be considered adverse to the
interest of the Company or any of its direct or indirect subsidiaries or affiliated
companies, the Committee may terminate rights to any further benefits hereunder.

          d. Except as may be provided to the contrary in a duly authorized written agreement
between you and the Company you acknowledge that the Company has made no commitments to you
of any kind with respect to the continuation of your employment, which we expressly agree
is an employment at will, and you or the Company shall have the

 

					
	 
	 	Page 10
	 	October 2, 2000

unrestricted right to terminate your employment with or without cause, at any time in
your or its discretion.

          e. At the Company’s request, expressed through a Company officer, you agree to
provide such information with respect to matters which may arise in connection with this
Agreement as may be deemed necessary by the Company or the Committee, including for example
only and not in limitation, information concerning benefits payable to you from third
parties, and you further agree to submit to such medical examinations by duly licensed
physicians as may be requested by the Company from time to time. You also agree to direct
third parties to provide such information, and your Surviving Spouse’s cooperation in
providing such information is a condition to the receipt of survivor’s benefits under this
Agreement.

          f. To the extent permitted by law, no interest in this Agreement or benefits payable
to you or to your Surviving Spouse shall be subject to anticipation, or to pledge,
assignment, sale or transfer in any manner nor shall you or your Surviving Spouse have the
power in any manner to charge or encumber such interest or benefits, nor shall such
interest or benefits be liable or subject in any manner for the liabilities of you or your
Surviving Spouse’s debts, contracts, torts or other engagements of any kind.

          g. No person other than you and your Surviving Spouse shall have any rights or
property interest of any kind whatsoever pursuant to this Agreement, and neither you nor
your Surviving Spouse shall have any rights hereunder other than those expressly provided
in this Agreement. Upon the death of you and your Surviving Spouse no further benefits of
whatsoever kind or nature shall accrue or be payable pursuant to this Agreement.

          h. All benefits payable pursuant to this Agreement, other than pursuant to paragraph
10, shall be paid in installments of one-twelfth of the annual benefit, or at such shorter
intervals as may be deemed advisable by the Company in its discretion, upon receipt of your
or your Surviving Spouse’s written application, or by the applicant’s personal
representative in the event of any legal disability.

          i. Except as provided in paragraph 10, all benefits under this Agreement shall be
payable from the Company’s general assets, which assets (including all funds in the
Deferred Compensation Trust) are subject to the claims of the Company’s general creditors,
and are not set aside for your or your Surviving Spouse’s benefit.

          j. You agree that, if the Company establishes the Deferred Compensation Trust, the
Company is entitled at any time prior to a Change in Control to revoke such trust and
withdraw all funds theretofore deposited in such trust. You acknowledge that although this
Agreement refers from time to time to your or your Surviving Spouse’s trust account, no
separate trust will be created and all assets of any Deferred Compensation Trust will be
commingled.

          k. This Agreement shall be governed by the laws of the State of Michigan.

     12. We have agreed that the determinations of the Committee described in paragraph 11a shall
be conclusive as provided in such paragraph, but if for any reason a claim is asserted which
subverts the provisions of paragraph 11a, we agree that, except for causes of action which may
arise under paragraph 11b and the first paragraph of paragraph 11c and provided no Change in
Control has occurred, arbitration shall be the sole and exclusive remedy to resolve all disputes,

 

					
	 
	 	Page 11
	 	October 2, 2000

claims or controversies which could be the subject of litigation (hereafter referred to as
“dispute”) involving or arising out of this Agreement. It is our mutual intention that the
arbitration award will be final and binding and that a judgment on the award may be entered in any
court of competent jurisdiction and enforcement may be had according to its terms.

     The arbitrator shall be chosen in accordance with the commercial arbitration rules of the
American Arbitration Association and the expenses of the arbitration shall be borne equally by the
parties to the dispute. The place of the arbitration shall be the principal offices of the
American Arbitration Association in the metropolitan Detroit area.

     The arbitrator’s sole authority shall be to apply the clauses of this Agreement.

     We agree that the provisions of this paragraph 12, and the decision of the arbitrator with
respect to any dispute, with only the exceptions provided in the first paragraph of this paragraph
12, shall be the sole and exclusive remedy for any alleged cause of action in any manner based upon
or arising out of this Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under this Agreement has
the right to resort to any federal, state or local court or administrative agency concerning any
matters dealt with by this Agreement and that the decision of the arbitrator shall be a complete
defense to any action or proceeding instituted in any tribunal or agency with respect to any
dispute. The arbitration provisions contained in this paragraph shall survive the termination or
expiration of this Agreement, and shall be binding on our respective successors, personal
representatives and any other party asserting a claim based upon this Agreement.

     We further agree that any demand for arbitration must be made within one year of the time any
claim accrues which you or any person claiming hereunder may have against the Company; unless
demand is made within such period, it is forever barred.

     We are pleased to be able to make this supplemental plan available to you. Please examine the
terms of this Agreement carefully and at your earliest convenience indicate your assent to all of
its terms and conditions by signing and dating where provided below and returning a signed copy to
me.

	 	 	 	 	 
	 	Sincerely,

MASCO CORPORATION

 	 
	 	By  	 	 
	 	 	Richard A. Manoogian 	 
	 	 	Chief Executive Officer

	 

                                                    

DATE:                                        

 

 

February 6, 2008

Mr. Timothy Wadhams

[Address]

Dear Tim:

          In light of the recent increase in your annual cash bonus opportunity from 100% of your base
salary, the Organization and Compensation Committee of our Board of Directors has approved a change
in your Supplemental Executive Retirement Plan to increase the amount of your annual bonus which is
includible in “Average Compensation”, as that term is used in your SERP Agreement. In order to
implement this change, the definition of “Average Compensation” in your SERP Agreement would be
changed to read as follows:

Average Compensation

          “Average Compensation” shall mean the aggregate of your highest three years total annual cash
compensation paid to you by the Company, consisting of (i) base salaries and (ii) regular year-end
cash bonuses paid with respect to the years in which such salaries are paid (the bonus with respect
to any such year, however, only to be included in an amount not in excess of 60% of your maximum
bonus opportunity for such year), divided by three, provided, however, (x) if any
portion of a bonus is excluded by the parenthetical contained in clause (ii) above, the total
amount excluded will be added to one or both of the other two years included in the calculation as
long as the amount so added does not result in a bonus with respect to any year exceeding 60% of
your maximum bonus opportunity for such year, (y) if you have on the date of determination less
than three full years of employment, the foregoing calculation, including any adjustment required
by clause (x) above, shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed.

