EXHIBIT 10(a)
THE SHERWIN-WILLIAMS COMPANY
1997 STOCK PLAN FOR NONEMPLOYEE DIRECTORS
FORM OF
RESTRICTED STOCK GRANT
***************
Number of Shares: ___________________
Date of Grant: _____________, 20__
THIS IS TO CERTIFY THAT, in accordance with and subject to all terms, provisions
and conditions of The Sherwin-Williams Company 1997 Stock Plan for Nonemployee
Directors ("Plan"), The Sherwin-Williams Company ("Company") does hereby grant
unto:
("Grantee") an aggregate of _________ shares of common stock, $1.00 par value,
of the Company ("Common Stock") subject, however, to the terms and conditions
hereinafter set forth ("Restricted Stock"). The shares of Restricted Stock shall
vest in accordance with the following schedule:
Number of Shares Date of Vesting
- ---------------- ---------------
________________ _______________
________________ _______________
________________ _______________
1. Grantee shall execute and return to the Company a copy of this Restricted
Stock Grant. At such time, the Company shall cause a stock certificate
("Restricted Certificate") for the number of shares of Common Stock noted
above to be issued in the name of Grantee. The Restricted Certificate
shall contain a legend in the form attached as Exhibit A. Upon issuance of
the Restricted Certificate, ownership of the shares of Common Stock shall
immediately transfer to Grantee and, except for the substantial risk of
forfeiture and the restrictions on transfer expressly set forth herein,
Grantee shall be entitled to all voting, dividend and other ownership
rights as may apply to the Common Stock generally.
2. Provided Grantee continuously serves as a member of the Board of Directors
of the Company ("Board of Directors") from the Date of Grant through the
Date of Vesting, inclusive, ("Restriction Period"), Grantee shall be
entitled to have a stock certificate ("Unrestricted Certificate") issued
in Grantee's name and delivered to Grantee representing the number of
shares of Restricted Stock which have vested (as set forth above) without
restrictions, other than such restrictions as may apply to the Common
Stock generally or as may otherwise be required by applicable federal or
state law. Notwithstanding anything contained in the immediately preceding
sentence, the Committee (as defined in the Plan) may direct that no
Unrestricted Certificate or an Unrestricted Certificate representing a
reduced number of shares of Common Stock shall be issued and delivered to
Grantee if the amount equal to the sum of the Fair Market Value (as
defined in the Plan) per share of Common Stock at the end of the
Restriction Period plus the dividends per share of Common Stock paid
during the Restriction Period less the Fair Market Value per share of
Common Stock on the Date of Grant ("Total Return") is negative. Except as
otherwise set forth in the Plan, the Committee shall have no authority to
increase the number of shares of Restricted Stock granted hereunder. The
issuance and delivery of the Unrestricted Certificate, if any, shall be
made after such time as the Committee has obtained the information, made
the decisions, and completed the calculations necessary to determine
whether the Total Return was negative. At such time, the Restricted
Certificate shall be cancelled and the Unrestricted Certificate, if any,
shall be issued and delivered to Grantee.
3. On the date Grantee ceases to be a member of the Board of Directors at any
time during the Restriction Period, Grantee shall lose all rights to the
Restricted Stock, except as otherwise provided below:
(a) In the event of the death of Grantee during the Restriction Period,
the Company shall deliver to the beneficiary of Grantee, or, if no
beneficiary is named, the estate of Grantee, an Unrestricted
Certificate issued in the name of such beneficiary or the estate for
the full number of shares of Restricted Stock granted hereunder.
(b) In the event Grantee ceases to be a member of the Board of Directors
as a result of a "Disability" due to sickness or bodily injury
during the Restriction Period, the Company shall deliver to Grantee
an Unrestricted Certificate issued in Grantee's name for the full
number of shares of Restricted Stock granted hereunder. The term
"Disability" as used in this Restricted Stock Grant means permanent
and total disability within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as the same has been or may be
amended from time to time.
(c) In the event Grantee ceases to be a member of the Board of Directors
by reason of Retirement, the Committee shall have the right to
cancel Grantee's rights hereunder, continue Grantee's rights
hereunder in full, or prorate the number of shares of Restricted
Stock granted hereunder for the portion of the Restriction Period
completed as of the date of such Retirement or as the Committee may
otherwise deem appropriate. The term "Retirement" as used in this
Restricted Stock Grant means termination of Grantee's status as a
member of the Board of Directors at or after attaining the age
sixty-five (65) or completing either five (5) years of service or
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five (5) one year terms as a member of the Board of Directors by
reason of resignation from the Board of Directors or by reason of
not standing for reelection as a member of the Board of Directors.
