MASCOTECH INC, DEF 14A, 1998-04-27

MASCOTECH INC
DEF 14A, 1998-04-27
MOTOR VEHICLE PARTS & ACCESSORIES

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<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

MASCOTECH, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

(5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

- --------------------------------------------------------------------------------

<PAGE> 2

MASCOTECH, INC.
21001 Van Born Road
Taylor, Michigan 48180

-------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO THE STOCKHOLDERS OF MASCOTECH, INC.:

The Annual Meeting of Stockholders of MascoTech, Inc. will be held at its
offices at 21001 Van Born Road, Taylor, Michigan 48180, on Tuesday, May 19, 1998
at 2:00 P.M., Eastern daylight time. The purposes of the meeting, which are set
forth in detail in the accompanying Proxy Statement, are:

1. To elect two Class I Directors and to approve the appointment of one
Class II Director;

2. To consider and act upon the ratification of the selection of Coopers &
Lybrand L.L.P. as independent auditors for the Company for the year 1998; and

3. To transact such other business as may properly come before the meeting.

The Board of Directors has fixed the close of business on March 27, 1998 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting and at any adjournment thereof.

Your attention is called to the accompanying Proxy Statement and Proxy.
Whether or not you plan to be present at the meeting, you are requested to sign
and return the Proxy in the enclosed envelope to which no postage need be
affixed if mailed in the United States. Your prompt attention will be
appreciated. Prior to being voted, the Proxy may be withdrawn in the manner
specified in the Proxy Statement.

By Order of the Board of Directors

EUGENE A. GARGARO, JR.
EUGENE A. GARGARO, JR.
Secretary
April 27, 1998
<PAGE> 3

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS OF
MASCOTECH, INC.

May 19, 1998

GENERAL INFORMATION

The solicitation of the enclosed Proxy is made by the Board of Directors of
MascoTech, Inc. (the "Company") for use at the Annual Meeting of Stockholders of
the Company to be held at its offices at 21001 Van Born Road, Taylor, Michigan
48180, on Tuesday, May 19, 1998 at 2:00 P.M., Eastern daylight time, and at any
adjournment thereof.

The expense of this solicitation will be borne by the Company. Solicitation
will be by use of the mails, and executive officers and other employees of the
Company may solicit Proxies, without extra compensation, personally and by
telephone and other means of communication. In addition, the Company has
retained Morrow & Company, Inc. to assist in the solicitation of Proxies for a
fee of $5,000, plus expenses. The Company will also reimburse brokers and other
persons holding Company Common Stock in their names or in the names of their
nominees for their reasonable expenses in forwarding Proxies and Proxy materials
to beneficial owners.

Stockholders of record as of the close of business on March 27, 1998 will
be entitled to vote at the Annual Meeting. On that date, there were 47,235,208
shares of Company Common Stock, $1 par value, outstanding and entitled to vote.
Each share of outstanding Company Common Stock entitles the holder to one vote.
The Company has been advised that Masco Corporation and Directors and officers
of the Company hold in the aggregate approximately 26 percent of the voting
power of the Company and intend to vote their shares in favor of the nominees,
for the ratification of the selection of Coopers & Lybrand L.L.P. and in
accordance with the recommendations of the Company's Board of Directors on any
other matters.

Presence in person or by proxy of holders of a majority of outstanding
shares of Company Common Stock will constitute a quorum at the Annual Meeting.
Broker non-votes and abstentions will be counted toward the establishment of a
quorum.

The shares represented by the Proxy will be voted as instructed if received
in time for the Annual Meeting. Any person signing and mailing the Proxy may,
nevertheless, revoke it at any time before it is exercised by written notice to
the Company (Attention: Eugene A. Gargaro, Jr., Secretary) at its executive
offices at 21001 Van Born Road, Taylor, Michigan 48180, or at the Annual
Meeting. This Proxy Statement and the enclosed Proxy are being mailed or given
to stockholders on or about April 27, 1998.
<PAGE> 4

ELECTION OF DIRECTORS

The Board of Directors is divided into three classes. The term of office of
the Class I Directors expires at this meeting and the Board of Directors
proposes the election of Richard A. Manoogian, who is currently a Director, and
nominates Helmut F. Stern, for election to the Board as Class I Directors.

Eugene A. Gargaro, Jr., a member of the Class II Directors, is resigning
from the Board of Directors effective immediately prior to the Annual Meeting.
Mr. Gargaro has been a Director and the Secretary of the Company since its
formation in 1984, and will continue to serve as Secretary. The Board wishes to
express its sincere appreciation to Mr. Gargaro for his many contributions to
the Board of Directors over the years. Under the Company's Certificate of
Incorporation, vacancies are to be filled by the Board of Directors. The Board
is filling this position by appointment of Frank M. Hennessey, subject to
stockholder approval at the Annual Meeting. Mr. Hennessey has been serving on
the Board since he was appointed by the Board in January 1998 to fill an
existing vacancy in the Class I Directors.

The Class I and Class II Directors will serve for terms expiring at the
Annual Meeting in 2001 and 1999, or until their respective successors are
elected and qualified. The Class III Directors have been elected to serve for a
term which expires at the Annual Meeting of Stockholders in 2000 or until their
respective successors are elected and qualified. The Board of Directors expects
that the persons named as proxies in the Proxy will vote the shares represented
by each Proxy for the election as Directors of the above nominees unless a
contrary direction is indicated. If prior to the meeting any nominee is unable
or unwilling to serve as a Director, which the Board of Directors does not
expect, the persons named as proxies will vote for such alternate nominee, if
any, as may be recommended by the Board of Directors.

Assuming a quorum is present, Directors are elected by a plurality of the
votes cast. The two nominees who receive the largest number of votes cast will
be elected as Class I Directors and the nominee for the Class II Director who
receives the largest number of votes cast will be elected as a Class II
Director; therefore, shares not voted (whether due to abstention or broker
non-vote) do not affect the election of Directors.

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<PAGE> 5

Information concerning the nominees and continuing Directors is set forth
below.

Richard A. Manoogian................. Mr. Manoogian, 61, has served as Chairman and
Chairman of the Board of the Director of the Company since its formation in 1984
Company and Chairman of the Board and as Chief Executive Officer until January 1998.
and Chief Executive Officer He joined Masco Corporation in 1958, was elected
of Masco Corporation. Vice President and a Director in 1964, President in
Director since 1984. 1968 and Chairman and Chief Executive Officer in
1985. He has served as Chairman of the Board of
TriMas Corporation from 1989 until it was acquired
by the Company in January 1998. He is also a
director of First Chicago NBD Corporation, MSX
International, Inc., Detroit Renaissance and The
American Business Conference, president of the
Board of Directors of the Detroit Institute of Arts
and a trustee of the Archives of American Art
(Smithsonian Institute), Center for Creative
Studies, The Fine Arts Committee of the State
Department, Trustees Council of the National
Gallery of Art, Armenian General Benevolent Union,
Detroit Investment Fund and Henry Ford Hospital.

Helmut F. Stern...................... Mr. Stern, 78, has served as President of Arcanum
President of Arcanum Corporation, a Corporation since 1970. He is the former President
private research and development of Industrial Tectonics, Inc., manufacturer of
company. precision balls and ball and roller bearings, from
1946 to 1983, and of its parent company, ITI
Holding Corp. from 1949 to 1983. Mr. Stern served
as a director of TriMas Corporation from 1989 until
it was acquired by the Company in January 1998.
</TABLE>

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<PAGE> 6

Frank M. Hennessey................... Mr. Hennessey, 59, became Vice Chairman and Chief
Vice Chairman and Chief Executive Executive Officer of the Company in January 1998.
Officer of the Company. Prior to joining the Company, he served as Masco
Director since January 1998. Corporation's Executive Vice President from
September 1995 and as its Vice President of
Strategic Planning from 1990 to 1995. He also
served as Emco Limited's President and Chief
Executive Officer from 1990 until 1995, as its
Chief Executive Officer from 1995 until 1997 and
has been its Chairman since 1995. In 1981 he became
President of the Handleman Company and assumed the
additional responsibilities of Chief Executive
Officer in 1988. Previously, he was the Group
Managing Partner of Coopers & Lybrand's Detroit
Group Office from 1977 to 1981. He is a director of
MCN Energy Group Inc. and Emco Limited. He is also
a director of New Detroit, Inc., a director at
large of the National Council of Northeastern
University, director and treasurer of the United
Way Community Services; trustee of the Citizen's
Research Council of Michigan; trustee of the
Hudson-Webber Foundation and Chairman of the Japan
America Society of Greater Detroit and Windsor.

