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EXHIBIT 10(b)
FORM A OF SEVERANCE PAY AGREEMENT
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AMENDED AND RESTATED
SEVERANCE PAY AGREEMENT
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THIS AMENDED AND RESTATED SEVERANCE PAY AGREEMENT ("Agreement") is made
and entered into effective as of the ____ day of ________, ____ by and
between THE SHERWIN-WILLIAMS COMPANY, an Ohio corporation (the "Company") and
____________ (the "Executive").
W I T N E S S E T H :
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WHEREAS, in the event a third party takes action toward a possible
business combination with the Company or acquisition of equity securities of the
Company, the Board of Directors believes it imperative that the Company and the
Board of Directors be able to rely upon Executive to continue in Executive's
position, and that the Company be able to receive and rely upon Executive's
objective advice as being in the best interests of the Company and its
shareholders;
WHEREAS, should the Company be in such a situation, in addition to
Executive's regular duties and responsibilities, Executive may be called upon to
assist in the assessment of proposals, advise management and the Board of
Directors as to whether the proposals would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board of
Directors might determine to be appropriate;
WHEREAS, this Agreement is consistent with the Company's plan to
attract and retain key executives at all times; and
WHEREAS, the Company and Executive entered into a certain Severance Pay
Agreement, effective as of ________, 19__, and Company and Executive desire to
amend and restate said Severance Pay Agreement in accordance with the terms and
conditions set forth herein.
NOW, THEREFORE, to assure the Company that it will have continued
dedication of Executive and the availability of Executive's advice and counsel
notwithstanding the possibility of a threat or occurrence of a bid to take over
control of the Company, and to induce Executive to remain in the employ of the
Company during the period of uncertainties due to such threat of take-over, the
Company and Executive agree as follows:
1. DEFINITIONS. The following terms, when used herein with initial capital
letters, shall have the following respective meanings unless the
context clearly indicates otherwise:
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(a) "BASE SALARY" shall mean Executive's highest regular bi-weekly
compensation in effect at any time during the three (3) year
period immediately preceding the Date of Termination.
Executive's regular bi-weekly compensation referred to in the
preceding sentence shall be Executive's regular bi-weekly rate
before reduction, deduction or deferral for any amounts
including, without limitation, any deduction for withholding
of income taxes or F.I.C.A. taxes and/or any reduction or
deferral pursuant to Sections 401(k) or 125 of the Code, or
any other employee benefit plans, programs or arrangements in
which Executive participates.
(b) 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 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 (A) arises
solely from a revocable proxy given to such person in response
to a public proxy or consent
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solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, and
(B) 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.
(c) "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, (I) 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
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(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 have
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 (II) 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 (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 (D)
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 (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 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
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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.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "COMPANY" shall mean The Sherwin-Williams Company and its
successor(s) in interest.
(f) "DATE OF TERMINATION" shall mean the date on which Executive's
services are terminated pursuant to Section 4.
(g) "DISABILITY" shall mean incapacity due to physical or mental
illness or injury which causes Executive to be absent from
employment duties for one hundred eighty (180) consecutive
calendar days and for which Executive is then currently
receiving
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and thereafter continues to receive payments under the
provisions of any plan of the Company which provides for
benefit payments as a consequence of such incapacity, provided
the payments which Executive receives during the four (4) year
period immediately following the Date of Termination, under
any such plan, are greater than the payments Executive would
otherwise have been entitled to receive under this Agreement.
(h) "INCENTIVE COMPENSATION" shall mean the amount paid or payable
under any incentive or bonus payment plan, program or
arrangement of the Company under which Executive is or was, at
any time during the three (3) year period immediately
preceding the Date of Termination, participating pursuant to
the provisions of such plan, program or arrangement.
(i) "RETIREMENT BENEFITS" shall mean the benefits Executive may be
entitled to receive pursuant to the provisions of any of the
following plans, programs or arrangements in which Executive
participates: (i) The Sherwin-Williams Company Salaried
Employees' Retirement Plan, The Sherwin-Williams Company
Salaried Employees' Revised Pension Investment Plan and/or The
Sherwin-Williams Company Employee Stock Purchase and Savings
Plan, or any successor or replacement plan with respect to any
of the foregoing; (ii) any retirement equalization program or
supplemental retirement plan relating to the qualified
retirement plans described in Section 1(i)(i); or (iii) any
other similar plans, programs or arrangements of the Company
(whether qualified or not) primarily intended to provide
benefits to an individual upon retirement.
(j) TERMINATION PERIOD" shall mean the period commencing on the
date of a Change of Control and ending on the second
anniversary date of such date.
(k) "TRUST" shall mean the trust funds established by the Company
in accordance with Section 6(b).
2. TERM. This Agreement shall be effective on the date hereof and shall
continue in effect until the Company has given no less than four (4)
years written notice to Executive that the Company is terminating this
Agreement; provided, however, notwithstanding the delivery of any such
notice, this Agreement shall become irrevocable upon the occurrence of
a Change of Control and shall continue in effect for a period of two
(2) years following a Change of Control, if such Change of Control
occurred during the term of this Agreement. Notwithstanding anything in
this Section 2 to the contrary, this Agreement shall terminate if
Executive or the Company terminates Executive's employment prior to a
Change of Control except as otherwise provided in Section 4(a).
3. EXECUTIVE'S OBLIGATIONS. In the event of a tender or exchange offer,
proxy contest, merger or other proposal which, if consummated, would
constitute a Change of
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Control, Executive agrees not to voluntarily leave the employ of the
Company (other than as a result of Disability or retirement) until the
Change of Control occurs or, if earlier, such tender or exchange offer,
proxy contest, merger or other proposal is terminated or abandoned.
Notwithstanding anything in this Agreement to the contrary, Executive's
sole liability for breaching the terms of this Section 3, and the
Company's sole and absolute remedy, shall be Executive's waiver of all
rights to receive any benefits pursuant to this Agreement.
4. TERMINATION OF EXECUTIVE'S SERVICES.
(a) TERMINATION AFTER CHANGE OF CONTROL. In the event of a Change
of Control, Executive shall become eligible for the benefits
hereunder upon Executive's termination of service within the
Termination Period, whether voluntary or involuntary, unless
such termination is:
(i) a result of the Executive's death; or
(ii) by the Company for Cause (as defined in Section
4(b)).
