Document:

<PAGE>
                                                               EXHIBIT 4.a.i(ii)

                                   RESOLUTIONS
                                     OF THE
                                PRICING COMMITTEE
                                     OF THE
                               BOARD OF DIRECTORS
                              OF MASCO CORPORATION
                                 April 16, 1998

     In lieu of a meeting, the undersigned being all of the members of the
Pricing Committee of the Board of Directors of Masco Corporation, a Delaware
corporation (the "Company"), adopt the following resolutions: WHEREAS, the
Company has filed a Registration Statement (No. 33-56043) on Form S-3 with the
Securities and Exchange Commission, which is in effect; WHEREAS, the Company
desires to create an additional series of securities under the Indenture dated
as of December 1, 1982 (as amended to the date hereof, the "Indenture"), with
The First National Bank of Chicago, as successor trustee to Morgan Guaranty
Trust Company of New York (the "Trustee"), providing for the issuance from time
to time of unsecured debentures, notes or other evidences of indebtedness of
this Company ("Securities") in one or more series under such Indenture; and

     WHEREAS, capitalized terms used in these resolutions and not otherwise
defined are used with the same meaning ascribed to such terms in the Indenture;
THEREFORE RESOLVED, that there is established a series of Securities under the
Indenture, the terms of which shall be as follows:

          1. The Securities of such series shall be designated as the "6.625%
     Debentures Due April 15, 2018".

          2. The aggregate principal amount of Securities of such series which
     may be authenticated and delivered under the Indenture is limited to Two
     Hundred Fifty Million Dollars ($250,000,000), expect for Securities of such
     series authenticated and delivered upon registration of, transfer of, or in
     exchange for, or in lieu of, other Securities of such series pursuant to
     Sections 2.07, 2.08, 2.09, 9.04 or 14.03 of the Indenture.

          3. The date on which the principal of the Securities of such series
     shall be payable is April 15, 2018.

          4. The Securities of such series shall bear interest from April 21,
     1998, at the rate of 6.625% per annum, payable semi-annually on April 15
     and October 15 of each year commencing on October 15, 1998, until the
     principal thereof is paid or made available for payment. The April 1 or
     October 1 (whether or not a business day), as the case may be, next

<PAGE>
     preceding each such interest payment date shall be the "record date" for
     the determination of holders to whom interest is payable.

          5. The Securities shall be issued initially in the form of one or more
     global securities registered in the name of Cede & Co., as nominee of The
     Depository Trust Company ("DTC"), and will be held by the Trustee as
     custodian for DTC. The Securities shall be subject to the procedures of DTC
     described in the Company's prospectus supplement dated April 16, 1998
     relating to the Securities and, except as described in such prospectus
     supplement, will not be issued in definitive registered form.

          6. The principal of and interest on the Securities of such series
     shall be payable at the office or agency of this Company maintained for
     such purpose under Section 3.02 of the Indenture in the Borough of
     Manhattan, The City of New York, or at any other office or agency
     designated by the Company, for such purpose pursuant to the Indenture;
     provided, however, that if Securities in definitive registered form are
     issued, then at the option of the Company payment of interest may be made
     by check mailed to the address of the person entitled thereto as such
     address shall appear on the Company's registry books.

          7. The Securities of such series shall not be redeemable prior to
     maturity.

          8. The Securities of such series shall be issuable in denominations of
     One Thousand Dollars ($1,000) and any integral multiples thereof.

          9. The Securities shall be issuable at a price such that this Company
     shall receive $247,460,000 after an underwriting discount of $2,187,500.

          10. The Securities shall be subject to defeasance and discharge and to
     defeasance of certain obligations as set forth in the Indenture.

     FURTHER RESOLVED, that the Securities of such series are declared to be
issued under the Indenture and subject to the provisions hereof; FURTHER
RESOLVED, that the Chairman of the Board, the President or any Vice President of
the Company is authorized to execute, on the Company's behalf and in its name,
and the Secretary or any Assistant Secretary of the Company is authorized to
attest to such execution and under the Company's seal (which may be in the form
of a facsimile of the Company's seal), $250,000,000 aggregate principal amount
of the Securities of such series (and in addition Securities to replace lost,
stolen, mutilated or destroyed Securities and Securities required for

                                        2
<PAGE>

exchange, substitution or transfer, all as provided in the Indenture) in fully
registered form in substantially the form of the note filed as an exhibit to the
Company's Registration Statement on Form S-3 (No. 33-56043), but with such
changes and insertions therein as are appropriate to conform the Securities to
the terms set forth herein or otherwise as the respective officers executing the
Securities shall approve and as are not inconsistent with these resolutions,
such approval to be conclusively evidenced by such officer's execution and
delivery of such Securities, and to deliver such Securities to the Trustee for
authentication, and the Trustee is authorized and directed thereupon to
authenticate and deliver the same to or upon the written order of this Company
as provided in the Indenture;

     FURTHER RESOLVED, that the signatures of the Company officers so authorized
to execute the Securities of such series may be the manual or facsimile
signatures of the present or any future authorized officers and may be imprinted
or otherwise reproduced thereon, and the Company for such purpose adopts each
facsimile signature as binding upon it notwithstanding the fact that at the time
the respective Securities shall be authenticated and delivered of disposed of,
the individual so signing shall have ceased to hold such office;

     FURTHER RESOLVED, that Salomon Brothers Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated are appointed as the underwriters for the issuance
and sale of the Securities of such series, and the Chairman of the Board, the
President or any Vice President of the Company is authorized, in the Company's
name and on its behalf, to execute and deliver an Underwriting Agreement,
substantially in the form heretofore approved by the Company's Board of
Directors, with such underwriters, with such changes and insertions therein as
are appropriate to conform such Underwriting Agreement to the terms set forth
herein or otherwise as the officer executing such Underwriting Agreement shall
approve and as are not inconsistent with these resolutions, such approval to be
conclusively evidenced by such officer's execution and delivery of the
Underwriting Agreement;

     FURTHER RESOLVED, that The First National Bank of Chicago, the Trustee
under the Indenture, is appointed trustee for Securities of such series, and as
Agent of this Company for the purpose of effecting the registration, transfer
and exchange of the Securities of such series as provided in the Indenture, and
the corporate trust office of The First National Bank of Chicago in the Borough
of Manhattan, The City of New York is designated pursuant to the Indenture as
the office or agency of the Company where such Securities may be presented for
registration, transfer and exchange and where notices and demands to or upon
this Company in respect of the Securities and the Indenture may be served;

                                        3
<PAGE>

     FURTHER RESOLVED, that The First National Bank of Chicago is appointed
Paying Agent of this Company for the payment of interest on and principal of the
Securities of such series, and the corporate trust office of The First National
Bank of Chicago, is designated, pursuant to the Indenture, as the office or
agency of the Company where Securities may be presented for payment; and

     FURTHER RESOLVED, that each of the Company's officers is authorized and
directed, on behalf of the Company and in its name, to do or cause to be done
everything such officer deems advisable to effect the sale and delivery of the
Securities of such series pursuant to the Underwriting Agreement and otherwise
to carry out the Company's obligations under the Underwriting Agreement, and to
do or cause to be done everything and to execute and deliver all documents as
such officer deems advisable in connection with the execution and delivery of
the Underwriting Agreement and the execution, authentication and delivery of
such Securities (including, without limiting the generality of the foregoing,
delivery to the Trustee of the Securities for authentication and of requests or
orders for the authentication and delivery of Securities).