CLASS II (TERM TO EXPIRE AT THE ANNUAL MEETING IN 1999)

Peter A. Dow......................... Mr. Dow, 64, initially joined Campbell-Ewald
Private investor; Retired Vice Company in 1958 and returned in 1979 to serve as
Chairman, Chief Operating Officer Executive Vice President and Director of General
and Chairman of the Executive Accounts. Beginning in 1982, he became President,
Committee of Campbell-Ewald, Chief Operating Officer and Chairman of the
an advertising and marketing Executive Committee, and then served as Vice
communications company. Chairman from 1993 until his retirement in 1995. He
Director since 1992. was named Director of Advertising for the Chrysler-
Plymouth Division of Chrysler Corporation in 1968.
Subsequently, he became responsible for the
advertising and merchandising for Chrysler
Corporation and all of its divisions. In 1978 he
was named Director of Marketing for Chrysler
Corporation. Mr. Dow is currently a director of The
Stroh Brewery Company, The Stroh Companies, Inc.
and Comtrad Industries, Inc. He is also Trustee
Emeritus of The Lawrenceville School, a trustee of
the Alice Kales Hartwick Foundation and a member of
the Board of Directors of the Detroit Institute of
Arts.
</TABLE>

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<PAGE> 7

<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR DIRECTORSHIPS AND OTHER INFORMATION
----------------------------------- -----------------------------------
<S> <C>
Roger T. Fridholm.................... Mr. Fridholm, 57, has been President of St. Clair
President of St. Clair Group, Inc., Group, Inc. since 1991. He also has served as
a private investment company. Chairman of Ad Hoc Legal Resources LLC since 1995,
Director since 1996. as President of IPG Services Corporation since 1996
and President of Ad Hoc, Inc. since 1997, all of
which are staffing service companies. He is the
past President and Chief Executive Officer of Of
Counsel, Enterprises, Inc. and past Senior Vice
President of Corporate Development of Kelly
Services, Inc. He served as President and Chief
Operating Officer of The Stroh Brewery Company from
1979 to 1991. He is currently a director of The
Stroh Brewery Company, The Stroh Companies, Inc.,
MCN Energy Group Inc. and Comerica Bank.

CLASS III (TERM TO EXPIRE AT THE ANNUAL MEETING IN 2000)

William K. Howenstein................ Mr. Howenstein, 64, held various positions at
President of TMX Division of Copper and Brass Sales, Inc., including Chairman
Thyssen, Inc., N.A., a materials and Chief Executive Officer, from 1965 until its
management and logistic service acquisition in 1997 by Thyssen, Inc., N.A. He is a
company. director of Thyssen, Inc., N.A., The Stroh Brewery
Director since 1997. Company and The Stroh Companies, Inc. He serves as
director of the Greater Detroit Chamber of
Commerce, The Economic Club of Detroit, advisory
board member of the Boys & Girls Club of Metro
Detroit and director of United Way Community
Services for Southeastern Michigan.

John A. Morgan....................... Mr. Morgan, 67, has been a partner in Morgan Lewis
Partner, Morgan Lewis Githens & Githens & Ahn since founding that firm in 1982.
Ahn, investment bankers. From 1977 to 1982, he was Vice Chairman of Smith
Director since 1984. Barney, Harris Upham & Co., Inc., in charge of the
firm's merger and acquisition activities, a member
of the executive committee and a director of Smith
Barney International Inc. Prior to becoming Vice
Chairman of Smith Barney, Mr. Morgan had been
Senior Vice President in Charge of the Corporate
Finance Department. He is a director of Allied
Digital Technologies Corp., Furnishings
International Inc. and Masco Corporation. He also
serves as a trustee of the Provident Loan Society
of New York.
</TABLE>

Further information concerning Masco Corporation is set forth in "Certain
Relationships and Related Transactions."

5
<PAGE> 8

The Board of Directors held five meetings during 1997. The Audit Committee
of the Board of Directors, consisting of Messrs. Dow, Fridholm, Howenstein and
Morgan, held two meetings during 1997. It reviews and acts on or reports to the
Board with respect to various auditing and accounting matters, including the
selection and fees of the Company's independent auditors, the scope of audit
procedures, the Company's internal audit program and results, the nature of
services to be performed by the independent auditors and the Company's
accounting practices. The Compensation Committee of the Board of Directors,
consisting of Messrs. Dow, Fridholm and Howenstein, held four meetings during
1997. It establishes and monitors executive compensation and administers and
determines awards and options granted under the Company's restricted stock
incentive and stock option plans. The Board of Directors recently established a
Nominating Committee, consisting of Messrs. Dow, Fridholm, Howenstein and
Morgan, to identify and consider candidates to serve as Directors of the
Company. The Nominating Committee will consider candidates for nominees for
election as Directors of the Company submitted by stockholders. Any stockholder
who wishes to have the Committee consider a candidate should submit the name of
the candidate, along with any biographical or other relevant information the
stockholder wishes the Committee to consider, to the Secretary of the Company at
the address appearing on the first page of this Proxy Statement.

COMPENSATION OF DIRECTORS

In 1997, the Company implemented a compensation program to more closely
align the compensation of Directors with long-term interests of stockholders. As
Company employees, Mr. Manoogian and Mr. Hennessey are not eligible for
compensation as Directors. Under the 1997 Non-Employee Directors Stock Plan (the
"Directors Stock Plan") approved by stockholders at last year's Annual Meeting,
one half of the cash compensation previously paid to Directors has been replaced
with an annual vesting of shares of restricted stock. For 1997, Directors
received an annual cash fee of $22,000 and $1,000 for each Board of Directors
meeting (and committee meeting if not held on a date on which the entire Board
met). Under the Directors Stock Plan, each Director received an award of Company
Common Stock to vest over a five-year period in 20 percent annual installments.
All Directors, except for Mr. Howenstein, received awards of 5,790 shares on
February 17, 1998. Mr. Howenstein was awarded 5,100 shares following his
election at last year's Annual Meeting. The value of the stock awards were based
on the market price of Company Common Stock on the date of grant and such value
equalled five year's of the replaced cash compensation (pro rated for Mr.
Howenstein to reflect the partial year of service during his initial term). The
Directors Stock Plan also provides for the annual grant on the date of each
Annual Meeting of a non-qualified option to purchase 5,000 shares of Company
Common Stock at the then current market price, commencing with the 1997 Annual
Meeting. These options become exercisable in 20 percent installments on the
first five anniversaries of the grant date. Each option has a ten year term from
the date of grant, except that options may be exercised for only a limited
period of time following termination of service as a non-employee Director.

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<PAGE> 9

SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS

Set forth below is information concerning beneficial ownership of Company
Common Stock as of March 13, 1998 by (i) all persons known by the Company to be
the beneficial owners of five percent or more of Company Common Stock, (ii) each
of the nominees and current Directors, (iii) each of the named executive
officers, and (iv) all current Directors and executive officers of the Company
as a group. Except as indicated below, each person exercises sole voting and
investment power with respect to the shares listed.

