<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Period Ended March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Transition Period from _____________to______________________
Commission file number 1-4851
------
THE SHERWIN-WILLIAMS COMPANY
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(Exact name of registrant as specified in its charter)
OHIO 34-0526850
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 PROSPECT AVENUE, N.W., CLEVELAND, OHIO 44115-1075
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(Address of principal executive offices) (Zip Code)
(216) 566-2000
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $1.00 Par Value - 172,344,527 shares as of April 30, 1997.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
Thousands of dollars, except per share data
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 1,069,787 $ 857,771
Costs and expenses:
Cost of goods sold 626,173 520,278
Selling, general and administrative expenses 387,876 299,659
Interest expense 20,798 5,436
Interest and net investment income (2,960) (1,597)
Other (25) 2,393
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1,031,862 826,169
- -------------------------------------------------------------------------------
Income before income taxes 37,925 31,602
Income taxes 14,791 12,009
- -------------------------------------------------------------------------------
Net income $ 23,134 $ 19,593
===============================================================================
Net income per share $ 0.13 $ 0.11
===============================================================================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 3
THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Thousands of dollars
<TABLE>
<CAPTION>
MARCH 31, Dec. 31, March 31,
1997 1996 1996
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<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 58,203 $ 1,880 $ 12,849
Accounts receivable, less allowance 596,846 452,421 479,586
Inventories:
Finished goods 629,999 529,148 496,354
Work in process and raw materials 125,193 113,539 100,680
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755,192 642,687 597,034
Other current assets 240,062 319,199 244,128
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Total current assets 1,650,303 1,416,187 1,333,597
Deferred pension assets 258,141 254,376 237,499
Goodwill 1,206,596 546,461 448,435
Other assets 404,467 228,175 190,070
Property, plant and equipment 1,245,657 1,133,932 1,071,221
Less allowances for depreciation and
amortization 604,007 584,541 548,493
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641,650 549,391 522,728
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Total assets $ 4,161,157 $ 2,994,590 $ 2,732,329
===================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 498,967 $ 168,001 $ 315,100
Accounts payable 399,541 385,928 326,124
Compensation and taxes withheld 83,030 103,353 70,125
Current portion of long-term debt 52,676 2,133 1,444
Other accruals 415,302 325,635 317,830
Accrued taxes 72,860 65,957 45,733
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Total current liabilities 1,522,376 1,051,007 1,076,356
Long-term debt 795,673 142,679 127,393
Postretirement benefits other than pensions 203,862 184,551 182,757
Other long-term liabilities 237,479 215,121 125,343
Shareholders' equity
Common stock - $1.00 par value:
172,335,790, 171,831,178 and 171,198,558
shares outstanding at March 31,
1997, December 31, 1996 and March 31, 1996,
respectively 203,825 101,650 101,258
Other capital 102,853 203,223 185,773
Retained earnings 1,417,225 1,411,295 1,246,784
Cumulative foreign currency translation
adjustment (24,942) (18,982) (20,472)
Treasury stock, at cost (297,194) (295,954) (292,863)
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Total shareholders' equity 1,401,767 1,401,232 1,220,480
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Total liabilities and shareholders' equity $ 4,161,157 $ 2,994,590 $ 2,732,329
===================================================================================================================================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 4
THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
Thousands of dollars
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------
1997 1996
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<S> <C> <C>
OPERATIONS
Net income $ 23,134 $ 19,593
Non-cash adjustments:
Depreciation 20,802 17,780
Amortization of goodwill and intangible assets 15,543 6,484
Increase in deferred pension assets (3,651) (3,925)
Net increase in postretirement liability 1,349 1,184
Other 2,464 318
Change in current assets and liabilities-net (138,014) (98,228)
Proceeds of insurance settlement 53,883
Other 3,124 (3,982)
- ------------------------------------------------------------------------------------------------------------------------------------
Net operating cash (21,366) (60,776)
INVESTING
Capital expenditures (33,883) (31,891)
Decrease in short-term investments 20,000
Acquisitions of assets (869,081) (491,983)
Decrease (increase) in other investments (15,959) 26,212
Other (8,914) (4,901)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investing cash (927,837) (482,563)
FINANCING
Net increase in short-term borrowings 330,362 284,750
Increase in long-term debt 704,699 105,205
Payments of long-term debt (1,170) (70,988)
Payments of cash dividends (17,206) (14,976)
Proceeds from stock options exercised 2,409 2,886
Costs related to issuance of debt (13,872)
Other 304 (173)
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Net financing cash 1,005,526 306,704
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Net increase (decrease) in cash and cash equivalents 56,323 (236,635)
Cash and cash equivalents at beginning of year 1,880 249,484
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Cash and cash equivalents at end of period $ 58,203 $ 12,849
===================================================================================================================================
Taxes paid on income $ 19,675 $ 4,110
Interest paid on debt 13,514 4,000
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 5
THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Periods ended March 31, 1997 and 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Form 10-K for the fiscal year ended December
31, 1996. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The consolidated results for the three months ended March 31, 1997 are
not necessarily indicative of the results to be expected for the fiscal year
ending December 31, 1997.
NOTE B--DIVIDENDS
Dividends paid on common stock during the first quarter of 1997 and 1996 were
$.10 per share and $.0875 per share, respectively, on a post-split basis (see
Note F).
NOTE C--INVESTMENT IN LIFE INSURANCE
The Company invests in broad-based corporate owned life insurance. The cash
surrender values of the policies, net of policy loans, are included in Other
Assets. The net expense associated with such investment is included in Other
Costs and Expenses.
NOTE D--OTHER COSTS AND EXPENSES
Significant items included in other costs and expenses are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
(Thousands of dollars) MARCH 31, March 31,
1997 1996
-------- ---------
<S> <C> <C>
Dividend and royalty income $ 914 $ 1,159
Net expense of financing and
investing activities (2,354) (3,661)
Foreign exchange gain (loss) 1,034 (38)
</TABLE>
The net expense of financing and investing activities represents the realized
gains or losses associated with disposing of fixed assets, the net gain or loss
associated with the investment of certain long-term asset funds and the net
pre-tax expense associated with the Company's investment in broad-based
corporate owned life insurance.
<PAGE> 6
NOTE E--ACQUISITION AND MERGER
Effective January 7, 1997, the Company, through a wholly-owned subsidiary,
acquired all outstanding shares of Thompson Minwax Holding Corp. (Thompson
Minwax). The total amount of funds required to acquire the shares and pay off
certain indebtedness of Thompson Minwax was approximately $830 million. The
excess purchase price over the fair value of the net assets acquired is being
amortized over 40 years using the straight-line method.
For financial statement purposes, the acquisition is being accounted for under
the purchase method of accounting. Accordingly, the results of operations of
Thompson Minwax since the date of acquisition are included in the Company's
statements of consolidated income. The following unaudited pro forma combined
condensed statement of consolidated income for the three months ended March 31,
1996 was prepared in accordance with Accounting Principles Board Opinion No. 16
and assumes the merger had occurred on January 1, 1996. The following pro forma
data reflects adjustments for interest expense, net investment income and
amortization of goodwill and intangible assets. In management's opinion, the pro
forma financial information is not necessarily indicative of the results of
operations which would have occurred had the acquisition of Thompson Minwax
taken place on January 1, 1996 or of future results of operations of the
combined companies under the ownership and operation of the Company.
UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENT OF CONSOLIDATED INCOME
<TABLE>
<CAPTION>
(Thousands of dollars, Three months ended
except per share data) March 31, 1996
------------------
<S> <C>
Net sales $ 947,355
=========
Net income $ 14,578
=========
Net income per share $ 0.08
=========
</TABLE>
NOTE F--STOCK SPLIT
The par value of additional shares of common stock issued in connection with a
two-for-one stock split distributed during March 1997 was credited to common
stock and a like amount charged to other capital.
NOTE G--RECLASSIFICATION
Certain amounts in the 1996 financial statements have been reclassified to
conform with the 1997 presentation.
<PAGE> 7
NOTE H--COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three months ended
------------------------------
Thousands of dollars, except per share data MARCH 31, March 31,
1997 1996
-------------- -----------
<S> <C> <C>
Fully Diluted
Average shares outstanding 172,248,545 171,133,128
Options - treasury stock method 1,685,265 1,329,824
------------ -----------
Average fully diluted shares 173,933,810 172,462,952
=========== ===========
Net income $ 23,134 $ 19,593
============ ============
Net income per share $ 0.13 $ 0.11
============ ============
Primary
Average shares outstanding 172,248,545 171,133,128
Options - treasury stock method 1,677,674 1,262,073
------------ -----------
Average shares and equivalents 173,926,219 172,395,201
============ ===========
Net income $ 23,134 $ 19,593
============ ============
Net income per share $ 0.13 $ 0.11
============ ============
</TABLE>
<PAGE> 8
NOTE I--BUSINESS SEGMENTS
NET EXTERNAL SALES/OPERATING PROFIT
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------------------------------------------------------
Thousands of dollars 1997 1996
---------------------------------- -------------------------------------
NET Net
EXTERNAL OPERATING External Operating
SALES PROFIT Sales Profit
----------------------------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Paint Stores $ 532,173 $ 7,127 $ 474,697 $ 5,508
Coatings 534,780 65,261 379,779 43,376
Other 2,834 2,948 3,295 3,339
----------- ---------- ----------- ----------
Segment totals $ 1,069,787 75,336 $ 857,771 52,223
=========== ===========
Corporate expenses - net (37,411) (20,621)
---------- ----------
Income before income taxes $ 37,925 $ 31,602
========== ==========
</TABLE>
================================================================================
INTERSEGMENT TRANSFERS
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------------------
Thousands of dollars 1997 1996
---------- -----------
<S> <C> <C>
Coatings $206,104 $178,653
Other 5,266 5,172
-------- --------
Segment total $211,370 $183,825
======== ========
</TABLE>
===============================================================================
Operating profit is total revenue, including realized profit on intersegment
transfers, less operating costs and expenses.
Export sales, sales of foreign subsidiaries, and sales to any individual
customer were each less than 10% of consolidated sales to unaffiliated customers
during all periods presented.
Intersegment transfers are accounted for at values comparable to normal
unaffiliated customer sales.
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated net sales were $1,069,787,000 during the first quarter of 1997, a
24.7 percent increase over the comparable period in 1996. Excluding the results
of operations of Thompson Minwax Holding Corp. (Thompson Minwax), acquired
during January 1997, and other smaller acquisitions which occurred at various
times since the first quarter of 1996, comparable first quarter sales increased
5.8 percent. First quarter sales in the Paint Stores Segment were 12.1 percent
higher than last year. Comparable store sales were up 9.4 percent. Excluding the
effects of the acquisitions, sales increased 7.6 percent. The sales increase was
generated by increased paint gallons sold to both retail and wholesale customers
combined with sales gains in the Segment's complementary product lines
(wallcovering, floorcovering and associated products). Wholesale customers
include professional painters, contractors and industrial and maintenance
accounts. The Coatings Segment's first quarter sales increased 40.8 percent over
1996 due primarily to incremental sales from acquisitions. Excluding these
acquisitions, sales were up 3.6 percent due primarily to increased sales to
national customers generated by new products and increased promotional sales in
its diversified product lines. Revenue generated by real estate operations in
the Other Segment declined 16.3 percent due to the loss of a large tenant in one
of its office buildings as of December 31, 1996.
Consolidated gross profit as a percent of sales increased to 41.5 percent from
39.3 percent in 1996. Excluding the effects of all acquisitions, first quarter
margins were higher than last year. The Paint Store Segment's increased retail
sales combined with sales gains in its higher-margin paint and paint-related
product lines led to improved first quarter margins. Excluding the acquisitions,
the Paint Stores Segment's margins were essentially even with last year. Margins
in the Coatings Segment were higher than last year for the first quarter on both
an as-reported basis and excluding the acquisitions due to manufacturing
efficiencies realized from increased gallon sales combined with sales increases
of higher-margin products.
