Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
a. Evaluation of Disclosure Controls and Procedures.
The Company's Principal Executive Officer and Principal Financial Officer have concluded, based on an evaluation of the Company's disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15 that, as of December 31, 2021, the Company's disclosure controls and procedures were effective.
b. Management's Report on Internal Control over Financial Reporting.
Management's report on the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is included in this Report under Item 8. Financial Statements and Supplementary Data, under the heading, "Management's Report on Internal Control over Financial Reporting" and is incorporated herein by reference. The report of our independent registered public accounting firm is also included under Item 8, under the heading, "Report of Independent Registered Public Accounting Firm" and is incorporated herein by reference.
c. Changes in Internal Control over Financial Reporting.
In connection with the evaluation of the Company's internal control over financial reporting that occurred during the quarter ended December 31, 2021, which is required under the Securities Exchange Act of 1934 by paragraph (d) of Exchange Rules 13a-15 or 15d-15 (as defined in paragraph (f) of Rule 13a-15), management determined that there was no change that materially affected or is reasonably likely to materially affect internal control over financial reporting.
Item 9B. Other Information.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our Code of Ethics applies to all employees, officers and directors including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, and is posted on our website at www.masco.com. Amendments to or waivers of our Code of Ethics for directors and executive officers, if any, will be posted on our website.
Other information required by this Item will be contained in our definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, to be filed before April 29, 2022, and such information is incorporated herein by reference.
Item 11. Executive Compensation.
Information required by this Item will be contained in our definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, to be filed before April 29, 2022, and such information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Equity Compensation Plan Information
We grant equity under our 2014 Long Term Stock Incentive Plan (the "2014 Plan"). The following table sets forth information as of December 31, 2021 concerning the 2014 Plan, which was approved by our stockholders. We do not have any equity compensation plans that have not been approved by our stockholders.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity compensation plans approved by stockholders 2,691,956 $ 36.67 12,923,217
The remaining information required by this Item will be contained in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, to be filed before April 29, 2022, and such information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information required by this Item will be contained in our definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, to be filed before April 29, 2022, and such information is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
Information required by this Item will be contained in our definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, to be filed before April 29, 2022, and such information is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
a. Listing of Documents.
(1) Financial Statements. Our consolidated financial statements included in Item 8 hereof, as required at December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020 and 2019, consist of the following:
Consolidated Balance Sheets
40
Consolidated Statements of Operations
41
Consolidated Statements of Comprehensive Income (Loss)
42
Consolidated Statements of Cash Flows
43
Consolidated Statements of Shareholders' Equity
44
Notes to Consolidated Financial Statements
45
(2) Financial Statement Schedule.
a. Our Financial Statement Schedule appended hereto, as required for the years ended December 31, 2021, 2020 and 2019, consists of the following:
II. Valuation and Qualifying Accounts
91
(3) Exhibits.
Exhibit
No.
Incorporated By Reference Filed
Herewith
Exhibit Description Form Exhibit Filing Date
2.a
Stock Purchase Agreement, dated September 29, 2019, by and between Masco Corporation and MIWD Holding Company LLC. 8-K 2.1 10/03/2019
2.b
Securities Purchase Agreement, dated November 14, 2019, by and between Masco Corporation and ACP Products, Inc. 8-K 2.1 11/18/2019
Note 1: Disclosure schedules and certain exhibits have been omitted from Exhibit No. 2.a and 2.b pursuant to Item 601(b)(2) of Regulation S-K. Each Agreement as filed identifies such schedules and exhibits, including the general nature of their contents. Masco agrees to furnish a copy of any omitted attachment to the Securities Exchange Commission on a confidential basis upon request.