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

	 	 	 	 	 
	 	Sincerely yours,

 	 
	 	/s/ Richard A. Manoogian

 	 
	 	Richard A. Manoogian 	 
	 	Executive Chairman 	 
	 

I agree to the above-described amendment

to my Supplemental Executive Retirement

Plan with the Company

	 	 	 	 	 
	/s/ Timothy Wadhams 	 	 

 

 

[Form]

March 15, 2005

Mr. Timothy Wadhams

Dear Mr. Wadhams:

          Our Company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the Company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. You are currently a participant in
a similar plan maintained by Metaldyne Corporation (formerly known as MascoTech, Inc.)
(“Metaldyne”) upon the terms of a letter agreement signed by you and dated November 21, 2000 as
modified by paragraph 6 of an employment, release and consulting agreement (“the November 22
Agreement”) dated November 22, 2000 (such plan as so modified referred to herein as the “Existing
Agreement”). Concurrently with your execution of this Agreement you have waived and released
Metaldyne Corporation from all rights to which you were previously entitled under the Existing
Agreement. The agreements contained in this letter, once accepted by you, establish your
participation in the Plan as of the date hereof and describe in full your benefits pursuant to the
Plan and all of the Company’s obligations to you, and yours to the Company with respect to the
Plan. These benefits as described below are contractual obligations of the Company.

For the purposes of this Agreement, words and terms are defined as follows:

     a. “Average Compensation” shall mean the aggregate of your highest three year’s total
annual cash compensation paid to you by the Company, consisting of (i) base salaries and
(ii) regular year-end cash bonuses paid with respect to the years in which such salaries
are paid (the bonus with respect to any such year, however, only to be included in an
amount not in excess of 60% of the base salary in effect at the end of such year), divided
by three, provided, however, (x) if any portion of a bonus is excluded by
the parenthetical contained in clause (ii) above, the total amount excluded will be added
to one or both of the other two years included in the calculation as long as the amount so
added does not result in a bonus with respect to any year exceeding 60% of the base salary
in effect at the end of that year, and (y) if you have on the date of determination less
than three full years of employment the foregoing calculation, including any adjustment
required by clause (x) above, shall be based on the average base salaries and regular
year-end cash bonuses paid to you while so employed.

     b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors

 

 

					
	Mr. Timothy Wadhams
	 	Page 2
	 	March 15, 2005

whose election by the Board or approval by the Board for stockholder election occurred
within one year after any “person” or “group of persons” as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a tender offer
for, or becoming the beneficial owner of, voting securities representing 25 percent or more
of the combined voting power of all outstanding voting securities of the Company, other
than pursuant to a tender offer approved by the Board prior to its commencement or pursuant
to stock acquisitions approved by the Board prior to their representing 25 percent or more
of such combined voting power.

     c. “Code” means the Internal Revenue Code of 1986, as amended.

     d. “Company” shall mean Masco Corporation or any corporation in which Masco
Corporation owns directly or indirectly stock possessing in excess of 50% of the total
combined voting power of all classes of stock.

     e. The “Deferred Compensation Trust” shall mean any trust created by the Company to
receive the deposit referred to in clause (2) of paragraph 10.

     f. “Disability” and “Disabled” shall mean your being unable to perform your duties as
a Company executive by reason of your physical or mental condition, prior to your attaining
age 65, provided that you have been employed by the Company for two consecutive Years or
more at the time you first became Disabled.

     g. The “Gross-Up Amount” (i) shall be determined if any payment or distribution by
the Company to or for your benefit, whether paid, distributed, payable or distributed or
distributable pursuant to the terms of this Agreement, any stock option or stock award
plan, retirement plan or otherwise (such payment or distribution, other than an Excise Tax
Adjustment Payment under clause (ii), is referred to herein as a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor provision)
or any interest or penalties with respect to such excise tax (such excise tax together with
any such interest or penalties are referred to herein as the “Excise Tax”), and (ii) shall
mean an additional payment (the “Excise Tax Adjustment Payment”) in an amount such that
after subtracting from the Excise Tax Adjustment Payment your payment of all applicable
Federal, state and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Excise Tax Adjustment Payment, the balance will be equal to the Excise Tax imposed
upon the Payments. All determinations required to be made with respect to the “Gross-Up
Amount”, including whether an Excise Tax Adjustment Payment is required and the amount of
such Excise Tax Adjustment Payment, shall be made by PricewaterhouseCoopers LLP, or such
national accounting firm as the Company may designate prior to a Change in Control, which
shall provide detailed supporting calculations to the Company and you. Except as provided
in clause (iv) of paragraph 10, all such determinations shall be binding upon you and the
Company.

     h. “PBGC” shall mean the Pension Benefit Guaranty Corporation.

     i. “Present Value” of future benefits means the discounted present value of those
benefits (including therein the benefits, if any, your Surviving Spouse would be entitled
to receive under this Agreement upon your death), using the UP-1984 Mortality Table and
discounted by the interest rate used, for purposes of determining the present value of a
lump sum distribution on plan termination, by the PBGC on the first day of the month

 

 

					
	Mr. Timothy Wadhams
	 	Page 3
	 	March 15, 2005

which is (i) four months prior to the month in which a Change in Control occurs or (ii) the
month in which your death occurs if the Present Value is being calculated under the proviso
in the last sentence of paragraph 4 (or if the PBGC has ceased publishing such interest
rate, such other interest rate as the Board of Directors deems is an appropriate
substitute). The above PBGC interest rate is intended to be determined based on PBGC
methodology and regulations in effect on September 1, 1993 (as contained in 29 CFR Part
2619).

     j. “Profit Sharing Conversion Factor” shall be a factor equal to the present value of
a life annuity payable at the later of age 65 or attained age based on the 1983 Group
Annuity Mortality Table using a blend of 50% of the male mortality rates and 50% of the
female mortality rates as set forth in Revenue Ruling 95-6 (or such other mortality table
that the Internal Revenue Service may prescribe in the future) and an interest rate equal
to the average yield for 30-year Treasury Constant Maturities, as reported in Federal
Reserve Statistical Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other interest rate
as the Board of Directors deems is an appropriate substitute).

     k. “Retirement” shall mean your termination of employment with the Company, on or
after you attain age 65. Your acting as a consultant shall not be considered employment.

     l. “SERP Percentage” of your Average Compensation is 60%.

     m. “Surviving Spouse” shall be the person to whom you shall be legally married (under the
law of the jurisdiction of your permanent residence) at the date of (i) your Retirement or
death after attaining age 65 (if death terminated employment with the Company) for the
purposes of paragraphs 1, 2 and 3, (ii) your death for the purposes of paragraph 5 and, if
paragraph 5 is applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6 or 7 are
applicable, for the purposes of paragraph 3, (iv) your termination of employment for the
purposes of paragraph 4 and, if paragraph 4 is applicable, for purposes of paragraph 3 and
(v) a “Change in Control” for the purposes of paragraph 10 if none of clauses (i) through
(iv) has become applicable prior to the Change in Control and, if this clause (v) is
applicable, for purposes of paragraph 3. For the purposes of paragraphs 11a, 11e, 11f,
11g, 11h, 11i and 11j, “Surviving Spouse” shall be any spouse entitled to any benefits
hereunder.

     n. If you become Disabled, “Total Compensation” shall mean 160% of your annual base
salary rate at the time of your Disability.

     o. “Vested Percentage” shall mean 100%.

     p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.

     q. “Years of Service” shall mean the number of Years during which you were employed by
the Company (including Years of Service for the time you were employed by Metaldyne and its
predecessors but excluding Years of Service with any other corporation prior to the time it
became a subsidiary of or otherwise affiliated with Masco Corporation).

