10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

Commission file number 1-04851

THE SHERWIN-WILLIAMS COMPANY

(Exact name of registrant as specified in its charter)

OHIO

(State or other jurisdiction of incorporation or organization)

34-0526850

(I.R.S. Employer Identification No.)

101 West Prospect Avenue, Cleveland, Ohio

(Address of principal executive offices)

44115-1075

(Zip Code)

(216) 566-2000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, Par Value $1.00	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x   No o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes o   No x

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 o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).   Yes x   No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No x

At January 31, 2010, 109,565,728 shares of common stock were outstanding, net of treasury shares. The aggregate market value of common stock held by non-affiliates of the Registrant at June 30, 2009 was $6,231,518,290 (computed by reference to the price at which the common stock was last sold on such date).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our Annual Report to Shareholders for the fiscal year ended December 31, 2009 (“2009 Annual Report”) are incorporated by reference into Parts I, II and IV of this report.

Portions of our Proxy Statement for the 2010 Annual Meeting of Shareholders (“Proxy Statement”) to be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2009 are incorporated by reference into Part III of this report.

THE SHERWIN-WILLIAMS COMPANY

Table of Contents

		Page
PART I
Item 1.	Business		1
	Cautionary Statement Regarding Forward-Looking Information		5
Item 1A.	Risk Factors		6
Item 1B.	Unresolved Staff Comments		11
Item 2.	Properties		11
Item 3.	Legal Proceedings		13
Item 4.	Submission of Matters to a Vote of Security Holders		13
	Executive Officers of the Registrant		14
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		15
Item 6.	Selected Financial Data		16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		16
Item 8.	Financial Statements and Supplementary Data		17
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		17
Item 9A.	Controls and Procedures		17
Item 9B.	Other Information		17
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		18
Item 11.	Executive Compensation		18
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		19
Item 13.	Certain Relationships and Related Transactions, and Director Independence		19
Item 14.	Principal Accountant Fees and Services		19
PART IV
Item 15.	Exhibits and Financial Statement Schedules		20
	Signatures		21
	Exhibit Index		22
EX-4.B
EX-10.B
EX-10.C
EX-10.D
EX-10.E
EX-10.F
EX-10.G
EX-10.J
EX-10.L
EX-10.M
EX-13
EX-21
EX-23
EX-24.A
EX-24.B
EX-31.A
EX-31.B
EX-32.A
EX-32.B
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I

ITEM 1.  BUSINESS

Introduction

The Sherwin-Williams Company, founded in 1866 and incorporated in Ohio in 1884, is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe and Asia. Our principal executive offices are located at 101 West Prospect Avenue, Cleveland, Ohio 44115-1075, telephone (216) 566-2000. As used in this report, the terms “Sherwin-Williams,” “Company,” “we” and “our” mean The Sherwin-Williams Company and its consolidated subsidiaries unless the context indicates otherwise.

Available Information

We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission. You may access these documents on the “Investor Relations” page of our website at www.sherwin.com.

We also make available free of charge on our website our Corporate Governance Guidelines, our Director Independence Standards, our Business Ethics Policy and the charters of our Audit Committee, our Compensation and Management Development Committee, and our Nominating and Corporate Governance Committee. You may access these documents in the “Corporate Governance” section on the “Investor Relations” page of our website at www.sherwin.com.

Basis of Reportable Segments

We report our segment information in the same way that management internally organizes our business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Reporting Topic of the Financial Accounting Standards Board Accounting Standards Codification (ASC). We have three reportable operating segments: Paint Stores Group, Consumer Group and Global Finishes Group (collectively, the “Reportable Operating Segments”). Factors considered in determining our Reportable Operating Segments include the nature of the business activities, existence of managers responsible for the operating and administrative activities and information presented to our Board of Directors. We report all other business activities and immaterial operating segments that are not reportable in the Administrative segment. For more information about the Reportable Operating Segments, see pages 5 through 7 of our 2009 Annual Report, which is incorporated herein by reference.

The Company’s chief operating decision maker (CODM) has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Operating Segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Operating Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Operating Segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements on pages 44 through 50 of our 2009 Annual Report, which is incorporated herein by reference.

