EXHIBIT 10(d)
THE SHERWIN-WILLIAMS COMPANY REVISED
KEY MANAGEMENT DEFERRED COMPENSATION PLAN
The Sherwin-Williams Company, an Ohio corporation (the
"Company"), hereby establishes this Key Management Deferred Compensation Plan
(the "Plan"), effective July 24, 2002, for the purpose of attracting high
quality executives and promoting in its key executives increased efficiency and
an interest in the successful operation of the Company. The Plan is intended to
offer a select group of management or highly compensated employees the ability
to defer compensation in excess of compensation available to be deferred under
other qualified and nonqualified plans sponsored by the Company.
ARTICLE 1
DEFINITIONS
1.1 Account shall mean the account or accounts established for a
particular Participant pursuant to Article 3 of the Plan.
1.2 Administrator shall mean the person or persons appointed by the
Board of Directors of the Company to administer the Plan pursuant to Article 12
of the Plan.
1.3 Base Salary shall mean the Participant's annual base salary
excluding incentive and discretionary bonuses and other non-regular forms of
compensation, after reductions for Social Security and Medicare taxes and
contributions to or deferrals under any pension, deferred compensation or other
benefit plans sponsored by the Company.
1.4 Beneficiary shall mean the person(s) or entity designated as such
in accordance with Article 11 of the Plan.
1.5 Bonus shall mean amounts paid to the Participant by the Company
annually in the form of a discretionary or incentive compensation or any other
bonus designated by the Administrator after reductions for contributions to or
deferrals under any pension, deferred compensation or benefit plans sponsored by
the Company.
1.6 Company shall mean The Sherwin-Williams Company.
1.7 Crediting Rate shall mean the notional gains and losses credited on
the Participant's Account balance which are based on the Participant's choice
among the investment alternatives made available by the Administrator pursuant
to Article 3 of the Plan.
1.8 Disability shall have the same definition given to such term under
The Sherwin-Williams Company Salaried Employees' Pension Investment Plan, as
amended from time to time.
1.9 Eligible Executive shall mean an employee of the Company, its
subsidiaries or affiliates eligible to participate in The Sherwin-Williams
Company Management Incentive Plan, or such other management employee, as may be
designated by the Administrator to be eligible to participate in the Plan.
1.10 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.11 Financial Hardship shall mean the Participant's or the
Participant's dependent's (as defined in Section 152(a) of the Internal Revenue
Code) sudden
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and unexpected illness or accident, the Participant's sudden and unexpected
property casualty loss, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, which is not covered by insurance and may not be relieved by
cessation of Plan deferrals or by the liquidation of the Participant's assets
provided that such liquidation would not cause a severe Financial Hardship, and
which is determined to qualify as a Financial Hardship by the Administrator.
Cash needs arising from foreseeable events such as the purchase of a residence
or education expenses for children shall not, alone, be considered a Financial
Hardship.
1.12 Participant shall mean an Eligible Executive who has elected to
participate and has completed a Participant Election Form pursuant to Article 2
of the Plan.
1.13 Participant Election Form shall mean the agreement in a form
acceptable to the Administrator, to make a deferral submitted by the Participant
to the Administrator on a timely basis pursuant to Article 2 of the Plan. The
Participant Election Form may take the form of an electronic communication
followed by appropriate written confirmation from the Administrator according to
specifications established by the Administrator.
1.14 Plan Year shall mean the calendar year, except that the first Plan
Year shall begin on the effective date of the Plan and end December 31, 2002.
1.15 Retirement shall mean Termination of Employment on or after the
Retirement Eligibility Date.
1.16 Retirement Eligibility Date shall mean the date on which the
Participant attains age fifty-five (55).
1.17 Scheduled Withdrawal shall mean the distribution elected by the
Participant pursuant to Article 7 of the Plan.
1.18 Settlement Date shall mean the date by which a lump sum payment
shall be made or the date by which installment payments shall commence. Unless
otherwise specified, the Settlement Date shall be no later than ninety (90) days
following the occurrence of the event triggering the payout unless the
Participant elects to defer the Settlement date, at the time and in a form
specified by the Administrator, until the last day of January of the Plan Year
following the year in which the event triggering the payout occurs. In the case
of death, the event triggering payout shall be deemed to occur upon the date the
Administrator is provided with the documentation reasonably necessary to
establish the fact of the Participant's death.
