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EXHIBIT 10(d)
SALARY CONTINUATION AND DEATH BENEFIT PLAN AGREEMENT
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THIS AGREEMENT, effective as of the 18th day of August, 2000, is made
by and between THE SHERWIN-WILLIAMS COMPANY, an Ohio corporation, with principal
offices and place of business in the State of Ohio (hereinafter referred to as
the "Corporation"), and JOHN G. BREEN, an individual residing in the State of
Ohio (hereinafter referred to as the "Employee"),
WITNESSETH THAT:
WHEREAS, the Employee has recently retired from employment with the
Corporation;
and
WHEREAS, the Corporation recognizes the value of the past services
performed by the Employee; and
WHEREAS, the Employee and the Corporation have, coincident with the
signing of this Agreement, executed an amended and restated Split-Dollar Life
Insurance Agreement by and between the Employee, the Corporation, and National
City Bank, Trustee ("Trustee") under Trust Agreement dated March 2, 1996 with
John G. Breen and Mary J. Breen as Grantors (the "Split Dollar Agreement")
setting forth the rights, duties and obligations of the Employee, the Trustee
and the Corporation as they relate to the Policy as that term is defined in the
Split Dollar Agreement; and
WHEREAS, the Employee wishes to be assured that he will be entitled to
a certain amount of additional compensation for some definite period of time and
that his wife, MARY J. BREEN, will be entitled to a certain benefit during the
period of time, if any, she survives the Employee; and
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WHEREAS, the parties hereto wish to provide the terms and conditions
upon which the Corporation shall pay such additional compensation to the
Employee and the terms and conditions upon which the Corporation shall pay such
benefit to the Employee's wife after the Employee's death if she survives the
Employee;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the parties hereto agree as follows:
I. ANNUAL COMPENSATION.
A. The Corporation shall pay to the Employee, or Mary J. Breen on
or about January 31st of each calendar year, an amount (the "Benefit Amount"),
determined annually, equal to the quotient of:
(1) the sum of the Annual Cost of Life Insurance Protection
and the Gift Tax on Life Insurance Protection, divided
by
(2) one hundred percent minus the Employee's Income Tax
Rate.
B. The "Annual Cost of Life Insurance Protection" shall be
defined as the Economic Benefit as defined under the Split Dollar Agreement
for the Policy for the Applicable Year.
C. The "Gift Tax on Life Insurance Protection" shall be defined
as the product of:
(1) the amount that will be reported as a taxable gift on
the Employee's and/or Mary J. Breen's federal gift tax
return (form 709 or its equivalent) related to a gift of
the Annual Cost of Life Insurance Protection for the
Applicable Year, and
(2) the highest marginal gift tax rate at which taxable
gifts are taxed under federal gift tax law for the
Applicable Year.
D. The "Employee's Income Tax Rate" shall be defined as the sum
of:
(1) the highest marginal tax rate at which the Employee's
and/or Mary J. Breen's income is taxed under federal
income tax law as
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reported on his/her/their federal form 1040 (or its
equivalent) for the Applicable Year,
(2) the highest marginal tax rate at which the Employee's
and/or Mary J. Breen's income is taxed under the income
tax law of the resident state of the Employee and/or
Mary J. Breen for the Applicable Year, net of any
reduction in federal income taxes which is obtained from
the deduction of such state income taxes,
(3) the highest marginal tax rate at which the Employee's
and/or Mary J. Breen's income is taxed under the local
income tax law applicable to the Employee and/or Mary J.
Breen for the Applicable Year, net of any reduction in
federal income taxes which is obtained from the
deduction of such local income taxes, and
(4) the applicable Hospital Insurance rate of tax under
section 3101(b) of the Internal Revenue Code of 1986 (as
amended) (the "Code") during the Applicable Year, and,
if the Employee has not exceeded the applicable Old Age,
Survivors, and Disability Insurance ("OASDI") base
amount under section 3121(a) of the Code, the applicable
OASDI rate of tax under section 3101(a) of the Code
during the Applicable Year, provided, however, that the
OASDI rate of tax shall be taken into account in this
calculation only to the extent necessary to reimburse
the Employee and/or his wife for OASDI tax up to the
OASDI base amount.