Anything in this Agreement to the contrary notwithstanding, if
Executive's employment is terminated prior to the date on
which a Change of Control occurs and it is reasonably
demonstrated that such termination (A) was at the request of a
third party who has taken steps reasonably calculated to
effect a Change of Control or (B) otherwise arose in
connection with or in anticipation of a Change of Control and
a Change of Control occurs within twelve (12) months of such
termination, then for purposes of this Agreement, such
termination shall be deemed to have occurred after and as a
result of a Change of Control, and Executive shall be entitled
to receive the benefits set forth in this Agreement.
(b) CAUSE. The Company may terminate Executive's employment for
Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful engaging by Executive in illegal conduct
or gross misconduct, which conduct or misconduct is
materially and demonstrably injurious to the Company;
or
(ii) the willful and continued failure by Executive to
substantially perform Executive's duties with the
Company (other than any such failure resulting from
Executive's incapacity due to physical or mental
illness or any such failure subsequent to the Company
giving Executive a notice or termination without
Cause) after a written demand for substantial
performance is delivered to Executive by the Board of
Directors, which demand specifically identifies the
manner in which the Board of Directors believes
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that Executive has not substantially performed such
duties, and Executive has failed to remedy such
alleged failure to substantially perform such duties
within thirty (30) days of receipt of such written
demand.
For purposes of this Section 4(b), no act or failure to act by
Executive shall be considered "willful" unless done or omitted
to be done by Executive in bad faith and without reasonable
belief by Executive that such action or omission was in or not
opposed to the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors or based
upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in or not opposed to the best
interests of the Company. Notwithstanding the foregoing,
Executive may not be terminated for Cause until Executive: (I)
receives a certified copy of a resolution adopted by the
affirmative vote of at least three-fourths of the members of
the entire Board of Directors at a meeting of the Board of
Directors called and held for such purpose, finding that in
the good faith opinion of the Board of Directors an event set
forth in clauses (i) or (ii) has occurred, specifying the
particulars thereof in detail, and that the Company has fully
and in good faith complied with the terms and conditions of
this Agreement; (II) has been afforded reasonable notice of
the Board of Director's decision to terminate employment; and
(III) has had an opportunity (with the assistance and presence
of such counsel as Executive deems appropriate) to be heard
before and to dispute the basis of any allegations upon which
the decision to terminate has been based by the Board of
Directors.
(c) EFFECT OF VOLUNTARY TERMINATION. In the event Executive elects
to voluntarily terminate Executive's employment in accordance
with Section 4(a), such termination shall not be deemed a
voluntary termination of employment by Executive for the
purpose of any plan or practice of the Company or for any
other reason whatsoever (except as may be otherwise required
to facilitate Executive's right to receive the benefits set
forth in this Agreement).
5. BENEFITS. Upon termination of Executive's employment, if Executive is
eligible for benefits pursuant to Section 4(a), the Company will
provide the payments described below to Executive:
(a) ACCRUED SALARY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive any accrued
salary not yet paid to Executive for services performed on and
prior to the Date of Termination.
(b) INCENTIVE COMPENSATION. On or immediately prior to the Date of
Termination, the Company shall pay to Executive an amount
equal to the sum of (i) any Incentive Compensation previously
earned by Executive which has not previously been paid
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to Executive, plus (ii) any Incentive Compensation not yet due
and payable to Executive for the then current year, covering
the period from the beginning of the then current year to the
end of the bi-weekly pay period during which Executive's Date
of Termination occurred, prorated for the number of bi-weekly
pay periods Executive was employed during the then current
year calculated using the greater of the following: (A) the
Incentive Compensation received by Executive for the year
immediately preceding the Date of Termination; (B) the
Incentive Compensation received by Executive for the year
immediately preceding the date of Change of Control; or (C)
the Incentive Compensation targeted for Executive for the year
in which the Date of Termination occurred, i.e., the amount of
Incentive Compensation Executive would have received for the
then current year had Executive reached one hundred percent
(100%) of any stated goals.
(c) VACATION PAY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive, at a daily
salary rate calculated from Executive's Base Salary, an amount
equal to (i) all unused vacation days earned on and prior to
the Date of Termination and (ii) additional vacation pay
prorated for full months of service since the last qualifying
date.
(d) SEVERANCE PAY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive a lump sum
cash amount equal to four (4) times the sum of (i) Executive's
Base Salary times twenty-six (26), plus (ii) the greater of
(a) the highest Incentive Compensation earned and/or received
by Executive, for any year or portion thereof, at any time
during the three (3) year period immediately preceding the
Date of Termination, or (b) the Incentive Compensation
targeted for Executive for the year in which the Date of
Termination occurred, i.e., the amount of Incentive
Compensation Executive would have received for the then
current year had Executive reached one hundred percent (100%)
of any stated goals. In the event Executive as of the Date of
Termination has another severance pay agreement or an
employment agreement providing for separation payments to be
paid by the Company, the amounts due under this Agreement
shall be off-set by the amounts of such separation payments
otherwise paid by the Company to Executive pursuant to such
other severance and/or separation agreement.
(e) INSURANCE. The Company shall maintain, upon the same terms and
conditions, in full force and effect for the continued benefit
of Executive all life, accident and medical benefit plans and
programs provided to Executive prior to the Change of Control
at no direct cost to Executive for a period of four (4) years
from the Date of Termination. At any time during said period
of four (4) years Executive may instruct the Company to
purchase on Executive's behalf an individual policy or
policies affording Executive individual coverage for all or
part of said group life, accident and health coverage and
long-term disability coverage. The Company shall pay (or cause
to be paid through the Trust) the premiums on any such policy
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or policies for the balance of the four (4) year period. At
the end of the four (4) year period, any such policy or
policies shall become the property of Executive, the Company
shall take all actions necessary to transfer ownership of any
such policy or policies to Executive and any subsequent
premiums due thereon shall become the responsibility of
Executive. In the event Executive accepts employment with
another company prior to the expiration of said four (4) year
period, the Company's obligation to continue the benefits
provided pursuant to this Section 5(e) shall severally
terminate with respect to any such plan or program as of the
date Executive first becomes eligible to participate in any
similar type plan or program with such other employer;
provided, however, in the case of medical benefit plans and
programs, in the event a medical condition being covered under
the Company's plans and programs is deemed to be a noncovered
pre-existing condition under such other employer's medical
benefit plans and programs (and Executive cannot obtain, after
using reasonable efforts which in no event shall include the
payment of higher premiums, a wavier of such pre-existing
condition under such other employer's medical benefit plans
and programs), then the Company's obligation to provide
medical benefit plans and programs shall continue solely with
respect to such medical condition until the earlier of: (i)
the expiration of the remainder of the four (4) year period;
or (ii) such time as the medical condition is covered by such
other employer's medical benefits plans and programs.