1.19 Statutory Limitations shall mean any statutory or regulatory
limitations imposed by one or more of Sections 401(a)(17), 401(k), 401(m),
402(g), 403(b), 408(k) or 415 or any other limitation on contributions or
benefits in the Internal Revenue Code. The impact of such limits on the
Participant for purposes of this Plan shall be determined by the Administrator
based upon reasonable estimates and shall be final and binding as of the date
the Company Contribution is credited to the Participant's Account. No subsequent
adjustments shall be made to increase Company Contribution under this Plan as a
result of any adjustments ultimately required under the Qualified Plans due to
actual employee contributions or other factors.
1.20 Termination of Employment shall mean the date of the cessation of
the Participant's employment with the Company for any reason whatsoever, whether
voluntary or involuntary, including as a result of the Participant's Retirement
or death, or to the extent provided in Article 6 of the Plan, Disability.
1.21 Unscheduled Withdrawal shall mean a distribution elected by the
Participant pursuant to Article 8 of the Plan.
1.23 Valuation Date shall mean the date through which earnings are
credited and shall, if a business day, be the date on which the payout or other
event triggering the valuation occurs; or if not a business day, the next
succeeding business day.
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1.24 Withdrawal Penalty shall mean the ten percent (10%) penalty
deducted from an Account as a result of an Unscheduled Withdrawal pursuant to
Article 8 of the Plan.
ARTICLE 2
PARTICIPATION
2.1 ELECTIVE DEFERRAL. Each Plan Year an Eligible Executive may elect
to defer any whole percentage up to one hundred percent (100%) of Base Salary
and/or Bonus earned by the Eligible Executive during the Plan Year. The
Administrator may further limit the minimum or maximum amount deferred by any
Participant or group of Participants, or waive the foregoing limits for any
Participant or group of Participants, for any reason. If a Participant ceases to
meet the eligibility requirements, the Participant shall continue as an inactive
Participant in the Plan but shall no longer be eligible to make further
deferrals under the Plan.
2.2 COMPANY MAKE-UP CONTRIBUTION. The Company shall make a Company
Make-Up Contribution to this Plan on behalf of the Participant for each Plan
Year in which the Participant elects deferrals pursuant to Section 2.1 above in
an amount equal to difference between the amount of all contributions the
Participant would have received under all qualified retirement plans and The
Sherwin-Williams Company Deferred Compensation Savings and Pension Equalization
Plan if the Participant had not elected to defer Base Salary and/or Bonus
pursuant hereto without regard to any Statutory Limitations and without regard
to the applicable dollar limit under Section 402(g)(1) of the Internal Revenue
Code, reduced by the amount of contributions actually credited to the
Participant under the qualified retirement plans and The Sherwin-Williams
Company Deferred Compensation Plan for such Plan Year.
2.3 SPECIAL ROLLOVER ELECTION. An Eligible Executive may elect, during
the thirty (30) day period commencing with the effective date of this Plan, to
transfer to and defer under, this Plan, such Eligible Executive's account
balance in The Sherwin-Williams Company Key Management Deferred Compensation
Plan. Any such election shall be effective as of the first business day of the
calendar month immediately following the end of such thirty (30) day election
period.
2.4 PARTICIPANT ELECTION FORM. In order to make a deferral, an Eligible
Executive must submit a Participant Election Form to the Administrator during
the enrollment period established by the Administrator prior to the beginning of
the period to which the Base Salary or Bonus relates or is determined, except
that with respect to the first Plan Year, the Participant shall submit a
Participant Election Form within thirty (30) days of adoption of the Plan by the
Board of Directors of the Company. Any such election shall be effective as of
the first business day of the calendar month immediately following the end of
such thirty (30) day election period. The Administrator may establish a special
enrollment period, not to exceed thirty (30) days, for Eligible Executives hired
during a Plan Year to allow deferrals of Base Salary or Bonus earned during the
balance of such Plan Year after such enrollment period. The Participant shall be
required to submit a new Participant Election Form each year in order to make
additional deferrals in such subsequent Plan Years. The election to defer Base
Salary or Bonus shall be irrevocable except as provided in Article 6 in the
event of Disability or Article 7 in the case of a Financial Hardship.
ARTICLE 3
ACCOUNTS
3.1 PARTICIPANT ACCOUNTS. Solely for recordkeeping purposes, separate
Accounts shall be maintained for each Participant. One Retirement Account and
Scheduled Withdrawal Accounts, in a number appropriate to the Participant's
elections to make Scheduled Withdrawals, shall be maintained for the Participant
and credited with the Participant's deferrals directed by the Participant to
each Account at the time such amounts would otherwise have been paid to the
Participant. Accounts shall be deemed to be credited with notional gains or
losses as provided in Section 3.2 from the date amounts are credited to the
Account through the Valuation Date. Amounts credited to a Participant's Account
shall be fully vested at all times.