Consolidated selling, general and administrative expenses as a percent of sales
were unfavorable to last year on both an as-reported basis and excluding the
acquisitions. First quarter SG&A expenses as a percent of sales were favorable
to last year in the Paint Stores Segment due to lower-than-average incremental
expenses of the acquisitions. Excluding the acquisitions, the Paint Stores
Segment's SG&A percentage was essentially even with last year. The
Coatings Segment's SG&A percentage was unfavorable to last year on both an
as-reported basis and excluding the acquisitions due primarily to increased
marketing and merchandising expenses related to new products, new customers and
product expansion at existing customers.
The increase in interest expense from the first quarter of 1996 is due to
additional debt incurred since the end of March 1996 primarily to finance
acquisitions. Average short-term borrowing rates remained even with 1996.
<PAGE> 10
Other costs and expenses were lower than the first quarter of 1996 due to
decreased expenses of investing and financing activities combined with an
increased foreign currency translation gain.
Net income increased to $23,134,000 for the first quarter of 1997, an 18.1
percent increase over last year, while net income per share increased to $0.13
per share from $0.11 per share last year. Excluding the results of operations of
all acquisitions and the related financing costs, net income increased 18.8
percent while net income per share increased to $0.13 per share.
FINANCIAL CONDITION
During the first three months of 1997, cash and cash equivalents increased $56.3
million, net long-term debt increased $703.5 million and net short-term
borrowings increased $330.9 million. Short-term borrowings incurred during the
quarter relate to the Company's commercial paper program, which had unused
borrowing availability of $951.0 million at March 31, 1997. The aggregate
principal amount of unsecured short-term notes which can be issued under this
program was increased to $1,450.0 million in January 1997. Outstanding
borrowings under this program are backed by the Company's revolving credit
agreements, whose maximum borrowing amount was increased to $1,450.0 million in
January 1997 and subsequently reduced to $1,080.0 million in March 1997. The
increase in long-term debt during the quarter is related to $400.0 million of
debt securities issued under the Company's shelf registration statement and
$300.0 million of debentures issued in a private offering not registered under
the Securities Act of 1933, as amended. Net cash used by operations of $21.4
million during the first three months of 1997 includes the receipt of
approximately $53.9 million related to a settlement with certain insurance
carriers pertaining to environmental-related matters, which settlement was
recorded in income during 1996. The proceeds from the issuance of short-term
borrowings and long-term debt were used for the Thompson Minwax acquisition and
other smaller acquisitions totaling $869.1 million, capital expenditures of
$33.9 million, cash dividends of $17.2 million, costs related to the issuance of
debt of $13.9 million and normal operating needs for seasonally higher working
capital. The Company's current ratio declined to 1.08 at March 31, 1997 from
1.35 at December 31, 1996. The decrease in this ratio occurred primarily due to
the increased short-term borrowings and effects of acquisitions. The increase in
goodwill is primarily related to the Thompson Minwax acquisition and other
smaller acquisitions. Other assets increased $176.3 million primarily due to
intangible assets acquired during the quarter. The increase in common stock and
related decrease in other capital during the quarter occurred due to the par
value of $101.9 million which was credited to common stock and a like amount
charged to other capital for additional common shares issued in the form of a
two-for-one stock split in March 1997.
Since March 31, 1996, cash and cash equivalents increased $45.4 million,
short-term borrowings increased $183.9 million and long-term debt increased
$719.5 million. Cash generated by operations during this period of $372.0
million combined with the net borrowing proceeds were offset by acquisitions of
$1,047.9 million, capital expenditures of $124.7 million, payments of cash
dividends of $62.3 million, debt issue costs of $13.9 million and normal working
capital needs. The Company expects to remain in a borrowing position throughout
1997.
<PAGE> 11
Capital expenditures during the first quarter of 1997 represented primarily the
costs of upgrading or installing point-of-sale terminals at the paint stores,
and costs for capacity expansion or upgrade of distribution centers and
manufacturing and research facilities. We do not anticipate the need for any
specific external financing to support our capital programs.
During the first three months of 1997, approximately 9,900 shares of our own
stock were received in exchange from the exercise of stock options. We did not
acquire any of our own shares through open market purchases during this time
period. We acquire our own stock for general corporate purposes and, depending
upon our cash position and market conditions, we may acquire additional shares
of our own stock in the future. At the April 23, 1997 board meeting, the Board
of Directors authorized the Company to purchase, in the aggregate, 10,000,000
shares of common stock.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share", which is
required to be adopted on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods presented in comparative statements. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded from the calculation. Due to the immaterial
amount of common stock equivalents in the Company's current primary earnings per
share calculation, the adoption of SFAS No. 128 will result in no change to the
primary earnings per share amounts reported for the three months ended March 31,
1997 and March 31, 1996. The impact of SFAS No. 128 on the calculation of fully
diluted earnings per share for these quarters is also expected to be immaterial.
The Company and certain other companies are defendants in a number of lawsuits
arising from the manufacture and sale of lead pigments and lead paints. It is
possible that additional lawsuits may be filed against the Company in the future
with similar allegations. The various existing lawsuits seek damages for
personal injuries and property damage, along with costs involving the abatement
of lead related paint from buildings and medical monitoring costs. The Company
believes that such lawsuits are without merit and is vigorously defending them.
The Company does not believe that any potential liability which may ultimately
be determined to be attributable to the Company arising out of such lawsuits
will have a material adverse effect on the Company's business or financial
condition.
The operations of the Company, like those of other companies in our industry,
are subject to various federal, state and local environmental laws and
regulations. These laws and regulations not only govern our current operations
and products, but also impose potential liability on the Company for past
operations which were conducted utilizing practices and procedures that were
considered acceptable under the laws and regulations existing at that time. The
Company expects the environmental laws and regulations to impose increasingly
stringent requirements upon the Company and our industry in the future. The
Company believes it conducts its operations in compliance with applicable
environmental laws and regulations and has implemented various programs designed
to protect the environment and ensure continued compliance.
<PAGE> 12
The Company is involved with environmental compliance and remediation activities
at some of its current and former sites. The Company, together with other
parties, has also been designated a potentially responsible party under federal
and state environmental protection laws for the remediation of hazardous waste
at a number of third-party sites, primarily Superfund sites. In general, these
laws provide that potentially responsible parties may be held jointly and
severally liable for investigation and remediation costs regardless of fault.
The Company may be similarly designated with respect to additional third-party
sites in the future.
Although the Company continuously assesses its potential liability for
remediation activities with respect to its past operations and third-party
sites, any potential liability ultimately determined to be attributable to the
Company is subject to a number of uncertainties including, among others, the
number and financial condition of parties involved with respect to any given
site, the volumetric contribution which may be attributed to the Company
relative to that attributable to other parties, the nature and magnitude of the
wastes involved, the various technologies that can be used for remediation and
the determination of acceptable remediation with respect to a particular site.
The Company has accrued for certain environmental remediation activities
relating to its past operations and third-party sites, including Superfund
sites, for which commitments or clean-up plans have been developed or for which
costs or minimum costs can be reasonably estimated. These environmental-related
accruals are adjusted as information becomes available upon which more accurate
costs can be reasonably estimated. In the opinion of the Company's management,
any potential liability ultimately attributed to the Company for its
environmental-related matters will not have a material adverse effect on the
Company's financial condition, liquidity or cash flow.
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
-----------------
As previously reported, on December 19, 1995, the Michigan
Department of Environmental Quality issued a letter of
violation with regard to the Company's Holland, Michigan
facility alleging that certain equipment located at such
facility did not have proper permits in violation of
Michigan's Air Pollution Control Act. On January 16, 1997, the
State of Michigan Circuit Court for the 30th Judicial Circuit,
Ingham County approved a Consent Judgment pursuant to which
the Company agreed to (a) pay a civil penalty in the amount of
$131,000, which includes an amount of $30,000 to fund state
implementation plans relating to air emissions and (b) take
certain other corrective measures and perform certain
recordkeeping, reporting and testing regarding the Company's
operations at such facility.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
(3)(i) Amended Articles of Incorporation, as
amended April 25, 1997 (filed herewith).
(10)(a) The Sherwin-Williams Company 1994 Stock
Plan, as amended and restated in its
entirety, effective April 23, 1997 (filed
herewith).
(10)(b) The Sherwin-Williams Company 1997 Stock Plan
for Nonemployee Directors, dated April 23,
1997 (filed herewith).
(10)(c) Amendment No. 1 to 364-Day Revolving Credit
Agreement, dated March 31, 1997, between
the Company, Texas Commerce Bank National
Association, as Administrative Agent, The
Chase Manhattan Bank, as Competitive Advance
Facility Agent, and the financial
institutions which are signatories thereto
(filed herewith).
(10)(d) Amendment No. 1 to Five Year Revolving
Credit Agreement, dated March 31, 1997,
between the Company, Texas Commerce Bank
National Association, as Administrative
Agent, The Chase Manhattan Bank, as
Competitive Advance Facility Agent, and the
financial institutions which are signatories
thereto (filed herewith).
(11) Computation of Net Income Per Share - See
Note H to Condensed Consolidated Financial
Statements (Unaudited).
(27) Financial Data Schedule for the period ended
March 31, 1997 (filed herewith).
(b) Reports on Form 8-K
(i) The Company filed a Current Report on Form 8-K dated
January 7, 1997 reporting in Item 2 that the Company,
through a wholly-owned subsidiary, had completed its
acquisition of all of the outstanding shares of
capital stock of Thompson Minwax Holding Corp.
("Thompson Minwax"). The Company filed as part of
Item 7 of such Current Report the following financial
statements and pro forma financial information:
<PAGE> 14
(1) Unaudited Consolidated Balance Sheet of
Thompson Minwax as of September 30, 1996 and
Unaudited Consolidated Income Statement and
Consolidated Cash Flow Statement of Thompson
Minwax for the nine months ended September
30, 1996.
(2) Audited Consolidated Balance Sheet of
Thompson Minwax as of December 31, 1995 (As
Restated) and Audited Consolidated Statement
of Operations and Accumulated Deficit and
Consolidated Statement of Cash Flows of
Thompson Minwax for the fiscal year ended
December 31, 1995 (As Restated).
(3) Unaudited Pro Forma Combined Condensed
Balance Sheet which combines the Unaudited
Consolidated Balance Sheet of Thompson
Minwax with the Unaudited Consolidated
Balance Sheet of the Company as of September
30, 1996, along with a description of the
pro forma adjustments.
(4) Unaudited Pro Forma Combined Condensed
Statements of Income which combine the
consolidated results of Thompson Minwax with
the consolidated results of the Company for
the year ended December 31, 1995 and for the
nine months ended September 30, 1996, along
with a description of the related pro forma
adjustments.
(ii) The Company filed a Current Report on Form 8-K dated
January 29, 1997 reporting in Item 5 the announcement
of (a) the two-for-one stock split distributed on
March 28, 1997, (b) the increase in the Company's
quarterly dividend and (c) the Company's operating
results for the quarter and year ended December 31,
1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SHERWIN-WILLIAMS COMPANY
May 14, 1997 By: /S/ J.L. AULT
--------------------------------------
J.L. Ault
Vice President-Corporate Controller
May 14, 1997 By: /S/ L.E. STELLATO
---------------------------------------
L.E. Stellato
Vice President, General Counsel and
Secretary
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT
(3)(i) Amended Articles of Incorporation, as amended April 25, 1997
(filed herewith).
(10)(a) The Sherwin-Williams Company 1994 Stock Plan, as amended and
restated in its entirety, effective April 23, 1997
(filed herewith).