 

 

					
	Mr. Timothy Wadhams
	 	Page 4
	 	March 15, 2005
	
	 	 	 	 

     1. In accordance with the Plan, upon your Retirement the Company will pay you annually
during your lifetime, subject to paragraph 8 below, the SERP Percentage of your Average
Compensation, less: (i) a sum equal to the annual benefit which would be payable to you upon your
Retirement if benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits Restoration Plan and
any similar plan were converted to a life annuity, or if you are married when you retire, to a 50%
joint and spouse survivor life annuity, (ii) a sum equal to the annual benefit which would be
payable to you upon Retirement if your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan were converted to a life annuity in accordance with
the Profit Sharing Conversion Factor, and (iii) any retirement benefits paid or payable to you by
reason of employment by all other employers (the amount of such deduction, in the case of benefits
paid or payable other than on an annual basis, to be determined on an annualized basis by the
Committee referred to in paragraph 11 and excluding from such deduction any portion thereof, and
earnings thereon, determined by such Committee to have been contributed by you rather than such
other employers); provided, however, in all cases the amount offset pursuant to
these subsections (i), (ii) and (iii) shall be determined prior to the effect of any payments from
the plans and trusts referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or other rights under
state law as applied to retirement benefits from non-qualified plans.

     2. Upon your death after Retirement or while employed by the Company after attaining age 65,
your Surviving Spouse shall receive for life 75% of the annual benefit pursuant to paragraph 1 of
this Agreement which was payable to you prior to your death (or, if death terminated employment
after attaining age 65, which would have been payable to you had your Retirement occurred
immediately prior to your death).

     3. The Company will provide, purchase or at its option provide reimbursement for premiums paid
for such supplemental medical insurance as the Company in its sole discretion may deem advisable
from time to time (i) for you and your Surviving Spouse for the lifetime of each of you (A)
following a termination of your employment with the Company due to Retirement or Disability, and
(B) following any other termination of employment with the Company provided you and your Surviving
Spouse are not covered by another medical insurance program substantially all of the cost of which
is paid by another employer and (ii) for your Surviving Spouse for his or her lifetime upon a
termination of your employment with the Company due to your death. In addition to the foregoing,
the Company guarantees the performance by Metaldyne of its obligations under clause (ii) of
paragraph 4(b) of the November 22 Agreement.

     4. If your employment with the Company is for any reason terminated prior to Retirement,
other than as a result of circumstances described in paragraphs 2, 5 or 6 of this Agreement or
following a Change in Control, and if prior to the date of termination you have completed 5 or more
Years of Service, upon your attaining age 65 the Company will pay to you annually during your
lifetime, subject to paragraph 8 below, the Vested Percentage of the result obtained by (1)
multiplying your SERP Percentage at the date your employment terminated by your Average
Compensation, less (2) the sum of the following: (i) a sum equal to the annual benefit which would
be payable to you upon your attaining age 65 if benefits payable to you under the Company and
Metaldyne funded qualified pension plans and the defined benefit (pension) plan provisions of the
Company’s and Metaldyne’s Retirement Benefits Restoration Plan and any similar plan were converted
to a life annuity, or if you are married when you attain age 65, to a 50% joint and spouse

 

 

					
	Mr. Timothy Wadhams
	 	Page 5
	 	March 15, 2005

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

     5. If while employed by the Company you die prior to your attaining age 65 leaving a
Surviving Spouse, and provided you shall have been employed by the Company for two consecutive
Years or more, your Surviving Spouse shall receive annually for life, subject to paragraph 8 below,
75% of the SERP Percentage of your Average Compensation, less: (i) a sum equal to the annual
benefit which would be payable to your Surviving Spouse under the Company funded qualified pension
plans and the defined benefit (pension) plan provisions of the Company’s Retirement Benefits
Restoration Plan and any similar plan if such benefit were converted to a life annuity (such
deduction, however, only to commence on the date such benefit is first payable), (ii) a sum
equal to the annual payments which would be received by your Surviving Spouse as if your spouse
were designated as the beneficiary of your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan and such accounts were converted to a life annuity
at the time of your death in accordance with the Profit Sharing Conversion Factor, and (iii) any
retirement benefits paid or payable to you or your Surviving Spouse by reason of your employment by
all other employers (the amount of such deduction, in the case of benefits paid or

 

 

					
	Mr. Timothy Wadhams
	 	Page 6
	 	March 15, 2005

payable other than on an annual basis, to be determined on an annualized basis by the Committee
referred to in paragraph 11 and excluding from such deduction any portion thereof, and earnings
thereon, determined by such Committee to have been contributed by you rather than such other
employers); provided, however, in all cases the amount offset pursuant to these
subsections (i),(ii) and (iii) shall be determined prior to the effect of any payments from the
plans and trusts referred to therein which are authorized pursuant to any Qualified Domestic
Relations Order under ERISA, or other comparable order allocating marital or other rights under
state law as applied to retirement benefits from non-qualified plans. No death benefits are
payable except to your Surviving Spouse.

     6. If you shall have been employed by the Company for two Years or more and while employed
by the Company you become Disabled prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual benefit, subject
to paragraph 8 below, equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the Company. If your
Disability continues until you attain age 65, you shall be considered retired and you shall receive
retirement benefits pursuant to paragraph 1 above, based upon your Average Compensation as of the
date it is determined you became Disabled.

     7. If you die leaving a Surviving Spouse while receiving Disability benefits pursuant to
paragraph 6 of this Agreement, you will be deemed to have retired on your death and your Surviving
Spouse shall receive for life 75% of the annual benefit which would have been payable to you if you
had retired on the date of your death and your benefit determined pursuant to paragraph 1, based
upon your Average Compensation as of the date you became Disabled.

     8. If the age of your Surviving Spouse is more than 20 years younger than your age, then the
annual benefit payable under paragraphs 1, 4, 5 and 6 of this Agreement and the benefit payable as
“the SERP Percentage of your Average Compensation”, as that phrase is used in paragraph 5 of this
Agreement, shall be reduced by the percentage obtained by multiplying 1.5% times the number of
Years or portion thereof by which your Surviving Spouse is more than 20 years younger than you.

     9. If you or your Surviving Spouse is eligible to receive benefits hereunder, unless
otherwise specifically agreed by the Company in writing, you and your Surviving Spouse will not be
able to receive benefits under any other Company sponsored non-qualified retirement plans other
than the Company’s Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be considered to have been
received under a Company sponsored non-qualified retirement plan even though such benefits are
received after retirement. Except as provided in the last sentence of paragraph 3, the last
sentence of paragraph 4 and in paragraph 10 of this Agreement, no benefits will be paid to your
Surviving Spouse pursuant to this Agreement unless upon your death you were employed by the
Company, Disabled or had taken Retirement from the Company.