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3.2 CREDITING RATE. The Crediting Rate on amounts in a Participant's
Account shall be based on the Participant's choice among the investment
alternatives made available from time to time by the Administrator. The
Administrator shall establish a procedure by which a Participant may elect to
have the Crediting Rate based on one or more investment alternatives and by
which the Participant may change investment elections at least quarterly. The
Participant's Account balance shall reflect the investments selected by the
Participant. If an investment selected by a Participant sustains a loss, the
Participant's Account shall be reduced to reflect such loss. The Participant's
choice among investments shall be solely for purposes of calculation of the
Crediting Rate. If the Participant fails to elect an investment alternative the
Crediting Rate shall be based on the investment alternative selected for this
purpose by the Administrator. The Company shall have no obligation to set aside
or invest funds as directed by the Participant and, if the Company elects to
invest funds as directed by the Participant, the Participant shall have no more
right to such investments than any other unsecured general creditor of the
Company. During payout, the Participant's Account shall continue to be credited
at the Crediting Rate selected by the Participant from among the investment
alternatives or rates made available by the Administrator for such purpose.
Installment payments shall be recalculated annually by dividing the account
balance by the number of payments remaining without regard to anticipated
earnings or in any other reasonable manner as may be determined from time to
time by the Administrator.
3.3 STATEMENT OF ACCOUNTS. The Administrator shall provide each
Participant with statements at least annually setting forth the Participant's
Account balance as of the end of each Plan Year.
ARTICLE 4
BENEFITS
4.1 RETIREMENT BENEFITS. In the event of the Participant's Retirement,
the Participant shall be entitled to receive an amount equal to the total
balance of the Participant's Accounts credited with notional earnings as
provided in Article 3 through the Valuation Date. The benefits shall be paid in
substantially level annual installments over ten (10) years unless the
Participant makes a timely election to have the benefit paid in a single lump
sum and/or in annual installments over a specified period of not more than
fifteen (15) years. Payments shall begin on the Settlement Date following
Retirement. An election to change the form of benefit payout may be made at any
time prior to Retirement by submitting to the Administrator the form provided
for such purpose.
4.2 TERMINATION BENEFIT. Upon Termination of Employment other than by
reason of Retirement or death, the Company shall pay to the Participant a
termination benefit equal to the balance on Termination of Employment of the
Participant's Accounts credited with notional earnings as provided in Article 3
through the Valuation Date. The termination benefits shall be paid in a single
lump sum on the Settlement Date following Termination of Employment.
4.3 SMALL BENEFIT EXCEPTION. Notwithstanding the foregoing, in the
event the sum of all benefits payable to the Participant hereunder is less than
or equal to Twenty Five Thousand and 00/100 Dollars ($25,000.00), the Company
may, in its sole discretion, elect to pay such benefits in a single lump sum
payable as soon as administratively practicable following the event triggering
payout.
ARTICLE 5
DEATH BENEFITS
5.1 SURVIVOR BENEFIT BEFORE BENEFITS COMMENCE. If the Participant dies
prior to commencement of benefits under Article 4, the Company shall pay to the
Participant's Beneficiary a death benefit equal to the total balance of the
Participant's Account as of the date of the Participant's death credited with
notional earnings as provided in Article 3 through the Valuation Date. The death
benefit shall be paid in the same form elected for the Retirement benefit under
Section 4.1 and shall commence on the Settlement Date. However, the
Administrator may,
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in its complete discretion, agree to an alternative form of payment if requested
by the Beneficiary prior to the Settlement Date.
5.2 SURVIVOR BENEFIT AFTER BENEFITS COMMENCE. If the Participant dies
after benefits have commenced under Article 4, the Company shall pay to the
Participant's Beneficiary an amount equal to the remaining benefits payable to
the Participant under the Plan over the same period such benefits would have
been paid to the Participant. However, the Administrator may, in its complete
discretion, agree to an alternative form of payment if requested by the
Beneficiary prior to the Settlement Date upon which the first payment to the
Beneficiary is to be made following the Participants death.
5.3 SMALL BENEFIT EXCEPTION. Notwithstanding the foregoing, in the
event the sum of all benefits payable to a Beneficiary is less than or equal to
Twenty Five Thousand and 00/100 Dollars ($25,000.00), the Company may, in its
sole discretion, elect to pay such benefits in a single lump sum payable as soon
as administratively practicable following the event triggering payout.