E. The "Applicable Year" shall be the calendar year immediately
preceding the year in which the determination is being made. For example, for
the determination to be made on or about January 31, 2001, the Applicable Year
is calendar year 2000.
II. SINGLE SUM PAYMENT FOR PRECEDING YEARS.
As soon as administratively practicable following execution of
this Agreement, the Corporation shall pay to Employee the amount of $65,576
representing the grossed up income tax and gift taxes on the amounts that have
been imputed to the Employee since the inception of the Split Dollar Agreement
in 1996 and related penalties and interest for gift tax returns for those
periods.
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III. NO CONTRACT OF EMPLOYMENT.
Nothing contained in this Agreement shall be construed to be a
contract of employment for any term of years. It is expressly understood by
the parties hereto that this Agreement relates exclusively to additional
compensation and a death benefit for the Employee's services, and is not
intended to be an employment contract.
IV. NO TRUST CREATED.
Nothing contained in this Agreement, and no action taken pursuant
to its provision by either party hereto, shall create, nor be construed to
create, a trust of any kind or a fiduciary relationship between the
Corporation and the Employee, Mary J. Breen or any other person.
V. BENEFITS PAYABLE ONLY FROM GENERAL CORPORATE ASSETS; UNSECURED
GENERAL CREDITOR STATUS OF EMPLOYEE; PAYMENT FROM SPLIT DOLLAR
AGREEMENT POLICY.
A. The payments to the Employee and/or to Mary J. Breen hereunder
shall be made from assets which shall continue, for all purposes, to be a part
of the general, unrestricted assets of the Corporation; no person shall have
or acquire any interest in any such assets by virtue of the provisions of this
Agreement. The Corporation's obligation hereunder shall be an unfunded and
unsecured promise to pay money in the future. To the extent that the Employee,
Mary J. Breen, or any other person acquires a right to receive payments from
the Corporation under the provisions hereof, such right shall be no greater
than the right of any general creditor of the Corporation; no such person
shall have nor acquire any legal or equitable right, interest or claim in or
to any property or assets of the Corporation.
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VI. NON-ASSIGNABILITY OF BENEFITS.
Neither the Employee nor Mary J. Breen shall have any power or
right to transfer, assign, anticipate, hypothecate or otherwise encumber any
part or all of the amounts payable hereunder, which are expressly declared to
be unassignable and non-transferable. Any such attempted assignment or
transfer shall be void. No amount payable hereunder shall, prior to actual
payment thereof, be subject to seizure by any creditor of any such beneficiary
for the payment of any debt, judgment or other obligation, by a proceeding at
law or in equity, nor transferable by operation of law in the event of the
bankruptcy, insolvency or death of the Employee, Mary J. Breen, or any other
beneficiary hereunder.
VII. DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
If the Employee (or the Employee's wife if she survives the death
of the Employee) believes that he or she is entitled to a benefit under the
Agreement which he or she has not received because the Committee (as defined
in Article X, section C) has denied the benefit in whole or in part, he or she
may file with the Committee a written claim specifying the basis of his or her
complaint and the facts upon which he or she relies in making such claim. Such
claim must be signed by the claimant or his or her authorized representative
and shall be deemed filed when received by the Committee. Unless such claim is
allowed in total by the Committee, the Committee shall respond in writing to
the claimant advising him or her of the total or partial denial of his or her
claim. Such notice shall include:
(1) The reasons for denial of the claim;
(2) Reference to the provisions of this Agreement upon
which the denial of the claim was based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material and information is necessary;
and
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(4) An explanation of the review procedure.
Within six (6) months after the receipt of such notice of denial, the claimant
can appeal such denial by filing with a special review committee appointed by
the Committee his or her written request for the review of said claim. A special
review committee shall consist of no less than three (3) disinterested parties
to the claimant who are not part of the Committee. If an appeal is so filed
within a six (6) month period, the special review committee shall conduct a full
and fair review of such claim and mail to the claimant not later than sixty (60)
days after receipt of a request for review a written decision of the matter
based upon the facts and pertinent provisions of this Agreement. Such a decision
shall state the reason for the decision as well as references to the pertinent
provisions of this Agreement on which the decision is based. During the full
review, the claimant shall be given the opportunity to review documents that are
pertinent to his or her claim and to submit issues and comments in writing to
the special review committee, or, if he or she requests a hearing to present his
or her case in person or by an authorized representative at a hearing scheduled
by the special review committee. In the event the claimant requests a hearing,
the time period for the special review committee to render a decision upon a
claim shall be extended from sixty (60) days to one hundred twenty (120) days
after receipt of the request for review.