(10)(b) The Sherwin-Williams Company 1997 Stock Plan for
Nonemployee Directors, dated April 23, 1997 (filed
herewith).
(10)(c) Amendment No. 1 to 364-Day Revolving Credit
Agreement, dated March 31, 1997, between
the Company, Texas Commerce Bank National
Association, as Administrative Agent, The
Chase Manhattan Bank, as Competitive Advance
Facility Agent, and the financial
institutions which are signatories thereto
(filed herewith).
(10)(d) Amendment No. 1 to Five Year Revolving
Credit Agreement, dated March 31, 1997,
between the Company, Texas Commerce Bank
National Association, as Administrative
Agent, The Chase Manhattan Bank, as
Competitive Advance Facility Agent, and the
financial institutions which are signatories
thereto (filed herewith).
(11) Computation of Net Income Per Share - See Note H to Condensed
Consolidated Financial Statements (Unaudited).
(27) Financial Data Schedule for the period ended March 31, 1997
(filed herewith).
<PAGE> 1
EXHIBIT 3(i)
AMENDED ARTICLES
OF
INCORPORATION
OF
THE SHERWIN-WILLIAMS COMPANY
(AS AMENDED THROUGH APRIL 25, 1997)
FIRST: The name of this Company is THE SHERWIN-WILLIAMS COMPANY.
SECOND: The place where this Company shall be located and its principal
business shall be transacted is the City of Cleveland in the County of Cuyahoga
and State of Ohio.
THIRD: The Company is formed for the purpose of developing, producing,
manufacturing, buying, selling and generally dealing in products, goods, wares,
merchandise and services of any and all kinds and doing all things necessary or
incidental thereto.
FOURTH: The number of shares which the Company is authorized to have
outstanding is 330,000,000 consisting of 30,000,000 shares of Serial Preferred
Stock without par value (hereinafter called "Serial Preferred Stock") and
300,000,000 shares of Common Stock, par value $1.00 each (hereinafter called
"Common Stock").
The shares of such classes shall have the following express terms:
DIVISION A
EXPRESS TERMS OF THE SERIAL PREFERRED STOCK
Section 1. The Serial Preferred Stock may be issued from time to time in
one or more series. All shares of Serial Preferred Stock shall be of equal rank
and shall be identical, except in respect of the matters that may be fixed by
the Board of Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. Subject to the provisions of Sections 2 to
8, both inclusive, of this Division, which provisions shall apply to all Serial
Preferred Stock, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series and with respect to each such series
prior to the issuance thereof to fix:
(a) The designation of the series, which may be by distinguishing
number, letter or title.
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of the
series) increase or decrease (but not below the number of shares thereof
then outstanding).
(c) The annual dividend rate of the series.
(d) The dates at which dividends, if declared, shall be payable, and
the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of
the series.
(f) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Company.
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(h) Whether the shares of the series shall be convertible into Common
Stock, and, if so, the conversion price or prices, any adjustments thereof,
and all other terms and conditions upon which such conversion may be made.
(i) Restrictions (in addition to those set forth in Sections 6(b) and
6(c) of this Division) on the issuance of shares of the same series or of
any other class or series.
The Board of Directors is authorized to adopt from time to time amendments
to the Articles of Incorporation fixing, with respect to each such series, the
matters described in clauses (a) to (i), both inclusive, of this Section 1.
Section 2. The holders of Serial Preferred Stock of each series, in
preference to the holders of Common Stock and of any other class of shares
ranking junior to the Serial Preferred Stock, shall be entitled to receive out
of any funds legally available and when and as declared by the Board of
Directors dividends in cash at the rate for such series fixed in accordance with
the provisions of Section 1 of this Division and no more, payable quarterly on
the dates fixed for such series. Such dividends shall be cumulative, in the case
of shares of each particular series, from and after the date or dates fixed with
respect to such series. No dividends may be paid upon or declared or set apart
for any of the Serial Preferred Stock for any quarterly dividend period unless
at the same time a like proportionate dividend for the same quarterly dividend
period, ratably in proportion to the respective annual dividend rates fixed
therefor, shall be paid upon or declared or set apart for all Serial Preferred
Stock of all series then issued and outstanding and entitled to receive such
dividend.
Section 3. In no event so long as any Serial Preferred Stock shall be
outstanding shall any dividends, except a dividend payable in Common Stock or
other shares ranking junior to the Serial Preferred Stock, be paid or declared
or any distribution be made except as aforesaid on the Common Stock or any other
shares ranking junior to the Serial Preferred Stock, nor shall any Common Stock
or any other shares ranking junior to the Serial Preferred Stock be purchased,
retired or otherwise acquired by the Company (except out of the proceeds of the
sale of Common Stock or other shares ranking junior to the Serial Preferred
Stock received by the Company subsequent to August 31, 1966):
(a) Unless all accrued and unpaid dividends on Serial Preferred Stock,
including the full dividends for the current quarterly dividend period,
shall have been declared and paid or a sum sufficient for payment thereof
set apart; and
(b) Unless there shall be no arrearages with respect to the redemption
of Serial Preferred Stock of any series from any sinking fund provided for
shares of such series in accordance with the provisions of Section 1 of
this Division.
Section 4. (a) Subject to the express terms of each series and to the
provisions of Section 6(b) (iii) of this Division A, the Company may from time
to time redeem all or any part of the Serial Preferred Stock of any series at
the time outstanding (i) at the option of the Board of Directors at the
applicable redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division, or (ii) in fulfillment of the
requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price, fixed in accordance with the
provisions of Section 1 of this Division, together in each case with accrued and
unpaid dividends to the redemption date.
(b) Notice of every such redemption shall be mailed, postage prepaid, to
the holders of record of the Serial Preferred Stock to be redeemed at their
respective addresses then appearing on the books of the Company, not less than
thirty (30) days nor more than sixty (60) days prior to the date fixed for such
redemption. At any time before or after notice has been given as above provided,
the Company may deposit the aggregate redemption price of the shares of Serial
Preferred Stock to be redeemed with any bank or trust company in Cleveland,
Ohio, or New York, New York, having capital and surplus of more than Five
Million Dollars ($5,000,000), named in such notice, and direct that such amount
be paid to the respective holders of the shares of Serial Preferred Stock so to
be redeemed, in amounts equal to the redemption price of all shares of Serial
Preferred Stock so to be redeemed, on surrender of the stock certificate or
certificates held by such holders. Upon the making of such deposit such holders
shall cease to be shareholders with respect to such shares, and after such
notice shall have been given and such deposit shall have been made such holders
shall
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have no interest in or claim against the Company with respect to such shares
except only to receive such money from such bank or trust company without
interest or the right to exercise, before the redemption date, any unexpired
privileges of conversion. In case less than all of the outstanding shares of
Serial Preferred Stock are to be redeemed, the Company shall select by lot the
shares so to be redeemed in such manner as shall be prescribed by its Board of
Directors.
If the holders of shares of Serial Preferred Stock which shall have been
called for redemption shall not, within six years after such deposit, claim the
amount deposited for the redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Company such unclaimed amounts and thereupon
such bank or trust company and the Company shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any shares of Serial Preferred Stock which are redeemed by the Company
pursuant to the provisions of this Section 4 and any shares of Serial Preferred
Stock which are purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series and any shares of Serial
Preferred Stock which are converted in accordance with the express terms thereof
shall be cancelled and not reissued. Any shares of Serial Preferred Stock
otherwise acquired by the Company shall resume the status of authorized and
unissued shares of Serial Preferred Stock without serial designation.
Section 5. (a) The holders of Serial Preferred Stock of any series shall,
in case of voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, be entitled to receive in full out of the assets of
the Company, including its capital, before any amount shall be paid or
distributed among the holders of the Common Stock or any other shares ranking
junior to the Serial Preferred Stock the amounts fixed with respect to the
shares of such series in accordance with Section 1 of this Division, plus in any
event an amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or winding
up of the affairs of the Company. In case the net assets of the Company legally
available therefor are insufficient to permit the payment upon all outstanding
shares of Serial Preferred Stock of the full preferential amount to which they
are respectively entitled, then such net assets shall be distributed ratably
upon outstanding shares of Serial Preferred Stock in proportion to the full
preferential amount to which each such share is entitled.
After payment to holders of Serial Preferred Stock of the full preferential
amounts as aforesaid, holders of Serial Preferred Stock as such shall have no
right or claim to any of the remaining assets of the Company.
(b) The merger or consolidation of the Company into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Company, shall not be deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary, for the purposes of this Section 5.
Section 6. (a) The holders of Serial Preferred Stock shall be entitled to
one vote for each share of such stock upon all matters presented to the
shareholders; and, except as otherwise provided herein or required by law, the
holders of Serial Preferred Stock and the holders of Common Stock shall vote
together as one class on all matters. No adjustment of the voting rights of the
holders of Serial Preferred Stock shall be made in the event of an increase or
decrease in the number of shares of Common Stock authorized or issued or in the
event of a stock split or combination of the Common Stock or in the event of a
stock dividend on any class of stock payable solely in Common Stock, and none of
the foregoing actions shall be deemed to affect adversely the voting powers,
rights or preferences of Serial Preferred Stock within the meaning and for the
purpose of this Division A.
If, and so often as, the Company shall be in default in the payment of
dividends in an amount equivalent to six (6) quarterly dividends (whether or not
consecutive) on any series of Serial Preferred Stock at the time outstanding,
whether or not earned or declared, the holders of Serial Preferred Stock of all
series, voting separately as a class and in addition to all other rights to vote
for Directors, shall be entitled to elect, as herein provided, two (2) members
of the Board of Directors of the Company; provided, however, that the holders of
shares of Serial Preferred Stock shall not have or exercise such special class
voting rights except at meetings of the shareholders for the election of
Directors at which the holders of not less than thirty-five per cent (35%) of
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<PAGE> 4
the outstanding shares of Serial Preferred Stock of all series then outstanding
are present in person or by proxy; and provided further that the special class
voting rights provided for herein when the same shall have become vested shall
remain so vested until all accrued and unpaid dividends on the Serial Preferred
Stock of all series then outstanding shall have been paid, whereupon the holders
of Serial Preferred Stock shall be divested of their special class voting rights
in respect of subsequent elections of Directors, subject to the revesting of
such special class voting rights in the event hereinabove specified in this
paragraph.
In the event of default entitling the holders of Serial Preferred Stock to
elect two (2) Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by the
Secretary of the Company upon written request of, or may be called by, the
holders of record of at least ten per cent (10%) of the shares of Serial
Preferred Stock of all series at the time outstanding, and notice thereof shall
be given in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Company shall not be required to call
such special meeting if the annual meeting of shareholders shall be held within
ninety (90) days after the date of receipt of the foregoing written request from
the holders of Serial Preferred Stock. At any meeting at which the holders of
Serial Preferred Stock shall be entitled to elect Directors, the holders of
thirty-five per cent (35%) of the then outstanding shares of Serial Preferred
Stock of all series, present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority of such shares so
present at any such meeting at which there shall be such a quorum shall be
sufficient to elect the members of the Board of Directors which the holders of
Serial Preferred Stock are entitled to elect as hereinabove provided.
