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EXHIBIT 10.L
MASCO CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK PLAN
SECTION 1. PURPOSE
The purpose of this Plan is to ensure that the non-employee Directors
of Masco Corporation (the "Company") have an equity interest in the Company and
thereby have a direct and long term interest in the growth and prosperity of
the Company by payment of part of their compensation in the form of common
stock of the Company.
SECTION 2. ADMINISTRATION OF THE PLAN
This Plan will be administered by the Company's Board of Directors
(the "Board"). The Board shall be authorized to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan
and to make all other determinations necessary or advisable for the
administration of the Plan. The Board's interpretation of the terms and
provisions of this Plan shall be final and conclusive. The Secretary of the
Company shall be authorized to implement the Plan in accordance with its terms
and to take such actions of a ministerial nature as shall be necessary to
effectuate the intent and purposes thereof. The validity, construction and
effect of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Michigan and applicable
Federal law.
SECTION 3. ELIGIBILITY
Participation will be limited to individuals who are Eligible
Directors, as hereinafter defined. Eligible Director shall mean any Director
of the Company who is not an employee of the Company and who receives a fee for
services as a Director.
SECTION 4. SHARES SUBJECT TO THE PLAN
(a) Subject to the adjustments set forth below, the aggregate number of
shares of Company Common Stock, par value $1.00 per share ("Shares"), which
may be the subject of awards issued under the Plan shall be 500,000.
(b) Any Shares to be delivered under the Plan shall be made available
from newly issued Shares or from Shares reacquired by the Company, including
Shares purchased in the open market.
(c) To the extent a Stock Option award, as hereinafter defined,
terminates without having been exercised, or an award of Restricted Stock, as
hereinafter defined, is forfeited, the Shares subject to such Stock Option or
Restricted Stock award shall again be available for distribution in connection
with future awards under the Plan. Shares equal in number to the Shares
surrendered to the Company in payment of the option price or withholding taxes
(if any) relating to or arising in connection with any Restricted Stock or
Stock Option hereunder shall be added to the number of Shares then available
for future awards under clause (a) above.
(d) In the event of any merger, reorganization, consolidation,
recapitalization, stock split, stock dividend, or other change in corporate
structure affecting the Shares, the aggregate number of Shares which may be
issued under the Plan, the number of Shares subject to Stock Options to be
granted under Section 6(a) hereof and the number of Shares subject to any
outstanding award of Restricted Stock or unexercised Stock Option shall be
adjusted to avoid enhancement or diminution of the benefits intended to be made
available hereunder.
SECTION 5. DIRECTOR STOCK COMPENSATION
(a) The compensation of each Eligible Director for the five year
period beginning January 1, 1997 shall be
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payable in part with an award of Restricted Stock determined as set forth
below, and in part in cash. Compensation for this purpose means annual
retainer fees but does not include supplemental retainer fees for committee
positions or fees for attendance at meetings, which shall be paid in cash.
The portion of compensation payable in Restricted Stock during the five year
period shall be equal to one-half of the annual compensation paid to Eligible
Directors in the year immediately prior to the award multiplied by five, and
the balance of compensation, unless otherwise determined by the Board, shall be
payable in cash. Each award of Restricted Stock shall vest in twenty percent
annual installments (disregarding fractional shares) on January 1 of each of
the five consecutive years following the year in which the award is made.
Subject to the approval of this Plan by the Company's stockholders, each
Eligible Director on February 18, 1997 is awarded as of that date 3,470 Shares
of Restricted Stock, based on the closing price of the Shares as reported on
the New York Stock Exchange Composite Tape ("the NYSE") on February 18, 1997.
Cash shall be paid to an Eligible Director in lieu of a fractional share.
(b) Subject to the approval of this Plan by the Company's
stockholders, each Eligible Director who is first elected or appointed to the
Board on or after the date of the Company's 1997 annual meeting of stockholders
shall receive, as of the date of such election or appointment, an award of
Restricted Stock determined in accordance with Section 5(a) for the five year
period beginning on January 1 of the year in which such election or appointment
occurred; provided, however, that the price of the Shares used in determining
the number of Shares of Restricted Stock which shall be issued to such Eligible
Director shall be the closing price of the Shares as reported on the NYSE on
the date on which such Eligible Director is elected or appointed, and provided,
further, that the amount of Restricted Stock awarded to any Eligible Director
who begins serving as a Director other than at the beginning of a calendar year
shall be prorated to reflect the partial service of the initial year of the
Director's term, such proration to be effected in the initial vesting.