4. In the event of a "Change of Control" of the Company, as defined below,
the Company shall deliver to Grantee an Unrestricted Certificate issued in
Grantee's name for the full number of the shares of Restricted Stock
granted hereunder. For purposes of this Paragraph 4, a "Change of Control"
shall be deemed to have occurred if:
(a) Any person (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended, hereinafter the
"Exchange Act") who or that, together with all "Affiliates" and
"Associates" (as such terms are defined in Rule 12b-2, as in effect
on April 23, 1997, of the General Rules and Regulations under the
Exchange Act) of such person, is the Beneficial Owner (as defined
below) of ten percent (10%) or more of the shares of Common Stock
then outstanding, except:
(i) the Company;
(ii) 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;
(iii) 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
(iv) 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: (A) 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 (iv) 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 (iv) 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 (iv) 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
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triggered a Change of Control; and (B) 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 (iv) above) of the shares of
Common Stock has become such inadvertently (including, without
limitation, because (1) 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 (iv) above) of the
shares of Common Stock or (2) 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 (iv) 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 (iv) above)
of the shares of Common Stock, and no Change of Control shall be
deemed to have occurred.
(b) During any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors and any
new director (other than a director 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.
(c) There shall be consummated any consolidation, merger or other
combination of the Company with any other person or entity other
than:
(i) 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
(ii) 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, 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 clause (a)(iv) above) of the combined voting
power of the
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Company's then outstanding securities.
(d) 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, 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.
(e) The shareholders of the Company approve a plan of complete
liquidation of the Company.
For purposes of this Paragraph 4, a person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any securities:
(x) which such person or any of such person's Affiliates or Associates
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;
(y) 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 definition) 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 conversation
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
(z) 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 respect to acquiring, holding, voting (except as
described in the proviso to this definition) 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 (1) arises solely from a revocable proxy
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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 (2) 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 Paragraph 4 shall cause a
person engaged in business as an underwriter or 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.
5. Notwithstanding anything in this Restricted Stock Grant to the contrary,
in the event that Grantee commits an act during the Restriction Period,
which act is determined by the Committee to be materially harmful to the
best interest of the Company, all rights of Grantee in the Restricted
Stock as provided herein and in the Plan shall terminate.
6. During the Restriction Period, Grantee shall not be permitted to sell,
transfer, pledge or assign the Restricted Stock. The Restricted Stock
granted hereunder shall be deemed to be subject to a substantial risk of
forfeiture within the meaning of Section 83 of the Internal Revenue Code.
7. Nothing contained in this Restricted Stock Grant nor any action taken in
connection with this Restricted Stock Grant shall be construed as giving
Grantee any right to continue to serve as a member of the Board of
Directors.
8. This Restricted Stock Grant is not transferable by Grantee otherwise than
by will or the laws of descent and distribution.
9. This Restricted Stock Grant shall not be valid if such would involve a
violation of any applicable state law, and the Company hereby agrees to
make reasonable efforts to comply with any applicable state law.
10. This Restricted Stock Grant shall not be valid if it would require
registration under the Securities Act of 1933, as amended, or under any
similar federal securities law then in effect, of the shares of Common
Stock or other securities to be delivered hereunder, and such registration
shall not then be effective. The Company shall register the shares of
Common Stock or other securities covered by this Restricted Stock Grant
under any such law if (a) such registration shall be necessary to effect
this Restricted Stock Grant and the Board of Directors shall not determine
that such registration would result in undue expense or undue hardship to
the Company, or (b) the Board of Directors, in its sole discretion, shall
determine that such registration is desirable to effect the purposes of
this Restricted Stock Grant and would not result in undue expense or undue
hardship to the Company.
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11. The Committee shall administer this Restricted Stock Grant in accordance
with, and Grantee shall be bound by, the terms of the Plan and the terms
of this Restricted Stock Grant. This Restricted Stock Grant shall be
subject to the terms and conditions of the Plan. The interpretation of any
terms and conditions contained in this Restricted Stock Grant and all
determinations to be made hereunder shall be made by the Committee, in its
sole and absolute discretion, and all such interpretations, determinations
and decisions shall be final and binding upon Grantee.
EXECUTED at Cleveland, Ohio, this _______ day of _________, 20____.
The Sherwin-Williams Company
By: _______________________________
Authorized Officer
The undersigned hereby acknowledges receipt of the foregoing Restricted Stock
Grant and agrees to the provisions set forth therein.
___________________________________
Signature of Grantee
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Exhibit A
LEGEND ON RESTRICTED SHARE CERTIFICATE
The rights of any shareholder to sell, transfer, pledge, assign or receive
the share(s) of Common Stock of the Company represented by this certificate are
reserved and/or restricted by the terms and conditions of the Restricted Stock
Grant dated the _____ day of ___________, 20____, and executed by the Company
and the shareholder(s) named on the face of this certificate, issued pursuant to
The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors ("Plan")
and the terms and conditions of such Plan.