<TABLE>
<CAPTION>
SHARES OF COMPANY PERCENTAGE OF COMPANY
COMMON STOCK COMMON STOCK
NAME BENEFICIALLY OWNED BENEFICIALLY OWNED
---- ------------------ ---------------------
<S> <C> <C>
Masco Corporation................................... 7,824,690 16.6%
21001 Van Born Road
Taylor, Michigan 48180
Peter A. Dow(1)..................................... 38,140 *
Roger T. Fridholm(1)(2)............................. 14,340 *
Eugene A. Gargaro, Jr.(1)(3)(4)(5).................. 1,048,187 2.2%
Frank M. Hennessey(5)............................... 268,400 *
William K. Howenstein(1)............................ 7,100 *
Richard A. Manoogian(3)(5).......................... 5,067,819 10.5%
John A. Morgan(1)................................... 29,790 *
Helmut F. Stern..................................... 2,000** *
Brian P. Campbell(5)................................ 181,834 *
Lee M. Gardner(5)................................... 298,601 *
Timothy Wadhams(2)(5)............................... 271,208 *
All ten current Directors and executive officers of
the Company as a group (excluding subsidiary,
divisional and group executives)(1)(2)(3)(4)(5)... 6,281,376 12.9%
</TABLE>

- -------------------------
* Less than one percent.

** Acquired after March 13, 1998.

(1) Includes unvested restricted stock award shares held under the Company's
1997 Non-Employee Directors Stock Plan (4,632 for each of Messrs. Dow,
Fridholm, Gargaro and Morgan; 4,300 for Mr. Howenstein; and 22,828 for all
current Directors and executive officers of the Company as a group). Holders
have sole voting but no investment power over unvested restricted shares.

(2) Includes 250 shares owned by a relative of Mr. Fridholm and 1,500 shares
owned by a relative of Mr. Wadhams (1,750 for all current Directors and
executive officers of the Company as a group), as to which beneficial
ownership is disclaimed.

(3) Includes 708,560 shares owned by a charitable foundation for which Messrs.
Manoogian and Gargaro serve as directors, and 235,483 shares which could be
acquired upon conversion of convertible securities owned by charitable
foundations for which Messrs. Manoogian and Gargaro

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<PAGE> 10

serve as directors. The directors of the foundations share voting and
investment power with respect to the securities owned by the foundation, but
Messrs. Manoogian and Gargaro disclaim beneficial ownership of such
securities.

(4) Includes 2,000 shares held by a charitable foundation for which Mr. Gargaro
serves as a director, 27,000 shares held by trusts for which Mr. Gargaro
serves as a trustee and 4,354 shares which can be acquired upon conversion
of convertible debt securities owned by such trusts. The directors of
foundation and trustees share voting and investment power with respect to
the securities owned by the such entities, but Mr. Gargaro disclaims
beneficial ownership of such securities.

(5) Includes shares which may be acquired on or before May 12, 1998 upon
exercise of stock options (142,061 shares for Mr. Gardner, 1,000,000 shares
for Mr. Manoogian, 62,769 shares for Mr. Wadhams and 1,204,830 shares for
all current Directors and executive officers as a group), as well as
unvested restricted stock award shares held under the Company's restricted
stock incentive plans (167,492 shares for Mr. Campbell, 130,000 shares for
Mr. Gardner, 20,000 shares for Mr. Gargaro, 125,000 shares for Mr.
Hennessey, 149,890 shares for Mr. Manoogian, 110,770 shares for Mr. Wadhams
and 703,152 shares for all current Directors and executive officers as a
group). Holders exercise neither voting nor investment power over
unexercised option shares and have sole voting but no investment power over
unvested restricted shares.

Masco Corporation and Mr. Manoogian may each be deemed a controlling person
of the Company by reason of their respective significant ownership of Company
Common Stock and, in the case of Mr. Manoogian, his positions as a Director and
an executive officer of the Company and the other matters described under
"Certain Relationships and Related Transactions."

EXECUTIVE COMPENSATION COMMITTEE REPORT

MascoTech has recently undergone many positive changes, culminating in the
acquisition in early 1998 of TriMas Corporation. The Board of Directors and
senior management have decided that this is an opportune time to ensure that
executive compensation is clearly aligned with stockholders' long-term
interests. Accordingly, the Compensation Committee has implemented new
compensation programs designed to closely link executive compensation to the
achievement of significant increases in the price of Company Common Stock. The
Committee believes that these new programs maintain the Company's ability to
attract, retain and motivate the highest quality management team, while ensuring
that executives remain firmly focused on enhancing stockholder value. The key
components of these programs are described below.

NEW COMPENSATION PROGRAMS TO ENHANCE STOCKHOLDER VALUE

The annual salary and bonus of the Company's Chairman, Richard A.
Manoogian, of $573,000, have been reduced at his request, effective January 1,
1998, to $1 per year. Frank M. Hennessey, who became the Company's Vice Chairman
and Chief Executive Officer in early 1998, also requested that he receive annual
salary and bonus of $1 for 1998. The Compensation Committee replaced Mr.
Manoogian's and Mr. Hennessey's salary and bonus with a ten year stock option
for 245,000 and 350,000 shares of Company Common Stock, respectively. The
options, which have an exercise price of

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<PAGE> 11

$19 (the market price on the date of grant), generally vest in installments,
with 20 percent vesting in February 2000, 10 percent vesting annually from
February 2001 through February 2005 and 30 percent vesting in February 2006. In
addition, Messrs. Manoogian and Hennessey received restricted stock awards for
50,000 and 75,000 shares of Company Common Stock, respectively, which generally
vest in ten percent annual installments over a period of ten years from the date
of grant. The Committee believes that replacing all of the cash compensation for
Messrs. Manoogian and Hennessey with compensation that is tied to the value of
Company Common Stock over an extended period of time firmly links the interests
of the Company's leaders with those of stockholders.

In order to give key employees a direct interest in the market value of
Company Common Stock, in early 1998 the Committee granted specially designed
stock options to approximately 100 senior management and operating executives,
including Messrs. Manoogian and Hennessey. Holders of these options, which have
an exercise price of $19, the grant date market price, have pledged not to
exercise the options unless the share price reaches levels of $25, $30 and $35
per share. The options will vest in installments only if these prices are met
for a specified period of time before certain dates. Even if the price targets
are met, the options will then only vest over time, retroactive to February 2000
for 20 percent of the options and thereafter at an annual rate of 10 percent of
the options through February 2005 and 30 percent in 2006. The attainment of a
higher price target will also trigger the vesting of stock options which did not
occur because a lower price target was not met. In order for the entire option
to vest in the installments noted above, the price of Company Common Stock must
appreciate from the date of grant by 84 percent to $35 per share by February
2001.

In order to further align the objectives of the Company's key employees
with the long-term interests of its stockholders, special "career" restricted
stock awards were also granted in 1998 to approximately 450 corporate and
operating employees. The vesting of these awards is linked to the achievement of
either the $25, $30 or $35 target share prices or 15 percent annual compound
earnings per share growth. Even if the targets are met, vesting generally occurs
in installments over a ten year period. If such prices or growth is not
achieved, the vesting will not commence until retirement. Messrs. Manoogian and
Hennessey also participate in this program.

Although Company Common Stock has historically been a major part of
compensation for key employees because of its inherent alignment with the
interests of stockholders, the Compensation Committee believes that by replacing
Messrs. Manoogian's and Hennessey's cash compensation with stock compensation,
and by directly linking a significant amount of other key employees'
compensation to the attainment of significant increases in the share price of
Company Common Stock, the new compensation programs implemented in 1998 more
directly align officers' and other key employees' interests with those of
stockholders. The Committee's strategy includes the continued use of Company
Common Stock in the future. Because compensation strategy includes a variety of
components, the terms and conditions of future options and awards may vary from
those granted in 1998. The customary terms and conditions of restricted stock
awards and stock options granted prior to 1998 are described below.

The Board established stock ownership guidelines for officers in 1998 to
formalize the Board's policy of encouraging stock ownership by officers and to
require them to remain at risk by maintaining a substantial interest in Company
Common Stock. The guidelines require that officers own stock with a
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<PAGE> 12

value that is not less than a specified multiple of base pay (in the case of the
Chief Executive Officer, at least five times regular base pay as determined by
the Compensation Committee). Officers are required to achieve the share
ownership (including restricted stock awards) necessary to meet the guidelines
within three years of becoming subject to them.