(f) RETIREMENT PLANS. Executive's participation in the Company's
qualified retirement plans including, but not limited to, the
Company's Stock Purchase and Savings Plan or any successor or
replacement plan thereto, shall continue only through the Date
of Termination; provided, however, that to the extent
permitted by such plans, Executive may be considered a
deferred vested participant who accrues no further benefit
with respect to periods following the Date of Termination. All
of Executive's rights, including but not limited to vesting
and distributions, with respect to any such plans shall be
determined solely with reference to the terms of such plans.
(g) SPECIAL RETIREMENT BENEFITS. The Company shall pay (or cause
to be paid through the Trust) to Executive "Special Retirement
Benefits" so that the total Retirement Benefits Executive
receives will equal the Retirement Benefits Executive would
have received had Executive continued in the employ of the
Company for four (4) years following the Date of Termination
(assuming all variable factors used to compute Executive's
Retirement Benefit, except years of service, remain constant
with those factors applicable as of the date of a Change of
Control or the Date of Termination, whichever date results in
the greatest aggregate Special Retirement Benefits being
payable to Executive). Should continued participation by
Executive in any plan affording to him Retirement Benefits be
precluded by law or the terms thereof, the Company shall pay
(or cause to be paid through the Trust) to Executive
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or, if applicable, to his beneficiaries, as an additional
supplemental benefit, an amount equal to the difference
between (i) the benefit that Executive would have been paid
under the plan had he continued to be employed for four (4)
years following the Date of Termination, and (ii) the benefit
actually payable under said plan(s). The Special Retirement
Benefits will be paid to Executive in the same manner as and
at the time Executive commences to receive or receives
Executive's Retirement Benefits.
(h) OTHER BENEFITS. The Company shall continue Executive's
participation in all fringe benefits Executive would have
participated in had Executive continued in the employ of the
Company for four (4) years following the Date of Termination
including, but not limited to, all ancillary rights regarding
Retirement Benefits, such as early retirement rights and joint
and survivor rights available under the applicable retirement
plans, and if Executive retires during said four (4) year
period, retiree group life and retiree group health insurance.
If Executive had been provided an automobile on the day prior
to a Change of Control under the Company's automobile policy,
the ownership of the automobile will be transferred to
Executive on the Date of Termination.
(i) OUTPLACEMENT SERVICES EXPENSES. The Company shall pay all
appropriate fees and expenses to employ the services of a full
service outplacement firm until the earlier of such time as:
(i) Executive has secured new employment; or (ii) the
expiration of the four (4) year period immediately following
Executive's Date of Termination.
6. REIMBURSEMENT OF EXPENSES; TRUST.
(a) REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Agreement to enforce or interpret any
provision contained herein (including, without limitation, any
contest or dispute relating to the termination of Executive's
employment and the Company's failure or refusal to perform
fully its obligations in accordance with the terms of this
Agreement), the Company agrees to reimburse Executive, on a
current basis, for all reasonable attorney's fees,
disbursements and expenses incurred by Executive in connection
with such contest or dispute (regardless of the result
thereof), and agrees to pay pre-judgment interest on any money
judgment obtained by Executive. Pre-judgment interest, if any,
shall be calculated at the base rate in effect from time to
time at KeyBank National Association of Cleveland, Ohio, from
the date that payments to Executive should have been made
under this Agreement.
(b) TRUST. In order to secure the benefits to be received by
Executive pursuant to this Agreement and similar arrangements
with other executives, the Company shall establish one or more
trust funds (the "Trust"). The Company will deposit in such
Trust, within five (5) business days after the occurrence of
an event that in the
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reasonable opinion of the Board of Directors will likely
result in a Change of Control, an amount equal to
approximately the maximum aggregate benefits that could be
payable to Executive under the terms of this Agreement. Any
funds which may be placed into the Trust under this Agreement
shall continue for all purposes to be a part of the general
funds of the Company subject to the claims of the Company's
creditors in the event of the Company's insolvency and no
person shall by virtue of this Agreement have any interest in
such funds. To the extent that any person acquires a right to
receive payments from the Company under this Agreement, such
rights shall be no greater than the right of any unsecured
general creditor of the Company. Executive shall be entitled
to receive distributions from the funds held in the Trust
pursuant to the terms and conditions of this Agreement and the
agreement establishing the Trust between the Company and the
trustee. If prior to the date of a Change of Control, the
Board of Directors of the Company has actual knowledge that
all third parties have abandoned or terminated their efforts
to effect a Change of Control and a Change of Control at that
time is unlikely and the Board so advises Executive, the trust
funds and interest earned thereon, if any, shall be returned
to the Company by the trustee. Notwithstanding the provisions
of this Section 6(b), failure by the Company to place such
funds in Trust in no way relieves the Company from its
financial obligations and responsibilities to Executive under
the terms of this Agreement.
(c) FUNDING. All benefits to be paid pursuant to this Agreement,
including any amounts paid pursuant to Section 6(a) which were
not paid through the Trust established pursuant to Section
6(b), shall be paid from the general assets of the Company.
7. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) GROSS-UP. Any provision contained in this Agreement to the
contrary notwithstanding, in the event it shall be determined
that any payment (within the meaning of Section 280G(b)(2) of
the Code) or distribution, other than any such payments or
distributions related to any incentive stock options
previously granted to Executive, by the Company to or for the
benefit of Executive, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or
penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive an
additional payment under this Agreement (a "Gross-up Payment")
in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to
such taxes), including any Excise Tax, imposed upon the
Gross-up Payment, Executive retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments.
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(b) ACCOUNTING FIRM. Subject to the provisions of Section 7(c),
all determinations required to be made under this Section 7,
including whether a Gross-up Payment is required and the
amount of such Gross-up Payment, shall be made by Ernst &
Young (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive
within fifteen (15) business days of the Date of Termination,
if applicable, or such earlier time as is requested by the
Company. All fees and expenses of Accounting Firm shall be
borne solely by the Company and the Company shall enter into
any agreement required by the Accounting Firm in connection
with the performance of the services hereunder. The initial
Gross-up Payment, if any, as determined pursuant to this
Section 7(b), shall be paid to Executive within five (5) days
of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with an opinion that
failure to report the Excise Tax on Executive's applicable
federal income tax return would not result in the imposition
of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and
Executive. Executive shall prepare Executive's tax returns in
a manner consistent with the determinations of the Accounting
Firm as such tax returns relate to any Payment and Gross-up
Payment. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible
that Gross-up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to
Section 7(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for
the benefit of Executive.