(c) Upon the full vesting of any award of Restricted Stock awarded
pursuant to Section 5(a) or 5(b), each affected Eligible Director shall be
eligible to receive a new award of Restricted Stock, subject to Section 4. The
number of Shares subject to such award shall be determined generally in
accordance with the provisions of Section 5(b); provided, however, that the
Board shall have sole discretion to adjust the amount of compensation then to
be paid in the form of Shares and the terms of any such award of Shares. Except
as the Board may otherwise determine, any increase or decrease in an Eligible
Director's annual compensation during the period when such Director has an
outstanding award of Restricted Stock shall be implemented by increasing or
decreasing the cash portion of such Director's compensation.
(d) Each Eligible Director shall be entitled to vote and receive
dividends on the unvested portion of his or her Restricted Stock, but will not
be able to obtain a stock certificate or sell, encumber or otherwise transfer
such Restricted Stock except in accordance with the terms of the Company's 1991
Long Term Stock Incentive Plan (the "Long Term Plan"). If an Eligible
Director's term is terminated by reason of death or permanent and total
disability, the restrictions on the Restricted Stock will lapse and such
Eligible Director's rights to the Shares will become vested on the date of such
termination. If an Eligible Director's term is terminated for any reason other
than death or permanent and total disability, the Restricted Stock that has not
vested shall be forfeited and transferred back to the Company; provided,
however, that a pro rata portion of the Restricted Stock which would have
vested on January 1 of the year following the year of the Eligible Director's
termination shall vest on the date of termination, based upon the portion of
the year during which the Eligible Director served as a Director of the
Company.
SECTION 6. STOCK OPTION GRANT
(a) Subject to approval of this Plan by the Compan's stockholders,
each Eligible Director on the date of such approval will be granted on such
date a stock option to purchase 4,000 Shares (the "Stock Option").
Thereafter, on the date of each of the Company's subsequent annual stockholders
meetings, each person who is or becomes an Eligible Director on that date and
whose service on the Board will continue after such date shall be granted a
Stock Option, subject to Section 4, effective as of the date of such meeting.
(b) Stock Options granted under this Section 6 shall be non-qualified
stock options and shall have the following terms and conditions.
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1. Option Price. The option price per Share shall be equal to the
closing price of the Shares as reflected on the NYSE on the date of grant (or
if there were no sales on such date, the most recent prior date on which there
were sales).
2. Term of Option. The term of the Stock Option shall be ten years
from the date of grant, subject to earlier termination in the event of
termination of service as an Eligible Director. If an Eligible Director's term
is terminated for any reason other than death at a time when such Director is
entitled to exercise an outstanding Stock Option, then at any time or times
within three months after termination such Stock Option may be exercised as to
all or any of the Shares which the Eligible Director was entitled to purchase
at the date of termination. If an Eligible Director dies at a time when such
Director is entitled to exercise a Stock Option, then at any time or times
within one year after death such Stock Option may be exercised as to all or any
of the Shares which the Eligible Director was entitled to purchase immediately
prior to such Director's death. Except as so exercised, such Stock Options
shall expire at the end of such periods. That portion of the Stock Option not
exercisable at the time of such termination shall be forfeited and transferred
back to the Company on the date of such termination.
3. Exercisability. Subject to clause 2 above, each Stock Option shall
vest and become exercisable with respect to twenty percent of the underlying
Shares on each of the first five anniversaries of the date of grant, provided
that the optionee is an Eligible Director on such date.
4. Method of Exercise. A Stock Option may be exercised in whole or in
part during the period in which such Stock Option is exercisable by giving
written notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment of the purchase price. Payment of the
purchase price shall be made in cash, by delivery of Shares, or by any
combination of the foregoing.
5. Non-Transferability. Unless otherwise provided by the terms of the
Long Term Plan or the Board, (i) Stock Options shall not be transferable by
the optionee other than by will or by the laws of descent and distribution, and
(ii) during the optionee's lifetime, all Stock Options shall be exercisable
only by the optionee or by his or her guardian or legal representative.
6. Stockholder Rights. The holder of a Stock Option shall, as such,
have none of the rights of a stockholder.
SECTION 7. GENERAL
(a) Plan Amendments. The Board may amend, suspend or discontinue the
Plan as it shall deem advisable or to conform to any change in any law or
regulation applicable thereto; provided, that the Board may not, without the
authorization and approval of the stockholders of the Company: (a) modify the
class of persons who constitute Eligible Directors as defined in the Plan; or
(b) increase the total number of Shares available under the Plan. In addition,
without the consent of affected participants, no amendment of the Plan or any
award under the Plan may impair the rights of participants under outstanding
awards.
(b) Listing and Registration. If at any time the Board shall
determine, in its discretion, that the listing, registration or qualification
of the Shares under the Plan upon any securities exchange or under any state or
Federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of any award hereunder, no Shares may be delivered or disposed of unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Board.
(c) Award Agreements. Each award of Restricted Stock and Stock
Option granted hereunder shall be evidenced by the Eligible Director's written
agreement with the Company which shall contain such terms and conditions not
inconsistent with the provisions of the Plan as shall be determined by the
Board in its discretion.
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