     10. Change in Control. (i) Immediately upon the occurrence of any Change in Control:

     (1) If you are then employed by the Company, your Vested Percentage, if not already
100%, shall be deemed for all purposes of this Agreement to be 100%.

     (2) If the Deferred Compensation Trust has theretofore been established or is
established within thirty days after the Change in Control, the Company shall forthwith
deposit to an account in your name (or that of your Surviving Spouse if you are then

 

 

					
	Mr. Timothy Wadhams
	 	Page 7
	 	March 15, 2005

deceased and your Surviving Spouse is entitled to benefits hereunder) in the Deferred
Compensation Trust 110% of the sum of the Gross-Up Amount plus:

     (A) If you are then employed by the Company, an amount equal to the
discounted Present Value of the benefits which would have been payable under
paragraphs 1 and 2 of this Agreement upon Retirement at age 65 or attained age if
greater, assuming for purposes of this clause, no compensation increases and that
if younger than age 65 you and your Surviving Spouse had attained such age;

     (B) If employment has previously been terminated but you or your Surviving
Spouse is then entitled in the future to receive benefits under paragraph 4 of this
Agreement, an amount equal to the discounted Present Value of the benefits which
would have been payable under such paragraph;

     (C) If you or your Surviving Spouse is then receiving payments under
paragraphs 1, 2, 4, 5 or 7 of this Agreement, an amount equal to the Present Value
of those benefits payable in the future to you and your Surviving Spouse; and

     (D) If you are then receiving payments under paragraph 6 of this Agreement,
an amount equal to the Present Value of the benefits which would have been payable
under paragraphs 6 and 7 on the assumption you would have continued to receive
benefits under paragraph 6 until you had attained age 65 and thereafter continued
to receive benefits as though you were deemed to have retired.

     (3) The Company shall thereafter be obligated to provide such supplemental medical
insurance as has theretofore in the discretion of the Company been generally provided to
participants and their Surviving Spouses under the Plan (after giving effect to the last
sentence of paragraph 3 and the provisions of clause (ii) of paragraph 4(b) of the
November 22 Agreement)(A) to you and your Surviving Spouse if you or your Surviving Spouse
is then receiving benefits under paragraph 3, (B) to you and your Surviving Spouse if you
become Disabled if you are employed by the Company at the time of the Change in Control,
(C) to your Surviving Spouse upon your death if you are employed by the Company at the
time of the Change in Control and (D) to you and your Surviving Spouse upon any
termination of employment following any Change in Control but only during the periods when
you and your Surviving Spouse are not covered by another medical insurance program
substantially all of the cost of which is paid by another employer. The obligations of the
Company under this clause (i)(3) shall remain in effect for the lifetime of both you and
your Surviving Spouse.

     (4) If the Deferred Compensation Trust is not established prior to or within thirty
days after the Change in Control, all payments which would have otherwise have been made
to you or your Surviving Spouse from the Deferred Compensation Trust shall immediately
after such thirty day period be made to you or your Surviving Spouse by the Company.

          (ii) Any deposit by the Company to an account in your name or that of your Surviving Spouse
in the Deferred Compensation Trust prior to the occurrence of the Change in Control, together with
all income then accrued thereon (but only to the extent of the value of such deposited amount and
the income accrued thereon on the day of any deposit under clause (i)(2) of this paragraph 10),
shall reduce by an equal amount the obligations of the Company to make the deposit required under
clause (i)(2) of this paragraph 10.

 

 

					
	Mr. Timothy Wadhams
	 	Page 8
	 	March 15, 2005

          (iii) At or prior to making the deposit required by clause (i)(2) of this paragraph 10, the
Company shall deliver to the Trustee under the Deferred Compensation Trust a certificate specifying
that portion, if any, of the amount in the trust account, after giving effect to the deposit, which
is represented by the Gross-Up Amount. Payment of 90.91% of the amount required by clause (i)(2) of
this paragraph 10 to be paid to the trust account, together with any income accrued thereon from
the date of the Change in Control, is to be made to you or your Surviving Spouse, as applicable,
under the terms of the Deferred Compensation Trust, at the earlier of (1) immediately upon a Change
in Control if you then are deceased or have attained age 65 or are Disabled, (2) your death
subsequent to the Change in Control, or (3) the date which is one year after the Change in Control;
provided, however, that the Trustee under the Deferred Compensation Trust is
required promptly to pay to you or your Surviving Spouse, as applicable, from the trust account
from time to time amounts, not exceeding in the aggregate the Gross-Up Amount, upon your or your
Surviving Spouse’s certification to the Trustee that the amount to be paid has been or within 60
days will be paid by you or your Surviving Spouse to a Federal, state or local taxing authority as
a result of the Change in Control and the imposition of the excise tax under Section 4999 of the
Code (or any successor provision) on the receipt of any portion of the Gross-Up Amount. All
amounts in excess of the amount required to be paid from the trust account by the preceding
sentence, after all expenses of the Deferred Compensation Trust have been paid, shall revert to the
Company provided that the Company has theretofore expressly affirmed its continuing obligations
under clause (i)(3) of this Paragraph 10.

          (iv) Subject to the next sentence of this clause (iv), the payment of the Gross-Up Amount to
you or your Surviving Spouse or the account in your or your Surviving Spouse’s name in the Deferred
Compensation Trust will thereby discharge the Company from any obligations it may have under any
present or future stock option or stock award plan, retirement plan or otherwise, to make any other
payment as a result of your income becoming subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) or any interest or penalties with respect to such excise tax.
As a result of the uncertainty which will be present in the application of Section 4999 of the
Code (or any successor provision) at the time of the determination of the Gross-Up Amount and the
possibility that between the date of determination of the Gross-Up Amount and the dates payments
are to be made to you or your Surviving Spouse under this Agreement, changes in applicable tax laws
will result in an incorrect determination of the Gross-Up Amount having been made, it is possible
that (1) payment of a portion of the Gross-Up Amount will not have been made by the Company which
should have been made (an “Underpayment”), or (2) payment of a portion of the Gross-Up Amount will
have been made which should not have been made (an “Overpayment”), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such Underpayment shall be
promptly paid by the Company to or for your benefit. In the event that you or your Surviving
Spouse discover that an Overpayment shall have occurred, the amount thereof shall be promptly
repaid by you or your Surviving Spouse to the Company.

          (v) Prior to the occurrence of a Change in Control, any deposits made by the Company to an
account in the Deferred Compensation Trust may be withdrawn by the Company. Upon the occurrence of
a Change in Control, all further obligations of the Company under this Agreement (other than under
this Paragraph 10 to the extent not theretofore performed) shall terminate in all respects.

