Exhibit 10a
RESTORATION STOCK OPTION
CURRENT DATE
[Name]
[Address1]
[Address2]
[Address3]
[Address4]
Dear [Salutation]:
You have exercised a non-qualified stock option previously granted to you
under the terms of the 1991 Long Term Stock Incentive Plan and you paid all or
part of the option exercise price by delivery of Company common stock. In
accordance with the program adopted by the Organization and Compensation
Committee of the Board of Directors, subject to your acceptance, you are granted
a non-qualified Restoration Option for shares of Company common stock, $1 par
value, subject to the terms of this letter and the attached Appendix (the
"Agreement") and the 2005 Long Term Stock Incentive Plan (the "Plan"), as
follows:
Date of Restoration Option:
Number of Shares Granted:
Option Exercise Price:
Exercisable in full on & after:
This Option expires after:
All installments of the option as above described must be exercised before
the Option expires; any portion that remains unexercised on the expiration date
shall lapse and the right to purchase such shares pursuant to this option shall
be of no further effect after such date. If during the option exercise period
your employment is terminated for any reason, the option shall terminate in
accordance with Section 6 of the Plan.
For purposes of this Agreement, use of the words "employment" or "employed"
shall be deemed to refer to employment by the Company and its subsidiaries and
unless otherwise stated shall not include employment by an "Affiliate" (as
defined in the Plan) which is not a subsidiary of the Company unless the
Committee so determines at the time such employment commences.
Page 2 [Date]
If our records indicate you have not previously received the Company's
latest annual report and proxy statement, the Prospectus dated [date] covering
the shares which are the subject of this option, and a copy of the Plan, these
documents are enclosed. Copies are also available upon request to the Company.
We suggest that you review each of these documents. The federal income tax
attributes of non-qualified stock options are discussed in the Prospectus. This
option does not qualify for the federal tax benefits of an "incentive stock
option" under the Internal Revenue Code.
Your acceptance of this option acknowledges that you have read all of the
terms and conditions set forth herein and in the attached Appendix and evidences
your agreement to all of such terms and conditions and to the incorporation of
the Appendix as part of this Agreement.
Please complete your mailing address and Social Security number as
indicated below and sign, date and return one copy of this option agreement to
Eugene A. Gargaro, Jr., our Vice President and Secretary, as soon as possible in
order that this option grant may become effective.
Very truly yours,
MASCO CORPORATION
By
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Richard A. Manoogian
Chairman of the Board
and Chief Executive Officer
I accept and agree to all of the foregoing terms and conditions and the terms
and conditions contained in the attached Appendix.
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(Signature of Recipient)
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(Mailing Address)
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(Social Security Number)
Dated:
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APPENDIX TO OPTION AGREEMENT
Masco Corporation (the "Company") and you agree that all of the terms and
conditions of the grant of the option (the "Option") contained in the foregoing
letter agreement into which this Appendix is incorporated (the "Agreement") are
reflected in the Agreement and in the 2005 Long Term Stock Incentive Plan (the
"Plan"), and that there are no other commitments or understandings currently
outstanding with respect to any other grants of options, restricted stock,
phantom stock or stock appreciation rights except as may be evidenced by
agreements duly executed by you and the Company.
By signing the Agreement you acknowledge acceptance of the Option and
receipt of the documents referred to in the Agreement and represent that you
have read the Plan, are familiar with its provisions, and agree to its
incorporation in the Agreement and all of the other terms and conditions of the
Agreement. Such acceptance, moreover, evidences your agreement promptly to
provide such information with respect to shares acquired pursuant to the Option,
as may be requested by the Company or any of its subsidiaries or affiliated
companies.
If your employment with the Company or any of its subsidiaries is
terminated for any reason, other than death, permanent and total disability,
retirement on or after normal retirement date or the sale or other disposition
of the business or subsidiary employing you, and other than termination of
employment in connection with a Change in Control, and if any installments of
the Option or any restoration options granted upon any exercise of the Option
became exercisable within the two year period prior to the date of such
termination (such installments and restoration options being referred to as the
"Subject Options"), by accepting the Option you agree that the following
provisions will apply:
(1) Upon the demand of the Company you will pay to the Company in cash
within 30 days after the date of such termination the amount of income
realized for income tax purposes from the exercise of any Subject
Options, net of all federal, state and other taxes payable on the
amount of such income, plus all costs and expenses of the Company in
any effort to enforce its rights hereunder; and
(2) Any right you would otherwise have, pursuant to the terms of the Plan
and this Agreement, to exercise any Subject Options on or after the
date of such termination, shall be extinguished as of the date of such
termination.
The Company shall have the right to set off or withhold any amount owed to you
by the Company or any of its subsidiaries or affiliates for any amount owed to
the Company by you hereunder.