(b) The vote or consent of the holders of at least two-thirds of the shares
of Serial Preferred Stock at the time outstanding, given in person or by proxy
either in writing or at a meeting called for the purpose at which the holders of
Serial Preferred Stock shall vote separately as a class, shall be necessary to
effect any one or more of the following (but so far as the holders of Serial
Preferred Stock are concerned, such action may be effected with such vote or
consent):
(i) Any amendment, alteration or repeal of any of the provisions of
the Articles of Incorporation or of the Regulations of the Company which
affects adversely the voting powers, rights or preferences of the holders
of Serial Preferred Stock; provided, however, that, for the purpose of this
clause (i) only, neither the amendment of the Articles of Incorporation so
as to authorize or create, or to increase the authorized or outstanding
amount of, Serial Preferred Stock or of any shares of any class ranking on
a parity with or junior to the Serial Preferred Stock, nor the amendment of
the provisions of the Regulations so as to increase the number of Directors
of the Company shall be deemed to affect adversely the voting powers,
rights or preferences of the holders of Serial Preferred Stock; and
provided further, that if such amendment, alteration or repeal affects
adversely the rights or preferences of one or more but not all series of
Serial Preferred Stock at the time outstanding, only the vote or consent of
the holders of at least two-thirds of the number of the shares at the time
outstanding of the series so affected shall be required;
(ii) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class, or any security convertible
into shares of any class, ranking prior to the Serial Preferred Stock; or
(iii) The purchase or redemption (for sinking fund purposes or
otherwise) of less than all of the Serial Preferred Stock then outstanding
except in accordance with a stock purchase offer made to all holders of
record of Serial Preferred Stock, unless all dividends upon all Serial
Preferred Stock then outstanding for all previous quarterly dividend
periods shall have been declared and paid or funds therefor set apart and
all accrued sinking fund obligations applicable thereto shall have been
complied with.
This Section 6(b) shall not apply to, and the class or series vote
specified therein shall not be required for the approval of, any action which is
part of or effected in connection with the consolidation of the Company with or
its merger into any other corporation, so long as the class vote specified by
Section 6(c) of this Division is obtained in any case in which such class vote
is required under clause (ii) of said Section 6(c).
(c) The vote or consent of the holders of at least a majority of the shares
of Serial Preferred Stock at the time outstanding, given in person or by proxy
either in writing or at a meeting called for the purpose at which the holders of
Serial Preferred Stock shall vote separately as a class, shall be necessary to
effect any one or
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more of the following (but so far as the holders of Serial Preferred Stock are
concerned, such action may be effected with such vote or consent):
(i) The sale, lease or conveyance by the Company of all or
substantially all of its property or business; or
(ii) The consolidation of the Company with or its merger into any
other corporation unless the corporation resulting from such consolidation
or merger will have after such consolidation or merger no class of shares
either authorized or outstanding ranking prior to or on a parity with the
Serial Preferred Stock except the same number of shares ranking prior to or
on a parity with the Serial Preferred Stock and having the same rights and
preferences as the shares of the Company authorized and outstanding
immediately preceding such consolidation or merger, and each holder of
Serial Preferred Stock immediately preceding such consolidation or merger
shall receive the same number of shares, with the same rights and
preferences, of the resulting corporation; or
(iii) The authorization of any shares ranking on a parity with the
Serial Preferred Stock or an increase in the authorized number of shares of
Serial Preferred Stock.
Section 7. If the shares of any series of Serial Preferred Stock shall be
convertible into Common Stock, then upon conversion of shares of such series the
stated capital of the Common Stock issued upon such conversion shall be the
aggregate par value of the shares so issued having par value, or, in the case of
shares without par value, shall be an amount equal to the stated capital
represented by each share of Common Stock outstanding at the time of such
conversion multiplied by the number of shares of Common Stock issued upon such
conversion. The stated capital of the Company shall be correspondingly increased
or reduced to reflect the difference between the stated capital of the shares of
Serial Preferred Stock so converted and the stated capital of the Common Stock
issued upon such conversion.
Section 8. The holders of Serial Preferred Stock shall have no preemptive
right to purchase or have offered to them for purchase any shares or other
securities of the Company, whether now or hereafter authorized.
Section 9. For the purpose of this Division A:
Whenever reference is made to shares "ranking prior to the Serial Preferred
Stock" or "on a parity with the Serial Preferred Stock", such reference shall
mean and include all shares of the Company in respect of which the rights of the
holders thereof as to the payment of dividends or as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company are given preference over, or rank on an equality
with (as the case may be) the rights of the holders of Serial Preferred Stock;
and whenever reference is made to shares "ranking junior to the Serial Preferred
Stock", such reference shall mean and include all shares of the Company in
respect of which the rights of the holders thereof as to the payment of
dividends and as to distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company are junior
and subordinate to the rights of the holders of Serial Preferred Stock.
DIVISION A-1
CUMULATIVE REDEEMABLE SERIAL PREFERRED STOCK
Section 1. There is established hereby a series of Serial Preferred Stock
that shall be designated "Cumulative Redeemable Serial Preferred Stock"
(hereinafter sometimes called this "Series" or the "Cumulative Redeemable
Preferred Stock") and that shall have the terms set forth in this Division A-1.
Section 2. The number of shares of this Series shall be 3,000,000.
Section 3. (a) The holders of record of shares of Cumulative Redeemable
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors in accordance with the terms hereof, out of funds legally available
for the purpose, cumulative quarterly dividends payable in cash on the first day
of January, April, July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance
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of a share of Cumulative Redeemable Preferred Stock or fraction of a share of
Cumulative Redeemable Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the lesser of (i) $750 per share or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock, or a subdivision of the outstanding
Common Stock (by reclassification or otherwise)), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share of Cumulative Redeemable Preferred Stock or fraction of a share of
Cumulative Redeemable Preferred Stock. In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Cumulative Redeemable
Preferred Stock were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) Dividends shall begin to accrue and be cumulative on outstanding shares
of Cumulative Redeemable Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Cumulative Redeemable
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Cumulative
Redeemable Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. No dividends shall
be paid upon or declared and set apart for any Cumulative Redeemable Preferred
Stock for any dividend period unless at the same time a dividend for the same
dividend period, ratably in proportion to the respective annual dividend rates
fixed therefor, shall be paid upon or declared and set apart for all Serial
Preferred Stock of all series then outstanding and entitled to receive such
dividend. The Board of Directors may fix a record date for the determination of
holders of Cumulative Redeemable Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 40 days prior to the date fixed for the payment thereof.
Section 4. Subject to the provisions of Section 6(b)(iii) of Division A and
in accordance with Section 4 of Division A, shares of the Cumulative Redeemable
Preferred Stock shall be redeemable from time to time at the option of the Board
of Directors of the Company, as a whole or in part, at any time at a redemption
price per share equal to one hundred times the then applicable Purchase Price as
defined in that certain Rights Agreement, dated as of April 23, 1997 between the
Company and KeyBank National Association (the "Rights Agreement"), as the same
may be from time to time amended in accordance with its terms, which Purchase
Price is $110 as of April 23, 1997, subject to adjustment from time to time as
provided in the Rights Agreement. Copies of the Rights Agreement are available
from the Company upon request. In case less than all of the outstanding shares
of Cumulative Redeemable Preferred Stock are to be redeemed, the Company shall
select by lot the shares so to be redeemed in such manner as shall be prescribed
by its Board of Directors.
Section 5. (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company (hereinafter referred to
as a "Liquidation"), no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon Liquidation) to the
Cumulative Redeemable Preferred Stock, unless, prior thereto, the holders of
shares of Cumulative Redeemable Preferred Stock shall have received at least an
amount per share equal to one hundred times the then applicable Purchase Price
as defined in the Rights Agreement, as the same may be from time to time amended
in accordance with its terms (which Purchase Price is $110 as of April 23,
1997), subject to adjustment from time to time as provided in the Rights
Agreement, plus an amount equal to accrued and unpaid dividends and
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distributions thereon, whether or not earned or declared, to the date of such
payment, provided that the holders of shares of Cumulative Redeemable Preferred
Stock shall be entitled to receive at least an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Stock (the "Cumulative Redeemable Preferred Stock Liquidation Preference").
(b) In the event, however, that the net assets of the Company are not
sufficient to pay in full the amount of the Cumulative Redeemable Preferred
Stock Liquidation Preference and the liquidation preferences of all other series
of Serial Preferred Stock, if any, which rank on a parity with the Cumulative
Redeemable Preferred Stock as to distribution of assets in Liquidation, all
shares of this Series and of such other series of Serial Preferred Stock shall
share ratably in the distribution of assets (or proceeds thereof) in Liquidation
in proportion to the full amounts to which they are respectively entitled.
(c) In the event the Company shall at any time declare or pay any dividend
on the Common Stock payable in Common Stock, or effect a subdivision or
combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of Cumulative Redeemable Preferred Stock were
entitled immediately prior to such event pursuant to the proviso set forth in
paragraph 5(a) above, shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Company into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Company, shall not be deemed to be a Liquidation for the purposes of this
Section 5.
Section 6. The Cumulative Redeemable Preferred Stock shall not be
convertible into Common Stock.
DIVISION B
EXPRESS TERMS OF THE COMMON STOCK
The Common Stock shall be subject to the express terms of the Serial
Preferred Stock and any series thereof. Each share of Common Stock shall be
equal to every other share of Common Stock. The holders of shares of Common
Stock shall be entitled to one vote for each share of such stock upon all
matters presented to the shareholders. The holders of shares of Common Stock
shall have no preemptive rights to purchase or have offered to them for purchase
any shares of Common Stock which at any time shall be required for issuance in
fulfillment of the provisions of any series of the Company's Serial Preferred
Stock.
FIFTH: No holders of any class of shares of the Company shall have any
preemptive right to purchase or have offered to them for purchase any shares or
other securities of the Company, whether now or hereafter authorized.
SIXTH: (A) Notwithstanding any provision of the Ohio Revised Code now or
hereafter in force requiring for any purpose the vote, consent, waiver or
release of the holders of shares entitling them to exercise two-thirds, or any
other proportion, of the voting power of the Company or of any class or classes
of shares thereof, such action, unless otherwise expressly required by statute
or by the Articles of the Company, may be taken by the vote, consent, waiver or
release of the holders of shares entitling them to exercise a majority of the
voting power of the Company or of such class or classes.
(B) The affirmative vote (i) of the holders of shares entitling them to
exercise two-thirds of the voting power of the Company, and (ii) of the holders
of two-thirds of the shares of Common Stock at the time outstanding, given in
person or by proxy at a meeting called for the purpose at which the holders of
Common Stock shall vote separately as a class, shall be necessary:
(a) to approve (i) the sale, exchange, lease, transfer or other
disposition by the Company of all, or substantially all, of its assets or
business to a related corporation or an affiliate of a related corporation,
or
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(ii) the consolidation of the Company with or its merger into a related
corporation or an affiliate of a related corporation, or (iii) the merger
into the Company of a related corporation or an affiliate of a related
corporation, or (iv) a combination or majority share acquisition in which
the Company is the acquiring corporation and its voting shares are issued
or transferred to a related corporation or an affiliate of a related
corporation or to shareholders of a related corporation or an affiliate of
a related corporation; or
(b) to approve any agreement, contract or other arrangement with a
related corporation providing for any of the transactions described in
subparagraph (a) above; or
(c) to effect any amendment of the Articles of the Company which
changes the provisions of this Paragraph (B).
For the purpose of this Paragraph (B), (i) a "related corporation" in respect of
a given transaction shall be any corporation which, together with its affiliates
and associated persons, owns of record or beneficially, directly or indirectly,
more than 5% of the shares of any outstanding class of stock of the Company
entitled to vote upon such transaction, as of the record date used to determine
the shareholders of the Company entitled to vote upon such transaction; (ii) an
"affiliate" of a related corporation shall be any individual, joint venture,
trust, partnership or corporation which, directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the related corporation; (iii) an "associated person" of a related
corporation shall be any officer or director or any beneficial owner, directly
or indirectly, of 10% or more of any class of equity security, of such related
corporation or any of its affiliates; (iv) the terms "combination", "majority
share acquisition" and "acquiring corporation" shall have the same meaning as
that contained in Section 1701.01 of the Ohio General Corporation Law or any
similar provision hereafter enacted.