     11. We also agree upon the following:

     a. Prior to the occurrence of a Change in Control, the Compensation Committee of the
Company’s Board of Directors, or any other committee however titled which shall be

 

 

					
	Mr. Timothy Wadhams
	 	Page 9
	 	March 15, 2005

vested with authority with respect to the compensation of the Company’s officers and
executives (in either case, the “Committee”), shall have the exclusive authority to make
all determinations which may be necessary in connection with this Agreement including the
dates of and whether you are or continue to be Disabled, the amount of annual benefits
payable hereunder by reason of offsets hereunder due to employment by other employers, the
interpretation of this Agreement, and all other matters or disputes arising under this
Agreement. The determinations and findings of the Committee shall be conclusive and
binding, without appeal, upon both of us.

     b. You will not during your employment or Disability, and after Retirement or the
termination of your employment, for any reason disclose or make use of for your own or
another person’s benefit under any circumstances any of the Company’s Proprietary
Information. Proprietary Information shall include trade secrets, secret processes,
information concerning products, developments, manufacturing techniques, new product or
marketing plans, inventions, research and development information or results, sales,
pricing and financial data, information relating to the management, operations or planning
of the Company and any other information treated as confidential or proprietary.

     c. You agree that you will not following your termination of employment for any
reason (whether on Retirement, Disability or termination prior to attaining age 65)
thereafter directly or indirectly engage in any business activities, whether as a
consultant, advisor or otherwise, in which the Company is engaged in any geographic area in
which the products or services of the Company have been sold, distributed or provided
during the five year period prior to the date of your termination of employment. In light
of ongoing payments to be received by you and your Surviving Spouse for your respective
lives, the restrictions contained in the preceding sentence shall be unlimited in duration
provided no Change in Control has occurred and, in the event of a Change in Control, all
such restrictions shall terminate one year thereafter.

     In addition to the foregoing and provided no Change in Control has occurred, if while
you or your Surviving Spouse is receiving retirement or other benefits pursuant to this
Agreement, in the judgment of the Committee you or your Surviving Spouse directly or
indirectly engage in activity or act in a manner which can be considered adverse to the
interest of the Company or any of its direct or indirect subsidiaries or affiliated
companies, the Committee may terminate rights to any further benefits hereunder.

     d. Except as may be provided to the contrary in a duly authorized written agreement
between you and the Company you acknowledge that the Company has made no commitments to you
of any kind with respect to the continuation of your employment, which we expressly agree
is an employment at will, and you or the Company shall have the unrestricted right to
terminate your employment with or without cause, at any time in your or its discretion.

     e. At the Company’s request, expressed through a Company officer, you agree to
provide such information with respect to matters which may arise in connection with this
Agreement as may be deemed necessary by the Company or the Committee, including for example
only and not in limitation, information concerning benefits payable to you from third
parties, and you further agree to submit to such medical examinations by duly licensed
physicians as may be requested by the Company from time to time. You also agree to direct
third parties to provide such information, and your Surviving Spouse’s

 

 

					
	Mr. Timothy Wadhams
	 	Page 10
	 	March 15, 2005

cooperation in providing such information is a condition to the receipt of survivor’s
benefits under this Agreement.

     f. To the extent permitted by law, no interest in this Agreement or benefits payable
to you or to your Surviving Spouse shall be subject to anticipation, or to pledge,
assignment, sale or transfer in any manner nor shall you or your Surviving Spouse have the
power in any manner to charge or encumber such interest or benefits, nor shall such
interest or benefits be liable or subject in any manner for the liabilities of you or your
Surviving Spouse’s debts, contracts, torts or other engagements of any kind.

     g. No person other than you and your Surviving Spouse shall have any rights or
property interest of any kind whatsoever pursuant to this Agreement, and neither you nor
your Surviving Spouse shall have any rights hereunder other than those expressly provided
in this Agreement. Upon the death of you and your Surviving Spouse no further benefits of
whatsoever kind or nature shall accrue or be payable pursuant to this Agreement.

     h. All benefits payable pursuant to this Agreement, other than pursuant to paragraph
10, shall be paid in installments of one-twelfth of the annual benefit, or at such shorter
intervals as may be deemed advisable by the Company in its discretion, upon receipt of your
or your Surviving Spouse’s written application, or by the applicant’s personal
representative in the event of any legal disability.

     i. Except as provided in paragraph 10, all benefits under this Agreement shall be
payable from the Company’s general assets, which assets (including all funds in the
Deferred Compensation Trust) are subject to the claims of the Company’s general creditors,
and are not set aside for your or your Surviving Spouse’s benefit.

     j. You agree that, if the Company establishes the Deferred Compensation Trust, the
Company is entitled at any time prior to a Change in Control to revoke such trust and
withdraw all funds theretofore deposited in such trust. You acknowledge that although this
Agreement refers from time to time to your or your Surviving Spouse’s trust account, no
separate trust will be created and all assets of any Deferred Compensation Trust will be
commingled.

     k. This Agreement shall be governed by the laws of the State of Michigan.

     12. We have agreed that the determinations of the Committee described in paragraph 11a shall
be conclusive as provided in such paragraph, but if for any reason a claim is asserted which
subverts the provisions of paragraph 11a, we agree that, except for causes of action which may
arise under paragraph 11b and the first paragraph of paragraph 11c and provided no Change in
Control has occurred, arbitration shall be the sole and exclusive remedy to resolve all disputes,
claims or controversies which could be the subject of litigation (hereafter referred to as
“dispute”) involving or arising out of this Agreement. It is our mutual intention that the
arbitration award will be final and binding and that a judgment on the award may be entered in any
court of competent jurisdiction and enforcement may be had according to its terms.

     The arbitrator shall be chosen in accordance with the commercial arbitration rules of the
American Arbitration Association and the expenses of the arbitration shall be borne equally by the
parties to the dispute. The place of the arbitration shall be the principal offices of the
American Arbitration Association in the metropolitan Detroit area.

 

 

					
	Mr. Timothy Wadhams
	 	Page 11
	 	March 15, 2005

     The arbitrator’s sole authority shall be to apply the clauses of this Agreement.

     We agree that the provisions of this paragraph 12, and the decision of the arbitrator with
respect to any dispute, with only the exceptions provided in the first paragraph of this paragraph
12, shall be the sole and exclusive remedy for any alleged cause of action in any manner based upon
or arising out of this Agreement. Subject to the foregoing exceptions, we acknowledge that since
arbitration is the exclusive remedy, neither of us or any party claiming under this Agreement has
the right to resort to any federal, state or local court or administrative agency concerning any
matters dealt with by this Agreement and that the decision of the arbitrator shall be a complete
defense to any action or proceeding instituted in any tribunal or agency with respect to any
dispute. The arbitration provisions contained in this paragraph shall survive the termination or
expiration of this Agreement, and shall be binding on our respective successors, personal
representatives and any other party asserting a claim based upon this Agreement.

     We further agree that any demand for arbitration must be made within one year of the time any
claim accrues which you or any person claiming hereunder may have against the Company; unless
demand is made within such period, it is forever barred.

     We are pleased to be able to make this supplemental plan available to you. Please examine the
terms of this Agreement carefully and at your earliest convenience indicate your assent to all of
its terms and conditions by signing and dating where provided below and returning a signed copy to
me.