GENERAL COMPENSATION INFORMATION

Executive officers currently receive a combination of base salary, annual
cash bonus and long-term (up to ten year) incentives utilizing Company Common
Stock. In making its decisions, the Compensation Committee uses a variety of
resources, including published compensation surveys, as it considers information
concerning current compensation practices within the Company's industries
(including companies that are included in the Standard & Poor's Trucks & Parts
Index). In addition, the Compensation Committee takes into account the
compensation policies and practices of corporations in other industries which
are similar to the Company in terms of revenues and market value, because the
Committee believes that the Company competes with such companies for executive
talent. Although the Committee reviews such information for general guidance, it
does not specifically target compensation of the executive officers to
compensation levels at other companies.

Annual cash compensation consists of salary and bonus. Base salaries are
usually determined annually. A range of increases is established by management
for corporate office employees generally that reflects inflation, promotions and
merit. The Compensation Committee then establishes a similar range for the
executive officers. The salary ranges reflect changes observed in general
compensation levels of salaried employees, and in particular, within the
geographic area of the Company's corporate office and within the Company's
industries. The Company's performance for the particular year and the Company's
prospects are more significant factors in determining the range for year-end
bonuses than in determining the salary range. In connection with the payment of
bonuses, corporate performance goals are considered by the Committee in light of
general economic conditions, and include items such as comparisons of
year-to-year operating results, market share performance and the achievement of
budget objectives and forecasts. However, the Committee does not identify
specific goals that must be satisfied in order for bonuses to be paid. There can
be variations from the established ranges for a variety of subjective factors
such as an individual's contribution to the performance of the Company and its
affiliates in addition to the competitive considerations noted above. In
general, the potential bonus opportunity for executive officers is up to fifty
percent of base salary.

Restricted stock awards and stock options granted under the 1991 Long Term
Stock Incentive Plan (the "1991 Plan") are generally used as part of the
Company's long-term incentive arrangements, which focus the recipient on
long-term enhancement in stockholder value and help retain key employees.
Factors reviewed by the Compensation Committee in determining whether to grant
options and awards are generally the same factors considered in determining
salaries and bonuses described above. In order to provide a strong incentive and
reinforce the individual's commitment to the Company, there can be awards that
are significant in size and potential value. The history of restricted stock
awards and stock options previously granted to an executive is also a factor in
determining new awards and grants. In general, the potential opportunity for
annual restricted stock awards under the Company's restricted

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<PAGE> 13

stock award program is up to thirty percent of base salary. In addition,
supplemental restricted stock awards are granted periodically.

The Company has historically purchased shares of Company Common Stock in
the open market sufficient to cover all restricted stock awards in order to
reflect consistent, non-variable expense related to these awards and to avoid
any dilution resulting from these awards. This expense is fixed and amortized
over the extended vesting period of the awards. Because the Company's tax
deduction is based on the fair market value at the time the restrictions lapse,
the after-tax cost of this program can be very favorable to the Company based on
future appreciation of Company Common Stock. The Company believes that the
extended vesting of stock awards with the opportunity for substantial
appreciation promotes retention, and also spreads compensation expense over a
longer term, which generally has resulted in a significant reduction in the
Company's after-tax cost of the compensation.

Restricted stock awards generally vest in ten percent annual installments
over a period of ten years from the date of grant. In general, vesting is
contingent on a continuing employment or consulting relationship with the
Company. The 1991 Plan provides, however, that all shares vest immediately upon
death, permanent and total disability or the occurrence of certain events
constituting a change in control of the Company. Each of the named executive
officers received restricted stock awards in early 1997 in conjunction with
awards made to other key employees based on the Company's financial performance
during 1996.

There were no original stock option grants made to executive officers in
1997. Original stock option grants made under the 1991 Plan generally vest in
installments beginning in the third year and extending through the eighth year
after grant and, unless otherwise provided, may be exercised until the earlier
of ten years from the date of grant or, as to the number of shares then
exercisable, the termination of the employment or consulting relationship of the
participant. Stock option grants generally do not have a financial reporting
expense associated with them since they are granted at fair market value, and in
fact, raise additional equity for the Company. The difference between the
exercise price and fair market value of Company Common Stock on the date of
exercise is, however, generally deductible by the Company for federal income tax
purposes and thereby provides tax savings to the Company. The Compensation
Committee permits Company Common Stock to be used in payment of federal, state
and local withholding tax obligations attributable to the exercise of stock
options. The 1991 Plan also permits the Compensation Committee to accept the
surrender of an exercisable stock option and to authorize payment by the Company
of an amount equal to the difference between the option exercise price of the
stock and its then fair market value.

Recipients of stock options are eligible to receive restoration options. A
restoration option is granted when a participant exercises a stock option and
pays the exercise price by delivering shares of Company Common Stock. The
restoration option is granted equal to the number of shares delivered by the
participant and does not increase the number of shares covered by the original
stock option. The exercise price is 100 percent of the fair market value of
Company Common Stock on the date the restoration option is granted so that the
participant benefits only from subsequent increases in the Company's stock
price. Restoration options were granted in 1997 to Messrs. Gardner and Wadhams
in connection with such individuals' exercise of original stock options. The
Compensation Committee believes that restoration options help to align more
closely the interests of executives with the long-term interests of
11
<PAGE> 14

stockholders and allow executives to maintain the level of their equity-based
interest in the Company through a combination of direct stock ownership and
stock options. The 1991 Plan also provides that, upon the occurrence of certain
events constituting a change in control of the Company, all stock options
previously granted immediately become fully exercisable, and all restricted
stock awards immediately vest. Generally, if a participant incurs an excise tax
under Section 4999 of the Internal Revenue Code of 1986 (the "Code") in
connection with a payment or distribution following a change in control, the
1991 Plan provides that the participant will receive an additional payment to
make them whole for such excise tax.

In addition to the stock-based plans noted above, most Company salaried
employees participate in defined contribution profit sharing retirement plans,
which further link compensation to Company performance. Discretionary
contributions are made into these plans based on the Company's performance.
Historically, aggregate annual contributions to the profit sharing plans in
which executive officers participate have ranged from approximately four percent
to seven percent of participants' base salaries. See footnote(3) to the "Summary
Compensation Table."

Beginning in 1994, Section 162(m) of the Code limits deductibility of
compensation in excess of $1 million paid to the Company's chief executive
officer and to each of the other four highest paid executive officers unless
this compensation qualifies as "performance-based". In 1997 the Board approved,
and the stockholders adopted, amendments to the 1991 Plan so that stock options
granted under the 1991 Plan will continue to result in compensation fully
deductible by the Company under Section 162(m). In addition, the Compensation
Committee approved, and stockholders adopted, the 1997 Annual Incentive
Compensation Plan to continue the Committee's practice of structuring
determinations for cash bonuses to make them performance-based and therefore
fully tax deductible. Historically, the compensation of the Company's named
executive officers has not exceeded the $1,000,000 limit. The Compensation
Committee continues to believe it is in the Company's interest to retain
flexibility in its compensation program, and although compensation may in some
circumstances exceed the limitation of Section 162(m), the Compensation
Committee believes that any tax deduction lost on account of such excess
compensation will be insignificant for the foreseeable future.

Compensation decisions for 1997 for all executive officers, including the
Chairman of the Board and Chief Executive Officer, are generally based on the
criteria described above.

Peter A. Dow, Chairman

Roger T. Fridholm

William K. Howenstein

12
<PAGE> 15

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

The following table summarizes the annual and long-term compensation of the
Company's executive officers (collectively, the "named executive officers") for
1997, 1996 and 1995. Mr. Manoogian's salary and bonus of $573,000 has been
reduced at his request, effective January 1, 1998, to $1 per year. Frank M.
Hennessey, who became the Company's Vice Chairman and Chief Executive Officer in
early 1998, at his request will also receive salary and bonus of $1 for 1998.
See also "Executive Compensation Committee Report."