The determination of the Board of Directors of the Company, based on
information known to the Board of Directors and made in good faith, shall be
conclusive as to whether any corporation is a related corporation as defined in
this Paragraph (B).
SEVENTH: The Company may from time to time, pursuant to authorization by
the Board of Directors and without action by the shareholders, purchase or
otherwise acquire shares of the Company of any class or classes in such manner,
upon such terms and in such amounts as the Board of Directors shall determine;
subject, however, to such limitation or restriction, if any, as is contained in
the express terms of any class of shares of the Company outstanding at the time
of the purchase or acquisition in question.
EIGHTH: No shareholder of the Company may cumulate his voting power.
NINTH: These Amended Articles of Incorporation shall supersede and take the
place of the heretofore existing Articles of Incorporation of the Company and
all amendments thereto.
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EXHIBIT 10(a)
THE SHERWIN-WILLIAMS COMPANY
1994 STOCK PLAN
(AMENDED AND RESTATED APRIL 23, 1997)
The Sherwin-Williams Company 1994 Stock Plan (the "Plan") is amended
and restated effective as of April 23, 1997. The Plan was established effective
as of 12:00:01 a.m. on February 16, 1994. The purpose of the Plan is to attract
and retain key executive, managerial, technical and professional personnel for
The Sherwin-Williams Company and its subsidiaries by providing incentives and
rewards for superior performance by such personnel.
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings unless the context clearly indicates otherwise:
1.01 Appreciation Right. A right to receive from the Company, upon
surrender of the related stock option, an amount equal to the Spread in
accordance with Article IV.
1.02 Board of Directors. The Board of Directors of the Company.
1.03 Code. The Internal Revenue Code of 1986, as the same has been or
may be amended from time-to-time.
1.04 Committee. The Compensation and Management Development Committee
of the Board of Directors or such other committee composed of not less than
three (3) non-employee directors appointed by the Board of Directors.
1.05 Common Stock. Common Stock of the Company or any security into
which such Common Stock may be changed by reason of any transaction or event of
the type described in Article VIII.
1.06 Company. The Sherwin-Williams Company, or its corporate successor
or successors.
1.07 Date of Grant. The date specified by the Board of Directors on
which a grant of Option Rights or Appreciation Rights or a grant or sale of
Restricted Stock shall become effective (which date shall not be earlier than
the date on which the Board of Directors takes action with respect thereto).
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1.08 Eligible Employees. Persons who are selected by the Board of
Directors and who are, at the time such persons are selected, officers
(including officers who are members of the Board of Directors) or other key
employees of the Company or any of its subsidiaries.
1.09 Fair Market Value. The average between the highest and the lowest
quoted selling price of the Company's Common Stock on the New York Stock
Exchange or any successor exchange.
1.10 ISO. An "incentive stock option" within the meaning of section 422
of the Code.
1.11 Option Right. The right to purchase a share of Common Stock upon
exercise of an option granted pursuant to Article III.
1.12 Participant. An Eligible Employee named in an agreement evidencing
an outstanding Option Right, Appreciation Right, sale or grant of Restricted
Stock or stock option granted under any stock option plan heretofore or
hereafter approved by the shareholders of the Company.
1.13 Plan. The Sherwin-Williams Company 1994 Stock Plan, as the same
may be amended from time-to-time.
1.14 Restricted Stock. Shares of Common Stock granted or sold pursuant
to Article V as to which neither the substantial risk of forfeiture nor the
prohibition or restriction on transfer referenced to therein has lapsed,
terminated or been cancelled.
1.15 Section 16. Section 16 of the Securities Exchange Act of 1934, as
the same has been and may be amended from time-to-time.
1.16 Spread. The excess of the Fair Market Value per share of Common
Stock on the date when an Appreciation Right is exercised over the option price
provided for in the related stock option.
1.17 Subsidiary. Any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Option Right, Appreciation Right or the grant or sale of
Restricted Stock, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
1.18 Tax Date. The date upon which the tax is first determinable.
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ARTICLE II
COMMON STOCK AVAILABLE
2.01 Number of Shares. The shares of Common Stock which may be (a) sold
upon the exercise of Option Rights, (b) delivered upon the exercise of
Appreciation Rights, or (c) awarded or sold as Restricted Stock and released
from substantial risks of forfeiture thereof shall not exceed in the aggregate
14,000,000 shares plus the number of shares of Common Stock previously
authorized pursuant to the Plan which are available as of the date hereof, all
subject to adjustment as provided in Articles VII and VIII. Such shares may be
shares of original issuance or treasury shares or a combination of the
foregoing.
2.02 Reuse of Shares. If an Option Right or portion thereof shall
expire or terminate for any reason without having been exercised in full, or if
the rights of a Participant in Restricted Stock shall terminate prior to the
lapse of the substantial risk of forfeiture relating thereto, the shares covered
by such Option Right or Restricted Stock grant not transferred to the
Participant shall be available for future grants of Option Rights and/or
Restricted Stock.
ARTICLE III
OPTION RIGHTS
3.01 Authorization and Terms. The Board of Directors may, from
time-to-time and upon such terms and conditions as it may determine, consistent
with the terms of the Plan, authorize the granting of options to Eligible
Employees to purchase shares of Common Stock. Each such grant may utilize any or
all of the authorizations and shall be subject to all of the applicable
limitations set forth in the Plan, including the following:
(A) Each grant shall specify the number of shares of Common
Stock to which it pertains;
(B) Each grant shall specify an option price per share equal
to the Fair Market Value per share on the Date of Grant, and that such
option price shall be payable in full at the time of exercise of the
option either (i) in cash, (ii) by exchanging for the shares to be
issued hereunder pursuant to the exercise of the option previously
acquired shares of the Company's Common Stock held for such period of
time, if any, as the Board of Directors may require and reflect in the
stock option certificate (valued at an amount equal to the Fair Market
Value of such stock on the date of exercise), or (iii) by a combination
of the payment methods specified in clauses (i) and (ii) hereof. The
proceeds of sale of Common Stock subject to Option Rights are to be
added to the general funds of the Company or to the shares of the
Common Stock held in treasury and used for the Company's corporate
purposes as the Board of Directors shall determine;
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(C) Successive grants may be made to the same Eligible
Employee whether or not any Option Rights previously granted to such
Eligible Employee remain unexercised;
(D) Each grant shall specify the period or periods of
continuous employment by the Participant with the Company or any
Subsidiary which is necessary before the Option Rights or installments
thereof will become exercisable;
(E) The Option Rights may be either (i) options which are
intended to qualify under particular provisions of the Code, as in
effect from time-to-time, including, but not limited to, ISOs, (ii)
options which are not intended to so qualify or (iii) any combination
of separate grants of both (i) and (ii) above;
(F) The aggregate Fair Market Value of the stock (determined
as of the time the option with respect to such stock is granted) for
which any Eligible Employee may be granted options which are intended
to qualify as ISOs and which are exercisable for the first time by such
Participants during any calendar year (under all plans of the Company
and its parent and Subsidiary corporations, if any) shall not exceed
$100,000;
(G) No Option Right shall be exercisable more than ten years
from the Date of Grant;
(H) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered
to and accepted by the Eligible Employee and containing such terms and
provisions, consistent with the Plan, as the Board of Directors may
approve; and
(I) The maximum number of shares for which Option Rights may
be granted to any Eligible Employee during any calendar year shall not
exceed 1,000,000.
ARTICLE IV
APPRECIATION RIGHTS
4.01 Generally. The Board of Directors may from time-to-time grant
Appreciation Rights in respect of any or all stock options heretofore or
hereafter granted (including stock options simultaneously granted) pursuant to
any stock option plan or employment agreement of the Company now or hereafter in
effect, whether or not such stock options are at such time exercisable, to the
extent that such stock options at such time have not been exercised and have not
been terminated. The Board of Directors may define the terms and provisions of
such Appreciation Rights, subject to the limitations and provisions of the Plan.
The amount which may be due the Participant at the time of the exercise of an
Appreciation Right may be paid by the Company in whole shares of Common Stock
(taken at their fair market value at the time of exercise), in cash or a
combination thereof, as the Board of Directors shall determine.
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4.02 Exercise of Appreciation Rights. An Appreciation Right may be
exercised at any time when the related stock option may be exercised by the
surrender to the Company, unexercised, of the related stock option. Shares
covered by stock options so surrendered shall not be available for the granting
of further stock options under any stock option plan of the Company or a
Subsidiary, anything in such plan to the contrary notwithstanding.
4.03 Limitation on Payments. The amount payable on the exercise of any
Appreciation Rights may not exceed 100% (or such lesser percentage as the Board
of Directors may determine) of the excess of (i) the Fair Market Value of the
shares of Common Stock covered by the related option as determined on the date
such Appreciation Right is exercised over (ii) the aggregate option price
provided for in the related stock option.
4.04 Termination of Appreciation Right. An Appreciation Right shall
terminate and may no longer be exercised upon the earlier of (i) exercise or
termination of the related stock option or (ii) any termination date specified
by the Board of Directors at the time of grant of such Appreciation Right.
4.05 Limitation on Number of Appreciation Rights. The maximum number of
shares for which Appreciation Rights may be granted to any Eligible Employee
during any calendar year shall not exceed 1,000,000.
ARTICLE V
RESTRICTED STOCK
5.01 Authorization and Terms. The Board of Directors may, from
time-to-time and upon such terms and conditions as it may determine, authorize
the granting or sale to Eligible Employees of Restricted Stock. Each grant or
sale may utilize any or all of the authorizations and shall be subject to all of
the following limitations:
(A) Each such grant or sale shall constitute an immediate
transfer of the ownership of shares of Common Stock to the Participant
in consideration of the performance of services and shall entitle such
Participant to voting, dividend and other ownership rights, as the
Board of Directors may determine, subject, however, to a substantial
risk of forfeiture and restrictions on transfer as the Board of
Directors may determine;
(B) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that
is less than the Fair Market Value per share at the Date of Grant;
(C) Each such grant or sale shall provide that the shares of
Restricted Stock covered by such grant or sale are subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of
the Code and the regulations thereunder;
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<PAGE> 6
(D) Each such grant or sale shall provide that during the
period for which the substantial risk of forfeiture is to continue, the
transferability of the Restricted Stock shall be prohibited or
restricted in the manner and to the extent prescribed by the Board of
Directors at the Date of Grant; and
(E) Each grant or sale of Restricted Stock shall be evidenced
by an agreement executed on behalf of the Company by an officer and
delivered to and accepted by the Participant and shall contain such
terms and provisions, consistent with the Plan, as the Board of
Directors may approve.
(F) Each grant or sale shall be subject to a vesting
requirement. The percentage of the number of shares of Restricted Stock
granted to any Participant that such Participant shall be entitled to
receive without restriction shall be based upon a comparison of the
average return on average equity of the Company and a group of other
companies. The number of shares of Restricted Stock which a Participant
shall be entitled to receive without restriction shall be determined in
accordance with the following table:
<TABLE>
<CAPTION>
Average Return on
Average Equity Percentile Ranking
of the Company Compared Percentage of
to Group of Other Companies Shares Vesting
--------------------------- --------------
<S> <C>
80th to 100th Percentile ................................................. 100%
75th to 80th Percentile .................................................. 90%
70th to 75th Percentile .................................................. 80%
65th to 70th Percentile .................................................. 70%
60th to 65th Percentile .................................................. 60%
55th to 60th Percentile .................................................. 50%
50th to 55th Percentile .................................................. 40%
Less than 50th Percentile ................................................ 0%
</TABLE>
The maximum number of shares of Restricted Stock that may be
granted to any Eligible Employee during any calendar year shall not
exceed 1,000,000.