	 	 	 	 	 
	 	Sincerely,

MASCO CORPORATION

 	 
	 	By  	 	 
	 	 	Richard A. Manoogian 	 
	 	 	Chief Executive Officer 	 
	 

                                                                       
         

DATE:                                                                     

 

 

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]

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 (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 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:

 

 

December 4, 2007

Mr. John G. Sznewajs

[Address]

Dear John:

          Our Company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the Company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. I am pleased to inform you that I
have designated you as a participant in the Plan, and this Agreement describes in full your
benefits pursuant to the Plan and all of the Company’s obligations to you, and yours to the Company
with respect to the Plan. These benefits as described below are contractual obligations of the
Company.

     For the purposes of this Agreement, words and terms are defined as follows:

          a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of (i) base salaries
and (ii) regular year-end cash bonuses paid with respect to the years in which such
salaries are paid (the bonus with respect to any such year, however, only to be included in
an amount not in excess of 60% of the base salary in effect at the end of such year),
divided by three, provided, however, (x) if any portion of a bonus is
excluded by the parenthetical contained in clause (ii) above, the total amount excluded
will be added to one or both of the other two years included in the calculation as long as
the amount so added does not result in a bonus with respect to any year exceeding 60% of
the base salary in effect at the end of that year, and (y) if you have on the date of
determination less than three full years of employment the foregoing calculation, including
any adjustment required by clause (x) above, shall be based on the average base salaries
and regular year-end cash bonuses paid to you while so employed.

          b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose election
by the Board or approval by the Board for stockholder election occurred within one year
after any “person” or “group of persons” as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or more of the combined
voting power of all outstanding voting securities of the Company, other than pursuant to a
tender offer approved by the Board prior to its commencement or pursuant to stock
acquisitions approved by the Board prior to their representing 25 percent or more of such
combined voting power.

 

 

          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 completing five Years of Service the Vested
Percentage is 0,(x) on your fiftieth birthday your Vested Percentage may not exceed 50%,
(y) on or prior to each of your birthdays following your fiftieth birthday your Vested
Percentage may not exceed the sum of 50% plus the product obtained by multiplying 10% by
the number of birthdays that have occurred following your fiftieth birthday, and (z) your
Vested Percentage in no event may exceed 100%.

          p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.

 

 

          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 marital or other rights under
state law as applied to retirement benefits from non-qualified plans. Upon your death on or after
age 65 should you be survived by your Surviving Spouse, your Surviving Spouse shall receive for
life, commencing upon the date of your death, 75% of the annual benefit payable to you under the
preceding sentence following your attainment of age 65; provided, further, if your
death should occur prior to age 65, your Surviving Spouse shall receive for life, commencing upon
the date of your death, 75% of the annual benefit which would have been payable to you under the
preceding sentence following your attainment of age 65, reduced by a factor of actuarial
equivalence as determined by the Committee, such that the Present Value of the aggregate payments
to be received by
your Surviving Spouse based on his or her life expectancy as of the date of your
death is equal to the Present Value, determined at the date of your death, of the aggregate
payments estimated to be received by your Surviving Spouse based on his or her life expectancy at
an age, and as if your Surviving Spouse had begun receiving payments, when you would have attained
age 65.

     5. If while employed by the Company you die prior to your attaining age 65 leaving a
Surviving Spouse, and provided you shall have been employed by the Company for two consecutive
Years or more, your Surviving Spouse shall receive annually for life, subject to paragraph 8 below,
75% of the SERP Percentage of your Average Compensation (with your SERP Percentage determined as
though you were given credit for additional Years of Service but no compensation increases between
the date of your death and the date you would have attained age 65), less: (i) a sum equal to the
annual benefit which would be payable to your Surviving Spouse under the Company funded qualified
pension plans and the defined benefit (pension) plan provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan if such benefit were converted to a life annuity
(such deduction, however, only to commence on the date
such benefit is first payable), (ii) a sum equal to the annual payments which would be received by

 

 

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 (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 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  	/s/ Timothy Wadhams
 	 
	 	 	President and Chief Executive Officer 	 
	 	 	 	 
	 

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

 

 

					
	 
	 	 
	 	October 2, 2000

Form for: Daniel Foley

October 2, 2000

Dear :

          Our company’s Board of Directors has adopted a plan whereby supplemental retirement and other
benefits, in addition to those provided under the Company’s pension and other benefit plans, will
be made available to those Company and subsidiary executives as may be designated from time to time
by the company’s Chief Executive Officer. The plan providing such benefits, as originally made
available to designated executives in 1987 and as subsequently amended from time to time heretofore
or in the future, is referred to in this letter as the “Plan”. You are currently a participant in
the Plan upon the terms of a letter agreement signed by you and dated      , . This
Agreement amends and replaces in its entirety your previously signed letter agreement and describes
in full your benefits pursuant to the Plan and all of the Company’s obligations to you, and yours
to the Company. These benefits as described below are contractual obligations of the Company.

     For the purposes of this Agreement, words and terms are defined as follows:

          a. “Average Compensation” shall mean the aggregate of your highest three years’
total annual cash compensation paid to you by the Company, consisting of (i) base salaries
and (ii) regular year-end cash bonuses paid with respect to the years in which such
salaries are paid, divided by three, provided, however, (x) if you have on
the date of determination less than three full years of employment the foregoing
calculation shall be based on the average base salaries and regular year-end cash bonuses
paid to you while so employed, and (y) if the determination of Average Compensation
includes any year in which you volunteered to reduce your salary or, as part of a program
generally applicable to participants in the Plan, you did not receive an increase in salary
compared with the immediately preceding year, the Committee referred to in paragraph 11
shall make a good faith determination of what your Average Compensation would have been
absent such salary reduction and absent such generally applicable program.

          b. A “Change in Control” shall be deemed to have occurred if, during any period of
twenty-four consecutive calendar months, the individuals who at the beginning of such
period constitute the Company’s Board of Directors, and any new directors (other than
Excluded Directors) whose election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors whose election
by the Board or approval by the Board for stockholder election occurred within one year
after any “person” or “group of persons” as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or more of the combined
voting power of all outstanding voting securities of the Company, other than 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.