<PAGE>

                 Permanent Global Registered Fixed Rate Security

     THIS DEBENTURE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR NOTES IN CERTIFICATED FORM, THIS DEBENTURE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC") TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS DEBENTURE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO MASCO CORPORATION OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                MASCO CORPORATION
                       6.625% Debenture Due April 15, 2018

REGISTERED                                                 CUSIP No. 574599 AR 7
No. R-1

Masco Corporation, a corporation duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Company"), for value received,
hereby promises to pay to CEDE & CO. or registered assigns, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, the
principal sum of TWO HUNDRED MILLION DOLLARS ($200,000,000) on April 15, 2018,
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest, semi-annually on April 15 and October 15 of each year, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Debenture, from the April 15 or October
15, as the case may be, next preceding the date of this Debenture to which
interest has been paid or duly provided for, unless the date hereof is a date to
which interest has been paid or duly provided for, in which case from the date
of this Debenture, or unless no Interest has been paid or duly provided for on
the Debentures since the original issue date (as defined in the Indenture
referred to on the reverse hereof) of this Debenture, in which case from the
original issue date, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after April 1
or October 1, as the case may be, and before the following April 15 or October
15, this Debenture shall bear interest from such April 15 or October 15;
provided, however,

                                       1

<PAGE>

that if the Company shall default in the payment of interest on such April 15 or
October 15, then this Debenture shall bear interest from the next preceding
April 15 or October 15 to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for on the Debentures since the
original issue date (as defined in such Indenture) of this Debenture, from the
original issue date hereof. The interest so payable on any April 15 or October
15 will, subject to certain exceptions provided in such Indenture, be paid to
the person in whose name this Debenture is registered at the close of business
on the April 1 or October 1, as the case may be, next preceding such April 15 or
October 15, whether or not such April 1 or October 1 is a business day, and may,
at the option of the Company, be paid by check mailed to the registered address
of such person.

Reference is made to the further provisions of this Debenture set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.

This Debenture shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee under such Indenture.

                             ****[end of page 2]***

                                        2

<PAGE>

IN WITNESS WHEREOF, Masco Corporation has caused this instrument to be executed
in its corporate name by the manual or facsimile signature of its Chairman of
the Board or its President and imprinted with a manual or facsimile of its
corporate seal, attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.

Dated:    April 21, 1997

Masco Corporation

By /s/Richard A. Manoogian
      Chairman of the Board

Attest

By /s/John R. Leekley
      Assistant Secretary

CERTIFICATE OF AUTHENTICATION

This is one of the securities of the series designated therein referred to in
the within-mentioned indenture.

THE FIRST NATIONAL BANK OF CHICAGO,
                    AS TRUSTEE

BY________________________
AUTHORIZED OFFICER

                                        3

<PAGE>

                                REVERSE OF NOTES

     This Debenture is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Company (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of December 1, 1982 (herein called
the "Indenture"), duly executed and delivered by the Company to The First
National Bank of Chicago (as successor trustee to Morgan Guaranty Trust Company
of New York), Trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and holders of the Securities. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any), may be subject to different sinking, purchase or analogous funds (if
any), may be subject to different covenants and Events of Default and may
otherwise vary as in the Indenture provided. This Debenture is one of a series
designated as the 6.625% Debentures Due April 15, 2018 of the Company, limited
in aggregate principal amount to $250,000,000.

     In case an Event of Default with respect to the 6.625% Debentures Due April
15, 2018 shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become due and payable, in the manner,
with the effect and subject to the conditions provided in the Indenture.

    The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66-2/3% in aggregate principal
amount of the Securities at the time outstanding of all series to be affected
(voting as a class), evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Securities
of each such series; provided, however, that no such supplemental indenture
shall (i) extend the final maturity of any Security, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or any premium thereon, or reduce any amount payable on redemption
thereof or make the principal thereof or any interest of premium thereon payable
in any coin or currency other than that hereinbefore provided, or impair or
affect the right of any holder to institute suit for payment thereof or the
right of repayment, if any, at the option of the holder, without the consent of
the holder of each Security so affected, or (ii) reduce the aforesaid principal
amount of Securities of all series to be affected, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Securities so affected then outstanding. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, prior to any declaration accelerating
the maturity of such Securities, the holders of a majority in aggregate
principal amount of the Securities of such series at the time outstanding

                                        4
<PAGE>

  (or, in the case of certain defaults or Events of Default, all the Securities)
may on behalf of the holders of all of the Securities of such series (or all the
Securities, as the case may be) waive any such past default or Event of Default
under the Indenture and its consequences except a default in the payment of
principal of, premium, if any, or interest, if any, on any of the Securities.
Any such consent or waiver by the holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and any Debentures which
may be issued in exchange or transfer hereof or in substitution herefor,
irrespective of whether or not any notation thereof is made upon this Debenture
or such other Debentures.

     No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Debenture at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.

     The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. Upon due presentment for
registration of transfer of this Debenture at the office or agency of the
Company for such registration in the Borough of Manhattan, The City of New York,
or any other location or locations as may be provided for pursuant to the
Indenture, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.

     The Debentures may not be redeemed prior to maturity.

     The Debentures will be subject to defeasance and discharge and to
defeasance of certain obligations as set forth in the Indenture.

     The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the holder hereof as the absolute hereof (whether or not this
Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon), for the purpose of receiving payment of or on account of
the principal hereof and, subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Company nor the Trustee nor
any such agent shall be affected by any notice to the contrary. All payments
made to or upon the order of such holder shall, to the extent of the sum or sums
paid, effectually satisfy and discharge liability for moneys payable hereon.

     No recourse for the payment of the principal of, or premium, if any, or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall

                                        5
<PAGE>

be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

     All terms used in this Debenture which are defined in the Indenture shall
have the respective meanings ascribed to them therein.

     This Debenture shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of that State.

                              ***[end of page 6]***
The following abbreviations, where such abbreviations appear on this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants
in common UNIF
GIFT MIN ACT-..............Custodian..............

                   (Cust)                    (Minor)
                    under Uniform Gifts to Minors Act........................
                                                                         (State)
Additional abbreviations may also be used though not in the above list.

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
                                      unto

________________________________________________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER
 IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________

________________________________________________________________________________
             PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE

________________________________________________________________________________
      the within Debenture of MASCO CORPORATION and hereby does irrevocably
                             constitute and appoint

                                                         Attorney
 to transfer the said Debenture on the books of the within-named Company, with
                  full power of substitution in the premises.

Dated
     _______________        ____________________________________________________
                            NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
                            CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
                            THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
                            ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

                                        6
<PAGE>

                 Permanent Global Registered Fixed Rate Security

     THIS DEBENTURE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR NOTES IN CERTIFICATED FORM, THIS DEBENTURE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC") TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS DEBENTURE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO MASCO CORPORATION OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                MASCO CORPORATION
                       6.625% Debenture Due April 15, 2018

REGISTERED                                                 CUSIP No. 574599 AR 7
No. R-2

Masco Corporation, a corporation duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Company"), for value received,
hereby promises to pay to CEDE & CO. or registered assigns, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, the
principal sum of FIFTY MILLION DOLLARS ($50,000,000) on April 15, 2018, in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay
interest, semi-annually on April 15 and October 15 of each year, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Debenture, from the April 15 or October
15, as the case may be, next preceding the date of this Debenture to which
interest has been paid or duly provided for, unless the date hereof is a date to
which interest has been paid or duly provided for, in which case from the date
of this Debenture, or unless no Interest has been paid or duly provided for on
the Debentures since the original issue date (as defined in the Indenture
referred to on the reverse hereof) of this Debenture, in which case from the
original issue date, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after April 1
or October 1, as the case may be, and before the following April 15 or October
15, this Debenture shall bear interest from such April 15 or October 15;
provided, however,

                                       1

<PAGE>
]

that if the Company shall default in the payment of interest on such April 15 or
October 15, then this Debenture shall bear interest from the next preceding
April 15 or October 15 to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for on the Debentures since the
original issue date (as defined in such Indenture) of this Debenture, from the
original issue date hereof. The interest so payable on any April 15 or October
15 will, subject to certain exceptions provided in such Indenture, be paid to
the person in whose name this Debenture is registered at the close of business
on the April 1 or October 1, as the case may be, next preceding such April 15 or
October 15, whether or not such April 1 or October 1 is a business day, and may,
at the option of the Company, be paid by check mailed to the registered address
of such person.

Reference is made to the further provisions of this Debenture set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.

This Debenture shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee under such Indenture.

                             ****[end of page 2]***

                                        2

<PAGE>

IN WITNESS WHEREOF, Masco Corporation has caused this instrument to be executed
in its corporate name by the manual or facsimile signature of its Chairman of
the Board or its President and imprinted with a manual or facsimile of its
corporate seal, attested by the manual or facsimile signature of its Secretary
or an Assistant Secretary.