(c) NOTIFICATION. Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-up
Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after
Executive knows of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior
to the expiration of the thirty (30) day period following the
date on which Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim;
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(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to
time including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest
and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 7(c),
the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs
Executive to pay such claims and sue for a refund, the Company
shall advance the amount of such payment to Executive, on an
interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income
tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further
provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited to
issues with respect to which a Gross-up Payment would be
payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) REFUND. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 7(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Company's complying
with the requirements of Section 7(c)) promptly pay to the
Company the amount of such
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refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to
Section 7(c), a determination is made that Executive shall not
be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of
thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent
thereof, the amount of Gross-up Payment required to be paid.
8. SUCCESSORS; BINDING AGREEMENT.
(a) SUCCESSORS. In the event of a Change of Control, the Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company, to expressly assume and agree to maintain this
Agreement, for a minimum period of two (2) years following any
such Change of Control in the same manner and to the same
extent that the Company would be required to maintain it if no
such succession had taken place. Failure of the Company to
obtain such assumption agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and
shall entitle Executive to receive from the Company, as
liquidated damages, an amount equal to the same amount of
benefits provided herein, and on the same terms set forth
herein, as Executive would have been entitled to receive if
Executive had terminated employment as provided in Section 4
after a Change of Control, on the date on which any succession
becomes effective.
(b) DEVISEES. All rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die
prior to receiving all amounts of benefits payable hereunder,
all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be
no such designee, to Executive's estate.
9. MISCELLANEOUS.
(a) SEGREGATION OF ASSETS. Except as provided in Section 6(b), the
Company shall not be required to segregate any assets with
respect to benefits under this Agreement. Any liability of the
Company to Executive shall be based solely upon the
contractual obligations created by this Agreement; no such
obligation shall be deemed to be secured by any pledge or any
encumbrance on the property of the Company other than the
rights Executive may have with respect to funds held in the
Trust.
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(b) PAYMENT OBLIGATIONS ABSOLUTE. Except as set forth in the last
sentence of Section 5(d), the Company's obligation to pay
Executive the severance benefits and to make the arrangements
provided herein shall be absolute and unconditional and shall
not be affected by any circumstances including, without
limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against Executive or
anyone else. All amounts payable by the Company hereunder
shall be paid without notice or demand. Each and every payment
made hereunder by the Company whether or not paid through the
Trust shall be final and the Company will not seek to recover
all or any part of such payment from Executive or from
whomsoever may be entitled thereto, for any reason whatsoever.
Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under
any provision of this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the
Company's obligations to make the payments and arrangements
required to be made under this Agreement.
(c) ASSIGNMENT. No amount payable under this Agreement shall be
subject to assignment, transfer, sale, pledge, encumbrance,
alienation or change by Executive or the beneficiary of
Executive except as may be required by law.
(d) CONTINUING OBLIGATIONS. Executive shall retain in confidence
any confidential information known to Executive concerning the
Company and its subsidiaries and their respective businesses
so long as such information is not publicly disclosed.
(e) NOT EMPLOYMENT CONTRACT. Neither this Agreement nor any action
taken hereunder shall be construed either (i) as a contract of
employment, (ii) as giving Executive any right to be retained
in the employ of the Company, or (iii) as giving Executive any
right to receive severance benefits of a type or in an amount
similar to the benefits described in Section 5, unless the
conditions set forth in this Agreement are satisfied and
Executive therefore qualifies for benefits under this
Agreement.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
(g) SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
(h) NOTICES. Any notice or other communication provided for in
this Agreement shall be in writing and, unless otherwise
expressly stated herein, shall be deemed to have been duly
given if hand delivered or if mailed by United States
registered mail, return receipt requested, postage prepaid
addressed in the case of Executive to Executive's last known
address or in the case of the Company to The Sherwin-Williams
Company, 101 Prospect Avenue, N.W., Cleveland, Ohio 44115,
Attention: Vice President-Human Resources, with a copy sent to
The Sherwin-Williams Company, 101 Prospect Avenue, N.W.,
Cleveland, Ohio 44115,
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Attention: Vice President, Secretary and General Counsel.
(i) MODIFICATION; WAIVER. No provision of this Agreement may be
modified or waived unless such modification or waiver is
agreed to in writing and signed by Executive and by a duly
authorized officer of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with
any provision of this Agreement or to assert any right
Executive or the Company may have hereunder shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement. Except as otherwise
specifically provided herein, the rights of, and benefits
payable to, Executive, Executive's estate or Executive's
beneficiaries pursuant to this Agreement are in addition to
any rights of, or benefits payable to, Executive, Executive's
estate or Executive's beneficiaries under any other employee
benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the date and year first above written.
EXECUTIVE
---------------------------------------
Signature
---------------------------------------
Typed or printed name
THE SHERWIN-WILLIAMS COMPANY
---------------------------------------
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FORM B OF SEVERANCE PAY AGREEMENT
---------------------------------
AMENDED AND RESTATED
SEVERANCE PAY AGREEMENT
-----------------------
THIS AMENDED AND RESTATED SEVERANCE PAY AGREEMENT ("Agreement") is made
and entered into effective as of the ____ day of _____, ____ by and between THE
SHERWIN-WILLIAMS COMPANY, an Ohio corporation (the "Company") and
__________________ (the "Executive").
W I T N E S S E T H :
---------------------
WHEREAS, in the event a third party takes action toward a possible
business combination with the Company or acquisition of equity securities of the
Company, the Board of Directors believes it imperative that the Company and the
Board of Directors be able to rely upon Executive to continue in Executive's
position, and that the Company be able to receive and rely upon Executive's
objective advice as being in the best interests of the Company and its
shareholders;
WHEREAS, should the Company be in such a situation, in addition to
Executive's regular duties and responsibilities, Executive may be called upon to
assist in the assessment of proposals, advise management and the Board of
Directors as to whether the proposals would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board of
Directors might determine to be appropriate;
WHEREAS, this Agreement is consistent with the Company's plan to
attract and retain key executives at all times; and
WHEREAS, the Company and Executive entered into a certain Severance Pay
Agreement, effective as of ________, 19__, and Company and Executive desire to
amend and restate said Severance Pay Agreement in accordance with the terms and
conditions set forth herein.