In addition you agree, in consideration for the grant of the Option and
regardless of whether the Option becomes exercisable or is exercised, while you
are employed or retained as a consultant by the Company or any of its
subsidiaries and for a period of one year following any termination of your
employment and, if applicable, any consulting relationship with the Company or
any of its subsidiaries other than a termination in connection with a Change in
Control, not to engage in, and not to become associated in a "Prohibited
Capacity" (as hereinafter defined) with any other entity engaged in, any
"Business Activities" (as hereinafter defined) and not to encourage or assist
others in encouraging any employee of the Company or any of its subsidiaries to
terminate employment or to become engaged in any such Prohibited Capacity with
an entity engaged in any Business Activities. "Business Activities" shall mean
the design, development, manufacture, sale, marketing or servicing of any
product or providing of services competitive with the products or services of
(x) the Company or any subsidiary if you are employed by or consulting with the
Company at any time the Option is outstanding, or (y) the subsidiary employing
or retaining you at any time while the Option is outstanding, to the extent such
competitive products or services are distributed or provided either (1) in the
same geographic area as are such products or services of the Company or any of
its subsidiaries, or (2) to any of the same customers as such products or
services of the Company or any of its subsidiaries are distributed or provided.
"Prohibited Capacity" shall mean being associated with an entity as an employee,
consultant, investor or another capacity where (1) confidential business
information of the Company or any of its subsidiaries could be used in
fulfilling any of your duties or responsibilities with such other entity, (2)
any of your duties or responsibilities are similar to or include any of those
you had while employed or retained as a consultant by the Company or any of its
subsidiaries, or (3) an investment by you in such other entity represents more
than 1% of such other entity's capital stock, partnership or other ownership
interests.
Should you either breach or challenge in judicial or arbitration
proceedings the validity of any of the restrictions contained in the preceding
paragraph, by accepting the Option you agree, independent of any equitable or
legal remedies that the Company may have and without limiting the Company's
right to any other equitable or legal remedies, to pay to the Company in cash
immediately upon the demand of the Company (1) the amount of income realized for
income tax purposes from the exercise of any portion of the Option, net of all
federal, state and other taxes payable on the amount of such income (and reduced
by any amount already paid to the Company under the second preceding paragraph),
but only to the extent such exercises occurred on or after your termination of
employment or, if applicable, any consulting relationship with the Company or
its subsidiary or within the two year period prior to the date of such
termination, plus (2) all costs and expenses of the Company in any effort to
enforce its rights under this or the preceding paragraph. The Company shall have
the right to set off or withhold any amount owed to you by the Company or any of
its subsidiaries or affiliates for any amount owed to the Company by you
hereunder.
By accepting the Option you: (a) agree to comply with the requirements of
applicable federal and other laws with respect to withholding or providing for
the payment of required taxes; (b) acknowledge that (1) all of your rights to
the Option are embodied in the Agreement and in the Plan, (2) the grant and
acceptance of the Option does not imply any commitment by the Company, a
subsidiary or affiliated company to your continued employment or consulting
relationship, and (3) your employment status is that of an employee-at-will and
in particular that the Company, its subsidiary or affiliated company has a
continuing right with or without cause (unless otherwise specifically agreed to
in writing executed by you and the Company) to terminate your employment or
other relationship at any time; and (c) agree not to terminate voluntarily your
current employment (or consulting arrangement, if applicable) for at least one
year from the date of grant unless you have already agreed in writing to a
longer period.
Section 3 of the Plan provides, in part, that the Committee appointed by
the Company's Board of Directors to administer the Plan shall have the authority
to interpret the Plan and award agreements, and decide all questions and settle
all controversies and disputes relating thereto. It further provides that the
determinations, interpretations and decisions of the Committee are within its
sole discretion and are final, conclusive and binding on all persons. In
addition, you and the Company agree that if for any reason a claim is asserted
against the Company or any of its subsidiaries or affiliated companies or any
officer, employee or agent of the foregoing which (1) is within the scope of the
Dispute Resolution Policy (the terms of which are incorporated herein); (2)
subverts the provisions of Section 3 of the Plan; or (3) involves any of the
provisions of the Agreement or the Plan or the provisions of any other option
agreements relating to Company Common Stock or restricted stock awards or other
agreements relating to Company Common Stock or the claims of yourself or any
persons to the benefits thereof, in order to provide a more speedy and
economical resolution, the Dispute Resolution Policy shall be the sole and
exclusive remedy to resolve all disputes, claims or controversies which are set
forth above, except as otherwise agreed in writing by you and the Company or a
subsidiary of the Company. It is our mutual
intention that any arbitration award entered under the Dispute Resolution Policy
will be final and binding and that a judgment on the award may be entered in any
court of competent jurisdiction. Notwithstanding the provisions of the Dispute
Resolution Policy, however, the parties specifically agree that any mediation or
arbitration required by this paragraph shall take place at the offices of the
American Arbitration Association located in the metropolitan Detroit area or
such other location in the metropolitan Detroit area as the parties might agree.
The provisions of this paragraph: (a) shall survive the termination or
expiration of this Agreement, (b) shall be binding upon the Company's and your
respective successors, heirs, personal representatives, designated beneficiaries
and any other person asserting a claim based upon the Agreement, (c) shall
supersede the provisions of any prior agreement between you and the Company or
its subsidiaries or affiliated companies with respect to any of the Company's
option, restricted stock or other stock-based incentive plans to the extent the
provisions of such other agreement requires arbitration between you and the
Company or one of its subsidiaries, and (d) may not be modified without the
consent of the Company. Subject to the exception set forth above, you and the
Company acknowledge that neither of us nor any other person asserting a claim
described above has the right to resort to any federal, state or local court or
administrative agency concerning any such claim and the decision of the
arbitrator shall be a complete defense to any action or proceeding instituted in
any tribunal or agency with respect to any dispute.
The Agreement shall be governed by and interpreted in accordance with
Michigan law.