Dated:    April 21, 1997

Masco Corporation

By/s/Richard A. Manoogian
     Chairman of the Board

Attest

By/s/John R. Leekley
     Assistant Secretary

CERTIFICATE OF AUTHENTICATION

This is one of the securities of the series designated therein referred to in
the within-mentioned indenture.

THE FIRST NATIONAL BANK OF CHICAGO,
                    AS TRUSTEE

BY________________________
AUTHORIZED OFFICER

                                        3

<PAGE>

                                REVERSE OF NOTES

     This Debenture is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Company (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of December 1, 1982 (herein called
the "Indenture"), duly executed and delivered by the Company to The First
National Bank of Chicago (as successor trustee to Morgan Guaranty Trust Company
of New York), Trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and holders of the Securities. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any), may be subject to different sinking, purchase or analogous funds (if
any), may be subject to different covenants and Events of Default and may
otherwise vary as in the Indenture provided. This Debenture is one of a series
designated as the 6.625% Debentures Due April 15, 2018 of the Company, limited
in aggregate principal amount to $250,000,000.

     In case an Event of Default with respect to the 6.625% Debentures Due April
15, 2018 shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become due and payable, in the manner,
with the effect and subject to the conditions provided in the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Securities at the time outstanding of all series to be affected
(voting as a class), evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Securities
of each such series; provided, however, that no such supplemental indenture
shall (i) extend the final maturity of any Security, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or any premium thereon, or reduce any amount payable on redemption
thereof or make the principal thereof or any interest of premium thereon payable
in any coin or currency other than that hereinbefore provided, or impair or
affect the right of any holder to institute suit for payment thereof or the
right of repayment, if any, at the option of the holder, without the consent of
the holder of each Security so affected, or (ii) reduce the aforesaid principal
amount of Securities of all series to be affected, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Securities so affected then outstanding. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, prior to any declaration accelerating
the maturity of such Securities, the holders of a majority in aggregate
principal amount of the Securities of such series at the time outstanding

                                        4
<PAGE>

(or, in the case of certain defaults or Events of Default, all the Securities)
may on behalf of the holders of all of the Securities of such series (or all the
Securities, as the case may be) waive any such past default or Event of Default
under the Indenture and its consequences except a default in the payment of
principal of, premium, if any, or interest, if any, on any of the Securities.
Any such consent or waiver by the holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and any Debentures which
may be issued in exchange or transfer hereof or in substitution herefor,
irrespective of whether or not any notation thereof is made upon this Debenture
or such other Debentures.

     No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Debenture at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.

     The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. Upon due presentment for
registration of transfer of this Debenture at the office or agency of the
Company for such registration in the Borough of Manhattan, The City of New York,
or any other location or locations as may be provided for pursuant to the
Indenture, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.

     The Debentures may not be redeemed prior to maturity.

     The Debentures will be subject to defeasance and discharge and to
defeasance of certain obligations as set forth in the Indenture.

     The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the holder hereof as the absolute hereof (whether or not this
Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon), for the purpose of receiving payment of or on account of
the principal hereof and, subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Company nor the Trustee nor
any such agent shall be affected by any notice to the contrary. All payments
made to or upon the order of such holder shall, to the extent of the sum or sums
paid, effectually satisfy and discharge liability for moneys payable hereon.

     No recourse for the payment of the principal of, or premium, if any, or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall

                                        5
<PAGE>

be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

     All terms used in this Debenture which are defined in the Indenture shall
have the respective meanings ascribed to them therein.

     This Debenture shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of that State.

                              ***[end of page 6]***

                                        6

<PAGE>

The following abbreviations, where such abbreviations appear on this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT MIN ACT-..............Custodian..............

                   (Cust)                    (Minor)
                  under Uniform Gifts to Minors Act............................
                                                                         (State)
Additional abbreviations may also be used though not in the above list.

            FOR VALUE RECEIVED, the undersigned hereby sells, assigns
                               and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
  IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________________________
   PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE

________________________________________________________________________________
      the within Debenture of MASCO CORPORATION and hereby does irrevocably
                             constitute and appoint

                                                                 Attorney
to transfer the said Debenture on the books of the within named Company, with
full power of substitution in the premises.

Dated
     ___________________    ____________________________________________________
                            NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
                            CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
                            THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
                            ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

                                       7EX-10c

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

 

 

					
	 
	 	Page 2
	 	October 2, 2000

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

 

 

					
	 
	 	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%.

          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

 

 

					
	 
	 	Page 4
	 	October 2, 2000

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

 

 

					
	 
	 	Page 5
	 	October 2, 2000

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

 

 

					
	 
	 	Page 6
	 	October 2, 2000

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

 

 

					
	 
	 	Page 7
	 	October 2, 2000

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

 

 

					
	 
	 	Page 8
	 	October 2, 2000

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

 

 

					
	 
	 	Page 9
	 	October 2, 2000

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.

 

 

					
	 
	 	Page 10
	 	October 2, 2000

          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 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:                                        

 

 

    Form for:
    William T. Anderson
    

 

		
	    [name]
    	    
    April 12, 2002
    

 

    [address]

 

    Dear :

 

    Our company’s Board of Directors has adopted a plan whereby
    supplemental retirement and other benefits, in addition to those
    provided under the Company’s pension and other benefit
    plans, will be made available to those Company and subsidiary
    executives as may be designated from time to time by the
    company’s Chief Executive Officer. The plan providing such
    benefits, as originally made available to designated executives
    in 1987 and as subsequently amended from time to time heretofore
    or in the future, is referred to in this letter as the
    “Plan”. 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.
    These benefits as described below are contractual obligations of
    the Company.

 

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

 

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

 

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

 

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

 

    d. “Company” shall mean Masco Corporation or any
    corporation in which Masco Corporation owns directly or
    indirectly stock possessing in excess of 50% of the total
    combined voting power of all classes of stock. For purposes of
    determining “Average Compensation”, “Years of
    Service” and “Years” employed by the Company,
    Company shall also include Metaldyne Corporation, a Delaware
    corporation (formerly MascoTech, Inc.).

 

    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,

 

 

			
	    [name]
    	    
    Page  2
    	    
    April 12, 2002
    

 

    provided that you have been employed by the Company for two
    consecutive Years or more at the time you first became Disabled.

 

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

 

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

 

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

 

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

 

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

 

    l. “SERP Percentage” of your Average Compensation
    is 60% if at the date of determination you have completed 15 or
    more Years of Service, and decreases by increments of four
    percentage points for each Year or portion thereof less than 15
    that you have accumulated at the date of determination. The
    minimum SERP Percentage is 20% after five Years of Service;
    prior to completing five Years of Service the SERP Percentage is
    0.

 

    m. “Surviving Spouse” shall be the person to whom
    you shall be legally married (under the law of the jurisdiction
    of your permanent residence) at the date of (i) your
    Retirement or death after attaining age 65 (if death
    terminated employment with the Company) for the purposes of

 

 

			
	    [name]
    	    
    Page  3
    	    
    April 12, 2002
    

 

    paragraphs 1, 2 and 3, (ii) your death for the
    purposes of paragraph 5 and, if paragraph 5 is
    applicable, for the purposes of paragraph 3,(iii) the commencement of your
    Disability for the purposes of paragraphs 6 and 7 and, as
    long as paragraphs 6 or 7 are applicable, for the purposes
    of paragraph 3, (iv) your termination of employment
    for the purposes of paragraph 4 and, if paragraph 4 is
    applicable, for purposes of paragraph 3 and (v) a
    “Change in Control” for the purposes of
    paragraph 10 if none of clauses (i) through
    (iv) has become applicable prior to the Change in Control
    and, if this clause (v) is applicable, for purposes of
    paragraph 3. For the purposes of paragraphs 11a, 11e,
    11f, 11g, 11h, 11i and 11j, “Surviving Spouse” shall
    be any spouse entitled to any benefits hereunder.