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION(1) YEAR SALARY BONUS AWARDS(2) OPTIONS COMPENSATION(3)
- ------------------------------ ---- ------ ----- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Manoogian....... 1997 $400,000 $173,000 $ 131,000 0 $38,000
Chairman of the Board 1996 400,000 188,000 653,000 140,000 44,000
and Chief Executive 1995 400,000 170,000 118,000 0 53,000
Officer(4)
Lee M. Gardner............. 1997 601,000 271,000 190,000 34,550(5) 70,000
President and Chief 1996 579,000 273,000 1,015,000 200,000 73,000
Operating Officer 1995 568,000 242,000 163,000 0 79,000
Timothy Wadhams............ 1997 336,000 203,000 106,000 20,611(5) 40,000
Vice President -- 1996 323,000 152,000 580,000 120,000 42,000
Controller and Treasurer 1995 316,000 135,000 92,000 0 45,000
</TABLE>

- -------------------------
(1) In connection with the acquisition of TriMas Corporation in early 1998, the
following changes were made in the Company's senior management: Frank M.
Hennessey, formerly Executive Vice President of Masco Corporation, became
the Company's Vice Chairman and Chief Executive Officer; Lee M. Gardner,
formerly President and Chief Operating Officer of the Company and Brian P.
Campbell, formerly President of TriMas Corporation, were each elected
President and Co-Chief Operating Officer; and Timothy Wadhams became Senior
Vice President -- Finance and Chief Financial Officer. Mr. Manoogian will
continue as Chairman of the Board.

(2) This column sets forth the dollar value, as of the date of grant, of
restricted stock awarded under the Company's 1991 Long Term Stock Incentive
Plan (the "1991 Plan"). Restricted stock awards shown in the table vest over
a period of ten years from the date of grant with ten percent of each award
vesting annually. In general, vesting is contingent on a continuing
employment or consulting relationship with the Company. The following number
of shares were awarded to the named executive officers in 1997: Mr.
Manoogian -- 6,900 shares; Mr. Gardner -- 10,000 shares; and Mr. Wadhams --
5,600 shares. As of December 31, 1997, the aggregate number and market value
of unvested restricted shares of Company Common Stock held by each of the
named executive officers were: Mr. Manoogian -- 64,760 shares valued at
$1,190,000; Mr. Gardner -- 119,700

13
<PAGE> 16

shares valued at $2,199,000; and Mr. Wadhams -- 64,220 shares valued at
$1,180,000. Recipients of restricted stock awards have the right to receive
dividends on unvested shares.

(3) This column includes (a) Company contributions and allocations under the
Company's defined contribution retirement plans for 1997 for the accounts of
each of the named executive officers other than Mr. Manoogian, who does not
participate in these plans (for 1997: Mr. Gardner -- $41,000 and Mr. Wadhams
-- $23,000), and (b) cash payments made pursuant to certain tandem rights
associated with the annual vesting of certain restricted stock awards
granted in 1989 (in 1997: Mr. Manoogian -- $38,000; Mr. Gardner -- $29,000
and Mr. Wadhams -- $17,000). For further information regarding these rights,
see "Certain Relationships and Related Transactions."

(4) Does not reflect the salary Mr. Manoogian received from TriMas Corporation
as its Chairman of the Board ($100,000 for 1997).

(5) No original stock options were granted in 1997 or 1995. Options shown in
1997 consist solely of restoration options granted upon the exercise of
previously held stock options. As described in more detail under "Executive
Compensation Committee Report," a restoration option does not increase the
number of shares covered by the original option or extend the term of the
original option.

OPTION GRANT TABLE

The following table sets forth information concerning options granted to
the named executive officers in 1997, which consist solely of restoration
options that expired without being exercised because the market price of Company
Common Stock on the date the options expired ($17 3/8) was less than the
exercise price of the options.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION
NAME OPTIONS GRANTED(1) IN 1997 PRICE DATE
---- ------------------ --------------- -------- ----------
<S> <C> <C> <C> <C>
Richard A. Manoogian.................... 0
Lee M. Gardner.......................... 34,550 39.9% $19 12/10/97
Timothy Wadhams......................... 20,611 23.8% $21.25 12/10/97
</TABLE>

- -------------------------
(1) Restoration options are equal to the number of shares delivered to exercise
prior options. The exercise price of restoration options is equal to the
market value of Company Common Stock on the date the original options were
exercised. For further information, see "Executive Compensation Committee
Report."

14
<PAGE> 17

OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE

The following table sets forth information concerning each exercise of
stock options during 1997 by each named executive officer and the value at
December 31, 1997 of unexercised options held by such individuals under the
Company's stock option plans. The value of unexercised options reflects the
increase in market value of Company Common Stock from the date of grant through
December 31, 1997 (the closing price of Company Common Stock on December 31,
1997 was $18 3/8 per share). The value actually realized upon future option
exercises by the named executive officers will depend on the value of Company
Common Stock at the time of exercise.

AGGREGATED OPTION EXERCISES IN 1997, AND DECEMBER 31, 1997 OPTION VALUE

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
---- ----------- -------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Manoogian....... 80,000 $900,000 540,000 1,000,000 $5,443,000 $8,125,000
Lee M. Gardner............. 72,000 $711,000 338,000 120,061 $2,377,000 $1,297,000
Timothy Wadhams............ 48,000 $582,000 180,000 47,769 $1,298,000 $ 624,000
</TABLE>

PENSION PLANS

The executive officers other than Mr. Manoogian participate in pension
plans maintained by the Company for certain of its salaried employees. The
following table shows estimated annual retirement benefits payable for life at
age 65 for various levels of compensation and service under these plans.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE(1)
--------------------------------------------------------------
REMUNERATION(2) 5 10 15 20 25 30
- --------------- -------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 5,645 $11,290 $ 16,935 $ 22,580 $ 28,225 $ 33,870
200,000 11,290 22,580 33,870 45,161 56,451 67,741
300,000 16,935 33,870 50,806 67,741 84,676 101,611
400,000 22,580 45,161 67,741 90,321 112,902 135,482
500,000 28,225 56,451 84,676 112,902 141,127 169,352
600,000 33,870 67,741 101,611 135,482 169,352 203,223
700,000 39,516 79,031 118,547 158,062 197,578 237,093
800,000 45,160 90,321 135,482 180,643 225,803 270,964
</TABLE>

- -------------------------
(1) The plans provide for credit for employment with any of the Company, Masco
Corporation, TriMas Corporation and their subsidiaries. Vesting occurs after
five full years of employment. The benefit amounts set forth in the table
above have been converted from the plans' calculated five-year certain and
life benefit and are not subject to reduction for social security benefits
or for other offsets, except to the extent that pension or equivalent
benefits are payable under a Masco

15
<PAGE> 18

Corporation or TriMas Corporation plan. The table does not depict Code
limitations on tax-qualified plans because one of the plans is a
non-qualified plan established by the Company to restore for certain
salaried employees (including the named executive officers) benefits that
are otherwise limited by the Code. Messrs. Gardner and Wadhams have
approximately 11 years and 22 years of credited service, respectively.

(2) For purposes of determining benefits payable, remuneration is equal to the
average of the highest five consecutive January 1 annual base salary rates
paid by the Company prior to retirement.