NOW, THEREFORE, to assure the Company that it will have continued
dedication of Executive and the availability of Executive's advice and counsel
notwithstanding the possibility of a threat or occurrence of a bid to take over
control of the Company, and to induce Executive to remain in the employ of the
Company during the period of uncertainties due to such threat of take-over, the
Company and Executive agree as follows:
1. DEFINITIONS. The following terms, when used herein with initial capital
letters, shall have the following respective meanings unless the
context clearly indicates otherwise:
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(a) "BASE SALARY" shall mean Executive's highest regular bi-weekly
compensation in effect at any time during the three (3) year
period immediately preceding the Date of Termination.
Executive's regular bi-weekly compensation referred to in the
preceding sentence shall be Executive's regular bi-weekly rate
before reduction, deduction or deferral for any amounts
including, without limitation, any deduction for withholding
of income taxes or F.I.C.A. taxes and/or any reduction or
deferral pursuant to Sections 401(k) or 125 of the Code, or
any other employee benefit plans, programs or arrangements in
which Executive participates.
(b) 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 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 (A) arises
solely from a revocable proxy given to such person in response
to a public proxy or consent
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solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, and
(B) 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.
(c) "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, (I) 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
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(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 (II) 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 (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 (D)
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 (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 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
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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.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "COMPANY" shall mean The Sherwin-Williams Company and its
successor(s) in interest.
(f) "DATE OF TERMINATION" shall mean the date on which Executive's
services are terminated pursuant to Section 4.
(g) "DISABILITY" shall mean incapacity due to physical or mental
illness or injury which causes Executive to be absent from
employment duties for one hundred eighty (180) consecutive
calendar days and for which Executive is then currently
receiving
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and thereafter continues to receive payments under the
provisions of any plan of the Company which provides for
benefit payments as a consequence of such incapacity, provided
the payments which Executive receives during the three (3)
year period immediately following the Date of Termination,
under any such plan, are greater than the payments Executive
would otherwise have been entitled to receive under this
Agreement.
(h) "INCENTIVE COMPENSATION" shall mean the amount paid or payable
under any incentive or bonus payment plan, program or
arrangement of the Company under which Executive is or was, at
any time during the three (3) year period immediately
preceding the Date of Termination, participating pursuant to
the provisions of such plan, program or arrangement.
(i) "RETIREMENT BENEFITS" shall mean the benefits Executive may be
entitled to receive pursuant to the provisions of any of the
following plans, programs or arrangements in which Executive
participates: (i) The Sherwin-Williams Company Salaried
Employees' Retirement Plan, The Sherwin-Williams Company
Salaried Employees' Revised Pension Investment Plan and/or The
Sherwin-Williams Company Employee Stock Purchase and Savings
Plan, or any successor or replacement plan with respect to any
of the foregoing; (ii) any retirement equalization program or
supplemental retirement plan relating to the qualified
retirement plans described in Section 1(i)(i); or (iii) any
other similar plans, programs or arrangements of the Company
(whether qualified or not) primarily intended to provide
benefits to an individual upon retirement.
(j) "TERMINATION PERIOD" shall mean the period commencing on the
date of a Change of Control and ending on the second
anniversary of such date.
(k) "TRUST" shall mean the trust funds established by the Company
in accordance with Section 6(b).
2. TERM. This Agreement shall be effective on the date hereof and shall
continue in effect until the Company has given no less than three (3)
years written notice to Executive that the Company is terminating this
Agreement; provided, however, notwithstanding the delivery of any such
notice, this Agreement shall become irrevocable upon the occurrence of
a Change of Control and shall continue in effect for a period of two
(2) years following a Change of Control, if such Change of Control
occurred during the term of this Agreement. Notwithstanding anything in
this Section 2 to the contrary, this Agreement shall terminate if
Executive or the Company terminates Executive's employment prior to a
Change of Control except as otherwise provided in Sections 4(a) and
(c).
3. EXECUTIVE'S OBLIGATIONS. In the event of a tender or exchange offer,
proxy contest, merger or other proposal which, if consummated, would
constitute a Change of
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Control, Executive agrees not to voluntarily leave the employ of the
Company (other than as a result of Disability, retirement or an event
which would constitute Good Reason if a Change of Control occurs) until
the Change of Control occurs or, if earlier, such tender or exchange
offer, proxy contest, merger or other proposal is terminated or
abandoned. Notwithstanding anything in this Agreement to the contrary,
Executive's sole liability for breaching the terms of this Section 3,
and the Company's sole and absolute remedy, shall be Executive's waiver
of all rights to receive any benefits pursuant to this Agreement.
4. TERMINATION OF EXECUTIVE'S SERVICES.
(a) TERMINATION AFTER CHANGE OF CONTROL. In the event of a Change
of Control, Executive shall become eligible for the benefits
hereunder upon Executive's termination of service within the
Termination Period, including a voluntary termination by
Executive for any reason during the thirty (30) day period
immediately following the first anniversary of the date of a
Change of Control, unless such termination is:
(i) a result of the death or Disability of Executive;
(ii) by the Company for Cause (as defined in Section
4(b)); or
(iii) by Executive other than during the thirty (30) day
period previously identified in this Section 4(a) and
other than for Good Reason (as defined in Section
4(c)).
Anything in this Agreement to the contrary notwithstanding, if
Executive's employment is terminated prior to the date on
which a Change of Control occurs and it is reasonably
demonstrated that such termination (A) was at the request of a
third party who has taken steps reasonably calculated to
effect a Change of Control or (B) otherwise arose in
connection with or in anticipation of a Change of Control and
a Change of Control occurs within twelve (12) months of such
termination, then for purposes of this Agreement, such
termination shall be deemed to have occurred after and as a
result of a Change of Control, and Executive shall be entitled
to receive the benefits set forth in this Agreement.
(b) CAUSE. The Company may terminate Executive's employment for
Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful engaging by Executive in illegal conduct
or gross misconduct, which conduct or misconduct is
materially and demonstrably injurious to the Company;
or
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(ii) the willful and continued failure by Executive to
substantially perform Executive's duties with the
Company (other than any such failure resulting from
Executive's incapacity due to physical or mental
illness or any such failure subsequent to the Company
giving Executive a notice of termination without
Cause) after a written demand for substantial
performance is delivered to Executive by the Board of
Directors, which demand specifically identifies the
manner in which the Board of Directors believes that
Executive has not substantially performed such
duties, and Executive has failed to remedy such
alleged failure to substantially perform such duties
within thirty (30) days of receipt of such written
demand.
