THE SHERWIN-WILLIAMS COMPANY
2008 AMENDED AND RESTATED
EXECUTIVE LIFE INSURANCE PLAN
The
Sherwin-Williams Company, an Ohio corporation (the
“Company”), on behalf of itself and Participating
Affiliates, hereby establishes this 2008 Amended and Restated
Executive Life Insurance Plan (the “Plan”), effective
retroactive to January 1, 2004 to assure compliance with new
securities and tax laws and regulations. The Plan has been operated
in good faith compliance with and shall hereafter be interpreted in
all respects to comply with final split dollar regulations,
applicable federal securities laws, Internal Revenue Code
Section 409A, to the extent applicable, and those provisions
of the Employee Retirement Income Security Act of 1974, as amended,
applicable to a welfare benefit plan maintained to provide life
insurance benefits to a “select group of management or highly
compensated employees.” The purpose of the Plan is to attract
and retain high quality executives and to promote in key executives
increased efficiency and an interest in the successful operation of
the Company. Participation in this Plan is in lieu of participation
in any other Company sponsored group life insurance
plan.
1.1
Administrator shall mean the Compensation and Management
Development Committee or such other person or persons appointed by
the Board of Directors of the Company to administer the Plan
pursuant to Article 7 of the Plan.
1.2 Base
Salary shall mean the Participant’s base annual salary
excluding incentive and discretionary bonuses and other non-regular
forms of compensation, before reductions for contributions to or
deferrals under any pension, deferred compensation or benefit plans
sponsored by the Company.
1.3
Beneficiary shall mean the person(s) or entity designated as
such in accordance with Article 6 of the Plan.
1.4
Class A Participant shall mean a Participant who has
been designated by the Administrator to participate in the
Class A Participant Program pursuant to
Article 3.
1.5
Class A Participant Program shall mean the collateral
assignment loan structure life insurance program provided to
Class A Participants pursuant to Article 3.
1.6
Class B Participant shall mean a Participant who has
been designated by the Administrator to participate in the
Class B Participant Program pursuant to
Article 4.
1.7
Class B Participant Program shall mean the endorsement
structure life insurance program provided to Class B
Participants pursuant to Article 4.
1.8 Company
shall mean The Sherwin-Williams Company except that where the
context requires, Company shall mean the Company or the
Participating Affiliate whichever is the employer of the
Participant.
1.9 Collateral
Assignment shall mean the Collateral Assignment Agreement
executed by a Class A Participant assigning the Policy to the
Company as collateral security for the return of the Cumulative
Company Loan pursuant to Article 3.
1.10 Coverage
Maturity Date unless otherwise specified in the Participant
Enrollment Form, the Coverage Maturity Date shall mean the later of
the last day of the sixth month commencing after the
Participant’s Retirement or the fifteenth (15
th ) anniversary date of the Policy (i.e. the end
of the 15 th
Policy year). The Coverage Maturity
Date may be changed by amendment of the Participant Enrollment Form
only if such change complies with all requirements of IRC
Section 409A without the imposition of excise
taxes.
1.11 Cumulative
Company Contribution shall mean the total cumulative premiums
actually paid on the Policy of a Class B Participant by the
Company as of the relevant date net of any loans or withdrawals
from the Policy by the Company and net of any amounts previously
reimbursed to the Company by the Participant.
1.12 Cumulative
Company Loan shall mean the total cumulative premiums actually
paid on the Policy of a Class A Participant by the Company as
of the relevant date net of any loans or withdrawals from the
Policy by the Company and net of any amounts previously reimbursed
to the Company by the Participant.
1.13
Disability shall mean that the Participant (i) is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or
(ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a
period of not less than three months under an accident and health
plan covering employees of the Participant’s employer. The
Administrator may require that the Participant submit evidence of
such qualification for disability benefits in order to determine
the Disability of the Participant under this Plan.
1.14 Early
Retirement Eligibility Date shall mean the date on which the
Participant has both attained age fifty-five (55) and
completed at least twenty (20) Years of Service.
