The Sherwin-Williams Company
Compensation and Management Development Committee
The purpose of the
Compensation and Management Development Committee is to provide
assistance to the Board of Directors in fulfilling the Board's
responsibilities on matters relating to: (1) compensating the
Company's management, which includes the Company's executive
officers; (2) overseeing the Company's management succession
planning; (3) producing an annual report on executive compensation
required by the rules of the Securities and Exchange Commission to
be included in the Company's annual proxy statement; and (4)
engaging in such other matters as may from time to time be
specifically delegated to the Committee by the Board.
The Committee shall
consist of at least three members. Each member of the Committee
shall meet the independence requirements of the New York Stock
Exchange as determined by the Board in its business judgment.
The members of the Committee will be appointed and replaced by
the Board. The Board will appoint a Chairman of the
Committee. The Chairman of the Committee will, in consultation
with the other members of the Committee and the appropriate officers
of the Company, be responsible for calling meetings of the
Committee, establishing the agenda for the meetings and conducting
the meetings of the Committee.
Committee will have broad authority and powers in fulfilling its
purpose and discharging its responsibilities. In discharging
its responsibilities, the Committee will:
1) Annually review and approve corporate goals and
objectives relevant to the Chief Executive Officer's compensation,
evaluate the Chief Executive Officer's performance in light of
those goals and objectives, and determine the Chief Executive
Officer's compensation based on this evaluation. In
determining the long-term incentive component of the Chief
Executive Officer's compensation, the Committee should consider
the Company's performance and relative shareholder return, the
value of similar awards to chief executive officers at comparable
companies, and the awards given to the Chief Executive Officer in
the past years.
2) Annually review and approve the compensation
(including annual base salary, incentive opportunity, long-term
incentive opportunity and other special or supplemental benefits)
for the Company's executive officers, other key salaried employees
and nonemployee directors.
3) Authorize and approve any grants of stock options,
stock appreciation rights, restricted stock and other awards under
the Company's stock and stock-based plans.
4) Authorize and approve any actions under the Company's
pension and welfare benefit plans, programs and
5) Meet from time to time with Company management to
review and evaluate the Company's programs, priorities and
progress for the recruiting, staffing, developing and retaining of
competent managers for present and future Company needs, including
the management succession planning for the Chief Executive Officer
and other executive officers.
6) Conduct an annual evaluation of the Committee's own
7) Review and evaluate the adequacy of this Charter at
least annually and recommend any proposed changes to the Board for
Committee shall have the sole authority to retain and terminate any
compensation consultant or consulting firm to be used to assist in
the evaluation of director, Chief Executive Officer or executive
compensation and shall have sole authority to approve the
consultant's or firm's fees and other retention terms.
The Committee shall have the authority to retain, at such times
and on such terms as the Committee determines in its sole discretion
and at the Company's expense, independent legal counsel or other
independent consultants and advisors, to advise and assist the
Committee in discharging its responsibilities.
The Committee may form and delegate authority to subcommittees
(consisting of one or more members) when appropriate.
The Committee shall meet
as frequently as it determines necessary to discharge its
responsibilities. The Committee may request any officer or employee
of the Company, the Company's outside legal counsel or other third
parties to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee. A majority of the
members of the Committee shall constitute a quorum. Members of the
Committee may participate in a meeting of the Committee by means of
conference call or any other communications equipment by which all
persons participating in the meeting can hear each other. The
Committee shall report its activities to the Board at the Board's
first regular meeting thereafter or at such earlier times as it