Under the Company's Supplemental Executive Retirement and Disability Plan,
certain officers and other key executives of the Company, or any company in
which the Company or a subsidiary owns at least 20 percent of the voting stock,
may receive retirement benefits in addition to those provided under the
Company's other retirement plans and supplemental disability benefits. Each
participant is designated by the Chairman of the Board (and approved by the
Compensation Committee) to receive annually upon retirement on or after age 65,
an amount which, when combined with benefits from the Company's other retirement
plans, and for most participants any retirement benefits payable by reason of
employment by prior employers, equals 60 percent of the average of the
participant's highest three years' cash compensation received from the Company
(limited to base salary and regular year-end cash bonus). Participants are
limited to an annual payment under this plan, which when combined with benefits
under the Company's non-qualified plan, may not exceed a maximum, currently
approximately $400,000. A participant may also receive supplemental medical
benefits. A participant who has been employed at least two years and becomes
disabled prior to retirement will receive annually 60 percent of the
participant's total annualized cash compensation in the year in which the
participant becomes disabled, subject to certain limitations on the maximum
payment and reduced by benefits payable pursuant to the Company's long-term
disability insurance and similar plans. Upon a disabled participant's reaching
age 65, such participant receives the annual cash benefits payable upon
retirement, as determined above. A surviving spouse will receive reduced
benefits upon the participant's death. Participants are required to agree that
they will not engage in competitive activities for at least two years after
termination of employment, and if employment terminates by reason of retirement
or disability, during such longer period as benefits are received under this
plan. The named executive officers other than Mr. Manoogian participate in this
plan.

16
<PAGE> 19

PERFORMANCE GRAPH

Set forth below is a line graph comparing the cumulative total stockholder
return on Company Common Stock with the cumulative total return of the Standard
& Poor's 500 Composite Stock Price Index ("S&P 500 Index") and the Standard and
Poor's Trucks & Parts Index ("S&P Trucks Index") for the period from January 1,
1993 through December 31, 1997, when the closing price of Company Common Stock
was $18 3/8 per share (on April 20, 1998 the closing price was $24 per share).
The graph assumes investments of $100 on December 31, 1992 in Company Common
Stock, the S&P 500 Index and the S&P Trucks Index, and the reinvestment of
dividends.

[GRAPH]

The table below sets forth the value, as of December 31 of each of the
years indicated, of a $100 investment made on December 31, 1992 in each of
Company Common Stock, the S&P 500 Index and the S&P Trucks Index, and the
reinvestment of dividends.

<TABLE>
<CAPTION>
Measurement Period S&P 500 S&P Trucks
(Fiscal Year Covered) MascoTech Index Index
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 241.65 109.92 121.31
1994 114.08 111.34 101.86
1995 96.66 152.66 105.71
1996 147.14 187.28 134.16
1997 167.09 249.28 215.85
</TABLE>

17
<PAGE> 20

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors currently consists of
Messrs. Dow, Fridholm and Howenstein. Until May 1997, the Compensation Committee
consisted of Messrs. Dow, Gargaro and Morgan. From time to time Morgan Lewis
Githens & Ahn, of which Mr. Morgan is a partner, performs investment banking and
other related services for the Company and Masco Corporation. Fees payable by
the Company to such firm for financial advisory services for 1997, including
services in connection with the Company's acquisition of TriMas, were
$1,750,000, plus expenses. Mr. Gargaro, an executive officer of Masco
Corporation, is of counsel to Dykema Gossett PLLC for certain matters on which
he worked as a partner at the firm prior to his employment with Masco
Corporation in 1993. Dykema Gossett provides legal services to the Company from
time to time. Mr. Gargaro receives no compensation from Dykema Gossett. Richard
A. Manoogian, an executive officer of the Company, is a director of Masco
Corporation.

18
<PAGE> 21

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company became a publicly owned company in July 1984 as part of a
restructuring of Masco Corporation, a manufacturer of home improvement and
building products.

In January 1998, the Company expanded its business operations when it
acquired the remaining 63 percent of the outstanding shares of TriMas
Corporation that it did not previously own for approximately $920 million in
cash through a tender offer. The Company paid $34.50 net per share and Masco
Corporation tendered to the Company the 1,583,708 shares (approximately 4
percent) of TriMas it held. TriMas is a diversified proprietary products company
with leadership positions in commercial, industrial and consumer niche markets.
In connection with the transaction, Brian P. Campbell, who was the President, a
director and a significant stockholder in TriMas, became a President and
Co-Chief Operating Officer of the Company. Mr. Campbell entered into an
employment agreement with the Company which expires March 8, 2001. Under this
agreement he will receive minimum annual compensation of $528,000, plus bonuses
of at least $285,000 for each of 1997 and 1998 and bonuses for each of 1999 and
2000 at least equal to 90 percent of his 1998 bonus. The agreement also provides
for severance payments and other benefits upon termination of Mr. Campbell's
employment under certain circumstances. As part of the acquisition, employees of
TriMas, including Mr. Campbell, who held stock options under TriMas' stock
option plans received a cash payment equal to the difference between $34.50 and
the option exercise price for each share subject to an outstanding option. The
Company also substituted shares of Company Common Stock with a value equivalent
to the TriMas common stock that was subject to restrictions under TriMas'
restricted stock award program. After completion of this acquisition in January
1998, Mr. Hennessey resigned as Masco Corporation's Executive Vice President and
became a Director and Vice Chairman and Chief Executive Officer of the Company.
Mr. Hennessey has agreed to serve as a part-time employee of Masco Corporation
(for no more than twenty percent of his time) in connection with matters with
which he was involved as Executive Vice President of Masco Corporation for an
annual salary of $100,000 plus a bonus opportunity of up to $50,000.

On September 30, 1997, the Company transferred to Masco Corporation
approximately 9.9 million shares (approximately 42 percent of the outstanding
common stock) of Emco Limited held by the Company and $45.6 million in cash in
payment of a promissory note owed by the Company to Masco Corporation in the
principal amount of $151,375,000, with interest at the rate of 6 5/8% per annum,
issued by the Company in connection with its October 1996 purchase of Company
Common Stock (at the then current market price) and warrants to purchase shares
of Company Common Stock held by Masco Corporation. The value of the shares
received by Masco Corporation was based on the market price of Emco Limited
common stock on the Toronto Stock Exchange, translated into U.S. dollars, in
accordance with the terms of the agreement entered into in October 1996 between
the Company and Masco Corporation. Emco Limited is a Canadian manufacturer and
distributor of home improvement and building products. As part of this
transaction, Masco Corporation granted the Company a right of first refusal,
which expires September 30, 2000, to purchase the remaining shares of Company
Common Stock held by Masco Corporation.

Concurrently with the purchase of securities from Masco Corporation in
1996, the Company also purchased one million shares of Company Common Stock from
Richard A. Manoogian, at the then
19
<PAGE> 22

current market price, for $13,625,000, of which $6 million was paid in cash at
closing, and the balance, together with accrued interest at the rate of 6 5/8%
per anum, was paid on September 30, 1997. Mr. Manoogian is the Chairman of the
Company and the Chairman and Chief Executive Officer of Masco Corporation. As a
result of the purchase of Mr. Manoogian's shares of Company Common Stock, his
ownership interest in the Company remained at approximately the same percentage
after giving effect to the purchase of shares from Masco Corporation.

The Company is a party to certain agreements with Masco Corporation as
described below.

CORPORATE SERVICES AGREEMENT: Under a Corporate Services Agreement, Masco
Corporation provides the Company and its subsidiaries with office space for
executive offices, use of Masco Corporation's data processing equipment and
services, certain research and development services, corporate administrative
staff and other support services in return for the Company's payment of an
annual base service fee of .8 percent of its consolidated annual net sales,
subject to adjustments. This agreement also provides for various license rights
and confidential treatment of information which may arise from Masco
Corporation's performance of research and development services on behalf of the
Company. Approximately $5 million has been charged by Masco Corporation, subject
to adjustment in accordance with the terms of this agreement, which continues in
effect until September 30, 1998 and thereafter will be renewed automatically for
one-year periods, unless terminated by either party upon at least 90 days'
notice before any October 1 renewal date. In connection with the Company's
acquisition of TriMas, the parties terminated the Corporate Services Agreement
between Masco Corporation and TriMas, pursuant to which Masco Corporation
received $3.8 million for services provided during 1997, and amended the
Corporate Services Agreement with the Company to include the TriMas companies
and provide for the same credits that were permitted to TriMas under its
agreement.