For purposes of this Section 4(b), no act or failure to act by
Executive shall be considered "willful" unless done or omitted
to be done by Executive in bad faith and without reasonable
belief by Executive that such action or omission was in or not
opposed to the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors or based
upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in or not opposed to the best
interests of the Company. Notwithstanding the foregoing,
Executive may not be terminated for Cause until Executive: (I)
receives a certified copy of a resolution adopted by the
affirmative vote of at least three-fourths of the members of
the entire Board of Directors at a meeting of the Board of
Directors called and held for such purpose, finding that in
the good faith opinion of the Board of Directors an event set
forth in clauses (i) or (ii) has occurred, specifying the
particulars thereof in detail, and that the Company has fully
and in good faith complied with the terms and conditions of
this Agreement; (II) has been afforded reasonable notice of
the Board of Director's decision to terminate employment; and
(III) has had an opportunity (with the assistance and presence
of such counsel as Executive deems appropriate) to be heard
before and to dispute the basis of any allegations upon which
the decision to terminate has been based by the Board of
Directors.
(c) GOOD REASON. Executive may terminate his employment with the
Company for Good Reason any time during the Termination
Period. "Good Reason" for purposes of this Agreement shall
mean the occurrence of any of the following events without the
express written consent of Executive:
(i) assignment to Executive of duties and
responsibilities inconsistent with Executive's
position, authority, and regular duties and
responsibilities held, exercised and assigned during
the ninety (90) day period immediately preceding the
date of a Change of Control, any change in
Executive's reporting responsibilities as they
existed during the ninety (90) day period immediately
preceding the Change of Control, any removal from or
failure
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to re-elect Executive to the position held during
the ninety (90) day period immediately preceding the
date of a Change of Control, or any significant
adverse alteration in the nature or status of
Executive's regular duties and responsibilities or
the conditions of Executive's employment from those
existing during the ninety (90) day period
immediately preceding the date of a Change of
Control;
(ii) any reduction in Executive's Base Salary or Incentive
Compensation opportunity as the same may be increased
from time to time;
(iii) failure to continue to provide benefits of a type and
at a level substantially similar to the benefits
provided to Executive prior to a Change of Control;
(iv) relocation of Executive to a location more than
thirty (30) miles from the location where Executive
was employed immediately preceding the date of a
Change of Control;
(v) a good faith determination by Executive that, as a
result of the Change of Control, Executive has been
rendered unable to effectively perform Executive's
regular duties and responsibilities to the Company;
(vi) any requirement that Executive travel on Company
business to an extent substantially greater than the
travel obligations of Executive which were necessary
to perform Executive's regular duties and
responsibilities immediately prior to such Change of
Control;
(vii) failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to
comply with the provisions of this Agreement in
accordance with Section 8; or
(viii) breach by the Company of any provision of this
Agreement.
Anything in this Agreement to the contrary notwithstanding,
any event or condition described in Sections 4(c)(i), (ii),
(iii), (iv) or (vi) that occurs prior to the date on which a
Change of Control occurs shall constitute Good Reason for
purposes of this Agreement if Executive reasonably
demonstrates that such event or condition (I) was at the
request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (II) otherwise
arose in connection with or in anticipation of a Change of
Control and a Change of Control occurs within twelve (12)
months of the date of such event or condition. In such case,
Executive shall be entitled to receive the benefits set forth
in this Agreement.
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(d) EFFECT OF CERTAIN TERMINATIONS. In the event Executive elects
to either: (i) voluntarily terminate Executive's employment
for any reason during the thirty (30) day period immediately
following the first anniversary date of a Change of Control in
accordance with Section 4(a); or (ii) terminate Executive's
employment for Good Reason in accordance with Section 4(c);
such termination shall not be deemed a voluntary termination
of employment by Executive for the purpose of any plan or
practice of the Company or for any other reason whatsoever
(except as may be otherwise required to facilitate Executive's
right to receive the benefits set forth in this Agreement).
5. BENEFITS. Upon termination of Executive's employment, if Executive is
eligible for benefits pursuant to Section 4(a), the Company will
provide the payments described below to Executive:
(a) ACCRUED SALARY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive any accrued
salary not yet paid to Executive for services performed on and
prior to the Date of Termination.
(b) INCENTIVE COMPENSATION. On or immediately prior to the Date of
Termination, the Company shall pay to Executive an amount
equal to the sum of (i) any Incentive Compensation previously
earned by Executive which has not previously been paid to
Executive, plus (ii) any Incentive Compensation not yet due
and payable to Executive for the then current year, covering
the period from the beginning of the then current year to the
end of the bi-weekly pay period during which Executive's Date
of Termination occurred, prorated for the number of bi-weekly
pay periods Executive was employed during the then current
year calculated using the greater of the following: (A) the
Incentive Compensation received by Executive for the year
immediately preceding the Date of Termination; (B) the
Incentive Compensation received by Executive for the year
immediately preceding the date of Change of Control; or (C)
the Incentive Compensation targeted for Executive for the year
in which the Date of Termination occurred, i.e., the amount of
Incentive Compensation Executive would have received for the
then current year had Executive reached one hundred percent
(100%) of any stated goals.
(c) VACATION PAY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive, at a daily
salary rate calculated from Executive's Base Salary, an amount
equal to (i) all unused vacation days earned on and prior to
the Date of Termination and (ii) additional vacation pay
prorated for full months of service since the last qualifying
date.
(d) SEVERANCE PAY. On or immediately prior to the Date of
Termination, the Company shall pay to Executive a lump sum
cash amount equal to three (3) times the sum of (i)
Executive's Base Salary times twenty-six (26), plus (ii) the
greater of (a) the
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highest Incentive Compensation earned and/or received by
Executive, for any year or portion thereof, at any time during
the three (3) year period immediately preceding the Date of
Termination, or (b) the Incentive Compensation targeted for
Executive for the year in which the Date of Termination
occurred, i.e., the amount of Incentive Compensation Executive
would have received for the then current year had Executive
reached one hundred percent (100%) of any stated goals. In the
event Executive as of the Date of Termination has another
severance pay agreement or an employment agreement providing
for separation payments to be paid by the Company, the amounts
due under this Agreement shall be off-set by the amounts of
such separation payments otherwise paid by the Company to
Executive pursuant to such other severance and/or separation
agreement.