 

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

 

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

 

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

 

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

 

    r. “MascoTech” shall mean Metaldyne Corporation,
    a Delaware corporation, formerly incorporated as MascoTech, Inc.

 

    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

 

 

			
	    [name]
    	    
    Page  4
    	    
    April 12, 2002
    

 

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 and
    MascoTech funded qualified pension plans and the defined benefit
    (pension) plan provisions of the Company’s and
    MascoTech’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 and MascoTech’s qualified defined
    contribution plans (excluding your contributions and earnings
    thereon in the Company’s and MascoTech’s 401(k)
    Savings Plans) and the defined contribution (profit sharing)
    provisions of the Company’s and MascoTech’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 (other than MascoTech), 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

 

 

			
	    [name]
    	    
    Page  5
    	    
    April 12, 2002
    

 

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

 

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

 

 

			
	    [name]
    	    
    Page  6
    	    
    April 12, 2002
    

 

date of your death and your benefit determined pursuant
    to paragraph 1, based upon your Average Compensation as of
    the date you became Disabled and with your SERP Percentage given
    credit for Years of Service from the date you became Disabled to
    the date you would have attained age 65.

 

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

 

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

 

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

 

    (1) If you are then employed by the Company, (i) your
    SERP Percentage, if not already 60%, shall be deemed for all
    purposes of this Agreement to be the lesser of 60% or the
    percentage resulting by adding to your SERP Percentage
    immediately prior thereto the product obtained by multiplying 4%
    by the number of Years which would then have to elapse prior to
    your attainment of age 65, and (ii) your Vested
    Percentage, if not already 100%, shall be deemed for all
    purposes of this Agreement to be 100%.

 

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

 

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

 

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

 

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

 

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

 

 

			
	    [name]
    	    
    Page  7
    	    
    April 12, 2002
    

 

    (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

 

 

			
	    [name]
    	    
    Page  8
    	    
    April 12, 2002
    

 

determination of the
    Gross-Up
    Amount having been made, it is possible that (1) payment of
    a portion of the
    Gross-Up
    Amount will not have been made by the Company which should have
    been made (an “Underpayment”), or (2) payment of
    a portion of the
    Gross-Up
    Amount will have been made which should not have been made (an
    “Overpayment”), consistent with the calculations
    required to be made hereunder. In the event of an Underpayment,
    such Underpayment shall be promptly paid by the Company to or
    for your benefit. In the event that you or your Surviving Spouse
    discover that an Overpayment shall have occurred, the amount
    thereof shall be promptly repaid by you or your Surviving Spouse
    to the Company.

 

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

 

    11. We also agree upon the following:

 

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

 

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

 

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

 

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

 

    d. Except as may be provided to the contrary in a duly
    authorized written agreement between you and the Company you
    acknowledge that the Company has made no commitments to you of
    any

 

 

			
	    [name]
    	    
    Page  9
    	    
    April 12, 2002
    

 

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. For purposes of paragraphs 1, 4 and 5, benefits
    “payable” but not paid by a former employer shall be
    disregarded in determining the company’s obligations to you
    hereunder.

 

    l. 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.

 

 

			
	    [name]
    	    
    Page  10
    	    
    April 12, 2002
    

 

 

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

 

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

 

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

 

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

 

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

 

    Sincerely,

 

    MASCO CORPORATION

 

			
	 	    By 
	
        

    Richard A. Manoogian

    Chief Executive Officer

 

    [name]

 

    DATE: ­
    ­

 

    Form of
    Amendment for:     William T. Anderson
    

 

John R. Leekley

Eugene A. Gargaro, Jr.

Richard A. Manoogian

 

    November 18, 2002

 

    Dear

 

    As you know the Compensation Committee has approved a revised
    bonus program for the executive group allowing year-end bonuses
    to fluctuate within a wide range above and below the normal 50%
    bonus opportunity historically used by the Company. This change
    is not, of course, intended to significantly increase or
    decrease your retirement or disability benefits under our
    Supplemental Executive Retirement Plan and to prevent such an
    effect a modification of your existing SERP Agreement is
    necessary. The amendment to your SERP Agreement set forth below
    limits the bonus paid with respect to any year included in the
    SERP retirement calculation to 50% of the salary paid during
    that year. The amount excluded, however, will be added to the
    bonus paid for any other year in the SERP retirement
    calculation, as long as the amount added does not adjust the
    bonus to an amount in excess of 50% of the salary paid during
    the year for which the adjusted bonus is paid. In the case of
    disability payments, in order to avoid a calculation based on a
    year for which the bonus was significantly higher or lower than
    the historical 50% level, the amendment would define “Total
    Compensation” as 150% of your then current salary and your
    overall disability payments would equal 60% of that amount.

 

    The amendments would consist of changing the definitions of
    “Average Compensation” and “Total
    Compensation” in your SERP Agreement to read, respectively,
    as follows:

 

    Average Compensation

 

    “Average Compensation shall mean the aggregate of your
    highest three years total annual cash compensation, paid to you
    by the Company, consisting of (i) base salaries and
    (ii) regular year-end cash bonuses paid with respect to the
    years in which such salaries are paid (the bonus with respect to
    any such year, however, only to be included in an amount not in
    excess of 50% of the base salary paid during such year), divided
    by three, provided, however, (x) if any
    portion of a bonus is excluded by the parenthetical contained in
    clause (ii) above, the total amount excluded will be added
    to one or both of the other two years included in the
    calculation as long as the amount so added does not result in a
    bonus with respect to any year exceeding 50% of the base salary
    paid during that year, (y) if you have on the date of
    determination less than three full years of employment the
    foregoing calculation, including any adjustment required by
    clause (x) above, shall be based on the average base
    salaries and regular year-end cash bonuses paid to you while so
    employed, and (z) if the determination of Average
    Compensation includes any year in which you volunteered to
    reduce your salary or, as part of a program generally applicable
    to participants in the Plan, you did not receive an increase in
    salary compared with the immediately preceding year, the
    Committee referred to in paragraph 11 shall make a good
    faith determination of what your Average Compensation would have
    been absent such salary reduction and absent such generally
    applicable program.”

 

    Total Compensation

 

    “If you become Disabled, “Total Compensation”
    shall mean 150% of your annual base salary rate at the time of
    your Disability, provided, however, if the determination of
    Total Compensation is for a year in which you volunteered to
    reduce your salary or, as part of a program generally applicable
    to participants in the Plan, you did not receive an increase in
    salary compared with the immediately preceding year, the
    Committee referred to in paragraph 11 shall make a good
    faith determination of what your Total Compensation would have
    been absent such salary reduction and absent such generally
    applicable program.”

 

    Should you have any questions regarding the proposed amendment,
    please feel free to discuss them with Ray Kennedy, Dan Foley,
    John Leekley or me. If not, I would appreciate your execution

 

 

 

    November 18, 2002

    Page  2

 

    and return of a copy of the enclosed amendment to Gene Gargaro,
    at which time the above-described amendment will become
    effective.

 

    Sincerely yours,

 

    Richard A. Manoogian

    Chairman

 

    I agree to the above amendment of

    my SERP Agreement

    changing the definition of

    “Average Compensation” and

    “Total Compensation” as set

    forth above

 

 

	 	 	 	 	 

	 	 	 	 	 
	 

	 	Form of Amendment for:
	 	William T. Anderson
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 of Amendment for: Richard A. Manoogian

	 
	 	 	 	 

March 31, 2004

 

Dear
               ,

 

          Masco’s Organization and Compensation Committee over the past several years has approved a
number of major improvements to the benefits for our executives covered by Masco’s program for
supplemental retirement and other benefits (the “SERP Plan”). At its October meeting this
Committee authorized a significant additional enhancement under your agreement pursuant to the SERP
Plan (the “SERP Agreement”) by increasing the percentage of your bonus eligible for inclusion in
the SERP calculation from 50% 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]

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:                                                                     

 

[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:

 

 

[FORM]

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 	 	 
	 

 

 

 

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 	 	 

 

 

 

February 6, 2008

Mr. Donald J. DeMarie, Jr.