Paint Stores Group

The Paint Stores Group consisted of 3,354 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten and Jamaica at December 31, 2009. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-

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use customers. The Paint Stores Group markets and sells Sherwin-Williams^® branded architectural paint and coatings, industrial and marine products, original equipment manufacturer (“OEM”) product finishes and related items. These products are produced by manufacturing facilities in the Consumer and Global Finishes Groups. In addition, each store sells selected purchased associated products. During 2009, this segment opened 8 net new stores, consisting of 53 new stores opened (44 in the United States, 7 in Canada, 1 in Jamaica and 1 in St. Maarten) and 45 stores closed (in the United States). In 2008, this segment opened 21 net new stores (14 in the United States). In 2007, there were 172 stores acquired and 107 net new stores opened (81 in the United States). The loss of any single customer would not have a material adverse effect on the business of this segment. A map on page 10 of our 2009 Annual Report, which is incorporated herein by reference, shows the number of paint stores and their geographic locations.

Consumer Group

The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third party customers primarily in the United States and Canada and the Paint Stores Group. Approximately 51 percent of the total sales of the Consumer Group in 2009, including inter-segment transfers, represented products sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures.

Global Finishes Group

The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, industrial and marine products, automotive finishes and refinish products, OEM coatings and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams^® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 539 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. During 2009, this segment opened 18 new branches (8 in the United States, 1 in Canada, 6 in South America and 3 in India) and closed 20 (1 in South America, 15 in the United States and 4 in Mexico) for a net reduction of 2 branches. At December 31, 2009, the Global Finishes Group consisted of operations in the United States, subsidiaries in 14 foreign countries, 4 foreign joint ventures and income from licensing agreements in 16 foreign countries. A map on page 10 of our 2009 Annual Report, which is incorporated herein by reference, shows the number of branches and their geographic locations.

Administrative Segment

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Operating Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management, and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

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Segment Financial Information

For financial information regarding our Reportable Operating Segments, including net external sales, segment profit, identifiable assets and other information by segment, see Note 19 of the Notes to Consolidated Financial Statements on pages 75 through 77 of our 2009 Annual Report, which is incorporated herein by reference.

Domestic and Foreign Operations

Financial and other information regarding domestic and foreign operations is set forth in Note 19 of the Notes to Consolidated Financial Statements on page 76 of our 2009 Annual Report, which is incorporated herein by reference.

Additional information regarding risks attendant to foreign operations is set forth on page 29 of our 2009 Annual Report under the caption “Market Risk” of “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” which is incorporated herein by reference.

Business Developments

For additional information regarding our business and business developments, see pages 5 through 10 of our 2009 Annual Report and the “Letter to Shareholders” on pages 1 through 4 of our 2009 Annual Report, which is incorporated herein by reference.

Raw Materials and Products Purchased for Resale

Raw materials and fuel supplies are generally available from various sources in sufficient quantities that none of the Reportable Operating Segments anticipate any significant sourcing problems during 2010. There are sufficient suppliers of each product purchased for resale that none of the Reportable Operating Segments anticipate any significant sourcing problems during 2010.

Seasonality

The majority of the sales for the Reportable Operating Segments traditionally occur during the second and third quarters. There is no significant seasonality in sales for the Administrative segment.

Working Capital

In order to meet increased demand during the second and third quarters, the Company usually builds its inventories during the first quarter. Working capital items (inventories and accounts receivable) are generally financed through short-term borrowings, which include the use of lines of credit and the issuance of commercial paper. For a description of the Company’s liquidity and capital resources, see pages 19 through 30 of our 2009 Annual Report under the caption “Financial Condition, Liquidity and Cash Flow” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

Trademarks and Trade Names

Customer recognition of our trademarks and trade names collectively contribute significantly to our sales. The major trademarks and trade names used by each Reportable Operating Segment are set forth below.

•  Paint Stores Group:  Sherwin-Williams^®, ProMar^®, SuperPaint^®, A-100^®, PrepRite^®, Classic 99^®, ProGreen^®, Harmony^®, Woodscapes^®, Deckscapes^®, Cashmere^®, ProClassic^®, Duration^®, Duron^®, Columbia^tm and MAB^tm.

•  Consumer Group:  Thompson’s^® WaterSeal^®, Dutch Boy^®, Cuprinol^®, Pratt & Lambert^®, Martin Senour^®, H&C^®, Rubberset^®, Dupli-Color^®, Minwax^®, White Lightning^®, Krylon^®, Purdy^®, Bestt Liebco^®, Accurate Dispersions^tm, Dobco^TM, Ronseal^TM, Tri-Flow^®, Kool Seal^®, Snow Roof^®, Altax^TM, Sprayon^®, Uniflex^® and VHT^®.

