Document:

Exhibit 10.b.i(iv)

 

	
 
    	
[Date]
    

 

 

Name

Address1

Address2

Address3

Address4

 

Dear Salutation:

 

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

 

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

 

WHEN THE OPTION IS EXERCISABLE AND TERMINATION

 

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

 

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

 

 

ACCEPTANCE

 

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

 

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

 

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

 

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

 

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

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
MASCO   CORPORATION
    
	
 
    	
 
    
	
 
    	
Richard   A. Manoogian
    
	
 
    	
Chairman   of the Board
    
	
 
    	
and   Chief Executive Officer
    

 

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

 

	
 
    	
 
    
	
 
    	
(Signature   of Recipient)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Mailing   Address)
    
	
 
    	
 
    
	
 
    	
(Social   Security Number)
    
	
 
    	
 
    
	
 
    	
Dated:
    	
 
    

 

 

APPENDIX TO OPTION AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

In addition you agree, in consideration for the grant of the Option and regardless of whether the Option becomes exercisable or is exercised, while you are a Director of the Company and for a period of one year following the termination of your term as a Director of the Company, other than a termination following a Change in Control, not to engage in, and not to become associated in a “Prohibited Capacity” (as hereinafter defined) with any other entity engaged in, any “Business Activities” (as hereinafter defined) and not to encourage or assist others in encouraging any employee of the Company or any of its subsidiaries to terminate employment or to become engaged in any such Prohibited Capacity with an entity engaged in any Business Activities. “Business Activities” shall mean the design, development, manufacture, sale, marketing or servicing of any product or providing of services competitive with the products or services of the Company or any subsidiary at any time the Option is outstanding, to the extent such competitive products or services are distributed or provided

 

 

either (1) in the same geographic area as are such products or services of the Company or any of its subsidiaries, or (2) to any of the same customers as such products or services of the Company or any of its subsidiaries are distributed or provided. “Prohibited Capacity” shall mean being associated with an entity as a director, employee, consultant, investor or another capacity where (1) confidential business information of the Company or any of its subsidiaries could be used in fulfilling any of your duties or responsibilities with such other entity, or (2) an investment by you in such other entity represents more than 1% of such other entity’s capital stock, partnership or other ownership interests.

 

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

 

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

 

Section 3 of the Plan provides, in part, that the Committee appointed by the Company’s Board of Directors to administer the Plan shall have the authority to interpret the Plan and award agreements, and decide all questions and settle all controversies and disputes relating thereto. It further provides that the determinations, interpretations and decisions of the Committee are within its sole discretion and are final, conclusive and binding on all persons. In addition, you and the Company agree that if for any reason a claim is asserted against the Company or any of its subsidiaries or affiliated companies or any officer, employee or agent of the foregoing which (1) is within the scope of the Dispute Resolution Policy (the terms of which are incorporated herein); (2) subverts the provisions of Section 3 of the Plan; or (3) involves any of the provisions of the Agreement or the Plan or the provisions of any other option agreements relating to Company common stock or restricted stock awards or other awards or the claims of yourself or any persons to the benefits thereof, in order to provide a more speedy and economical resolution, the Dispute Resolution Policy shall be the sole and exclusive remedy to resolve all disputes, claims or controversies which are set forth above, and you shall be deemed to be an employee within the scope of the Dispute Resolution Policy and you and the Company shall be bound as if you were an employee for all claims within the scope of the Dispute Resolution Policy, except as otherwise agreed in writing by you and the Company. It is our mutual intention that any arbitration award entered under the Dispute Resolution

 

 

Policy will be final and binding and that a judgment on the award may be entered in any court of competent jurisdiction.  Notwithstanding the provisions of the Dispute Resolution Policy, however, the parties specifically agree that any mediation or arbitration required by this paragraph shall take place at the offices of the American Arbitration Association located in the metropolitan Detroit area or such other location in the metropolitan Detroit area as the parties might agree. The provisions of this paragraph: (a) shall survive the termination or expiration of this Agreement, (b) shall be binding upon the Company’s and your respective successors, heirs, personal representatives, designated beneficiaries and any other person asserting a claim based upon the Agreement, (c) shall supersede the provisions of any prior agreement between you and the Company with respect to any of the Company’s option or restricted stock incentive plans or other awards to the extent the provisions of such other agreement requires arbitration between you and the Company, and (d) may not be modified without the consent of the Company.  Subject to the exception set forth above, you and the Company acknowledge that neither of us nor any other person asserting a claim described above has the right to resort to any federal, state or local court or administrative agency concerning any such claim and the decision of the arbitrator shall be a complete defense to any action or proceeding instituted in any tribunal or agency with respect to any dispute.

 

The Agreement shall be governed by and interpreted in accordance with Michigan law.Exhibit 10.b.ii

 

MASCO CORPORATION

2004 RESTRICTED STOCK AWARD PROGRAM

(a program established under the

1991 long term stock incentive plan)

 

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

 

Section 1.                                          Purpose

 

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

 

Section 2.                                          Eligibility

 

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

 

Section 3.                                          Performance Period

 

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

 

Section 4.                                          Administration

 

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

 

Section 5.                                          Performance Goals

 

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

 

 

Section 6.              Awards

 

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

 

Section 7.              Certification and Payment

 

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

 

Section 8.              Other Plans and Programs

 

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

 

Section 9.              Amendment

 

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

 

Section 10.            Adoption and Duration

 

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

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