ARTICLE 6
DISABILITY
In the event of Disability, deferral elections shall cease and for purposes of
calculating benefits under the Plan, Disability shall be treated as a Retirement
entitling the Participant to receive the benefits provided under Article 4.1 of
the Plan. The Disability benefits shall commence on the Settlement Date
following Termination of Employment by reason of Disability.
ARTICLE 7
SCHEDULED WITHDRAWAL
7.1 ELECTION. The Participant may make an irrevocable election on the
Participant Election Form at the time of making a deferral to take a Scheduled
Withdrawal from the Account established by the Participant for such purpose,
including any earnings credited thereon. The Participant may elect to receive
the Scheduled Withdrawal in any Plan Year on or after the fourth Plan Year
following the enrollment period in which such Scheduled Withdrawal is elected.
The Participant may irrevocably elect to make additional deferrals into such
Scheduled Withdrawal Account in subsequent Participant Election Forms but may
not elect another Scheduled Withdrawal date for such Account until all of the
amounts in the original Scheduled Withdrawal Account have been paid out.
7.2 MAXIMUM SCHEDULED WITHDRAWAL. The Participant shall be entitled to
elect a Scheduled Withdrawal of up to one hundred percent (100%) of the amount
of the relevant deferral credited with notional interest as provided in Article
3 through the Valuation Date.
7.3 TIMING OF SCHEDULED WITHDRAWAL. The Scheduled Withdrawal shall be
paid by the Company to the Participant in a single lump sum no later than the
last day of January of the Plan Year elected by the Participant in the
Participant Election Form unless preceded by Termination of Employment. In the
event of Termination of Employment prior to the date elected for the Scheduled
Withdrawal, the Scheduled Withdrawal shall be paid in the form provided in
Article 4 of the Plan. In the event such Termination of Employment is as a
result of the Participant's death, the Scheduled Withdrawal shall be paid as
provided in Section 5.1 of the Plan.
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ARTICLE 8
UNSCHEDULED WITHDRAWAL
8.1 ELECTION. A Participant, excluding a Participant at any time after
Retirement may take an Unscheduled Withdrawal from an Account at any time in an
amount no less than the balance of his Account or Twenty Five Thousand and
00/100 Dollars ($25,000.00), whichever is greater, up to the full value of the
Participant's Account. The Unscheduled Withdrawal shall be paid no later than
the last day of the month following the month in which the Unscheduled
Withdrawal is requested. After an Unscheduled Withdrawal, a Participant's
deferrals shall cease and the Participant shall not be allowed to make a new
deferral election until the enrollment period following six (6) full calendar
months from the date of the Unscheduled Withdrawal. Only one Unscheduled
Withdrawal shall be permitted in each Plan Year.
8.2 WITHDRAWAL PENALTY. There shall be a Withdrawal Penalty deducted
from the Account prior to an Unscheduled Withdrawal equal to ten percent (10%)
of the amount of the Unscheduled Withdrawal.
ARTICLE 9
FINANCIAL HARDSHIP DISTRIBUTION
Upon a finding that the Participant (or, after the Participant's death, a
Beneficiary) has suffered a Financial Hardship, the Administrator may in its
sole discretion, accelerate distributions of benefits, in whole or in part, or
approve reduction or cessation of current deferrals under the Plan in the amount
reasonably necessary to alleviate such Financial Hardship.
ARTICLE 10
AMENDMENT AND TERMINATION OF PLAN
The Company may, at any time, amend or terminate the Plan, except that no such
amendment or termination may reduce a Participant's Account balance. If the
Company terminates the Plan, the date of such termination shall be treated as a
Termination of Employment for the purpose of calculating Plan benefits and the
Company shall pay to each Participant the benefits such Participant would be
entitled to receive under Article 4 of the Plan except that such termination
benefits shall be paid in a single lump sum payable on the last day of the month
following the month in which termination of the Plan occurs.
ARTICLE 11
BENEFICIARIES
11.1 BENEFICIARY DESIGNATION. The Participant shall have the right, at
any time, to designate any person or persons as Beneficiary (both primary and
contingent) to whom payment under the Plan shall be made in the event of the
Participant's death. The Beneficiary designation shall be effective when it is
submitted in writing to and acknowledged by the Administrator during the
Participant's lifetime on a form prescribed by the Administrator.
11.2 REVISION OF DESIGNATION. The submission of a new Beneficiary
designation shall cancel all prior Beneficiary designations. Any finalized
divorce or marriage (other than a common law marriage) of a Participant
subsequent to the date of a Beneficiary designation shall revoke such
designation, unless in the case of divorce the previous spouse was not
designated as Beneficiary and unless in the case of marriage the Participant's
new spouse has previously been designated as Beneficiary.