CORPORATE OPPORTUNITIES AGREEMENT: The Company and Masco Corporation are
parties to a Corporate Opportunities Agreement which addresses potential
conflicts of interests with respect to future business opportunities. This
agreement materially restricts the ability of either party to enter into
acquisitions, joint ventures or similar transactions involving businesses in
which the other party is engaged without the consent of the other party. It will
continue in effect until September 30, 1998 and will thereafter automatically
renew for one-year periods, unless terminated by either party at least 90 days
before any October 1 renewal date.

STOCK REPURCHASE AGREEMENT: Under a Stock Repurchase Agreement, Masco
Corporation has the right to sell to the Company, at a price based on fair
market value, shares of Company Common Stock upon certain events that would
result in Masco Corporation's ownership of Company Common Stock exceeding 49
percent of the Company's then outstanding shares. Such events include
repurchases of Company Common Stock initiated by the Company or any of its
subsidiaries and reacquisitions of Company Common Stock through forfeitures of
shares previously awarded by the Company or Masco Corporation pursuant to their
respective employee stock incentive plans. In each case the Company has control
over the amount of Company Common Stock it would ultimately acquire, including
shares subject to repurchase under the Stock Repurchase Agreement. These rights
expire 30 days from the date notice of an event is given by the Company. Masco
Corporation has advised the Company that it intends to exercise such right
whenever necessary to prevent its ownership from exceeding 49 percent of the
Company Common Stock then outstanding; however, in view of Masco Corporation's
current level of
20
<PAGE> 23

ownership of Company Common Stock, the Company does not anticipate that this
agreement will ever be operative.

ASSUMPTION AND INDEMNIFICATION AGREEMENT: Under an Assumption and
Indemnification Agreement, the Company assumed, and agreed to indemnify Masco
Corporation against, all of the liabilities and obligations of the businesses
transferred to it in Masco Corporation's 1984 restructuring, including claims
and litigation resulting from events or circumstances that occurred or existed
prior to the transfer, but excluding specified liabilities.

In 1993, as part of its plan to dispose of its energy related businesses,
the Company sold Lamons Metal Gasket Co. to TriMas for a purchase price of $60
million plus additional future payments contingent upon the profitability of
Lamons. The Company received a contingent payment of approximately $7 million
from TriMas during 1997. As part of the transaction, the Company agreed to
indemnify TriMas against certain liabilities of the acquired business.

In addition, TriMas acquired several businesses from Masco Corporation in
early 1990, and as part of the transaction, Masco Corporation agreed to
indemnify TriMas against certain liabilities of the acquired businesses.

SECURITIES PURCHASE AGREEMENT: Under a Securities Purchase Agreement, the
Company and Masco Corporation agreed that Masco Corporation will purchase from
the Company at the Company's option up to $200 million of subordinated
debentures and, in connection therewith, the Company pays an annual commitment
fee to Masco Corporation of $250,000. This commitment was extended to March 31,
2002 in connection with the Company's 1996 purchase from Masco Corporation of
Company Common Stock and warrants. The Company has also agreed to file
registration statements under the federal securities laws to enable Masco
Corporation from time to time to publicly dispose of securities of the Company
held by Masco Corporation.

In 1988 the Company and Masco Corporation jointly established Masco Capital
Corporation to seek business and other investment opportunities of mutual
interest that for various reasons were viewed as more appropriately undertaken
on a joint basis rather than individually. In December 1991, the Company sold
its 50 percent ownership interest in Masco Capital to Masco Corporation for
approximately $49.5 million and may receive additional payments based upon any
aggregate net increase in the value of Masco Capital's remaining investments.

MascoTech GmbH, a German subsidiary of the Company, and Masco GmbH, a
German subsidiary of Masco Corporation, have from time to time advanced excess
funds held in such foreign country to one another to be used for working
capital. The parties negotiated a fluctuating rate of interest for these loans.
The largest amount outstanding payable to MascoTech GmbH during 1997 was
approximately $13 million.

Sales of products and services and other transactions occur from time to
time among the Company, Masco Corporation and TriMas. As a result of such
transactions in 1997, the Company paid approximately $124,000 to Masco
Corporation and approximately $4.1 million to TriMas, and received approximately
$20.9 million from Masco Corporation and approximately $355,000 from TriMas. In
addition, Masco Corporation paid approximately $1 million to TriMas as a result
of transactions in 1997.

21
<PAGE> 24

The Company also participates with Masco Corporation in a number of national
purchasing programs which enable them to obtain favorable terms from certain of
their service and product suppliers.

In 1989 the Company made long-term restricted stock awards to a number of
key Company employees that were combined with tandem rights to phantom TriMas
shares. The value of a phantom TriMas share is deemed to be equal to the value
of a share of TriMas common stock. At the time of the grant, the aggregate value
of the shares of Company Common Stock awarded to each participant was equal to
the aggregate value of the alternative phantom TriMas shares that were awarded.
The phantom TriMas shares vest on the same schedule as the shares of Company
Common Stock. On each vesting date the participant receives the benefit of the
then current value of the vesting shares of Company Common Stock or the then
current value of the vesting phantom TriMas shares, whichever is greater. If the
value of the vesting phantom TriMas shares is greater, the participant receives
the vesting shares of Company Common Stock and the excess is paid in cash. If
the value of the vesting phantom TriMas shares is less, the participant receives
only the vesting shares of Company Common Stock. For the 1998 vesting and the
final vesting in 1999, the Compensation Committee of the Board of Directors has
determined the per share value of TriMas to be $34.50, the price per share paid
by the Company in connection with its acquisition of TriMas.

Ownership of securities and various other relationships and incentive
arrangements may result in conflicts of interest in the Company's dealings with
Masco Corporation and others. The Corporate Opportunities Agreement with Masco
Corporation and other aspects of the relationship between the companies may
affect their ability to make acquisitions and develop new businesses under
certain circumstances, although the Company does not believe that it has
experienced any such effect to date. Four persons affiliated with Masco
Corporation are currently members of the Company's Board of Directors. Mr.
Manoogian, the Company's Chairman of the Board, is also the Chairman of the
Board and Chief Executive Officer of Masco Corporation and a significant
stockholder of both companies. Mr. Hennessey, a Director and Vice Chairman and
Chief Executive Officer of the Company, was formerly Executive Vice President
and is currently a part-time employee of Masco Corporation. Mr. Morgan, who is a
Director of the Company, is also a Director of Masco Corporation. Mr. Gargaro,
who is an executive officer of Masco Corporation, is resigning as a Director of
the Company, but he will continue to serve as the Secretary of the Company.
Because of these relationships, an independent committee of the Company's Board
of Directors reviews its significant transactions with affiliated companies.

22
<PAGE> 25

The following table sets forth the number of shares of Masco Corporation
common stock beneficially owned as of March 13, 1998 by the nominees, the
current Directors and named executive officers and by the current Directors and
executive officers of the Company as a group. Except as indicated below, each
person exercises sole voting and investment power with respect to the shares
listed.

<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK OF
MASCO CORPORATION
NAME BENEFICIALLY OWNED(1)
---- ---------------------
<S> <C>
Brian P. Campbell........................................... 800
Peter A. Dow................................................ 5,500
Roger T. Fridholm........................................... 0
Lee M. Gardner.............................................. 400
Eugene A. Gargaro, Jr.(2)(3)................................ 2,063,251
Frank M. Hennessey(3)....................................... 168,903
William K. Howenstein....................................... 0
Richard A. Manoogian(2)(3).................................. 5,832,610
John A. Morgan(4)........................................... 5,070
Helmut F. Stern............................................. 0
Timothy Wadhams............................................. 9,000
All ten current Directors and executive officers of the
Company as a group (excluding subsidiary, divisional and
group executives)(2)(3)(4)................................ 6,120,334
</TABLE>

- -------------------------
(1) The only nominee, current Director or executive officer of the Company who
beneficially own one percent or more of Masco Corporation common stock are
Mr. Manoogian, who beneficially owns 3.4 percent of Masco Corporation common
stock, and Mr. Gargaro, who beneficially owns 1.2 percent of Masco
Corporation common stock. Current Directors and executive officers of the
Company as a group beneficially own 3.6 percent of Masco Corporation common
stock.