[Address]

Dear Donny:

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

Average Compensation

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

          In addition, the Organization and Compensation Committee has also determined that it is no
longer appropriate to prevent any vesting of benefits from occurring until your fiftieth birthday.
In order to implement this change, the definition of “Vested Percentage” in your SERP Agreement
would be changed to read as follows:

Vested Percentage

          “Vested Percentage” shall mean the sum of the following percentages: (i) 2% multiplied by
your Years of Service, plus (ii) 8% multiplied by the number of Years, while an employee of the
Company, you have been designated a participant in the Plan; provided, however, (w)
prior to completing five Years of Service the Vested Percentage is 0, (x) on your fiftieth birthday
your Vested Percentage may not exceed 50%, (y) on or prior to each of your birthdays following your
fiftieth birthday your Vested Percentage may not exceed the sum of 50% plus the product obtained by
multiplying 10% by the number of birthdays that have occurred following your fiftieth birthday, and
(z) your Vested Percentage in no event may exceed 100%.

 

 

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

	 	 	 	 	 
	 

	 	Sincerely yours,
	 	 
	 
	 	 	 	 
	 

	 	/s/ Timothy Wadhams	 	 
	 

	 	 	 	 
	 

	 	Timothy Wadhams

President and Chief Executive Officer	 	 
	 
	 	 	 	 
	I agree to the above-described amendments
	 	 	 	 
	to my Supplemental Executive Retirement
	 	 	 	 
	Plan with the Company
	 	 	 	 
	 
	 	 	 	 
	/s/ Donald J. DeMarie, Jr.
 

Donald J. DeMarie, Jr.
	 	 	 	 

 

 

Form of Amendment for: Richard A. Manoogian

November 3, 2008

Dear :

     Section 409A of the Internal Revenue Code contains complex provisions regulating the payment
of deferred compensation under non-qualified retirement programs, including your agreement (the
“SERP Agreement”) under Masco’s supplemental executive retirement plan (the “Plan”). Under
recently issued regulations of the Internal Revenue Service, non-complying payments under the Plan
will result in serious adverse tax consequences to recipients, which include an increase in your
marginal tax rate by 20 percentage points on all Plan payments not in compliance with Section 409A
and an increase in applicable late-payment penalty rates by a full percentage point. The
amendments to your SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with Section 409A.

     The principal changes under Section 409A described in this letter apply only to benefits
accrued or vested after December 31, 2004 (“Covered Benefits”). Covered Benefits therefore include
those under post 2004 SERP Agreements, post 2004 amendments to SERP Agreements and any increase in
benefits resulting from higher compensation paid after 2004. Benefits, to the extent they were
accrued and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid without regard
to Section 409A provisions. As a result of Section 409A, Masco will be required under the Plan to
determine for each participant the portion of SERP payments attributable to Grandfathered Benefits
and the portion attributable to Covered Benefits and, at times, treat these payments differently as
described in this letter agreement.

     No payment, however, of benefits under your SERP may be made under Section 409A unless a
“separation from service” has occurred. Since it is unclear under the Plan if a “separation from
service” has occurred if a participant is rendering services to Masco following retirement or
during a disability, this letter agreement clarifies that a “separation from service” will have
occurred, thereby allowing the commencement of SERP payments, even if a participant following
retirement or during disability is providing services to Masco which do not exceed 49% of the
individual’s prior services as a full-time employee.

     Initial monthly payments for Covered Benefits under the Plan must be delayed until six months
have elapsed following a separation from service, after which time the delayed payments would be
paid in a lump sum without interest. Any portion of your SERP payments represented by
Grandfathered Benefits will not be delayed by Section 409A.

     In the unlikely event of a change in control, if such a change satisfies the requirements of
your existing SERP Agreement but not the more stringent requirements in Section 409A for a change
in control, the same seriously adverse tax consequences to you could occur. In order to eliminate
these consequences if a change in control does not satisfy both tests, this letter

2

 

agreement would provide that any Grandfathered Benefits under your SERP Agreement will be paid
in a lump sum as currently provided in the existing SERP Agreement with the Covered Benefits
subject to Section 409A paid to the Deferred Compensation Trust and thereafter distributed by the
Trust as though no change in control has occurred. A new change in control trigger, included in
this letter agreement in clause (iii) of Paragraph 13, has been added to ensure that if the
requirements of Section 409A have been met, payments of your SERP benefits will be made as
currently scheduled in your SERP Agreement.

     In order to assure ongoing compliance with these new statutory provisions and to avoid
potentially severe tax consequences to you, we are requesting that you agree to the amendments to
your SERP Agreement set forth below.

     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement shall be amended by
substituting for the words “the commencement of your Disability” the words “the termination of your
employment as a result of Disability”.

     The definition of “Retirement” in clause (1) of your SERP Agreement shall be amended to read
as follows:

     “Retirement” shall mean your termination of employment with the Company on or after you
attain age 65. Termination of employment for all purposes under this Agreement shall mean a
“separation from service” under Section 409A of the Code which shall only occur if any
services which you may continue to provide to the Company as an employee or as a consultant
after termination of employment are not in excess of 49% of your prior service level, all as
determined in accordance with the regulations under Section 409A of the Code.

     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase “resulting in a
termination of employment” following the first occurrence of the word “Disabled” and thereby read
as follows:

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

     Paragraph 9 of your SERP Agreement shall be amended by substituting for the word “Disabled” in
the last sentence thereof the words “terminated from employment by reason of Disability”.

3

 

     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the word “Disabled” in
clause (1) thereof and substituting therefore the phrase “are terminated as a result of
Disability”.

     A new or modified Paragraph 13 for your SERP Agreement shall read as follows and replace any
existing Paragraph 13 in your SERP Agreement:

     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the Code) a
six-month waiting period for payments of Covered Benefits (hereinafter defined), to begin
following your termination of employment. If such waiting period is applicable, the first
payment following the waiting period shall include any payments (with no payment for
interest) delayed under this provision.

     (ii) If a “Change in Control” has occurred which is also a “Change of Control” as
defined in Section 13(iii) below, then all of the provisions of the Agreement, including the
provisions of Paragraph 10, shall apply without change. However, if there is a “Change in
Control” which is not a “Change of Control” as defined in Section 13(iii) then (A) as to
that portion of your benefits under this Agreement which is not subject to the provisions of
Section 409A of the Code (the “Grandfathered Benefits”), all of the provisions of this
Agreement, including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code (the
“Covered Benefits”), the only provisions of Paragraph 10 which shall be applicable thereto
are clauses (1), (2) and (3) of Paragraph 10(i) and Paragraphs 10(ii), 10(iv) and 10(v).
The amount deposited in the Deferred Compensation Trust representing 110% of the Gross-Up
Amount attributable to the Grandfathered Benefits, the Covered Benefits or otherwise shall
be held in and distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered Benefits shall
be held and invested by the Deferred Compensation Trust and paid to you or your Surviving
Spouse as an annuity under the applicable circumstances of Paragraphs 1, 2, 4 (disregarding
the inapplicability of Paragraph 4 in the event of a “Change in Control”), 5, 6 or 7 of this
Agreement. If, for any reason, the monthly benefit paid by the Deferred Compensation Trust
to you or your Surviving Spouse is less than the monthly benefit used to calculate the
amount deposited under the next preceding sentence, the Company shall pay the deficiency
directly to you or your Surviving Spouse.

     (iii) A “Change of Control” for purposes of Section 409A of the Code shall be deemed to
have occurred if during any period of twelve consecutive calendar months, the individuals
who at the beginning of such period constitute the Company’s Board of Directors, and any new
directors (other than Excluded Directors) whose election by such Board or nomination for
election by stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the period or whose
election or nomination for election as directors was previously so approved, for any reason
cease to constitute at least a majority of the

4

 

members thereof. Excluded Directors are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year after any “person”
or “group of persons” as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 commencing a tender offer for, or becoming the beneficial owner of,
voting securities representing 30 percent or more of the combined voting power of all
outstanding voting securities of the Company, other than pursuant to a tender offer approved
by the Board prior to its commencement or pursuant to stock acquisitions approved by the
Board prior to their representing 30 percent or more of such combined voting power.