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11.3 SUCCESSOR BENEFICIARY. If the primary Beneficiary dies prior to
complete distribution of the benefits provided in Article 5, the remaining
Account balance shall be paid to the contingent Beneficiary elected by the
Participant in the form of a lump sum payable no later than the last day of the
month following the month in which the primary Beneficiary's death is
established.
11.4 ABSENCE OF VALID DESIGNATION. If a Participant fails to designate
a Beneficiary as provided above, or if the Beneficiary designation is revoked by
marriage, divorce, or otherwise without execution of a new designation, or if
every person designated as Beneficiary predeceases the Participant or dies prior
to complete distribution of the Participant's benefits, then the Administrator
shall direct the distribution of such benefits to the relevant estate.
ARTICLE 12
ADMINISTRATION/CLAIMS PROCEDURES
12.1 ADMINISTRATION. The Plan shall be administered by the
Administrator, which shall have the exclusive right and full discretion (i) to
interpret the Plan, (ii) to decide any and all matters arising hereunder
(including the right to remedy possible ambiguities, inconsistencies, or
admissions), (iii) to make, amend and rescind such rules as it deems necessary
for the proper administration of the Plan and (iv) to make all other
determinations necessary or advisable for the administration of the Plan,
including determinations regarding eligibility for benefits payable under the
Plan. All interpretations of the Administrator with respect to any matter
hereunder shall be final, conclusive and binding on all persons affected
thereby. No member of the Administrator shall be liable for any determination,
decision, or action made in good faith with respect to the Plan. The Company
will indemnify and hold harmless the members of the Administrator from and
against any and all liabilities, costs, and expenses incurred by such persons as
a result of any act, or omission, in connection with the performance of such
persons' duties, responsibilities, and obligations under the Plan, other than
such liabilities, costs, and expenses as may result from the bad faith, willful
misconduct, or criminal acts of such persons.
12.2 CLAIMS PROCEDURE. Any Participant, former Participant or
Beneficiary may file a written claim with the Administrator setting forth the
nature of the benefit claimed, the amount thereof, and the basis for claiming
entitlement to such benefit. The Administrator shall determine the validity of
the claim and communicate a decision to the claimant promptly and, in any event,
not later than ninety (90) days after the date of the claim. The claim may be
deemed by the claimant to have been denied for purposes of further review
described below in the event a decision is not furnished to the claimant within
such ninety (90) day period. If additional information is necessary to make a
determination on a claim, the claimant shall be advised of the need for such
additional information within forty-five (45) days after the date of the claim.
The claimant shall have up to one hundred and eighty (180) days to supplement
the claim information, and the claimant shall be advised of the decision on the
claim within forty-five (45) days after the earlier of the date the supplemental
information is supplied or the end of the one hundred and eighty (180) day
period. Every claim for benefits which is denied shall be denied by written
notice setting forth in a manner calculated to be understood by the claimant (i)
the specific reason or reasons for the denial, (ii) specific reference to any
provisions of the Plan (including any internal rules, guidelines, protocols,
criteria, etc.) on which the denial is based, (iii) description of any
additional material or information that is necessary to process the claim, and
(iv) an explanation of the procedure for further reviewing the denial of the
claim.
12.3 REVIEW PROCEDURES. Within sixty (60) days after the receipt of a
denial on a claim, a claimant or his/her authorized representative may file a
written request for review of such denial. Such review shall be undertaken by
the Administrator and shall be a full and fair review. The claimant shall have
the right to review all pertinent documents. The Administrator shall issue a
decision not later than sixty (60) days after receipt of a request for review
from a claimant unless special circumstances, such as the need to hold a
hearing, require a longer period of time, in which case a decision shall be
rendered as soon as possible but not later than one hundred and twenty (120)
days after receipt of the claimant's request for review. The decision on review
shall be in writing and shall
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include specific reasons for the decision written in a manner calculated to be
understood by the claimant with specific reference to any provisions of the Plan
on which the decision is based .