ARTICLE VI
ADMINISTRATION OF THE PLAN
6.01 Generally. The Plan shall be administered by the Board of
Directors, which may from time-to-time delegate all or any part of its authority
under the Plan to a Committee. The members of the Committee shall not be
eligible and shall not have been eligible for a period of at least one year
prior to their appointment, to participate in the Plan. A majority of the Board
of Directors or the Committee, if applicable, shall constitute a quorum, and the
action of the members present at any meeting at which a quorum is present, or
acts unanimously approved in
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writing, shall be the acts of the Board of Directors or the Committee, as
applicable. No Restricted Stock, Option Right or Appreciation Right shall be
granted or sold under the Plan to any member of the Committee so long as his
membership continues.
6.02 Interpretation and Construction. The interpretation and
construction by the Board of Directors of any provision of the Plan or of any
agreement, notification or document evidencing the grant of Restricted Stock,
Option Rights or Appreciation Rights and any determination by the Board of
Directors pursuant to any provision of the Plan or of any such agreement,
notification or document, made in good faith, shall be final and conclusive. No
member of the Board of Directors shall be liable for any such action or
determination made in good faith.
ARTICLE VII
AMENDMENT AND TERMINATION
7.01 Amendment of the Plan. The Plan may be amended from time-to-time
by the Board of Directors without further approval by the shareholders of the
Company unless such amendment (i) increases the maximum number of shares
specified in Article II (except that adjustments authorized by Section 8.02
shall not be limited by this provision), (ii) changes the definition of
"Eligible Employees" or (iii) causes Rule 16b-3 issued under the Securities
Exchange Act of 1934 (or any successor rule to the same effect) to cease to be
applicable to the Plan.
7.02 Amendment of the Agreements. The Board of Directors may cancel or
amend any agreement evidencing Restricted Stock, Option Rights or Appreciation
Rights granted under the Plan provided that the terms and conditions of each
such agreement as amended are not inconsistent with the Plan and provided
further that, except as provided in Section 8.02, the option price per share may
not be increased or decreased following the Date of Grant of the Related Option
Right.
7.03 Automatic Termination. The Plan will terminate at midnight on
February 16, 2003; provided, however, that Option Rights and Appreciation Rights
granted on or before that date may extend beyond that date and restrictions
imposed on Restricted Stock transferred on or before that date may extend beyond
such date.
ARTICLE VIII
MISCELLANEOUS
8.01 Transferability. No Option Right or Appreciation Right shall be
transferable by a Participant other than by will or the laws of descent and
distribution. Option Rights and Appreciation Rights shall be exercisable during
the Participant's lifetime only by the Participant. No right or interest of any
Participant granted under the Plan shall be subject to alienation, anticipation,
encumbrance, garnishment, attachment, any lien, obligation or liability of such
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Participant, or execution or levy of any kind, voluntary or involuntary, except
as provided herein or required by law.
8.02 Adjustments. The Board of Directors may make or provide for such
adjustments in the exercise price, sale price and the number or kind of shares
of the Company's Common Stock or other securities covered by outstanding Option
Rights, Appreciation Rights or Restricted Stock grants as such Board of
Directors in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of
Participants that would otherwise result from (i) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, (ii) any merger, consolidation, separation,
reorganization or partial or complete liquidation, or (iii) any other corporate
transaction or event having an effect similar to any of the foregoing. The Board
of Directors may also make or provide for such adjustments in the number or kind
or shares of the Company's Common Stock or other securities which may be sold or
transferred under the Plan and in the maximum number of shares that may be
purchased or received by any person, as such Board of Directors in its sole
discretion, exercised in good faith, may determine is appropriate to reflect any
event of the type described in clauses (i) and/or (ii) of the preceding
sentence.
8.03 Fractional Shares. The Company shall not be required to sell or
transfer any fractional share of Common Stock pursuant to the Plan. The Board of
Directors may provide for the elimination of fractions or for the settlement of
fractions in cash.
8.04 Withholding Taxes. The Company shall have the right to deduct from
any transfer of shares or other payment under this Plan an amount equal to the
Federal, state and local income taxes and employment taxes required to be
withheld by it with respect to such transfer and payment and, if the cash
portion of any such payment is less than the amount of taxes required to be
withheld, to require the Participant or other person receiving such transfer or
payment, to pay to the Company the balance of such taxes so required to be
withheld. Notwithstanding the foregoing, when a Participant is required to pay
to the Company an amount required to be withheld under applicable income and
employment tax laws, the Participant may elect to satisfy the obligation, in
whole or in part, by electing to have withheld, from the shares required to be
delivered to the Participant, shares of Common Stock having a value equal to the
amount required to be withheld (except in the case of Restricted Stock where an
election under Section 83(b) of the Code has been made), or by delivering to the
Company other shares of Common Stock held by such Participant. The shares used
for tax withholding settlement will be valued at an amount equal to the Fair
Market Value of such Common Stock on the Tax Date. Election by a Participant to
have shares withheld or to deliver other shares of Common Stock for this purpose
will be subject to the following restrictions: (i) such election must be made
prior to the Tax Date, (ii) such election will be irrevocable, and (iii) such
election will be subject to the disapproval of the Board of Directors.
8.05 Not an Employment Contract. This Plan shall not confer upon any
Eligible Employee or Participant any right with respect to continuance of
employment with the Company
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or any Subsidiary, nor shall it interfere in any way with any right such
Eligible Employee, Participant, the Company or any Subsidiary would otherwise
have to terminate such Participant or Eligible Employee's employment at any
time.
8.06 Invalidity of Provisions. Should any part of the Plan for any
reason be declared by any court of competent jurisdiction to be invalid, such
decision shall not affect the validity of any remaining portion, which remaining
portion shall continue in full force and effect as if the Plan had been adopted
with the invalid portion hereof eliminated, it being the intention of the
Company that it would have adopted the remaining portion of the Plan without
including any such part, parts or portion which may for any reason be hereafter
declared invalid.
8.07 Effective Date. The Plan became effective at 12:00:01 a.m. on
February 16, 1994 following its approval at the April 28, 1993 Annual Meeting of
Shareholders of the Company by the affirmative vote of the holders of a majority
of the shares of Common Stock present, in person or by proxy, and entitled to
vote thereat. The Plan shall be deemed to have been adopted on the date of such
meeting.
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<PAGE> 1
EXHIBIT 10(b)
THE SHERWIN-WILLIAMS COMPANY
1997 STOCK PLAN FOR NONEMPLOYEE DIRECTORS
The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors
is effective as of April 23, 1997. The purpose of the Plan is to attract and
retain highly qualified persons to serve as nonemployee members of the Board of
Directors of the Company and to align the interests of such persons more closely
with the interests of the Company's shareholders.
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings unless the context clearly indicates otherwise:
1.01 Board of Directors. The Board of Directors of the Company.
1.02 Code. The Internal Revenue Code of 1986, as the same has been or
may be amended from time-to-time.
1.03 Committee. The Committee shall consist of three or more members
who may be, but are not required to be, directors or employees of the Company,
one of whom may be the Chief Executive Officer of the Company and the others of
whom shall be appointed by the Chief Executive Officer of the Company and shall
serve from the effective date of their appointment until such time as the Chief
Executive Officer shall appoint a successor to any or all of such members of the
Committee.
1.04 Common Stock. Common Stock of the Company or any security into
which such Common Stock may be changed by reason of any transaction or event of
the type described in Article VII.
1.05 Company. The Sherwin-Williams Company, or its corporate successor
or successors.
1.06 Date of Grant. The date on which a grant of Option Rights or a
grant or sale of Restricted Stock shall become effective (which date shall not
be earlier than the date the Board of Directors takes action with respect
thereto).
1.07 Eligible Directors. Members of the Board of Directors who are not
employees of the Company or any Subsidiary.
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1.08 Fair Market Value. The average between the highest and the lowest
quoted selling price of the Company's Common Stock on the New York Stock
Exchange or any successor exchange.
1.09 Option Right. The right to purchase a share of Common Stock upon
exercise of an option granted pursuant to Article III.
1.10 Participant. An Eligible Director named in an agreement evidencing
an outstanding Option Right, sale or grant of Restricted Stock or stock option
granted under any stock option plan heretofore or hereafter approved by the
shareholders of the Company.
1.11 Plan. The Sherwin-Williams Company 1997 Stock Plan for Nonemployee
Directors, as the same may be amended from time-to-time.
1.12 Restricted Stock. Shares of Common Stock granted or sold pursuant
to Article IV as to which neither a substantial risk of forfeiture, if any, nor
any prohibition or restriction on transfer referenced to therein has lapsed,
terminated or been cancelled.
1.13 Subsidiary. Any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Option Right or the grant or sale of Restricted Stock, each of
the corporations other than the last corporation in the unbroken chain owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
ARTICLE II
COMMON STOCK AVAILABLE
2.01 Number of Shares. The shares of Common Stock which may be (a) sold
upon the exercise of Option Rights or (b) awarded or sold as Restricted Stock
and released from any substantial risks of forfeiture or restrictions on
transfers relating thereto shall not exceed in the aggregate 400,000 shares,
subject to adjustment as provided in Articles VI and VII. Such shares may be
shares of original issuance or treasury shares or a combination of the
foregoing.
2.02 Reuse of Shares. If an Option Right or portion thereof shall
expire or terminate for any reason without having been exercised in full, or if
the rights of a Participant in Restricted Stock shall terminate prior to the
lapse of any substantial risk of forfeiture or restrictions on transfer relating
thereto, the shares covered by such Option Right or Restricted Stock grant not
transferred to the Participant shall be available for future grants of Option
Rights and/or Restricted Stock.
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ARTICLE III
OPTION RIGHTS
3.01 Authorization and Terms. The Board of Directors may, from
time-to-time and upon such terms and conditions as it may determine, consistent
with the terms of the Plan, authorize the granting of options to Eligible
Directors to purchase shares of Common Stock. Each such grant may utilize any or
all of the authorizations and shall be subject to all of the applicable
limitations set forth in the Plan, including the following:
(A) Each grant shall specify the number of shares of Common
Stock to which it pertains;
(B) Each grant shall specify an option price per share equal
to the Fair Market Value per share on the Date of Grant, and that such
option price shall be payable in full at the time of exercise of the
option either (i) in cash, (ii) by exchanging for the shares to be
issued hereunder pursuant to the exercise of the option previously
acquired shares of the Company's Common Stock held for such period of
time, if any, as the Board of Directors may require and reflect in the
stock option certificate (valued at an amount equal to the Fair Market
Value of such stock on the date of exercise), or (iii) by a combination
of the payment methods specified in clauses (i) and (ii) hereof. The
proceeds of sale of Common Stock subject to Option Rights are to be
added to the general funds of the Company, in the case of cash, or to
the shares of the Common Stock held in treasury, in the case of shares,
and used for the Company's corporate purposes as the Board of Directors
shall determine;
(C) Successive grants may be made to the same Eligible
Directors whether or not any Option Rights previously granted to such
Eligible Director remain unexercised;
(D) Each grant shall specify the period or periods of
continuous service by the Participant on the Board of Directors which
is necessary before the Option Rights or installments thereof will
become exercisable;
(E) No Option Right shall be exercisable more than ten years
from the Date of Grant; and
(F) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered
to and accepted by the Eligible Director and containing such terms and
provisions, consistent with the Plan, as the Board of Directors may
approve.