VIII. AMENDMENT.
This Agreement may not be amended, altered or modified, except by
a written instrument signed by the parties hereto, or their respective
successors and may not be otherwise terminated except as provided herein.
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IX. INUREMENT.
This Agreement shall be binding upon and inure to the benefit of
the Corporation and its successors and assigns, and the Employee, his
successors, heirs, executors, administrators and beneficiaries.
X. MISCELLANEOUS.
A. The laws of the State of Ohio shall govern, control and
determine all questions arising with respect to this Agreement and the
interpretation and validity of its respective provisions, except where those
laws are preempted by the laws of the United States.
B. Where headings have been supplied for portions of this
Agreement, they have been supplied for convenience only and are not to be taken
as limiting or excluding the meaning of any portion of the Agreement. The
singular or plural number or masculine, feminine and neuter gender shall each
be deemed to include the other unless the context clearly implies the contrary.
C. This Agreement shall be administered by a Committee composed of
not less than three (3) members of the Corporation's Board, as shall from time
to time be duly appointed by the Corporation's Board and who shall each
thereafter serve, without compensation, until death, resignation or removal
from such office. Any member of the Committee may resign at any time by notice
in writing to the Corporation, and to the remaining members of the Committee.
The Corporation's Board may remove any member of the Committee at any time by
written notice to him and to the remaining members of the Committee. In the
event of resignation, removal, death, inability or failure to act or continue
to act of any member of the Committee at any time, a successor to such Member
shall be appointed by the Corporation's Board. It is the intention of the
Corporation that there shall be at all times at least three Committee members
acting hereunder, and that all vacancies shall be filled promptly.
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Nevertheless, in the event of and during any such vacancy, the remaining
members or member shall have and may exercise all powers of the Committee.
Except as otherwise expressly provided in this
Agreement, the Committee shall have the full power and authority, within the
limits provided by the Agreement:
(1) to construe the Agreement and determine all
questions arising in the administration of
the Agreement, including the power to
determine the rights or eligibility of
participants and their beneficiaries, and
the amount of their respective interests,
and to make equitable adjustments for any
mistakes or errors made in the
administration of the Agreement, and its
decisions and actions made in good faith
shall be final and binding on all persons
hereunder;
(2) to adopt such rules and regulations as it
may deem reasonably necessary for the proper
and efficient administration of the
Agreement and consistent with its purposes;
(3) to enforce the Agreement, in accordance with
its terms and with the rules and regulations
adopted by the Committee;
(4) to delegate such of its authority as the
Committee deems appropriate to Corporation
representatives and third party service
providers to facilitate the day-to-day
administration of the Agreement; and
(5) to do all other acts which in its judgment
are necessary or desirable for the proper
and advantageous administration of the
Agreement.
The Committee shall act by the vote or concurrence of
a majority of its members; but no member shall act on any matter that has
particular reference to his own interest. No member of the Committee shall have
any personal liability to anyone, either as such member or as an individual, for
anything done or omitted to be done in good faith in carrying out the provisions
of this Agreement. In addition to such other rights or indemnification as the
Committee members may have as members of the Corporation's Board or as members
of the Committee, the members of the Committee shall be indemnified by the
Corporation against the reasonable expenses, including attorneys' fees, actually
and necessarily incurred in connection
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with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which the Committee members or any of one or more of them may
be a party by reason of any action taken or failure to act under or in
connection with the Agreement, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Corporation), or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is liable for gross
misconduct in his or her duties; provided that within sixty (60) days after the
institution of such action, suit or proceeding, such Committee member shall in
writing offer the Company the opportunity, at its own expense, to handle and
defend the same.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
/s/___________________________________
JOHN G. BREEN
THE SHERWIN-WILLIAMS COMPANY
By: /s/______________________________
Its:__________________________________
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