•  Global Finishes Group:  Sherwin-Williams^®, Martin Senour^®, Lazzuril^®, Excelo^®, Baco^®, Planet Color^®, Ultra-Cure^®, Dutch Boy^®, Krylon^®, Kem Tone^®, Kem Aqua^®, Pratt & Lambert^®, Minwax^®, Sher-Wood^®,

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Powdura^®, Polane^®, Colorgin^TM, Sumare^TM, Andina^TM, Marson^TM, Thompson’s^® WaterSeal^®, Metalatex^®, Euronavy^®, Inchem^tm, Novacor^tm, Loxon^®, Napko^tm, AWX^® and Ultra^tm.

Patents

Although patents and licenses are not of material importance to our business as a whole or any segment, the Global Finishes Group derives a portion of its income from the licensing of technology, trademarks and trade names to foreign companies.

Backlog and Productive Capacity

Backlog orders are not significant in the business of any Reportable Operating Segment since there is normally a short period of time between the placing of an order and shipment. We believe that sufficient productive capacity currently exists to fulfill our needs for paint, coatings and related products through 2010.

Research and Development

For information regarding our costs of research and development included in technical expenditures, see Note 1 of the Notes to Consolidated Financial Statements on page 47 of our 2009 Annual Report, which is incorporated herein by reference.

Competition

We experience competition from many local, regional, national and international competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products. We are a leading manufacturer and retailer of paint, coatings and related products to professional, industrial, commercial and retail customers, however, our competitive position varies for our different products and markets.

In the Paint Stores Group, competitors include other paint and wallpaper stores, mass merchandisers, home centers, independent hardware stores, hardware chains and manufacturer-operated direct outlets. Product quality, product innovation, breadth of product line, technical expertise, service and price determine the competitive advantage for this segment.

In the Consumer Group, domestic and foreign competitors include manufacturers and distributors of branded and private labeled paint and coatings products. Technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price are the key competitive factors for this segment.

The Global Finishes Group has numerous competitors in its domestic and foreign markets with broad product offerings and several others with niche products. Key competitive factors for this segment include technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price.

The Administrative segment has many competitors consisting of other real estate owners, developers and managers in areas in which this segment owns property. The main competitive factors are the availability of property and price.

Employees

We employed 29,220 persons at December 31, 2009.

Environmental Compliance

For additional information regarding environmental-related matters, see pages 22 through 24 of our 2009 Annual Report under the caption “Environmental-Related Liabilities” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 1, 9 and 14 of the Notes to Consolidated Financial Statements on pages 46, 63 through 65, and 72, respectively, of our 2009 Annual Report, which is incorporated herein by reference.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “expects,” “anticipates,” “believes,” “will,” “will likely result,” “will continue,” “plans to” and similar expressions.

Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside our control, that could cause actual results to differ materially from such statements and from our historical results and experience. These risks, uncertainties and other factors include such things as:

•  the duration and severity of the current negative global economic and financial conditions;

•  general business conditions, strengths of retail and manufacturing economies and the growth in the coatings industry;

•  competitive factors, including pricing pressures and product innovation and quality;

•  changes in raw material and energy supplies and pricing;

•  changes in our relationships with customers and suppliers;

•  our ability to attain cost savings from productivity initiatives;

•  our ability to successfully integrate past and future acquisitions into our existing operations, as well as the performance of the businesses acquired;

•  risks and uncertainties associated with our ownership of Life Shield Engineered Systems, LLC;

•  changes in general domestic economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations;

•  risks and uncertainties associated with our expansion into and our operations in Asia, Mexico, South America and other foreign markets, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest and other external economic and political factors;

•  the achievement of growth in developing markets, such as Asia, Mexico and South America;

•  increasingly stringent domestic and foreign governmental regulations including those affecting health, safety and the environment;

•  inherent uncertainties involved in assessing our potential liability for environmental-related activities;

•  other changes in governmental policies, laws and regulations, including changes in accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations);

•  the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto; and

•  unusual weather conditions.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Any forward-

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looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ITEM 1A.  RISK FACTORS

Described below and elsewhere in this report and other documents that we file from time to time with the Securities and Exchange Commission are risks, uncertainties and other factors that can adversely affect our business, results of operations, cash flow, liquidity or financial condition.

Adverse changes in general business and economic conditions in the United States and worldwide may adversely affect our results of operations, cash flow, liquidity or financial condition.

Adverse changes in general business and economic conditions in the United States and worldwide may reduce the demand for some of our products and adversely affect our results of operations, cash flow, liquidity or financial condition. Higher inflation rates, interest rates, tax rates and unemployment rates, higher labor and healthcare costs, recessions, changing governmental policies, laws and regulations, and other economic factors that adversely affect the demand for our paint, coatings and related products could adversely affect our results of operations, cash flow, liquidity or financial condition.