(e) INSURANCE. The Company shall maintain, upon the same terms and
conditions, in full force and effect for the continued benefit
of Executive all life, accident and medical benefit plans and
programs provided to Executive prior to the Change of Control
at no direct cost to Executive for a period of three (3) years
from the Date of Termination. At any time during said period
of three (3) years Executive may instruct the Company to
purchase on Executive's behalf an individual policy or
policies affording Executive individual coverage for all or
part of said group life, accident and health coverage and
long-term disability coverage. The Company shall pay (or cause
to be paid through the Trust) the premiums on any such policy
or policies for the balance of the three (3) year period. At
the end of the three (3) year period, any such policy or
policies shall become the property of Executive, the Company
shall take all actions necessary to transfer ownership of any
such policy or policies to Executive and any subsequent
premiums due thereon shall be the responsibility of Executive.
In the event Executive accepts employment with another company
prior to the expiration of said three (3) year period, the
Company's obligation to continue the benefits provided
pursuant to this Section 5(e) shall severally terminate with
respect to any such plan or program as of the date Executive
first becomes eligible to participate in any similar type plan
or program with such other employer; provided, however, in the
case of medical benefit plans and programs, in the event a
medical condition being covered under the Company's plans and
programs is deemed to be a noncovered pre-existing condition
under such other employer's medical benefit plans and programs
(and Executive cannot obtain, after using reasonable efforts
which in no event shall include the payment of higher
premiums, a wavier of such pre-existing condition under such
other employer's medical benefit plans and programs), then the
Company's obligation to provide medical benefit plans and
programs shall continue solely with respect to such medical
condition until the earlier of: (i) the expiration of the
remainder of the three (3) year period; or (ii) such time as
the medical condition is covered by such other employer's
medical benefits plans and programs.
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(f) RETIREMENT PLANS. Executive's participation in the Company's
qualified retirement plans including, but not limited to, the
Company's Stock Purchase and Savings Plan or any successor or
replacement plan thereto, shall continue only through the Date
of Termination; provided, however, that to the extent
permitted by such plans, Executive may be considered a
deferred vested participant who accrues no further benefit
with respect to periods following the Date of Termination. All
of Executive's rights, including but not limited to vesting
and distributions, with respect to any such plans shall be
determined solely with reference to the terms of such plans.
(g) SPECIAL RETIREMENT BENEFITS. The Company shall pay (or cause
to be paid through the Trust) to Executive "Special Retirement
Benefits" so that the total Retirement Benefits Executive
receives will equal the Retirement Benefits Executive would
have received had Executive continued in the employ of the
Company for three (3) years following the Date of Termination
(assuming all variable factors used to compute Executive's
Retirement Benefit, except years of service, remain constant
with those factors applicable as of the date of a Change of
Control or the Date of Termination, whichever date results in
the greatest aggregate Special Retirement Benefits being
payable to Executive). Should continued participation by
Executive in any plan affording to him Retirement Benefits be
precluded by law or the terms thereof, the Company shall pay
(or cause to be paid through the Trust) to Executive or, if
applicable, to his beneficiaries, as an additional
supplemental benefit, an amount equal to the difference
between (i) the benefit that Executive would have been paid
under the plan had he continued to be employed for three (3)
years following the Date of Termination, and (ii) the benefit
actually payable under said plan(s). The Special Retirement
Benefits will be paid to Executive in the same manner as and
at the time Executive commences to receive or receives
Executive's Retirement Benefits.
(h) OTHER BENEFITS. The Company shall continue Executive's
participation in all fringe benefits Executive would have
participated in had Executive continued in the employ of the
Company for three (3) years following the Date of Termination
including, but not limited to, all ancillary rights regarding
Retirement Benefits, such as early retirement rights and joint
and survivor rights available under the applicable retirement
plans, and if Executive retires during said three (3) year
period, retiree group life and retiree group health insurance.
If Executive had been provided an automobile on the day prior
to a Change of Control under the Company's automobile policy,
the ownership of the automobile will be transferred to
Executive on the Date of Termination.
(i) OUTPLACEMENT SERVICES EXPENSES. The Company shall pay all
appropriate fees and expenses to employ the services of a full
service outplacement firm until the earlier of such time as:
(i) Executive has secured new employment; or (ii) the
expiration
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of the three (3) year period immediately following Executive's
Date of Termination.
6. REIMBURSEMENT OF EXPENSES; TRUST.
(a) REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Agreement to enforce or interpret any
provision contained herein (including, without limitation, any
contest or dispute relating to the termination of Executive's
employment and the Company's failure or refusal to perform
fully its obligations in accordance with the terms of this
Agreement), the Company agrees to reimburse Executive, on a
current basis, for all reasonable attorney's fees,
disbursements and expenses incurred by Executive in connection
with such contest or dispute (regardless of the result
thereof), and agrees to pay pre-judgment interest on any money
judgment obtained by Executive. Pre-judgment interest, if any,
shall be calculated at the base rate in effect from time to
time at KeyBank National Association of Cleveland, Ohio, from
the date that payments to Executive should have been made
under this Agreement.
(b) TRUST. In order to secure the benefits to be received by
Executive pursuant to this Agreement and similar arrangements
with other executives, the Company shall establish one or more
trust funds (the "Trust"). The Company will deposit in such
Trust, within five (5) business days after the occurrence of
an event that in the reasonable opinion of the Board of
Directors will likely result in a Change of Control, an amount
equal to approximately the maximum aggregate benefits that
could be payable to Executive under the terms of this
Agreement. Any funds which may be placed into the Trust under
this Agreement shall continue for all purposes to be a part of
the general funds of the Company subject to the claims of the
Company's creditors in the event of the Company's insolvency
and no person shall by virtue of this Agreement have any
interest in such funds. To the extent that any person acquires
a right to receive payments from the Company under this
Agreement, such rights shall be no greater than the right of
any unsecured general creditor of the Company. Executive shall
be entitled to receive distributions from the funds held in
the Trust pursuant to the terms and conditions of this
Agreement and the agreement establishing the Trust between the
Company and the trustee. If prior to the date of a Change of
Control, the Board of Directors of the Company has actual
knowledge that all third parties have abandoned or terminated
their efforts to effect a Change of Control and a Change of
Control at that time is unlikely and the Board so advises
Executive, the trust funds and interest earned thereon, if
any, shall be returned to the Company by the trustee.
Notwithstanding the provisions of this Section 6(b), failure
by the Company to place such funds in Trust in no way relieves
the Company from its financial obligations and
responsibilities to Executive under the terms of this
Agreement.
