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Exhibit 11
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Benjamin Moore & Co. Stock Option Plan
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Section 1. PURPOSE
The purpose of the Stock Option Plan (hereinafter the "Plan") is to encourage
and enable officers and key members of management to increase their share
ownership in the Company commensurate with their accountability for and
contribution to Company performance, and also to provide additional
opportunities for share ownership to other employees with at least five years of
service, so as to increase employee identification with the interests of the
Company and its shareholders. Increased share ownership will provide additional
incentive for participants to achieve long-range performance goals.
Section 2. DEFINITIONS
"Affiliate" means any business entity that is wholly or partially owned by the
Company.
"Board" means the Board of Directors of the Company.
"Change in Capitalization" means any increase or reduction in the number of
shares of Common Stock, or any change Including, but not limited to, a change in
value) in the shares of Common Stock or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the Company, by reason
of a reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, change in corporate
structure or otherwise.
"Committee" means not less than two members of the Board (who are not employees
of the Company) appointed to administer the Plan, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934.
"Common Stock" means the common stock, par value $10 per share, of the Company.
"Company" means Benjamin Moore & Co.
"Designated Beneficiary" means the Participant's beneficiary designated in the
manner prescribed by the Committee to receive amounts due or exercise rights of
the Participant in the event of the Participant's death. In the absence of an
effective designation by a Participant, Designated Beneficiary will mean the
Participant's estate.
"Disability" means total and permanent disability as defined by the Company's
long term disability insurance carrier.
"Fair Value" means the value of the Common Stock established by the Board of
Directors of the Company.
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"Nonstatutory Stock Option" means a non-qualified option, not intended to be an
Incentive Stock Option (as defined in Section 422 of the Internal Revenue Code
of 1986), granted to a Participant to purchase shares of Common Stock.
"Option" means a Nonstatutory Stock Option.
"Participant" means any officer or other employee selected by the Committee to
participate in the Plan.
Section 3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have the
authority to grant Options under the Plan and to establish the terms and
conditions applicable to such Option. The Committee will have authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the operation of the Plan as it shall from time to time consider
advisable, and to interpret the provisions of the Plan. The Committee's
decisions will be final and binding. To the extent permitted by applicable law,
the Committee may delegate to a committee consisting of two or more executive
officers (who are Directors) of the Company the power to make awards to
participants and all determinations under the Plan with respect thereto,
provided that the Committee will fix the maximum amount of such grants for the
group and a maximum for any one participant.
Section 4. STOCK AVAILABLE FOR THE PLAN
No more than 400,000 shares of Common Stock shall be cumulatively available for
Plan use; provided, however, that upon a Change in Capitalization the maximum
number of shares shall be adjusted in number and kind pursuant to Section 7. If
an Option expires, terminates or is surrendered without having been fully
exercised the unpurchased or forfeited shares of Common Stock subject to option
or grant will again become available for the purpose of the Plan.
Section 5. OPTION GRANT
Subject to the provisions of the Plan, the Committee may grant Nonstatutory
Stock Options and determine the number of shares to be covered by each Option,
the option price thereof and the conditions and limitations applicable to the
exercise of the Option.
The Committee will establish the option price at the time each Option is
granted, which price shall not be less than 100% of the Fair Value of the Common
Stock on the date of grant.
Each Option will be exercisable at such time or times as the Committee may
determine and on such terms and conditions as the Committee may specify in the
applicable grant or thereafter. No Option may be exercised until two years have
elapsed from date of grant. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable.
No shares will be delivered pursuant to any exercise of an Option until payment
in full of the Option price therefor is received by the Company. To assist
Participants in exercising their Options, the Company may make loans available
to Participants up to a maximum of one-half of
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the total exercise price applicable to that portion of any Option(s) exercised
by the Participant in any calendar year. The term of the loan may be up to ten
years, except in cases of exercise of an Option after death, Disability, or
retirement of the optionee entitling the optionee to immediate payment of
retirement benefits under the Company's Retirement Income Plan, in which cases
the term of the loan may be no more than five years.
Section 6. GENERAL PROVISIONS APPLICABLE TO GRANTS
Transferability of Grants and Holding Period
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No Participant will have the right to assign any grant or the right to receive
any grant or any other right or interest under the Plan, contingent or
otherwise, or to cause or permit any encumbrance, pledge or charge of any nature
to be imposed on any such grant or right to receive any grant or any such right
or interest, other than by will or the laws of descent and distribution. Grants
will be exercisable during the Participant's lifetime only by the Participant or
the Participant's guardian or legal representative.
Documentation
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Each grant under the Plan will be evidenced by a writing delivered to the
Participant specifying the ten-ns and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan as
the Committee considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.
Each grant may be made alone, in addition to or in relation to any other grant.
The terms of each grant need not be identical, and the Committee need not treat
Participants uniformly.
Termination of Employment
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The Committee will determine the effect on a grant of the Disability, death,
retirement or other termination of employment of a Participant and the extent to
which, and the period during which, the Participant, or his or her legal
representative, guardian or Designated Beneficiary may exercise rights
thereunder.
Right of First Refusal
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The Company will have a right of first refusal as described herein to repurchase
any shares purchased pursuant to this Plan. Such rights of first refusal will
apply to any holder of such shares (herein referred to as a "holder"), whether
it be an employee, a former employee, the estate or permitted transferee of an
employee, or any other transferee.