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ARTICLE IV
RESTRICTED STOCK
4.01 Authorization and Terms. The Board of Directors may, from
time-to-time and upon such terms and conditions as it may determine, authorize
the granting or sale to Eligible Directors of Restricted Stock. Each grant or
sale may utilize any or all of the authorizations and shall be subject to all of
the following limitations:
(A) Each such grant or sale shall constitute an immediate
transfer of the ownership of shares of Common Stock to the Participant
in consideration of the performance of services and shall entitle such
Participant to voting, dividend and other ownership rights, as the
Board of Directors may determine, subject, however, to any substantial
risk of forfeiture and any restrictions on transfer as the Board of
Directors may determine;
(B) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that
is less than the Fair Market Value per share at the Date of Grant;
(C) Each such grant or sale may provide that the shares of
Restricted Stock covered by such grant or sale are subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of
the Code and the regulations thereunder;
(D) Each such grant or sale may provide that during the period
for which any substantial risk of forfeiture is to continue, the
transferability of the Restricted Stock shall be prohibited or
restricted in the manner and to the extent prescribed by the Board of
Directors at the Date of Grant; and
(E) Each grant or sale of Restricted Stock shall be evidenced
by an agreement executed on behalf of the Company by an officer and
delivered to and accepted by the Eligible Director and shall contain
such terms and provisions, consistent with the Plan, as the Board of
Directors may approve.
ARTICLE V
ADMINISTRATION OF THE PLAN
5.01 Generally. The Plan shall be administered by the Board of
Directors, which may from time-to-time delegate all or any part of its authority
to a Committee. A majority of the Board of Directors or the Committee, if
applicable, shall constitute a quorum, and the action of the members present at
any meeting at which a quorum is present, or acts unanimously approved in
writing, shall be the acts of the Board of Directors or the Committee, as
applicable. The Board
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of Directors or the Committee may make such rules and establish such procedures
for the administration of the Plan as it deems appropriate to carry out the
purpose of the Plan.
5.02 Interpretation and Construction. The interpretation and
construction by the Board of Directors or the Committee of any provision of the
Plan or of any agreement, notification or document evidencing the grant of
Option Rights or Restricted Stock and any determination by the Board of
Directors or the Committee pursuant to any provision of the Plan or of any such
agreement, notification or document, made in good faith, shall be final and
conclusive. No member of the Board of Directors or the Committee shall be liable
for any such action or determination made in good faith.
ARTICLE VI
AMENDMENT AND TERMINATION
6.01 Amendment of the Plan. The Plan may be amended from time-to-time
by the Board of Directors in any respect, provided, however, that without
further approval by the shareholders of the Company, no amendment may increase
the maximum number of shares specified in Article II (except that adjustments
authorized by Section 7.02 shall not be limited by this provision).
6.02 Amendment of the Agreements. The Board of Directors may cancel or
amend any agreement evidencing Option Rights or Restricted Stock granted under
the Plan provided that the terms and conditions of each such agreement as
amended are not inconsistent with the Plan and provided further that, except as
provided in Section 7.02, the option price per share may not be increased or
decreased following the Date of Grant of the related Option Right.
6.03 Automatic Termination. The Plan will terminate at midnight on
April 22, 2007 unless earlier terminated by the Board of Directors; provided,
however, that Option Rights granted on or before that date may extend beyond
that date and restrictions imposed on Restricted Stock transferred on or before
that date may extend beyond such date.
ARTICLE VII
MISCELLANEOUS
7.01 Transferability. Except as otherwise provided in any agreement
evidencing Option Rights, no Option Right shall be transferable by a Participant
other than by will or the laws of descent and distribution, and Option Rights
shall be exercisable during the Participant's lifetime only by the Participant.
No right or interest of any Participant granted under the Plan shall be subject
to alienation, anticipation, encumbrance, garnishment or attachment, any lien,
obligation or liability of such Participant, or execution or levy of any kind,
voluntary or involuntary, except as provided herein or required by law.
5
<PAGE> 6
7.02 Adjustments. The Board of Directors may make or provide for such
adjustments in the exercise price, sale price and the number or kind of shares
of the Company's Common Stock or other securities covered by outstanding Option
Rights or Restricted Stock grants as the Board of Directors in its sole
discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants that would
otherwise result from (i) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, (ii) any merger, consolidation, separation, reorganization or partial
or complete liquidation, or (iii) any other corporate transaction or event
having an effect similar to any of the foregoing. The Board of Directors may
also make or provide for such adjustments in the number or kind or shares of the
Company's Common Stock or other securities which may be sold or transferred
under the Plan (including the maximum number of shares specified in Article II)
and in the maximum number of shares that may be purchased or received by any
person, as the Board of Directors in its sole discretion, exercised in good
faith, may determine is appropriate to reflect any event of the type described
in clauses (i), (ii) and/or (iii) of the preceding sentence.
7.03 Fractional Shares. The Company shall not be required to sell or
transfer any fractional share of Common Stock pursuant to the Plan. The Board of
Directors may provide for the elimination of fractions or for the settlement of
fractions in cash.
7.04 No Shareholder Rights. A Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issued upon the exercise
of an Option Right until such time as the Option Right is exercised and such
shares of Common Stock are issued.
7.05 No Right to Continue as a Director. Neither the existence of the
Plan nor any action taken under the Plan shall be construed as giving any
Participant any right to continue to serve as a member of the Board of
Directors.
7.06 Invalidity of Provisions. Should any part of the Plan for any
reason be declared by any court of competent jurisdiction to be invalid, such
decision shall not affect the validity of any remaining portion, which remaining
portion shall continue in full force and effect as if the Plan had been adopted
with the invalid portion hereof eliminated, it being the intention of the
Company that it would have adopted the remaining portion of the Plan without
including any such part, parts or portion which may for any reason be hereafter
declared invalid.
7.07 Effective Date. The Plan will become effective immediately
following its approval at the Company's 1997 Annual Meeting of Shareholders. The
Plan shall be deemed to have been adopted on the date of such meeting.
6
<PAGE> 1
EXHIBIT 10(c)
AMENDMENT NO. 1
TO
364-DAY REVOLVING CREDIT AGREEMENT
This Amendment No. 1 to 364-Day Revolving Credit Agreement
("Amendment") is made and entered into as of the 31st day of March, 1997, by and
among The Sherwin-Williams Company ("Company"), whose principal place of
business is located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, Texas
Commerce Bank National Association ("TCB"), as Administrative Agent, The Chase
Manhattan Bank ("Chase"), as the Competitive Advance Facility Agent, and the
financial institutions listed on Schedule A hereto together with each of their
successors and assigns (collectively referred to as the "Lenders" and
individually a "Lender").
W I T N E S S E T H:
--------------------
WHEREAS, Company, TCB, Chase, the Lenders and certain other financial
institutions entered into that certain 364-Day Revolving Credit Agreement, dated
January 3, 1997 ("Agreement"), pursuant to which the Lenders and certain other
financial institutions agreed, on the terms and subject to the conditions
contained therein, to make available to the Company the principal amount of Two
Hundred Ninety Million Dollars ($290,000,000) to be used by the Company for
general corporate purposes including, but not limited to, the acquisition of all
or part of the business, assets or stock of Thompson Minwax Holding Corp. (the
"Acquisition"), commercial paper backup, general working capital, other
acquisitions of assets, stock or other ownership interests and repurchases or
redemptions of securities.
WHEREAS, Company consummated the Acquisition on January 7, 1997.
WHEREAS, Company has timely notified the following financial
institutions that were "Lenders" under the Agreement that their Commitments have
been terminated effective March 31, 1997: (i) Den Danske Bank, (ii) Morgan
Guaranty Trust Company of New York, (iii) Comerica Bank, (iv) Caisse Nationale
de Credit Agricole, (v) The Dai Ichi Kangyo Bank, Ltd. - Chicago Branch, (vi)
Norddeutsche Landesbank Girozentrale - New York Branch and Cayman Islands
Branch, (vii) The Sumitomo Bank, Limited - Chicago Branch, and (viii) United
States National Bank of Oregon.
WHEREAS, Company, TCB, Chase and the Lenders desire to amend the
Agreement to (i) provide that the maximum amount of funds available to the
Company thereunder shall be Two Hundred Sixteen Million Dollars ($216,000,000),
to be used for general corporate purposes including, but not limited to,
commercial paper backup, general working capital, acquisitions of assets, stock
or other ownership interests and repurchases or redemptions of securities, (ii)
reduce the Commitments of certain of the Lenders, and (iii) reflect the fact
that the Commitments of certain financial institutions that were "Lenders" under
the Agreement have been terminated.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual promises contained
herein the parties agree as follows:
1. All capitalized terms used in this Amendment and not otherwise defined
herein shall have the meanings ascribed such terms in the Agreement.
2. The Commitments and Percentages set forth on Schedule A attached to the
Agreement shall be deleted and the Commitments and Percentages set
forth on Schedule A attached hereto shall be substituted in lieu
thereof.
3. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and when
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date indicated above.
THE SHERWIN-WILLIAMS COMPANY
By: /s/
------------------------------------
LARRY J. PITORAK
Title: SENIOR VICE PRESIDENT-
FINANCE, TREASURER AND
CHIEF FINANCIAL OFFICER
By: /s/
------------------------------------
CYNTHIA D. BROGAN
Title: VICE PRESIDENT AND ASSISTANT
TREASURER
2
<PAGE> 3
<TABLE>
<CAPTION>
SCHEDULE A / 1-YEAR
-------------------
AMOUNT OF PERCENTAGE OF
INSTITUTION COMMITMENT COMMITMENT
----------- ---------- -------------
<S> <C> <C>
Texas Commerce Bank National Association $13,000,000 6.0185%
First Union National Bank of North Carolina $13,000,000 6.0185%
The Bank of Nova Scotia $13,000,000 6.0185%
Nationsbank, N.A. $13,000,000 6.0185%
KeyBank National Association $13,000,000 6.0185%
The First National Bank of Chicago $13,000,000 6.0185%
The Bank of New York $13,000,000 6.0185%
SunTrust Bank $13,000,000 6.0185%
National City Bank $10,000,000 4.6296%
Royal Bank of Canada $10,000,000 4.6296%
Wachovia Bank of Georgia, N.A. $10,000,000 4.6296%
Wells Fargo Bank, N.A. $10,000,000 4.6296%
PNC Bank, National Association $10,000,000 4.6296%
ABN AMRO Bank N.V. $10,000,000 4.6296%
CIBC, Inc. $10,000,000 4.6296%
The Fuji Bank, Limited $6,000,000 2.7778%
The Bank of Tokyo-Mitsubishi, Ltd. $6,000,000 2.7778%
The First National Bank of Boston $6,000,000 2.7778%
Bank of Montreal $6,000,000 2.7778%
Banca Commerciale Italiana $6,000,000 2.7778%
The Long-Term Credit Bank of Japan, Ltd. $6,000,000 2.7778%
Mellon Bank, N.A. $6,000,000 2.7778%
TOTAL $216,000,000 100.00%
</TABLE>
<PAGE> 4
The Chase Manhattan Bank,
as the Competitive Advance Facility Agent
By: /s/
_________________________________________
Name:_______________________________________
Title:______________________________________
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Telephone: _____________________
Facsimile: _____________________
<PAGE> 5
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$13,000,000 6.0185% Texas Commerce Bank National
Association
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Texas Commerce Bank National
Association
707 Travis Street
Houston, Texas 77002
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- ---------------
<S> <C> <C>
$13,000,000 6.0185% First Union National Bank of North Carolina
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
First Union National Bank of North Carolina
301 South College Street
Charlotte, NC 28288
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- --------------
<S> <C> <C>
$13,000,000 6.0185% The Bank of Nova Scotia
Atlanta Agency
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree St., N.E., Suite 2700
Atlanta, GA 30308
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- --------------
<S> <C> <C>
$13,000,000 6.0185% Nationsbank, N.A.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Nationsbank, N.A.