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(c) FUNDING. All benefits to be paid pursuant to this Agreement,
including any amounts paid pursuant to Section 6(a) which were
not paid through the Trust established pursuant to Section
6(b), shall be paid from the general assets of the Company.
7. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) GROSS-UP. Any provision contained in this Agreement to the
contrary notwithstanding, in the event it shall be determined
that any payment (within the meaning of Section 280G(b)(2) of
the Code) or distribution, other than any such payments or
distributions related to any incentive stock options
previously granted to Executive, by the Company to or for the
benefit of Executive, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or
penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive an
additional payment under this Agreement (a "Gross-up Payment")
in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to
such taxes), including any Excise Tax, imposed upon the
Gross-up Payment, Executive retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments.
(b) ACCOUNTING FIRM. Subject to the provisions of Section 7(c),
all determinations required to be made under this Section 7,
including whether a Gross-up Payment is required and the
amount of such Gross-up Payment, shall be made by Ernst &
Young (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive
within fifteen (15) business days of the Date of Termination,
if applicable, or such earlier time as is requested by the
Company. All fees and expenses of Accounting Firm shall be
borne solely by the Company and the Company shall enter into
any agreement required by the Accounting Firm in connection
with the performance of the services hereunder. The initial
Gross-up Payment, if any, as determined pursuant to this
Section 7(b), shall be paid to Executive within five (5) days
of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with an opinion that
failure to report the Excise Tax on Executive's applicable
federal income tax return would not result in the imposition
of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and
Executive. Executive shall prepare Executive's tax returns in
a manner consistent with the determinations of the Accounting
Firm as such tax returns relate to any Payment and Gross-up
Payment. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm
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hereunder, it is possible that Gross-up Payments which will
not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 7(c) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of Executive.
(c) NOTIFICATION. Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-up
Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after
Executive knows of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior
to the expiration of the thirty (30) day period following the
date on which Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim;
(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to
time including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest
and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 7(c),
the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or
forego any and all administrative appeals,
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proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner,
and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the
Company directs Executive to pay such claims and sue for a
refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify
and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year
of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-up Payment
would be payable hereunder and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised
by the Internal Revenue Service or any other taxing authority.
(d) REFUND. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 7(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Company's complying
with the requirements of Section 7(c)) promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the
Company pursuant to Section 7(c), a determination is made that
Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior
to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-up
Payment required to be paid.
8. SUCCESSORS; BINDING AGREEMENT.
(a) SUCCESSORS. In the event of a Change of Control, the Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company, to expressly assume and agree to maintain this
Agreement, for a minimum period of two (2) years following any
such Change of Control in the same manner and to the same
extent that the Company would be required to maintain it if no
such succession had taken place. Failure of the Company to
obtain such assumption agreement prior to the effectiveness of
any such succession shall be a breach of this
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Agreement and shall entitle Executive to receive from the
Company, as liquidated damages, an amount equal to the same
amount of benefits provided herein, and on the same terms set
forth herein, as Executive would have been entitled to receive
if Executive had terminated employment as provided in Section
4 after a Change of Control, on the date on which any
succession becomes effective.
(b) DEVISEES. All rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die
prior to receiving all amounts of benefits payable hereunder,
all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be
no such designee, to Executive's estate.
9. MISCELLANEOUS.
(a) SEGREGATION OF ASSETS. Except as provided in Section 6(b), the
Company shall not be required to segregate any assets with
respect to benefits under this Agreement. Any liability of the
Company to Executive shall be based solely upon the
contractual obligations created by this Agreement; no such
obligation shall be deemed to be secured by any pledge or any
encumbrance on the property of the Company other than the
rights Executive may have with respect to funds held in the
Trust.
(b) PAYMENT OBLIGATIONS ABSOLUTE. Except as set forth in the last
sentence of Section 5(d), the Company's obligation to pay
Executive the severance benefits and to make the arrangements
provided herein shall be absolute and unconditional and shall
not be affected by any circumstances including, without
limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against Executive or
anyone else. All amounts payable by the Company hereunder
shall be paid without notice or demand. Each and every payment
made hereunder by the Company whether or not paid through the
Trust shall be final and the Company will not seek to recover
all or any part of such payment from Executive or from
whomsoever may be entitled thereto, for any reason whatsoever.
Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under
any provision of this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the
Company's obligations to make the payments and arrangements
required to be made under this Agreement.
(c) ASSIGNMENT. No amount payable under this Agreement shall be
subject to assignment, transfer, sale, pledge, encumbrance,
alienation or change by Executive or the beneficiary of
Executive except as may be required by law.
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(d) CONTINUING OBLIGATIONS. Executive shall retain in confidence
any confidential information known to Executive concerning the
Company and its subsidiaries and their respective businesses
so long as such information is not publicly disclosed.
(e) NOT EMPLOYMENT CONTRACT. Neither this Agreement nor any action
taken hereunder shall be construed either (i) as a contract of
employment, (ii) as giving Executive any right to be retained
in the employ of the Company, or (iii) as giving Executive any
right to receive severance benefits of a type or in an amount
similar to the benefits described in Section 5, unless the
conditions set forth in this Agreement are satisfied and
Executive therefore qualifies for benefits under this
Agreement.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
(g) SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
(h) NOTICES. Any notice or other communication provided for in
this Agreement shall be in writing and, unless otherwise
expressly stated herein, shall be deemed to have been duly
given if hand delivered or if mailed by United States
registered mail, return receipt requested, postage prepaid
addressed in the case of Executive to Executive's last known
address or in the case of the Company to The Sherwin-Williams
Company, 101 Prospect Avenue, N.W., Cleveland, Ohio 44115,
Attention: Vice President-Human Resources, with a copy sent to
The Sherwin-Williams Company, 101 Prospect Avenue, N.W.,
Cleveland, Ohio 44115, Attention: Vice President, Secretary
and General Counsel.
(i) MODIFICATION; WAIVER. No provision of this Agreement may be
modified or waived unless such modification or waiver is
agreed to in writing and signed by Executive and by a duly
authorized officer of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with
any provision of this Agreement or to assert any right
Executive or the Company may have hereunder shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement. Except as otherwise
specifically provided herein, the rights of, and benefits
payable to, Executive, Executive's estate or Executive's
beneficiaries pursuant to this Agreement are in addition to
any rights of, or benefits payable to, Executive, Executive's
estate or Executive's beneficiaries under any other employee
benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the date and year first above written.
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EXECUTIVE
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Signature
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Typed or printed name
THE SHERWIN-WILLIAMS COMPANY
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