3.a
Restated Certificate of Incorporation of Masco Corporation. 2015 10-K 3.i 02/12/2016
3.b
Bylaws of Masco Corporation, as Amended and Restated on February 5, 2021. 2020 10-K 3.b 02/09/2021
4.a
Indenture dated as of December 1, 1982 between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee under agreement originally with Morgan Guaranty Trust Company of New York, as Trustee, and Supplemental Indenture thereto dated as of July 26, 1994; and Directors' resolutions establishing Masco Corporation's: 2016 10-K 4.a 02/09/2017
4.a.i
7-3/4% Debentures Due August 1, 2029. 2014 10-K 4.a.i(ii) 02/13/2015
85
Exhibit
No. Incorporated By Reference Filed
Herewith
Exhibit Description Form Exhibit Filing Date
4.b
Indenture dated as of February 12, 2001 between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee under agreement originally with Bank One Trust Company, National Association, as Trustee, and Supplemental Indenture thereto dated as of November 30, 2006; and Directors' Resolutions establishing Masco Corporation's: 2016 10-K 4.b 02/09/2017
4.b.i
6-1/2% Notes Due August 15, 2032; 2017 10-K 4.b.i 02/08/2018
4.b. i i
3.500% Notes Due November 15, 2027; and 8-K 4.1 06/15/2017
4.b.iii
4.500% Notes Due May 15, 2047. 8-K 4.2 06/15/2017
4.b. i v
Second Supplemental Indenture, dated as of September 18, 2020, between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee. 8-K 4.3 09/18/2020
4.b.v
4.500% Notes Due May 15, 2047 8-K 4.2 09/18/2020
4.b. v i
2.000% Notes Due October 1, 2030 8-K 4.1 09/18/2020
4.b.vii
1.500% Notes Due February 15, 2028 8-K 4.1 03/04/2021
4.b.viii
2.000% Notes Due February 15, 2031 8-K 4.2 03/04/2021
4.b.ix
3.125% Notes Due February 15, 2051 8-K 4.3 03/04/2021
Note 2: Other instruments, notes or extracts from agreements defining the rights of holders of long-term debt of Masco Corporation or its subsidiaries have not been filed since (i) in each case the total amount of long-term debt permitted thereunder does not exceed 10 percent of Masco Corporation's consolidated assets, and (ii) such instruments, notes and extracts will be furnished by Masco Corporation to the Securities and Exchange Commission upon request.
4.c
Description of securities. 2019 10-K 4.c 02/11/2020
10.a
Credit Agreement dated as of March 13, 2019 by and among Masco Corporation and Masco Europe S.à r.l. as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and PNC Bank, National Association, as Co-Syndication Agents, and Deutsche Bank Securities, Inc., Royal Bank of Canada, SunTrust Bank, Bank of America, N.A., Fifth Third Bank and Wells Fargo Bank, National Association, as Co-Documentation Agents, as amended by Amendment No. 1 dated as of December 22, 2021. 8-K 10 12/22/2021
Note 3: Exhibits 10.b through 10.i constitute the management contracts and executive compensatory plans or arrangements in which certain of the directors and executive officers of the Company participate.
10.b
Masco Corporation 2005 Long Term Stock Incentive Plan (Amended and Restated May 11, 2010): 2015 10-K 10.b.i 02/12/2016
Form of Stock Option Grant Agreements:
10.b.i
for grants on or after January 1, 2013 2017 10-K 10.b.iii 02/08/2018
10.b.ii
for grants during 2012 2017 10-K 10.b.iv 02/08/2018
10.b.iii
for grants prior to 2012 2015 10-K 10.b.i(ii)(C) 02/12/2016
86
Exhibit
No. Incorporated By Reference Filed
Herewith
Exhibit Description Form Exhibit Filing Date
10.c
Masco Corporation 2014 Long Term Stock Incentive Plan (Amended and Restated May 9, 2016): 10-Q 10.a 07/26/2016
Form of Restricted Stock Award Agreements:
10.c.i
for awards prior to July 1, 2018 8-K 10.b 05/06/2014
10.c.ii
for awards on or after July 1, 2018 2018 10-K 10.c.ii 02/07/2019
Form of Restricted Stock Unit Award Agreements:
10.c.iii
for awards between December 17, 2019 and February 2, 2022 2019 10-K 10.c.iii 02/11/2020
10.c.iv
for awards on or after February 3, 2022 X
Form of Stock Option Grant Agreements:
10.c.v
for grants prior to July 1, 2018 8-K 10.d 05/06/2014
10.c.vi
for grants between July 1, 2018 and December 17, 2019 2018 10-K 10.c.iv 02/07/2019
10.c.vii
for grants between December 17, 2019 and February 3, 2022 2019 10-K 10.c.vi 02/11/2020
10.c.viii
for grants on or after February 3, 2022 X
10.c.xi
Form of Long Term Incentive Program Award Agreement for awards prior to December 17, 2019. 2018 10-K 10.c.v 02/07/2019
10.c.x
Long-Term Incentive Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (December 17, 2019) and form of Performance Restricted Stock Unit Award Agreement thereunder. 10-Q 10.a 04/29/2020
10.c.xi
Long-Term Incentive Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (Amended and Restated February 3, 2022) and form of Performance Restricted Stock Unit Award Agreement thereunder. X
10.c.xii
Non-Employee Directors Equity Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (Amended and Restated May 9, 2016). 10-Q 10.b 07/26/2016