100 N. Tryon Street
Charlotte, N.C. 28255
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- --------------
<S> <C> <C>
$13,000,000 6.0185% KeyBank National Association
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
KeyBank National Association
127 Public Square
Mail Code: OH 01-27-0606
Cleveland, OH 44114-1306
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$13,000,000 6.0185% The First National Bank of Chicago
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The First National Bank of Chicago
611 Woodward Avenue
Detroit, MI 48226
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$13,000,000 6.0185% The Bank of New York
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The Bank of New York
One Wall Street
New York, NY 10286
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$13,000,000 6.0185% SunTrust Bank, Atlanta
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
SunTrust Bank, Atlanta
25 Park Place
Atlanta, GA 30302
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% National City Bank
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
National City Bank
1900 E. Ninth Street
Cleveland, OH 44114-3484
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% Royal Bank of Canada
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Royal Bank of Canada
Financial Square
New York, NY 10005
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% Wachovia Bank of Georgia, N.A.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Wachovia Bank of Georgia, N.A.
191 Peachtree St., N.E.
Atlanta, GA 30303
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% Wells Fargo Bank, N.A.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Wells Fargo Bank, N.A.
707 Wilshire Blvd. - MAC 2818-165
Los Angeles, CA 90017
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% PNC Bank, National Association
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
PNC Bank, National Association
249 Fifth Ave., 2nd Floor
Pittsburgh, PA 15222
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% ABN AMRO Bank N.V.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
ABN Amro Bank N.V.
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% CIBC, Inc.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
CIBC, Inc.
425 Lexington Ave., 6th Floor
New York, NY 10017
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% The Fuji Bank, Limited
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% The Bank of Tokyo-Mitsubishi, Ltd.
Chicago Branch
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The Bank of Tokyo-Mitsubishi, Ltd.
Chicago Branch
227 W. Monroe St., Suite 2300
Chicago, IL 60606
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% The First National Bank of Boston
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The First National Bank of Boston
100 Federal Street, 01-09-05
Boston, MA 02110
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% Bank of Montreal
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Bank of Montreal
430 Park Avenue
New York, NY 10022
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% Banca Commerciale Italiana
Chicago Branch
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Banca Commerciale Italiana
Chicago Branch
150 N. Michigan Ave., Suite 1500
Chicago, IL 60601
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% The Long-Term Credit Bank of Japan, Ltd.
Chicago Branch
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
The Long-Term Credit Bank of Japan, Ltd.
Chicago Branch
190 S. LaSalle St., Suite 800
Chicago, IL 60603
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$6,000,000 2.7778% Mellon Bank, N.A.
By: /s/
____________________________________
Name: _________________________________
Title: ________________________________
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 1
EXHIBIT 10(d)
AMENDMENT NO. 1
TO
FIVE YEAR REVOLVING CREDIT AGREEMENT
This Amendment No. 1 to Five Year Revolving Credit Agreement
("Amendment") is made and entered into as of the 31st day of March, 1997, by and
among The Sherwin-Williams Company ("Company"), whose principal place of
business is located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, Texas
Commerce Bank National Association ("TCB"), as Administrative Agent, The Chase
Manhattan Bank ("Chase"), as the Competitive Advance Facility Agent, and the
financial institutions listed on Schedule A hereto together with each of their
successors and assigns (collectively referred to as the "Lenders" and
individually a "Lender").
W I T N E S S E T H:
--------------------
WHEREAS, Company, TCB, Chase, the Lenders and certain other financial
institutions entered into that certain Five Year Revolving Credit Agreement,
dated January 3, 1997 ("Agreement"), pursuant to which the Lenders and certain
other financial institutions agreed, on the terms and subject to the conditions
contained therein, to make available to the Company the principal amount of One
Billion One Hundred Sixty Million Dollars ($1,160,000,000) to be used by the
Company for general corporate purposes including, but not limited to, the
acquisition of all or part of the business, assets or stock of Thompson Minwax
Holding Corp. (the "Acquisition"), commercial paper backup, general working
capital, other acquisitions of assets, stock or other ownership interests and
repurchases or redemptions of securities.
WHEREAS, Company consummated the Acquisition on January 7, 1997.
WHEREAS, Company has timely notified the following financial
institutions that were "Lenders" under the Agreement that their Commitments have
been terminated effective March 31, 1997: (i) Den Danske Bank, (ii) Morgan
Guaranty Trust Company of New York, (iii) Comerica Bank, (iv) Caisse Nationale
de Credit Agricole, (v) The Dai Ichi Kangyo Bank, Ltd. - Chicago Branch, (vi)
Norddeutsche Landesbank Girozentrale - New York Branch and Cayman Islands
Branch, (vii) The Sumitomo Bank, Limited - Chicago Branch, and (viii) United
States National Bank of Oregon.
WHEREAS, Company, TCB, Chase and the Lenders desire to amend the
Agreement to (i) provide that the maximum amount of funds available to the
Company thereunder shall be Eight Hundred Sixty-Four Million Dollars
($864,000,000), to be used for general corporate purposes including, but not
limited to, commercial paper backup, general working capital, acquisitions of
assets, stock or other ownership interests and repurchases or redemptions of
securities, (ii) reduce the Commitments of certain of the Lenders, and (iii)
reflect the fact that the Commitments of certain financial institutions that
were "Lenders" under the Agreement have been terminated.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual promises contained
herein the parties agree as follows:
1. All capitalized terms used in this Amendment and not otherwise defined
herein shall have the meanings ascribed such terms in the Agreement.
2. The Commitments and Percentages set forth on Schedule A attached to the
Agreement shall be deleted and the Commitments and Percentages set
forth on Schedule A attached hereto shall be substituted in lieu
thereof.
3. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and when
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date indicated above.
THE SHERWIN-WILLIAMS COMPANY
By: /s/
---------------------------------------
LARRY J. PITORAK
Title: SENIOR VICE PRESIDENT-
FINANCE, TREASURER AND
CHIEF FINANCIAL OFFICER
By: /s/
---------------------------------------
CYNTHIA D. BROGAN
Title: VICE PRESIDENT AND ASSISTANT
TREASURER
2
<PAGE> 3
<TABLE>
<CAPTION>
SCHEDULE A / 5-YEAR
-------------------
Amount of Percentage of
Institution Commitment Commitment
----------- ---------- --------------
<S> <C> <C>
Texas Commerce Bank National Association $52,000,000 6.0185%
First Union National Bank of North Carolina $52,000,000 6.0185%
The Bank of Nova Scotia $52,000,000 6.0185%
Nationsbank, N.A. $52,000,000 6.0185%
KeyBank National Association $52,000,000 6.0185%
The First National Bank of Chicago $52,000,000 6.0185%
The Bank of New York $52,000,000 6.0185%
SunTrust Bank $52,000,000 6.0185%
National City Bank $40,000,000 4.6296%
Royal Bank of Canada $40,000,000 4.6296%
Wachovia Bank of Georgia, N.A. $40,000,000 4.6296%
Wells Fargo Bank, N.A. $40,000,000 4.6296%
PNC Bank, National Association $40,000,000 4.6296%
ABN AMRO Bank N.V. $40,000,000 4.6296%
CIBC, Inc. $40,000,000 4.6296%
The Fuji Bank, Limited $24,000,000 2.7778%
The Bank of Tokyo-Mitsubishi, Ltd. $24,000,000 2.7778%
The First National Bank of Boston $24,000,000 2.7778%
Bank of Montreal $24,000,000 2.7778%
Banca Commerciale Italiana $24,000,000 2.7778%
The Long-Term Credit Bank of Japan, Ltd. $24,000,000 2.7778%
Mellon Bank, N.A. $24,000,000 2.7778%
TOTAL $864,000,000 100.00%
</TABLE>
<PAGE> 4
The Chase Manhattan Bank,
as the Competitive Advance Facility Agent
By: /s/
_______________________________
Name: ____________________________
Title: ___________________________
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Telephone: _____________________
Facsimile: _____________________
<PAGE> 5
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% Texas Commerce Bank National
Association
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Texas Commerce Bank National
Association
707 Travis Street
Houston, Texas 77002
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% First Union National Bank of North Carolina
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
First Union National Bank of North Carolina
301 South College Street
Charlotte, NC 28288
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% The Bank of Nova Scotia
Atlanta Agency
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree St., N.E., Suite 2700
Atlanta, GA 30308
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% Nationsbank, N.A.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Nationsbank, N.A.
100 N. Tryon Street
Charlotte, N.C. 28255
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% KeyBank National Association
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
KeyBank National Association
127 Public Square
Mail Code: OH 01-27-0606
Cleveland, OH 44114-1306
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% The First National Bank of Chicago
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The First National Bank of Chicago
611 Woodward Avenue
Detroit, MI 48226
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% The Bank of New York
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The Bank of New York
One Wall Street
New York, NY 10286
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$52,000,000 6.0185% SunTrust Bank, Atlanta
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
SunTrust Bank, Atlanta
25 Park Place
Atlanta, GA 30302
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% National City Bank
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
National City Bank
1900 E. Ninth Street
Cleveland, OH 44114-3484
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% Royal Bank of Canada
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Royal Bank of Canada
Financial Square
New York, NY 10005
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% Wachovia Bank of Georgia, N.A.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Wachovia Bank of Georgia, N.A.
191 Peachtree St., N.E.
Atlanta, GA 30303
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% Wells Fargo Bank, N.A.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Wells Fargo Bank, N.A.
707 Wilshire Blvd. - MAC 2818-165
Los Angeles, CA 90017
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% PNC Bank, National Association
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
PNC Bank, National Association
249 Fifth Ave., 2nd Floor
Pittsburgh, PA 15222
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$40,000,000 4.6296% ABN AMRO Bank N.V.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
ABN Amro Bank N.V.
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$10,000,000 4.6296% CIBC, Inc.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
CIBC, Inc.
425 Lexington Ave., 6th Floor
New York, NY 10017
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% The Fuji Bank, Limited
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% The Bank of Tokyo-Mitsubishi, Ltd.
Chicago Branch
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The Bank of Tokyo-Mitsubishi, Ltd.
Chicago Branch
227 W. Monroe St., Suite 2300
Chicago, IL 60606
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% The First National Bank of Boston
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The First National Bank of Boston
100 Federal Street, 01-09-05
Boston, MA 02110
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% Bank of Montreal
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Bank of Montreal
430 Park Avenue
New York, NY 10022
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% Banca Commerciale Italiana
Chicago Branch
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Banca Commerciale Italiana
Chicago Branch
150 N. Michigan Ave., Suite 1500
Chicago, IL 60601
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% The Long-Term Credit Bank of Japan, Ltd.
Chicago Branch
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
The Long-Term Credit Bank of Japan, Ltd.
Chicago Branch
190 S. LaSalle St., Suite 800
Chicago, IL 60603
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
Amount of Percentage of
Commitment Commitments
- ---------- -------------
<S> <C> <C>
$24,000,000 2.7778% Mellon Bank, N.A.
By: /s/
___________________________________
Name: _________________________________
Title: ________________________________
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Telephone: _____________________
Facsimile: _____________________
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000089800
<NAME> THE SHERWIN-WILLIAMS COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 58,203
<SECURITIES> 0
<RECEIVABLES> 625,344
<ALLOWANCES> 28,498
<INVENTORY> 755,192
<CURRENT-ASSETS> 1,650,303
<PP&E> 1,245,657
<DEPRECIATION> 604,007
<TOTAL-ASSETS> 4,161,157
<CURRENT-LIABILITIES> 1,522,376
<BONDS> 795,673
<COMMON> 203,825
0
0
<OTHER-SE> 1,197,942
<TOTAL-LIABILITY-AND-EQUITY> 4,161,157
<SALES> 1,069,787
<TOTAL-REVENUES> 1,069,787
<CGS> 626,173
<TOTAL-COSTS> 626,173
<OTHER-EXPENSES> (25)
<LOSS-PROVISION> 5,382
<INTEREST-EXPENSE> 20,798
<INCOME-PRETAX> 37,925
<INCOME-TAX> 14,791
<INCOME-CONTINUING> 23,134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,134
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