(2) Includes 1,965,200 shares of Masco Corporation common stock owned by a
charitable foundation for which Messrs. Manoogian and Gargaro serve as
directors. Shares beneficially owned by Mr. Manoogian and by all current
Directors and executive officers of the Company as a group include in each
case 914,500 shares of Masco Corporation common stock owned by a trust for
which Mr. Manoogian serves as a trustee. Shares beneficially owned by Mr.
Gargaro and by all current Directors and executive officers of the Company
as a group include in each case 13,401 shares of Masco Corporation common
stock owned by a charitable foundation for which Mr. Gargaro serves as a
director and 12,670 shares of Masco Corporation common stock held by trusts
for which Mr. Gargaro serves as a trustee. The directors of the foundations
and the trustees share voting and investment power with respect to the Masco
Corporation common stock owned by the foundations and trusts, but Messrs.
Manoogian and Gargaro each disclaim beneficial ownership of such shares.

(3) Ownership of Masco Corporation common stock includes shares which may be
acquired on or before May 12, 1998 upon exercise of stock options (1,310,000
shares for Mr. Manoogian, 30,000 shares for Mr. Gargaro, 35,633 shares for
Mr. Hennessey and 1,375,633 shares for all current

23
<PAGE> 26

Directors and executive officers of the Company as a group) and unvested
restricted stock award shares of Masco Corporation common stock issued under
Masco Corporation's restricted stock incentive plan (29,719 shares for Mr.
Gargaro, 101,503 for Mr. Hennessey, 182,097 shares for Mr. Manoogian,
313,319 shares for all current Directors and executive officers of the
Company as a group). Holders exercise neither voting nor investment power
over unexercised option shares and have voting but no investment power over
unvested restricted shares.

(4) Includes 2,776 unvested restricted stock award shares issued under Masco
Corporation's 1997 Non-Employee Directors Stock Plan. Mr. Morgan has voting
but no investment power over these shares.

Mr. Manoogian may be deemed to be a controlling person of Masco Corporation
by reason of his significant ownership of Masco Corporation common stock and his
position as a director and executive officer of Masco Corporation.

RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS

Upon the recommendation of the Audit Committee, the Board of Directors has
selected the independent public accounting firm of Coopers & Lybrand L.L.P.
("Coopers & Lybrand") to audit the Company's financial statements for the year
1998, and believes it appropriate to submit its choice for ratification by
stockholders.

Coopers & Lybrand has acted as the Company's independent certified public
accounting firm since the Company's formation in 1984. It has performed services
of an accounting and auditing nature and, from time to time, has provided other
consulting services for the Company as well as for Masco Corporation and TriMas
Corporation. Representatives of Coopers & Lybrand are expected to be present at
the meeting, will have the opportunity to make a statement and are expected to
be available to respond to appropriate questions.

The affirmative vote of a majority of the votes cast on the proposal is
required for the ratification of the selection of independent auditors.
Abstentions and broker non-votes are not counted as votes cast, and therefore do
not affect the ratification of the selection of auditors. If the selection is
not ratified, the Board will consider selecting another public accounting firm
as the independent auditors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS FOR THE COMPANY
FOR THE YEAR 1998.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by regulations of the Securities and Exchange
Commission to furnish the Company copies of all Section 16(a) forms they file.

24
<PAGE> 27

Based solely on the Company's review of copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
are required for those persons, the Company believes that its Directors,
officers and greater than ten percent beneficial owners met all applicable
filing requirements during the last fiscal year, except that a report of Peter
A. Dow, a Director, covering the purchase by his wife of 100 shares of Company
Common Stock was filed after the due date.

STOCKHOLDERS' PROPOSALS

Stockholders' proposals intended to be presented at the 1999 Annual Meeting
of Stockholders of the Company must be received by the Company at its address
stated above by December 28, 1998, to be considered for inclusion in the
Company's Proxy Statement and Proxy relating to such meeting.

OTHER MATTERS

The Board of Directors knows of no other matters to be voted upon at the
meeting. If any other matters properly come before the meeting, it is the
intention of the proxies named in the enclosed Proxy to vote the shares
represented thereby with respect to such matters in accordance with their best
judgment.

By Order of the Board of Directors

EUGENE A. GARGARO, JR.

EUGENE A. GARGARO, JR.
Secretary

Taylor, Michigan
April 27, 1998

25
<PAGE> 28

MASCOTECH, INC.
ANNUAL MEETING OF STOCKHOLDERS
AT CORPORATE HEADQUARTERS
21001 VAN BORN ROAD
TAYLOR, MICHIGAN 48180

[MAP]

FROM DOWNTOWN DETROIT (EAST)
- - Take I-94 west to the Pelham Road exit.
- - Turn right onto Pelham Road and travel to Van Born Road.
- - Turn left onto Van Born Road and proceed to the corporate office.

FROM METRO AIRPORT (WEST)
- - Take I-94 east to Pelham/Southfield Road exit.
- - Turn left onto Pelham and travel to Van Born Road.
- - Turn left onto Van Born Road and proceed to the corporate office.

FROM SOUTHFIELD/BIRMINGHAM (NORTH)
- - Take the Southfield Freeway to the Outer Drive/Van Born Road exit.
- - Stay on the service drive and proceed to Van Born Road.
- - Bear right onto Van Born Road and travel to the corporate office.

FROM TOLEDO (SOUTH)
- - Take I-75 north to the Telegraph Road north exit.
- - Proceed on Telegraph Road north to Van Born Road.
- - Turn right on Van Born Road and proceed to the corporate office.
<PAGE> 29
<TABLE>
<S><C>
____________
|__________|

(1) Election of Directors FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below

Class I Directors to hold office until the Annual Meeting of Stockholders in 2001 or until their respective successors are elected
and qualified.
Nominees: RICHARD A. MONOOGIAN and HELMUT F. STERN
Class II Director to hold office until the Annual Meeting of Stockholders in 1999 or until his successor is elected and qualified.
Nominee: FRANK M. HENNESSEY
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT
NOMINEE'S NAME.)

(2) Ratification of the selection of Coopers & Lybrand L.L.P. as independent
auditors for the Company for the year 1998.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

(3) In their discretion upon such other business as may properly come before
the meeting.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS ABOVE. IF SPECIFICATIONS ARE NOT MADE, THE PROXY WILL BE
VOTED FOR THE ELECTION OF NOMINEES AND FOR RATIFICATION.

CHANGE OF ADDRESS OR [ ]
COMMENTS MARK HERE

Please sign exactly as name appears at
left. Executors, administrators, trustees,
et al, should so indicate when signing.
If the signature is for a corporation ,
please sign the full corporate name by an
authorized officer. If the signature is
for a partnership, please sign the full
partnership name by an authorized person.
If shares are registered in more than one
name, all holders must sign.

Dated:_________________________, 1998

___________________________________(L.S.)
Signature

VOTES MUST BE INDICATED (X)
IN BLACK OR BLUE INK. [ ]
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 19, 1998
MASCOTECH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, hereby revoking any Proxy heretofore given, appoints
RICHARD A. MANOOGIAN and EUGENE A. GARGARO, JR. and each of them attorneys and
proxies for the undersigned, each with full power of substitution, to vote the
shares of Company Common Stock registered in the name of the undersigned to the
same extent the undersigned would be entitled to vote if then personally present
at the Annual Meeting of Stockholders of MascoTech, Inc. to be held at the
offices of the Company at 21001 Van Born Road, Taylor, Michigan 48180, on
Tuesday, May 19, 1998, at 2:00 P.M. Eastern daylight time and at any adjournment
thereof.

The undersigned hereby acknowledges receipt of the accompanying Notice
of Annual Meeting of Stockholders and Proxy Statement.

(Continued and to be dated and signed on the reverse side.)

MASCOTECH, INC.
P.O. BOX 11275
NEW YORK, N.Y. 10203-0275