 

 

					
	 
	 	Page 2
	 	October 2, 2000

          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

 

 

					
	 
	 	Page 3
	 	October 2, 2000

female mortality rates as set forth in Revenue Ruling 95-6 (or such other mortality table
that the Internal Revenue Service may prescribe in the future) and an interest rate equal
to the average yield for 30-year Treasury Constant Maturities, as reported in Federal
Reserve Statistical Releases G.13 and H.15, four months prior to the month of the date of
determination (or, if such interest rate ceases to be so reported, such other interest rate
as the Board of Directors deems is an appropriate substitute).

          k. “Retirement” shall mean your termination of employment with the Company, on or
after you attain age 65. Your acting as a consultant shall not be considered employment.

          l. “SERP Percentage” of your Average Compensation is 60%.

          m. “Surviving Spouse” shall be the person to whom you shall be legally married (under
the law of the jurisdiction of your permanent residence) at the date of (i) your Retirement
or death after attaining age 65 (if death terminated employment with the Company) for the
purposes of paragraphs 1, 2 and 3, (ii) your death for the purposes of paragraph 5 and, if
paragraph 5 is applicable, for the purposes of paragraph 3,(iii) the commencement of your
Disability for the purposes of paragraphs 6 and 7 and, as long as paragraphs 6 or 7 are
applicable, for the purposes of paragraph 3, (iv) your termination of employment for the
purposes of paragraph 4 and, if paragraph 4 is applicable, for purposes of paragraph 3 and
(v) a “Change in Control” for the purposes of paragraph 10 if none of clauses (i) through
(iv) has become applicable prior to the Change in Control and, if this clause (v) is
applicable, for purposes of paragraph 3. For the purposes of paragraphs 11a, 11e, 11f,
11g, 11h, 11i and 11j, “Surviving Spouse” shall be any spouse entitled to any benefits
hereunder.

          n. If you become Disabled, “Total Compensation” shall mean your annual base salary
rate at the time of your Disability plus the regular year-end cash bonus paid to you for
the year immediately prior thereto, provided, however, if the determination
of Total Compensation is for a year in which you volunteered to reduce your salary or, as
part of a program generally applicable to participants in the Plan, you did not receive an
increase in salary compared with the immediately preceding year, the Committee referred to
in paragraph 11 shall make a good faith determination of what your Total Compensation would
have been absent such salary reduction and absent such generally applicable program.

          o. “Vested Percentage” shall mean the sum of the following percentages: (i) 2%
multiplied by your Years of Service, plus (ii) 8% multiplied by the number of Years you
have been designated a participant in the Plan; provided, however, (w)
prior to completing five Years of Service the Vested Percentage is 0,(x) on or prior to
your fiftieth birthday your Vested Percentage may not exceed 50%, (y) on or prior to each
of your birthdays following your fiftieth birthday your Vested Percentage may not exceed
the sum of 50% plus the product obtained by multiplying 5% by the number of birthdays that
have occurred following your fiftieth birthday, and (z) your Vested Percentage in no event
may exceed 100%.

          p. “Year” shall mean twelve full consecutive months, and “year” shall mean a
calendar year.

 

 

					
	 
	 	Page 4
	 	October 2, 2000

          q. “Years of Service” shall mean the number of Years during which you were employed
by the Company or MascoTech, Inc. (excluding, however, Years of Service with a corporation
prior to the time it became a subsidiary of or otherwise affiliated with Masco
Corporation).

     1. In accordance with the Plan, upon your Retirement the Company will pay you annually
during your lifetime, subject to paragraph 8 below, the SERP Percentage of your Average
Compensation, less: (i) a sum equal to the annual benefit which would be payable to you upon your
Retirement if benefits payable to you under the Company funded qualified pension plans and the
defined benefit (pension) plan provisions of the Company’s Retirement Benefits Restoration Plan and
any similar plan were converted to a life annuity, or if you are married when you retire, to a 50%
joint and spouse survivor life annuity, and (ii) a sum equal to the annual benefit which would be
payable to you upon Retirement if your vested accounts in the Company’s qualified defined
contribution plans (excluding your contributions and earnings thereon in the Company’s 401(k)
Savings Plan) and the defined contribution (profit sharing) provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan were converted to a life annuity in accordance with
the Profit Sharing Conversion Factor, provided, however, in all cases the amount
offset pursuant to these subsections (i) and (ii) shall be determined prior to the effect of any
payments from the plans and trusts referred to therein which are authorized pursuant to any
Qualified Domestic Relations Order under ERISA, or other comparable order allocating marital or
other rights under state law as applied to retirement benefits from non-qualified plans.

     2. Upon your death after Retirement or while employed by the Company after attaining age 65,
your Surviving Spouse shall receive for life 75% of the annual benefit pursuant to paragraph 1 of
this Agreement which was payable to you prior to your death (or, if death terminated employment
after attaining age 65, which would have been payable to you had your Retirement occurred
immediately prior to your death).

     3. The Company will provide, purchase or at its option provide reimbursement for premiums paid
for such supplemental medical insurance as the Company in its sole discretion may deem advisable
from time to time (i) for you and your Surviving Spouse for the lifetime of each of you (A)
following a termination of your employment with the Company due to Retirement or Disability, and
(B) following any other termination of employment with the Company provided (x) you and your
Surviving Spouse are not covered by another medical insurance program substantially all of the cost
of which is paid by another employer, (y) on the date of such termination your Vested Percentage is
not less than 80% and (z) the benefits under this paragraph 3 shall not commence until you have
attained age 60 or your earlier death to the extent you die leaving a Surviving Spouse, and (ii)
for your Surviving Spouse for his or her lifetime upon a termination of your employment with the
Company due to your death.

     4. If your employment with the Company is for any reason terminated prior to Retirement,
other than as a result of circumstances described in paragraphs 2, 5 or 6 of this Agreement or
following a Change in Control, and if prior to the date of termination you have completed 5 or more
Years of Service, upon your attaining age 65 the Company will pay to you annually during your
lifetime, subject to paragraph 8 below, the Vested Percentage of the result obtained by (1)
multiplying your SERP Percentage at the date your employment terminated by your Average
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

 

 

					
	 
	 	Page 5
	 	October 2, 2000

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

     5. If while employed by the Company you die prior to your attaining age 65 leaving a
Surviving Spouse, and provided you shall have been employed by the Company for two consecutive
Years or more, your Surviving Spouse shall receive annually for life, subject to paragraph 8 below,
75% of the SERP Percentage of your Average Compensation (assuming no compensation increases between
the date of your death and the date you would have attained age 65), less: (i) a sum equal to the
annual benefit which would be payable to your Surviving Spouse under the Company funded qualified
pension plans and the defined benefit (pension) plan provisions of the Company’s Retirement
Benefits Restoration Plan and any similar plan if such benefit were converted to a life annuity
(such deduction, however, only to commence on the date such benefit is first payable), and
(ii) a sum equal to the annual payments which would be received by your Surviving Spouse as if your
spouse were designated as the beneficiary of your vested accounts in the Company’s qualified
defined benefit contribution plans (excluding your contributions and earnings thereon in the
Company’s 401(k) Savings Plan) and the defined contribution (profit sharing) provisions of the
Company’s Retirement Benefits Restoration Plan and any similar plan and such accounts were converted to a life annuity at the time of your death in
accordance with the Profit Sharing Conversion Factor, provided, however, in all
cases the amount offset pursuant to these subsections (i) and (ii) shall be determined prior to the
effect of any

 

 

					
	 
	 	Page 6
	 	October 2, 2000

payments from the plans and trusts referred to therein which are authorized pursuant
to any Qualified Domestic Relations Order under ERISA, or other comparable order allocating marital
or other rights under state law as applied to retirement benefits from non-qualified plans. No
death benefits are payable except to your Surviving Spouse.