1.15 Economic
Benefit Amount shall mean the value of the economic benefit of
the life insurance coverage provided to a Class B Participant
under the Plan as determined in the complete and sole discretion of
the Administrator based on Treasury regulations, rulings issued by
the Internal Revenue Service and other applicable
authorities.
1.16 Eligible
Executive shall mean an executive of the Company or a
Participating Affiliate selected by the Administrator to be
eligible to participate in the Plan. The Administrator shall
designate whether an Eligible Executive is eligible to participate
as either a Class A Participant or a Class B
Participant.
1.17 ERISA
shall mean the Employee Retirement Income Security Act of 1974, as
amended, as interpreted by regulations and applicable authorities
promulgated thereunder.
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1.18 Imputed
Interest shall mean the interest imputed to the Participant
under IRC Section 7872 by reason of the Cumulative Company
Loan which shall be based on the blended annual federal statutory
short-term rate which is in effect under IRC Section 1274(d) for
the Plan Year for which the amount of forgone interest is being
determined, compounded annually.
1.19 IRC
shall mean the Internal Revenue Code of 1986, as amended, as
interpreted by Treasury regulations and applicable authorities
promulgated thereunder.
1.20 Normal
Retirement Date shall mean the date on which the Participant
attains age sixty-five (65).
1.21
Participant shall mean an Eligible Executive who has
completed a Participant Enrollment Form pursuant to Article 2
of the Plan and shall include either a Class A Participant or
a Class B Participant.
1.22
Participant Enrollment Form shall mean the written agreement
to participate in the Plan submitted by a Participant to the
Administrator pursuant to Article 2 of the Plan which shall
specify the class in which the Participant shall participate in the
Plan and the Coverage Maturity Date. The Participant Enrollment
From may only be amended by mutual agreement of the Company and the
Participant and in compliance with all requirements of IRC
Section 409A, without the imposition of excise taxes. For
example, any amendment to change the Coverage Maturity Date shall
be made no less twelve (12) months prior to the original
Coverage Maturity Date and shall delay the Coverage Maturity Date
by a minimum of five (5) years.
1.23
Participating Affiliate shall mean The Sherwin-Williams
Automotive Finishes Corporation and/or such other affiliate of the
Company as may be designated by the Administrator to participate in
the Plan and which has adopted the Plan and authorized the
Administrator and The Sherwin-Williams Company to act on it’s
behalf in administration of the Plan, as provided in
Section 8.2.
1.24 Plan
Year shall mean the calendar year.
1.25 Policy
shall mean the life insurance policy or policies insuring the life
of the Participant made subject to this Plan pursuant to Articles 3
or 4 of the Plan.
1.26
Retirement shall mean Termination of Employment on or after
the earlier of the Early Retirement Eligibility Date or the Normal
Retirement Date.
1.27 Target
Death Benefit shall be based on a multiple of the
Participant’s approximate projected Base Salary specified on
a Schedule A to this Plan. The specified multiple and the
approximation of Base Salary for this purpose may be adjusted from
time to time by amendment of Schedule A in the complete and
sole discretion of the Administrator.
1.28
Termination of Employment shall mean the date of the
cessation of the Participant’s employment with the Company
for any reason whatsoever, whether voluntary or involuntary,
including by reason of Retirement, Disability or death. A transfer
between the Company and a Participating Affiliate or among
Participating Affiliates shall not be considered a Termination of
Employment.
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1.29 Years of
Service shall mean the cumulative consecutive years of
continuous full-time employment with the Company or a Participating
Affiliate, beginning on the date the Participant first began
service with the Company or Participating Affiliate, and counting
each anniversary thereof.
2.1
Enrollment . An Eligible Executive shall enroll in the Plan
by filing a completed and fully executed Participant Enrollment
Form and such other insurance applications and forms as may be
reasonably requested by the Administrator. An Eligible Executive
shall become a Participant in the Plan when he or she is notified
in writing that his or her participation in a particular class of
coverage has been approved by the Administrator and that insurance
coverage has been secured on his or her behalf.