ARTICLE 13
CHANGE OF CONTROL
In the event of a Change of Control, the amounts to which Participants are
entitled under this Plan shall be immediately distributed in a lump sum cash
payment to Participants. For purposes of this Plan, a Change of Control shall be
deemed to have occurred if:
(i) Any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) who or that, together with all
Affiliates and Associates of such person, is the Beneficial
Owner of ten percent (10%) or more of the shares of Common
Stock of the Company then outstanding, except:
(A) the Company;
(B) any of the Company's subsidiaries in which a majority
of the voting power of the equity securities or
equity interests of such subsidiary is owned,
directly or indirectly, by the Company;
(C) any employee benefit or stock ownership plan of the
Company or any trustee or fiduciary with respect to
such a plan acting in such capacity; or
(D) any such person who has reported or may, pursuant to
Rule 13d-1(b)(1) of the General Rules and Regulations
under the Exchange Act, report such ownership (but
only as long as such person is the Beneficial Owner
of less than fifteen percent (15%) of the shares of
Common Stock then outstanding) on Schedule 13G (or
any comparable or successor report) under the
Exchange Act.
Notwithstanding the foregoing: (1) no person shall become the
Beneficial Owner of ten percent (10%) or more (fifteen percent
(15%) or more in the case of any person identified in clause
(D) above) solely as the result of an acquisition of Common
Stock by the Company that, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such person to ten percent (10%) or more
(fifteen percent (15%) or more in the case of any person
identified in clause (D) above) of the shares of Common Stock
then outstanding; provided, however, that if a person becomes
the Beneficial Owner of ten percent (10%) or more (fifteen
percent (15%) or more in the case of any person identified in
clause (D) above) of the shares of Common Stock solely by
reason of purchases of Common Stock by the Company and shall,
after such purchases by the Company, become the Beneficial
Owner of any additional shares of Common Stock which has the
effect of increasing such person's percentage ownership of the
then-outstanding shares of Common Stock by any means
whatsoever, then such person shall be deemed to have triggered
a Change of Control; and (2) if the Board of Directors
determines that a person who would otherwise be the Beneficial
Owner of ten percent (10%) or more (fifteen percent (15%) or
more in the case of any person identified in clause (D) above)
of the shares of Common Stock has become such inadvertently
(including, without limitation, because (i) such person was
unaware that it Beneficially Owned ten percent (10%) or more
(fifteen percent (15%) or more in the case of any person
identified in clause (D) above) of the shares of Common Stock
or (ii) such person was aware of the extent of such beneficial
ownership but such person acquired beneficial ownership of
such shares of Common Stock without the intention to change or
influence the control of the Company) and such person divests
itself as promptly as practicable of a sufficient number of
shares of Common Stock so that such person would no longer be
the Beneficial Owner of ten percent (10%) or more (fifteen
percent (15%) or more in the case of any person identified in
clause (D) above), then such person shall not be deemed to be,
or have been, the Beneficial Owner of ten percent (10%) or
more (fifteen percent (15%) or more in the case of any person
identified in clause (D) above) of the shares of Common Stock,
and no Change of Control shall be deemed to have occurred.
(ii) During any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of
Directors of the Company and any new director (other than a
director
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initially elected or nominated as a director as a result of an
actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of
proxies by or on behalf of such director) whose election by
the Board of Directors or nomination for election by the
Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a majority
thereof.
(iii) There shall be consummated any consolidation, merger or other
combination of the Company with any other person or entity
other than:
(A) a consolidation, merger or other combination which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities of the
surviving entity) more than fifty-one percent (51%)
of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such consolidation, merger or other
combination; or
(B) a consolidation, merger or other combination effected
to implement a recapitalization and/or reorganization
of the Company (or similar transaction), or any other
consolidation, merger or other combination of the
Company, which results in no person (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange
Act), together with all Affiliates and Associates of
such person, becoming the Beneficial Owner of ten
percent (10%) or more (fifteen percent (15%) or more
in the case of any person identified in Section
1(c)(i)(D)) of the combined voting power of the
Company's then outstanding securities.
(iv) There shall be consummated any sale, lease, assignment,
exchange, transfer or other disposition (in one transaction or
a series of related transactions) of fifty percent (50%) or
more of the assets or earning power of the Company (including,
without limitation, any such sale, lease, assignment,
exchange, transfer or other disposition effected to implement
a recapitalization and/or reorganization of the Company (or
similar transaction)) which results in any person (as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), together with all Affiliates and Associates of such
person, owning a proportionate share of such assets or earning
power greater than the proportionate share of the voting power
of the Company that such person, together with all Affiliates
and Associates of such person, owned immediately prior to any
such sale, lease, assignment, exchange, transfer or other
disposition.