     6. If you shall have been employed by the Company for two Years or more and while employed
by the Company you become Disabled prior to your attaining age 65, until the earlier of your death,
termination of Disability or attaining age 65 the Company will pay you an annual benefit, subject
to paragraph 8 below, equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the Company. If your
Disability continues until you attain age 65, you shall be considered retired and you shall receive
retirement benefits pursuant to paragraph 1 above, based upon your Average Compensation as of the
date it is determined you became Disabled.

     7. If you die leaving a Surviving Spouse while receiving Disability benefits pursuant to
paragraph 6 of this Agreement, you will be deemed to have retired on your death and your Surviving
Spouse shall receive for life 75% of the annual benefit which would have been payable to you if you
had retired on the date of your death and your benefit determined pursuant to paragraph 1, based
upon your Average Compensation as of the date you became Disabled and with credit for Years of
Service from the date you became Disabled.

     8. If the age of your Surviving Spouse is more than 20 years younger than your age, then the
annual benefit payable under paragraphs 1, 4, 5 and 6 of this Agreement and the benefit payable as
“the SERP Percentage of your Average Compensation”, as that phrase is used in paragraph 5 of this
Agreement, shall be reduced by the percentage obtained by multiplying 1.5% times the number of
Years or portion thereof by which your Surviving Spouse is more than 20 years younger than you.

     9. If you or your Surviving Spouse is eligible to receive benefits hereunder, unless
otherwise specifically agreed by the Company in writing, you and your Surviving Spouse will not be
able to receive benefits under any other Company sponsored non-qualified retirement plans other
than the Company’s Retirement Benefits Restoration Plan. For this purpose benefits received under
the Company’s non-qualified stock option or stock award plans will not be considered to have been
received under a Company sponsored non-qualified retirement plan even though such benefits are
received after retirement. Except as provided in the last sentence of paragraph 4 and in paragraph
10 of this Agreement, no benefits will be paid to your Surviving Spouse pursuant to this Agreement
unless upon your death you were employed by the Company, Disabled or had taken Retirement from the
Company.

     10. Change in Control. (i) Immediately upon the occurrence of any Change in Control:

          (1) If you are then employed by the Company, your Vested Percentage, if not already
100%, shall be deemed for all purposes of this Agreement to be 100%.

          (2) If the Deferred Compensation Trust has theretofore been established or is
established within thirty days after the Change in Control, the Company shall forthwith
deposit to an account in your name (or that of your Surviving Spouse if you are then 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:

 

 

					
	 
	 	Page 7
	 	October 2, 2000

          (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

 

 

					
	 
	 	Page 8
	 	October 2, 2000

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,

 

 

					
	 
	 	Page 9
	 	October 2, 2000

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

 

 

					
	 
	 	Page 10
	 	October 2, 2000

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

 

 

					
	 
	 	Page 11
	 	October 2, 2000

arbitration is the exclusive remedy, neither of us or any party claiming under this Agreement has
the right to resort to any federal, state or local court or administrative agency concerning any
matters dealt with by this Agreement and that the decision of the arbitrator shall be a complete
defense to any action or proceeding instituted in any tribunal or agency with respect to any
dispute. The arbitration provisions contained in this paragraph shall survive the termination or
expiration of this Agreement, and shall be binding on our respective successors, personal
representatives and any other party asserting a claim based upon this Agreement.

     We further agree that any demand for arbitration must be made within one year of the time any
claim accrues which you or any person claiming hereunder may have against the Company; unless
demand is made within such period, it is forever barred.

     We are pleased to be able to make this supplemental plan available to you. Please examine the
terms of this Agreement carefully and at your earliest convenience indicate your assent to all of
its terms and conditions by signing and dating where provided below and returning a signed copy to
me.

	 	 	 	 	 
	 	Sincerely,

MASCO CORPORATION

 	 
	 	By  	 	 
	 	 	Richard A. Manoogian 	 
	 	 	Chief Executive Officer 	 
	 

                                                                       
         

DATE:exv10wg

 

Exhibit 10.g

COMPENSATION OF NON-EMPLOYEE DIRECTORS

     Non-employee Directors receive an annual retainer of $80,000, of which one-half is paid in
cash. In order to more closely align the compensation of non-employee Directors with long-term
enhancement of stockholder value, the other half of the retainer is paid by means of restricted
stock granted under our 2005 Long Term Stock Incentive Plan (the “2005 Plan”) in accordance with
our Non-Employee Directors Equity Program (the “Directors Equity Program”), which has the same
material terms as their 1997 Non-Employee Directors Stock Plan that expired in 2007.

     Grants of restricted stock vest in 20% equal annual installments over a five-year period. A
new non-employee Director is given an initial grant of restricted stock valued at one-half of the
Director’s total retainer for the initial five years of anticipated service on the Board (subject
to adjustment for partial years). After full vesting of the initial grant, each non-employee
Director thereafter receives an annual grant of restricted stock valued at one-half of the annual
retainer. These annual grants vest over the succeeding five years.

     The Directors Equity Program also provides for the grant to each non-employee Director on the
date of each Annual Meeting of Stockholders of a non-qualified option to purchase 8,000 shares of
Masco common stock at the fair market value on the date of grant. In addition, each new
non-employee Director receives a one-time stock option grant of 32,000 shares under our 2005 Plan.
All of these options become exercisable in equal annual installments on the first five
anniversaries of the grant date. Each option has a ten-year term for exercise, except that options
may generally be exercised for only a limited period of time upon death or, for options granted
before October 27, 2005, following termination of service as a non-employee Director for any reason
other than permanent and total disability or retirement on or after Masco’s normal retirement age
for Directors.

     The Directors Stock Plan restricts Directors from engaging in certain competitive activities while serving as a Director and for one year following
termination of service as a Director. Upon breach of this noncompete agreement, we may require the
Director to pay us certain amounts realized from awards of restricted stock and option exercises to
the extent realized on or after termination or within two years prior to termination.

     The Board has established stock ownership guidelines for non-employee Directors that require
Directors to retain at least 50% of the shares of restricted stock they received until the date of
their termination from service as a Director. The vesting arrangements and stock retention
requirement are intended to assure that non-employee Directors maintain a financial interest in
Masco over an extended period of time.

     We provide a few additional benefits to Directors. Non-employee Directors are eligible to
participate in our matching gifts program (which is generally available to our employees) pursuant
to which we will match gifts made to eligible educational and cultural institutions up to an
aggregate of $10,000 per year for each participant. In addition, if space is available, a
Director’s spouse is permitted to accompany the Director who travels to attend Board or committee
meetings on Company aircraft. We have permitted, on an infrequent basis, non-employee Directors’
personal use of Company aircraft. Directors are also eligible to participate in our employee
purchase program, which is generally available to our employees and enables them to purchase our
products for their personal use at discounted prices. We consult with former Directors from time to
time and have followed a practice of paying $50,000 per year to former Directors who make
themselves available for consulting for two years after ending their service on the Board.

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