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

	 	 	 	 	 
	 	Sincerely yours,

Timothy Wadhams

President and Chief Executive Officer

 	 
	 	 	 
	 	 	 
	 	 	 
	 

I agree to the above-described

Amendments to my SERP

Agreement.

	 	 	 
	 

[Name]

	 	 

5

 

Form of Amendment for: William Anderson

Eugene Gargaro, Jr.

John Leekley

John Sznewajs

November 3, 2008

Dear :

     Section 409A of the Internal Revenue Code contains complex provisions regulating the payment
of deferred compensation under non-qualified retirement programs, including your agreement (the
“SERP Agreement”) under Masco’s supplemental executive retirement plan (the “Plan”). Under
recently issued regulations of the Internal Revenue Service, non-complying payments under the Plan
will result in serious adverse tax consequences to recipients, which include an increase in your
marginal tax rate by 20 percentage points on all Plan payments not in compliance with Section 409A
and an increase in applicable late-payment penalty rates by a full percentage point. The
amendments to your SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with Section 409A.

     The principal changes under Section 409A described in this letter apply only to benefits
accrued or vested after December 31, 2004 (“Covered Benefits”). Covered Benefits therefore include
those under post 2004 SERP Agreements, post 2004 amendments to SERP Agreements and any increase in
benefits resulting from higher compensation paid after 2004. Benefits, to the extent they were
accrued and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid without regard
to Section 409A provisions. As a result of Section 409A, Masco will be required under the Plan to
determine for each participant the portion of SERP payments attributable to Grandfathered Benefits
and the portion attributable to Covered Benefits and, at times, treat these payments differently as
described in this letter agreement.

     No payment, however, of benefits under your SERP may be made under Section 409A unless a
“separation from service” has occurred. Since it is unclear under the Plan if a “separation from
service” has occurred if a participant is rendering services to Masco following retirement or
during a disability, this letter agreement clarifies that a “separation from service” will have
occurred, thereby allowing the commencement of SERP payments, even if a participant following
retirement or during disability is providing services to Masco which do not exceed 49% of the
individual’s prior services as a full-time employee.

14

 

     Initial monthly payments for Covered Benefits under the Plan must be delayed until six months
have elapsed following a separation from service, after which time the delayed payments would be
paid in a lump sum without interest. Any portion of your SERP payments represented by
Grandfathered Benefits will not be delayed by Section 409A.

     In the unlikely event of a change in control, if such a change satisfies the requirements of
your existing SERP Agreement but not the more stringent requirements in Section 409A for a change
in control, the same seriously adverse tax consequences to you could occur. In order to eliminate
these consequences if a change in control does not satisfy both tests, this letter agreement would
provide that any Grandfathered Benefits under your SERP Agreement will be paid in a lump sum as
currently provided in the existing SERP Agreement with the Covered Benefits subject to Section 409A
paid to the Deferred Compensation Trust and thereafter distributed by the Trust as though no change
in control has occurred. A new change in control trigger, included in this letter agreement in
clause (iii) of Paragraph 13, has been added to ensure that if the requirements of Section 409A
have been met, payments of your SERP benefits will be made as currently scheduled in your SERP
Agreement.

     Finally, in light of the recent increase in your annual cash bonus opportunity from 100% of
your base salary, the Organization and Compensation Committee of our Board of Directors has
approved a change in your SERP Agreement to increase the amount of your annual bonus which is
includible in “Average Compensation”, as that term is used in your SERP Agreement. A conforming
change would also be made in the definition of ‘Total Compensation” for purposes of disability
payments. As noted above, the increased portion of your benefit attributable to these changes will
be a Covered Benefit under Section 409A.

     In order to assure ongoing compliance with these new statutory provisions, to avoid
potentially severe tax consequences to you and to increase the amount of any bonuses includible in
determining payments to be made under your SERP Agreement, we are requesting that you agree to the
amendments to your SERP Agreement set forth below.

     The definition of “Average Compensation” in clause (a) of your SERP Agreement shall be amended
to read as follows:

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

15

 

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

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

     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement shall be amended by
substituting for the words “the commencement of your Disability” the words “the termination of your
employment as a result of Disability”.

     The definition of “Retirement” in clause (1) of your SERP Agreement shall be amended to read
as follows:

     “Retirement” shall mean your termination of employment with the Company on or after you
attain age 65. Termination of employment for all purposes under this Agreement shall mean a
“separation from service” under Section 409A of the Code which shall only occur if any
services which you may continue to provide to the Company as an employee or as a consultant
after termination of employment are not in excess of 49% of your prior service level, all as
determined in accordance with the regulations under Section 409A of the Code.

     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase “resulting in a
termination of employment” following the first occurrence of the word “Disabled” and thereby read
as follows:

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

     Paragraph 9 of your SERP Agreement shall be amended by substituting for the word “Disabled” in
the last sentence thereof the words “terminated from employment by reason of Disability”.

     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the word “Disabled” in
clause (1) thereof and substituting therefore the phrase “are terminated as a result of
Disability”.

16

 

     A new or modified Paragraph 13 for your SERP Agreement shall read as follows and replace any
existing Paragraph 13 in your SERP Agreement:

     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the Code) a
six-month waiting period for payments of Covered Benefits (hereinafter defined), to begin
following your termination of employment. If such waiting period is applicable, the first
payment following the waiting period shall include any payments (with no payment for
interest) delayed under this provision.

     (ii) If a “Change in Control” has occurred which is also a “Change of Control” as
defined in Section 13(iii) below, then all of the provisions of the Agreement, including the
provisions of Paragraph 10, shall apply without change. However, if there is a “Change in
Control” which is not a “Change of Control” as defined in Section 13(iii) then (A) as to
that portion of your benefits under this Agreement which is not subject to the provisions of
Section 409A of the Code (the “Grandfathered Benefits”), all of the provisions of this
Agreement, including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code (the
“Covered Benefits”), the only provisions of Paragraph 10 which shall be applicable thereto
are clauses (1), (2) and (3) of Paragraph 10(i) and Paragraphs 10(ii), 10(iv) and 10(v).
The amount deposited in the Deferred Compensation Trust representing 110% of the Gross-Up
Amount attributable to the Grandfathered Benefits, the Covered Benefits or otherwise shall
be held in and distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered Benefits shall
be held and invested by the Deferred Compensation Trust and paid to you or your Surviving
Spouse as an annuity under the applicable circumstances of Paragraphs 1, 2, 4 (disregarding
the inapplicability of Paragraph 4 in the event of a “Change in Control”), 5, 6 or 7 of this
Agreement. If, for any reason, the monthly benefit paid by the Deferred Compensation Trust
to you or your Surviving Spouse is less than the monthly benefit used to calculate the
amount deposited under the next preceding sentence, the Company shall pay the deficiency
directly to you or your Surviving Spouse.

     (iii) A “Change of Control” for purposes of Section 409A of the Code shall be deemed to
have occurred if during any period of twelve consecutive calendar months, the individuals
who at the beginning of such period constitute the Company’s Board of Directors, and any new
directors (other than Excluded Directors) whose election by such Board or nomination for
election by stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the period or whose
election or nomination for election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof. Excluded Directors are
directors whose election by the Board or approval by the Board for stockholder election
occurred within one year after any “person” or “group of persons” as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a tender offer
for, or becoming the

17

 

beneficial owner of, voting securities representing 30 percent or more of the combined
voting power of all outstanding voting securities of the Company, other than pursuant to a
tender offer approved by the Board prior to its commencement or pursuant to stock
acquisitions approved by the Board prior to their representing 30 percent or more of such
combined voting power.

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

Sincerely yours,

Timothy Wadhams

President and Chief Executive Officer

I agree to the above-described

Amendments to my SERP

Agreement.