(v) The shareholders of the Company approve a plan of complete
liquidation of the Company. For purposes of this Article 13, a
person (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended, hereinafter
"Exchange Act") shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "beneficially own" any securities:
(i) which such person or any of such person's "Affiliates" or
"Associates" (as such terms are defined in Rule 12b-2, as in
effect on April 23, 1997, of the General Rules and under the
Exchange Act) is considered to be a "beneficial owner" under
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on April 23, 1997;
(ii) which such person or any of such person's Affiliates or
Associates, directly or indirectly, has or shares the right to
acquire, hold, vote (except pursuant to a revocable proxy as
described in the proviso to this Section 1(b)) or dispose of
such securities (whether any such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a person shall not be deemed to be the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such person or any of such person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or
(iii) which are beneficially owned, directly or indirectly, by any
other person (or any Affiliate or Associate of such other
person) with which such person (or any of such person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), with
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respect to acquiring, holding, voting (except as described in
the proviso to this Section 1(b)) or disposing of any
securities of the Company;
provided, however, that a person shall not be deemed the Beneficial
Owner of, nor to beneficially own, any security if such person has the
right to vote such security pursuant to an agreement, arrangement or
understanding which (I) arises solely from a revocable proxy given to
such person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (II) is not also then
reportable on Schedule 13D (or any comparable or successor report)
under the Exchange Act; and provided, further, that nothing in this
Section 1(b) shall cause a person engaged in business as an underwriter
of securities to be the Beneficial Owner of, or to beneficially own,
any securities acquired through such person's participation in good
faith in a firm commitment underwriting until the expiration of forty
(40) days after the date of such acquisition or such later date as the
Board of Directors may determine in any specific case.
ARTICLE 14
CONDITIONS RELATED TO BENEFITS
14.1 NONASSIGNABILITY. No amount payable to a Participant or
Beneficiary under the Plan will be subject in any manner to anticipation,
alienation, attachment, garnishment, sale, transfer, assignment (either at law
or in equity), levy, execution, pledge, encumbrance, charge or any other legal
or equitable process by a Participant or Beneficiary, an any attempt to do so
will be void; nor will any benefit be in any manner liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person entitled
thereto. However, (i) the withholding of taxes from Plan benefit payments, (ii)
the recovery by the Plan of overpayment of benefits previously made to a
Participant, or (iii) the direct deposit of benefit payments to an account in a
banking institution (if not actually part of an arrangement constituting an
assignment or alienation) shall not be construed as an assignment or alienation.
14.2 NO RIGHT TO COMPANY ASSETS. The benefits paid under the Plan shall
be paid from the general funds of the Company, and the Participant and any
Beneficiary shall be no more than unsecured general creditors of the Company
with no special or prior right to any assets of the Company for payment of any
obligations hereunder and the Plan constitutes a mere promise by the Company to
make benefit payments in the future.
14.3 PROTECTIVE PROVISIONS. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Administrator, in
order to facilitate the payment of benefits hereunder, and taking such other
actions as may be requested by the Administrator. If the Participant refuses to
so cooperate, the Company shall have no further obligation to the Participant
under the Plan.
14.4 SECTION 16B ELIGIBLE EXECUTIVES. In the event any Eligible
Executive subject to Rule 16b issued under the Securities Exchange Act of 1934
(or any successor rule to the same effect) has, at any time, a Crediting Rate
based upon an investment alternative consisting of or the value of which is
determined based upon the value of the Company's common stock or any security
into which such common stock may be changed by reason of: (a) any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Company; (b) any merger, consolidation,
separation, reorganization or partial or complete liquidation; or (c) any other
corporate transaction or event having an effect similar to the foregoing, unless
the transaction is otherwise exempt under Rule 16b-3, no transaction with
respect to the portion of the Participant's Account attributable to such
investment alternative shall be permitted pursuant to this Plan until a date
which is not less than six (6) months and one (1) day from the date on which the
investment alternative was selected or transferred within the Participant's
Account.
14.5 WITHHOLDING. The Participant shall make appropriate arrangements
with the Company for satisfaction of any federal, state or local income tax
withholding requirements and Social Security, Medicare or other employee tax
requirements applicable to the payment of benefits under the Plan. If the
Participant elects to defer
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one hundred percent (100%) of Base Salary, such deferral shall be net of the
amount of any Social Security taxes payable by the Participant as a result of
compensation received from the Company for such Plan Year. If no other
arrangements are made, the Company may provide, at its discretion, for such
withholding and tax payments as may be required, including, without limitation,
by the reduction of other amounts payable to the Participant.
14.6 ASSUMPTIONS AND METHODOLOGY. The Administrator shall establish the
actuarial assumptions and method of calculation used in determining the present
or future value of benefits, earnings, payments, fees, expenses or any other
amounts required to be calculated under the terms of the Plan. The Administrator
shall also establish reasonable procedures regarding the form and timing of
installment payments. Such assumptions and methodology shall be outlined in
detail in procedures established by the Administrator and made available to
Participants and may be changed from time to time by the Administrator.