Form of Restricted Stock Award Agreement for Non-Employee Directors:
10.c.xiii
for Non-Employee Directors for awards prior to July 1, 2018 8-K 10.c 05/06/2014
10.c.xiv
for Non-Employee Directors for awards after July 1, 2018 2018 10-K 10.c.viii 02/07/2019
10.c.xv
Non-Employee Directors Equity Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (Amended and Restated February 7, 2020). 2019 10-K 10.c.xiii 02/11/2020
Form of Restricted Stock Unit Award Agreement for Non-Employee Directors:
10.c.xvi
for awards between February 7, 2020 and February 3, 2022 2019 10-K 10.c.xiv 02/11/2020
10.c.xvii
for awards on or after February 3, 2022 X
10.d
Form of Masco Corporation Supplemental Executive Retirement and Disability Plan and amendments thereto (includes amendment freezing benefit accruals) for John G. Sznewajs. 2015 10-K 10.d.i(ii) 02/12/2016
10.e
Other compensatory arrangements for executive officers. 2016 10-K 10.f 02/09/2017
10.f
Compensation of Non-Employee Directors. X
87
Exhibit
No. Incorporated By Reference Filed
Herewith
Exhibit Description Form Exhibit Filing Date
10.g
Masco Corporation Retirement Benefit Restoration Plan effective January 1, 1995 (as amended and restated December 22, 2010), and amendments thereto effective February 6, 2012 and January 1, 2014. 2016 10-K 10.i 02/09/2017
10.h
Employment Offer Letter dated May 3, 2021 between Richard Marshall and Masco Corporation 10-Q 10 07/29/2021
10.i
Employment Offer Letter dated January 6, 2022 between Robin Zondervan and Masco Corporation 8-K 10 02/07/2022
21
List of Subsidiaries. X
23
Consent of Independent Registered Public Accounting Firm relating to Masco Corporation's Consolidated Financial Statements and Financial Statement Schedule. X
31.a
Certification by Chief Executive Officer required by Rule 13a-14(a)/15d-14(a). X
31.b
Certification by Chief Financial Officer required by Rule 13a-14(a)/15d-14(a). X
32
Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code. X
101 The following financial information from Masco Corporation's Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity, and (vi) Notes to Consolidated Financial Statements. X
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) X
The Company will furnish to its stockholders a copy of any of the above exhibits not included herein upon the written request of such stockholder and the payment to the Company of the reasonable expenses incurred by the Company in furnishing such copy or copies.
Item 16. Form 10-K Summary
The optional summary in Item 16 has not been included in this Form 10-K.
88
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
MASCO CORPORATION
By: /s/ John G. Sznewajs
John G. Sznewajs
Vice President, Chief Financial Officer
February 8, 2022
89
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
Principal Executive Officer:
/s/ Keith J. Allman President and Chief Executive
Officer and Director
Keith J. Allman
Principal Financial Officer:
/s/ John G. Sznewajs Vice President, Chief
Financial Officer
John G. Sznewajs
Principal Accounting Officer:
/s/ John P. Lindow Vice President, Controller
and Chief Accounting Officer
John P. Lindow
/s/ Lisa A. Payne Chair of the Board
Lisa A. Payne
/s/ Mark R. Alexander Director
Mark R. Alexander February 8, 2022
/s/ Marie A. Ffolkes Director
Marie A. Ffolkes
/s/ Christopher A. O'Herlihy Director
Christopher A. O'Herlihy
/s/ Donald R. Parfet Director
Donald R. Parfet
/s/ John C. Plant Director
John C. Plant
/s/ Charles K. Stevens, III
Charles K. Stevens, III Director
/s/ Reginald M. Turner, Jr. Director
Reginald M. Turner, Jr.
90
MASCO CORPORATION
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2021, 2020 and 2019
(In Millions)
Column A Column B Column C Column D Column E
Additions
Description Balance at
Beginning
of Period Charged to
Costs and
Expenses Charged
to Other
Accounts Deductions Balance at
End of
Period
Allowances for doubtful accounts, deducted from accounts receivable in the balance sheet:
2021 $ 7 $ 1 $ — $ ( 2 ) (a) (b) $ 6
2020 $ 5 (c) $ 3 $ — $ ( 1 ) (a) $ 7
2019 $ 5 $ 1 $ — $ ( 2 ) (a) $ 4
Valuation allowance on deferred tax assets:
2021 $ 35 $ 5 $ — $ ( 23 ) (b) $ 17
2020 $ 38 $ — $ 2 (d) $ ( 5 ) (e) $ 35
2019 $ 43 $ — $ — $ ( 5 ) (e) $ 38
______________________________
(a) Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years.
(b) As a result of the Hüppe divestiture in May 2021, $ 1 million was removed from allowance for credit losses and $ 23 million was removed from valuation allowance on deferred tax assets.
(c) Includes a $ 1 million adjustment related to the cumulative effect of adoption of the new credit loss standard.
(d) $ 2 million net increase in valuation allowance due to currency translation recorded in other comprehensive income (loss).
(e) $ 5 million net reduction to valuation allowance recorded as an income tax benefit.
91