	 	 	 
	 

[Name]

	 	 

18

 

Form of Amendment for: Timothy Wadhams

November 3, 2008

Dear :

     Section 409A of the Internal Revenue Code contains complex provisions regulating the payment
of deferred compensation under non-qualified retirement programs, including your agreement (the
“SERP Agreement”) under Masco’s supplemental executive retirement plan (the “Plan”). Under
recently issued regulations of the Internal Revenue Service, non-complying payments under the Plan
will result in serious adverse tax consequences to recipients, which include an increase in your
marginal tax rate by 20 percentage points on all Plan payments not in compliance with Section 409A
and an increase in applicable late-payment penalty rates by a full percentage point. The
amendments to your SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with Section 409A.

     The principal changes under Section 409A described in this letter apply only to benefits
accrued or vested after December 31, 2004 (“Covered Benefits”). Covered Benefits therefore include
those under post 2004 SERP Agreements, post 2004 amendments to SERP Agreements and any increase in
benefits resulting from higher compensation paid after 2004. Benefits, to the extent they were
accrued and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid without regard
to Section 409A provisions. As a result of Section 409A, Masco will be required under the Plan to
determine for each participant the portion of SERP payments attributable to Grandfathered Benefits
and the portion attributable to Covered Benefits and, at times, treat these payments differently as
described in this letter agreement.

     No payment, however, of benefits under your SERP may be made under Section 409A unless a
“separation from service” has occurred. Since it is unclear under the Plan if a “separation from
service” has occurred if a participant is rendering services to Masco following retirement or
during a disability, this letter agreement clarifies that a “separation from service” will have
occurred, thereby allowing the commencement of SERP payments, even if a participant following
retirement or during disability is providing services to Masco which do not exceed 49% of the
individual’s prior services as a full-time employee.

     Initial monthly payments for Covered Benefits under the Plan must be delayed until six months
have elapsed following a separation from service, after which time the delayed payments would be
paid in a lump sum without interest. Any portion of your SERP payments represented by
Grandfathered Benefits will not be delayed by Section 409A.

     In the unlikely event of a change in control, if such a change satisfies the requirements of
your existing SERP Agreement but not the more stringent requirements in Section 409A for a change
in control, the same seriously adverse tax consequences to you could occur. In order to eliminate
these consequences if a change in control does not satisfy both tests, this letter

10

 

agreement would provide that any Grandfathered Benefits under your SERP Agreement will be paid
in a lump sum as currently provided in the existing SERP Agreement with the Covered Benefits
subject to Section 409A paid to the Deferred Compensation Trust and thereafter distributed by the
Trust as though no change in control has occurred. A new change in control trigger, included in
this letter agreement in clause (iii) of Paragraph 13, has been added to ensure that if the
requirements of Section 409A have been met, payments of your SERP benefits will be made as
currently scheduled in your SERP Agreement.

     Finally, in light of the recent increase in your annual cash bonus opportunity, the amount of
your annual bonus includible in “Average Compensation” was increased earlier this year. A
conforming change, which should then have been made in the definition of “Total Compensation” for
purposes of disability payments, is being made in this letter agreement.

     In order to assure ongoing compliance with these new statutory provisions and to avoid
potentially severe tax consequences to you, we are requesting that you agree to the amendments to
your SERP Agreement set forth below.

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

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

     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement shall be amended by
substituting for the words “the commencement of your Disability” the words “the termination of your
employment as a result of Disability”.

     The definition of “Retirement” in clause (1) of your SERP Agreement shall be amended to read
as follows:

     “Retirement” shall mean your termination of employment with the Company on or after you
attain age 65. Termination of employment for all purposes under this Agreement shall mean a
“separation from service” under Section 409A of the Code which shall only occur if any
services which you may continue to provide to the Company as an employee or as a consultant
after termination of employment are not in excess of 49% of your prior service level, all as
determined in accordance with the regulations under Section 409A of the Code.

     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase “resulting in a
termination of employment” following the first occurrence of the word “Disabled” and thereby read
as follows:

     6. If you shall have been employed by the Company for two Years or more and while
employed by the Company you become Disabled resulting in a termination of employment prior
to your attaining age 65, until the earlier of your death, termination of

11

 

Disability or attaining age 65 the Company will pay you an annual benefit, subject to
paragraph 8 below, equal to 60% of your Total Compensation less any benefits payable to you
pursuant to long-term disability insurance under programs provided by the Company. If your
Disability continues until you attain age 65, you shall be considered retired and you shall
receive retirement benefits pursuant to paragraph 1 above, based upon your Average
Compensation as of the date it is determined you became Disabled and with your SERP
Percentage given credit for Years of Service while you were Disabled.

     Paragraph 9 of your SERP Agreement shall be amended by substituting for the word “Disabled” in
the last sentence thereof the words “terminated from employment by reason of Disability”.

     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the word “Disabled” in
clause (1) thereof and substituting therefore the phrase “are terminated as a result of
Disability”.

     A new or modified Paragraph 13 for your SERP Agreement shall read as follows and replace any
existing Paragraph 13 in your SERP Agreement:

     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the Code) a
six-month waiting period for payments of Covered Benefits (hereinafter defined), to begin
following your termination of employment. If such waiting period is applicable, the first
payment following the waiting period shall include any payments (with no payment for
interest) delayed under this provision.

     (ii) If a “Change in Control” has occurred which is also a “Change of Control” as
defined in Section 13(iii) below, then all of the provisions of the Agreement, including the
provisions of Paragraph 10, shall apply without change. However, if there is a “Change in
Control” which is not a “Change of Control” as defined in Section 13(iii) then (A) as to
that portion of your benefits under this Agreement which is not subject to the provisions of
Section 409A of the Code (the “Grandfathered Benefits”), all of the provisions of this
Agreement, including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code (the
“Covered Benefits”), the only provisions of Paragraph 10 which shall be applicable thereto
are clauses (1), (2) and (3) of Paragraph 10(i) and Paragraphs 10(ii), 10(iv) and 10(v).
The amount deposited in the Deferred Compensation Trust representing 110% of the Gross-Up
Amount attributable to the Grandfathered Benefits, the Covered Benefits or otherwise shall
be held in and distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The amount so deposited representing the Covered Benefits shall
be held and invested by the Deferred Compensation Trust and paid to you or your Surviving
Spouse as an annuity under the applicable circumstances of Paragraphs 1, 2, 4 (disregarding
the inapplicability of Paragraph 4 in the event of a “Change in Control”), 5, 6 or 7 of this
Agreement. If, for any reason, the monthly benefit paid by the Deferred Compensation Trust
to you or your

12

 

Surviving Spouse is less than the monthly benefit used to calculate the amount
deposited under the next preceding sentence, the Company shall pay the deficiency directly
to you or your Surviving Spouse.

     (iii) A “Change of Control” for purposes of Section 409A of the Code shall be deemed to
have occurred if during any period of twelve consecutive calendar months, the individuals
who at the beginning of such period constitute the Company’s Board of Directors, and any new
directors (other than Excluded Directors) whose election by such Board or nomination for
election by stockholders was approved by a vote of at least a majority of the members of
such board who were either directors on such Board at the beginning of the period or whose
election or nomination for election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof. Excluded Directors are
directors whose election by the Board or approval by the Board for stockholder election
occurred within one year after any “person” or “group of persons” as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 commencing a tender offer
for, or becoming the beneficial owner of, voting securities representing 30 percent or more
of the combined voting power of all outstanding voting securities of the Company, other than
pursuant to a tender offer approved by the Board prior to its commencement or pursuant to
stock acquisitions approved by the Board prior to their representing 30 percent or more of
such combined voting power.

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

Sincerely yours,

Richard A. Manoogian

Executive Chairman

I agree to the above-described

Amendments to my SERP

Agreement.

	 	 	 
	

 

[Name]
	 	 

13

 

Form of Amendment for: Donald DeMarie

November 3, 2008

Dear :

     Section 409A of the Internal Revenue Code contains complex provisions regulating the payment
of deferred compensation under non-qualified retirement programs, including your agreement (the
“SERP Agreement”) under Masco’s supplemental executive retirement plan (the “Plan”). Under
recently issued regulations of the Internal Revenue Service, non-complying payments under the Plan
will result in serious adverse tax consequences to recipients, which include an increase in your
marginal tax rate by 20 percentage points on all Plan payments not in compliance with Section 409A
and an increase in applicable late-payment penalty rates by a full percentage point. The
amendments to your SERP Agreement contained in this letter agreement are therefore necessary to
bring the payment provisions of your SERP Agreement into compliance with Section 409A.