14.7 TRUST. The Company shall be responsible for the payment of all
benefits under the Plan. At its discretion, the Company may establish one or
more grantor trusts for the purpose of providing for payment of benefits under
the Plan. Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Company's creditors. Benefits paid to the
Participant from any such trust or trusts shall be considered paid by the
Company for purposes of meeting the obligations of the Company under the Plan.
Neither the establishment of the Plan or Trust or any modification thereof, or
the creation of any fund or account, or the payment of any benefits shall be
construed as giving to any Participant or other person any legal or equitable
right against the Company or any officer or employee thereof, except as provided
by law or by any Plan provision. The amounts in the Accounts shall remain the
sole property of the Company unless and until required to be distributed in
accordance with the provisions of the Plan, and shall not constitute a trust or
be deemed to be held in trust for the benefit of any Participant or Beneficiary
hereunder or their personal representative. The Company does not in any way
guarantee the trust or any Participant's benefit from loss or depreciation. In
no event shall the Company's employees, officers, directors or stockholders be
liable to any person on account of any claim arising by reason of the provisions
of the Plan or of any instrument or instruments implementing its provisions, or
for the failure of any Participant, Beneficiary or other person to be entitled
to any particular tax consequences with respect to the Plan, the trust(s) or any
contribution thereto or distribution therefrom
ARTICLE 15
MISCELLANEOUS
15.1 SUCCESSORS OF THE COMPANY. The rights and obligations of the
Company under the Plan shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company.
15.2 EMPLOYMENT NOT GUARANTEED. Nothing contained in the Plan nor any
action taken hereunder shall be construed as a contract of employment or as
giving any Participant any right to continued employment with the Company.
15.3 GENDER, SINGULAR AND PLURAL. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may require, the
singular may be read as the plural and the plural as the singular.
15.4 CAPTIONS. The captions of the articles, paragraphs and sections of
the Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
15.5 VALIDITY. In the event any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.
15.6 WAIVER OF BREACH. The waiver by the Company of any breach of any
provision of the Plan shall not operate or be construed as a waiver of any
subsequent breach by that Participant or any other Participant.
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15.7 NOTICE. Any notice or filing required or permitted to be given to
the Company or the Participant under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by first class mail, in the case of the
Company, to the principal office of the Company, directed to the attention of
the Administrator, and in the case of the Participant, to the last known address
of the Participant indicated on the employment records of the Company. Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification. Notices to the Company may be permitted by electronic
communication according to specifications established by the Administrator.
15.8 ERRORS IN BENEFIT STATEMENT OR DISTRIBUTIONS. In the event an
error is made in a benefit statement, such error shall be corrected on the next
benefit statement following the date such error is discovered. In the event of
an error in a distribution, the Participant's Account shall, immediately upon
the discovery of such error, be adjusted to reflect such under or over payment
and, if possible, the next distribution shall be adjusted upward or downward to
correct such prior error. If the remaining balance of a Participant's Account is
insufficient to cover an erroneous overpayment, the Company may, at its
discretion, offset other amounts payable to the Participant from the Company
(including but not limited to salary, bonuses, expense reimbursements, severance
benefits or other employee compensation benefit arrangements, as allowed by law)
to recoup the amount of such overpayment(s).
15.9 ERISA PLAN. The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of Sections 201,
301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I
of ERISA.
15.10 APPLICABLE LAW. In the event any provision of, or legal issue
relating to, this Plan is not fully preempted by ERISA, such issue or provision
shall be governed by the laws of the State of Ohio.
15.11 EFFECT OF LEGISLATIVE OR REGULATORY CHANGES. Notwithstanding
anything in this Plan to the contrary, in the event of the enactment of any
legislation or regulations which , in the sole discretion of the Company, have
an unfavorable impact on the Company and/or Participants, the Company shall have
the unilateral right to amend the Plan in whatever manner it deems appropriate
to mitigate the effects of such legislation or regulations, without the
necessity of obtaining further Board approval.
15.12 EFFECT OF IRS DETERMINATION. Notwithstanding anything in this
Plan to the contrary, in the event the Internal Revenue Service rules
unfavorably as to the tax consequences of deferrals made under this Plan for any
Plan Year, the Board may take any such action as it deems necessary or
appropriate, including action to restore Participants to substantially the same
position they would have enjoyed had this Plan not been effective for such Plan
Year.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this 24th day of July, 2002.
THE SHERWIN-WILLIAMS COMPANY
By /s/
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Its
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