2.2
Insurability . Eligible Executives are not automatically
entitled to the insurance benefits provided under this Plan. Each
Eligible executive must satisfy the requirements for obtaining
insurance and be issued a Policy before he or she shall be covered
(or coverage may be increased) under the Plan. The Eligible
Executive shall cooperate with the Company by furnishing any and
all information requested by the Administrator, in order to
facilitate the payment of benefits hereunder, taking such physical
examinations as the Administrator may deem necessary and taking
such other actions as may be requested by the Administrator. If the
Eligible Executive refuses to so cooperate, the Company shall have
no further obligation to the Eligible Executive under the Plan. In
the event of the Eligible Executive’s suicide during the
first two (2) years in the Plan, or if the Eligible Executive
makes any material misstatement of information or non-disclosure of
medical history, then no benefits shall be payable to the Eligible
Executive under the Plan, except that benefits may be payable in a
reduced amount in the sole discretion of the
Administrator.
2.3 Addition or
Removal of Participants . The Administrator may, at any time,
in its discretion, designate additional Eligible Executives to
participant in the Plan or remove a Participant or class of
Participants from eligibility to participate in the Plan. The
Administrator shall notify the Participant in writing whenever a
Participant is no longer eligible to participate in the Plan, at
which time (i) a Class A Participant shall have the right
to repay the Cumulative Company Loan and retain the Policy under
the same terms and conditions as if the Participant had experienced
a Termination of Employment under Section 3.6 of this Plan,
and (ii) a Class B Participant shall have the right to
purchase the Policy for the net cash surrender value under the same
terms and conditions as if the Participant had experienced a
Termination of Employment under Section 4.6 of this Plan upon
receipt of such notice. In the event that a Class A
Participant becomes eligible for the Class B Participant
Program, the Company shall purchase the Class A
Participant’s Policy from the Participant for its net cash
surrender value in excess of the Cumulative Company Loan as of the
date of conversion and shall thereafter provide benefits to such
Participant through the Class B Participant Program under such
terms and conditions as may be specified in the new Participant
Enrollment Form. A Class B Participant shall not be eligible
for conversion to the Class A Participant Program.
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ARTICLE 3
Class A Participant Life Insurance Program
3.1 Policy
. To provide the insurance benefits to Class A Participants
under the Plan, the Participant shall be issued one or more
insurance policies covering the life of the Participant (referred
to together herein as the “Policy”). The Class A
Participant shall be the owner of the Policy and shall hold all
incidents of ownership therein. However, the Class A
Participant shall execute a Collateral Assignment of the Policy in
favor of the Company, securing to the Company, on a nonrecourse
basis, the right to return of its Cumulative Company Loan, and the
Class A Participant’s ownership rights in the Policy
shall be subject to the terms of this Plan and the Collateral
Assignment.
3.2
Premiums . Prior to the earlier of (i) Termination of
Employment, other than by reason of Retirement or Disability, and
(ii) the Coverage Maturity Date, the Company shall pay
premiums on the Policy each Plan Year reasonably calculated to
provide a death benefit under the Policy at least equal to the
Cumulative Company Loan plus the Target Death Benefit.
3.3 Imputed
Interest . The Company shall include in the Class A
Participant’s income for income tax purposes each year
Imputed Interest on the balance of the Cumulative Company Loan to
the Class A Participant under the Plan for such Plan
Year.
3.4 Policy
Loans, Withdrawals, or Surrender . The Company shall have the
right to obtain loans or make withdrawals from the Policy of a
Class A Participant up to the amount of the Cumulative Company
Loan so long as such loans or withdrawals do not reduce the net
cash value in the Policy below the level required to provide a
death benefit under the Policy at least equal to the remaining
Cumulative Company Loan plus the Target Death Benefit. The
Class A P
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