If at any time a holder of shares purchased pursuant to this Plan receives and
wishes to accept a bona fide offer to sell or transfer such shares, such holder
must first give written notice to the Company at its principal executive offices
stating the name and address of the proposed transferee, the number of shares to
be transferred, the price per share and the terms and conditions for the payment
of such price. The Company will thereupon have the option to
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purchase the shares from the holder at the greater of (a) their current Fair
Value; or (b) the terms of sale of the bona fide offer within thirty (30) days
of such notice.
If the Company does not exercise its right of first refusal within thirty (30)
days after its receipt of the sale notice, the holder will be free to sell the
shares to the proposed transferee in accordance with the terms of sale, provided
that if such sale does not occur within thirty (30) days after the expiration of
the Company's option, the holder's right to sell such shares to the
proposed transferee shall expire and the holder shall again be obligated to
comply with the provisions hereof as to any sale or transfer of such shares.
Notwithstanding the foregoing, an employee's proposed transfer of shares to
members of his or her immediate family shall not trigger the Company's right of
first refusal set forth herein although G) no such transfer may be made while a
promissory note is outstanding with respect to such shares and 00 the Company
shall continue to have a right of first refusal on any proposed subsequent sale
or transfer of the shares.
Company Option to Repurchase. Shares
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If before any promissory note with respect to any shares has been paid in full,
an employee leaves the employ of the Company or its Affiliates for any reason,
other than retirement entitling the employee to immediate payment of retirement
benefits under the Company's Retirement Income Plan, the Company will have the
option, for a period of sixty (60) days subsequent to the date of termination or
discharge other than by reason of the death of the employee and for a period of
six (6) months subsequent to the date of death in such event, to repurchase all
of his or her shares at their then current Fair Value.
The Company will have a similar option to repurchase the shares, subject to
applicable laws relating to the rights and obligations of secured creditors, in
the event the employee does not fully perform all obligations under any purchase
agreement with respect to the shares.
The Company may exercise its option to repurchase shares by giving written
notice to the employee at his/her address on the records of the Company. The
Company's written notice shall set forth a date (the "Closing Date") not more
than thirty (30) days after the date of such notice on which the Company's
repurchase shall occur (provided that in the case of death, the Closing Date
shall not be sooner than six (6) months after the date of death). Promptly
after the Closing Date, the Company will pay to the employee or his/her estate
the excess, if any, of W the current Fair Value of any pledged shares, over (ii)
the unpaid portion of the aggregate purchase price for said shares, if any. The
shares will thereupon be owned by the Company and the employee or his/her estate
will have no further interest therein. If such repurchase option is not
exercised by the Company, the employee or the employee's estate will have the
right to continue to make the payments on such note.
Notwithstanding the foregoing, in the event of the death of an employee, the
employee's estate will have the option at any time prior to the six (6) month
anniversary of the date of death to make full payment of the unpaid balance of
the promissory note, in which event such estate shall retain ownership of the
shares subject only to the Company's right of first refusal described above. An
employee's estate desirous of electing to make such payment must do so by
delivering
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notice of such election and a check or money order for the unpaid balance of the
promissory note to the Company at its principal executive offices prior to such
six (6) month anniversary, except as may be otherwise specifically agreed to by
the Committee.
Section 7. MISCELLANEOUS
Adjustment Upon a Change in Capitalization
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In the event of a Change in Capitalization, the Committee shall conclusively
determine the appropriate adjustments, if any, to (i) the maximum number and
class of shares of Common Stock or other stock or securities with respect to
which Options may be granted under the Plan, and 00 the number and class of
shares of Common Stock or other stock or securities, which are subject to
outstanding Options granted under the Plan, and the purchase price therefor.
Effect of Certain Transactions
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In the event of (i) the liquidation or dissolution of the Company or (ii) a
merger or consolidation of the Company (a "Transaction"), the Plan and the
Options issued hereunder shall continue in effect in accordance with their
respective terms and each optionee shall be entitled to receive in respect of
each share of Common Stock subject to any outstanding Option, upon exercise of
the Option, the same number and kind of stock, securities, cash, property, or
other consideration that each shareholder was entitled to receive in the
Transaction in respect of a share of Common Stock.
Conditions to Company's Obligations
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The obligations of the Company to sell or deliver shares of Common Stock with
respect to Options granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
No Right to Employment
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No person will have any claim or right to receive a grant, and the receipt of a
grant will not be construed as giving a Participant the right to continued
employment. The Company expressly reserves the right at any time to discuss a
Participant free from any liability or claim under the Plan, except as expressly
provided in the applicable grant.
No Rights As Shareholder
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Subject to the provisions of the applicable grant, no Participant or Designated
Beneficiary will have any rights as a shareholder with respect to any shares of
Common Stock to be distributed under the Plan until he or she becomes the owner
of record thereof.
Effective Date
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The Plan will be effective upon approval of the shareholders of the Company.
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Term of Plan
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No grant will be made pursuant to the Plan on or after the tenth anniversary of
the date of shareholder approval, but grants made prior to such tenth
anniversary may extend beyond that date.
Amendment of Plan
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The Board may amend, suspend or terminate the Plan or any portion thereof at any
time, provided that no amendment will be made without shareholder approval to M
increase the maximum number of shares for use in the Plan; 60 reduce the minimum
option price described herein; (iii) extend the period during which Options may
be granted or exercised; or GO change any provision if shareholder approval is
necessary to comply with any applicable tax or regulatory requirement.
Withholding
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The Company will have the right to require an optionee or other person entitled
to receive Common Stock under this Plan to pay the Company any amount that the
Company is required to withhold under any tax law with respect to such Common
Stock.
Governing Law
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The provisions of the Plan will be governed by and interpreted in accordance
with the laws of the State of New Jersey.
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