     The principal changes under Section 409A described in this letter apply only to benefits
accrued or vested after December 31, 2004 (“Covered Benefits”). Covered Benefits therefore include
those under post 2004 SERP Agreements, post 2004 amendments to SERP Agreements and any increase in
benefits resulting from higher compensation paid after 2004. Benefits, to the extent they were
accrued and vested prior to January 1, 2005 (“Grandfathered Benefits”), may be paid without regard
to Section 409A provisions. As a result of Section 409A, Masco will be required under the Plan to
determine for each participant the portion of SERP payments attributable to Grandfathered Benefits
and the portion attributable to Covered Benefits and, at times, treat these payments differently as
described in this letter agreement.

     No payment, however, of benefits under your SERP may be made under Section 409A unless a
“separation from service” has occurred. Since it is unclear under the Plan if a “separation from
service” has occurred if a participant is rendering services to Masco following retirement or
during a disability, this letter agreement clarifies that a “separation from service” will have
occurred, thereby allowing the commencement of SERP payments, even if a participant following
retirement or during disability is providing services to Masco which do not exceed 49% of the
individual’s prior services as a full-time employee.

     Initial monthly payments for Covered Benefits under the Plan must be delayed until six months
have elapsed following a separation from service, after which time the delayed payments would be
paid in a lump sum without interest. Any portion of your SERP payments represented by
Grandfathered Benefits will not be delayed by Section 409A.

     In the unlikely event of a change in control, if such a change satisfies the requirements of
your existing SERP Agreement but not the more stringent requirements in Section 409A for a change
in control, the same seriously adverse tax consequences to
you could occur. In order to eliminate these consequences if a change in control does not
satisfy both tests, this letter agreement would provide that any Grandfathered Benefits under your
SERP Agreement will be paid in a lump sum as currently provided in the existing SERP Agreement with
the Covered

6

 

Benefits subject to Section 409A paid to the Deferred Compensation Trust and thereafter
distributed by the Trust as though no change in control has occurred. A new change in control
trigger, included in this letter agreement in clause (iii) of Paragraph 13, has been added to
ensure that if the requirements of Section 409A have been met, payments of your SERP benefits will
be made as currently scheduled in your SERP Agreement.

     Finally, in light of the recent increase in your annual cash bonus opportunity, the amount of
your annual bonus includible in “Average Compensation” was increased earlier this year. A
conforming change, which should then have been made in the definition of “Total Compensation” for
purposes of disability payments, is being made in this letter agreement.

     In order to assure ongoing compliance with these new statutory provisions and to avoid
potentially severe tax consequences to you, we are requesting that you agree to the amendments to
your SERP Agreement set forth below.

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

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

     The definition of “Surviving Spouse” in clause (m) of your SERP Agreement shall be amended by
substituting for the words “the commencement of your Disability” the words “the termination of your
employment as a result of Disability”.

     The definition of “Retirement” in clause (1) of your SERP Agreement shall be amended to read
as follows:

     “Retirement” shall mean your termination of employment with the Company on or after
you attain age 65. Termination of employment for all purposes under this Agreement shall
mean a “separation from service” under Section 409A of the Code which shall only occur if
any services which you may continue to provide to the Company as an employee or as a
consultant after termination of employment are not in excess of 49% of your prior service
level, all as determined in accordance with the regulations under Section 409A of the Code.

     Paragraph 6 of your SERP Agreement shall be amended to insert the phrase “resulting in a
termination of employment” following the first occurrence of the word “Disabled” and thereby read
as follows:

     6. If you shall have been employed by the Company for two Years or more and while
employed by the Company you become Disabled resulting in a termination of employment prior
to your attaining age 65, until the earlier of your death, termination of Disability or
attaining age 65 the Company will pay you an annual benefit, subject to paragraph 8 below,
equal to 60% of your Total Compensation less any benefits payable

7

 

to you pursuant to
long-term disability insurance under programs provided by the Company. If your Disability
continues until you attain age 65, you shall be considered retired and you shall receive
retirement benefits pursuant to paragraph 1 above, based upon your Average Compensation as
of the date it is determined you became Disabled and with your SERP Percentage given credit
for Years of Service while you were Disabled.

     Paragraph 9 of your SERP Agreement shall be amended by substituting for the word “Disabled” in
the last sentence thereof the words “terminated from employment by reason of Disability”.

     Paragraph 10(iii) of your SERP Agreement shall be amended by deleting the word “Disabled” in
clause (1) thereof and substituting therefore the phrase “are terminated as a result of
Disability”.

     A new or modified Paragraph 13 for your SERP Agreement shall read as follows and replace any
existing Paragraph 13 in your SERP Agreement:

     13. Section 409A (i) This Agreement shall be administered so as to impose
(if required in order to avoid a violation of Section 409A (a)(2)(B)(i) of the Code) a
six-month waiting period for payments of Covered Benefits (hereinafter defined), to begin
following your termination of employment. If such waiting period is applicable, the first
payment following the waiting period shall include any payments (with no payment for
interest) delayed under this provision.

     (ii) If a “Change in Control” has occurred which is also a “Change of Control” as
defined in Section 13(iii) below, then all of the provisions of the Agreement, including
the provisions of Paragraph 10, shall apply without change. However, if there is a “Change
in Control” which is not a “Change of Control” as defined in Section 13(iii) then (A) as to
that portion of your benefits under this Agreement which is not subject to the provisions
of Section 409A of the Code (the “Grandfathered Benefits”), all of the provisions of this
Agreement, including Section 10, shall apply without change, and (B) as to that portion of
your benefits under this Agreement which is subject to Section 409A of the Code (the
“Covered Benefits”), the only provisions of Paragraph 10 which shall be applicable thereto
are clauses (1), (2) and (3) of Paragraph 10(i) and Paragraphs 10(ii), 10(iv) and 10(v).
The amount deposited in the Deferred Compensation Trust representing 110% of the Gross-Up
Amount attributable to the Grandfathered Benefits, the Covered Benefits or otherwise shall
be held in and distributed from the Deferred Compensation Trust in accordance with the
provisions of Paragraph 10. The
amount so deposited representing the Covered Benefits shall be held and invested by
the Deferred Compensation Trust and paid to you or your Surviving Spouse as an annuity
under the applicable circumstances of Paragraphs 1, 2, 4 (disregarding the inapplicability
of Paragraph 4 in the event of a “Change in Control”), 5, 6 or 7 of this Agreement. If,
for any reason, the monthly benefit paid by the Deferred Compensation Trust to you or your
Surviving Spouse is less than the monthly benefit used to calculate the amount deposited

8

 

under the next preceding sentence, the Company shall pay the deficiency directly to you or
your Surviving Spouse.

     (iii) A “Change of Control” for purposes of Section 409A of the Code shall be deemed
to have occurred if during any period of twelve consecutive calendar months, the
individuals who at the beginning of such period constitute the Company’s Board of
Directors, and any new directors (other than Excluded Directors) whose election by such
Board or nomination for election by stockholders was approved by a vote of at least a
majority of the members of such board who were either directors on such Board at the
beginning of the period or whose election or nomination for election as directors was
previously so approved, for any reason cease to constitute at least a majority of the
members thereof. Excluded Directors are directors whose election by the Board or approval
by the Board for stockholder election occurred within one year after any “person” or “group
of persons” as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934 commencing a tender offer for, or becoming the beneficial owner of, voting
securities representing 30 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than pursuant to a tender offer approved by the
Board prior to its commencement or pursuant to stock acquisitions approved by the Board
prior to their representing 30 percent or more of such combined voting power.

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

	 	 	 
	 

	 	Sincerely yours,
	 
	 	 
	 

	 	Timothy Wadhams
	 

	 	President and Chief Executive Officer
	I agree to the above-described
	 	 
	Amendments to my SERP
	 	 
	Agreement.
	 	 
	 
	 	 
	 

[Name]

	 	 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]