The duration and severity of the current global economic and financial downturn may adversely affect our results of operations, cash flow, liquidity or financial condition.

A protracted continuation or worsening of the current global economic and financial conditions may adversely impact our net sales, the collection of accounts receivable, funding for working capital needs, expected cash flow generation from current and acquired businesses, and our investments, which may adversely impact our results of operations, cash flow, liquidity or financial condition.

We finance a portion of our sales through trade credit. The current global economic and financial conditions have caused some customers to be less profitable and have increased our exposure to credit risk. In addition, due to the tightening of credit markets, some customers who require financing for their businesses have not been able to obtain necessary financing. Continuation of these conditions could limit our ability to collect our accounts receivable, which could adversely affect our results of operations, cash flow, liquidity or financial condition.

We generally fund a portion of our seasonal working capital needs and obtain funding for other general corporate purposes through short-term borrowings backed by our revolving credit facility and other financing facilities. If any of the banks in these credit and financing facilities are unable to perform on their commitments, which could adversely affect our ability to fund seasonal working capital needs and obtain funding for other general corporate purposes, our cash flow, liquidity or financial condition could be adversely impacted.

Although we currently have available credit facilities to fund our current operating needs, we cannot be certain that we will be able to replace our existing credit facilities or refinance our existing debt when necessary. Our cost of borrowing and ability to access the capital markets are affected not only by market conditions, but also by our debt and credit ratings assigned by the major credit rating agencies. Downgrades in these ratings will increase our cost of borrowing and could have an adverse effect on our access to the capital markets, including our access to the commercial paper market. An inability to access the capital markets could have a material adverse effect on our results of operations, cash flow, liquidity or financial condition.

We have goodwill and intangible assets recorded on our balance sheet. We periodically evaluate the recoverability of the carrying value of our goodwill and intangible assets whenever events or changes in circumstances indicate that such value may not be recoverable. Impairment assessment involves judgment as to assumptions regarding future sales and cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact our assumptions and may result in changes in our estimates of future sales and cash flows that may result in us incurring substantial impairment charges, which would adversely affect our results of operations or financial condition.

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We hold investments in equity and debt securities in some of our defined benefit pension plans. A decrease in the value of plan assets resulting from a general financial downturn may cause a negative pension plan investment performance, which may adversely affect our results of operations, cash flow, liquidity or financial condition.

Economic downturns in cyclical segments of the economy may reduce the demand for some of our products and adversely affect our sales, earnings, cash flow or financial condition.

Portions of our business involve the sale of paint, coatings and related products to segments of the economy that are cyclical in nature, particularly segments relating to construction, housing and manufacturing. Our sales to these segments are affected by the levels of discretionary consumer and business spending in these segments. During economic downturns in these segments, the levels of consumer and business discretionary spending may decrease. This decrease in spending will likely reduce the demand for some of our products and may adversely affect our sales, earnings, cash flow or financial condition.

During the past three years, the U.S. homebuilding industry experienced a significant and sustained decrease in demand for new homes and an oversupply of new and existing homes available for sale. During this same time period, the U.S. real estate industry also experienced a significant decrease in existing home turnover. The commercial and industrial building and maintenance sectors also began to experience a significant decline in 2008. The downturn in each of these segments has contributed to an unprecedented decline in the demand for some of our products and adversely affected our sales and earnings. We cannot predict the duration or severity of the downturn in these segments. Continued downturn in these segments will continue to reduce the demand for some of our products and may adversely impact sales, earnings and cash flow.

Increases in the cost of raw materials and energy may adversely affect our earnings or cash flow.

We purchase raw materials and energy for use in the manufacturing, distribution and sale of our products. Factors such as adverse weather conditions, including hurricanes, and other disasters can disrupt raw material and fuel supplies and increase our costs. Although raw materials and energy supplies are generally available from various sources in sufficient quantities, unexpected shortages and increases in the cost of raw materials and energy, or any deterioration in our relationships with or the financial viability of our suppliers, may have an adverse effect on our earnings or cash flow in the event we are unable to offset higher costs in a timely manner by sufficiently decreasing our operating costs or raising the prices of our products. Many of our paint and coatings products utilize petroleum based derivatives, minerals (including titanium dioxide) and metals.

Although we have an extensive customer base, the loss of any of our largest customers could adversely affect our sales, earnings or cash flow.

We have a large and varied customer base due to our extensive distribution network. During 2009, no individual customer accounted for sales totaling more than ten percent of our sales. However, we have some customers that, individually, purchase a large amount of products from us. Although our broad distribution channels would help to minimize the impact of the loss of any one customer, the loss of any of these large customers could have an adverse effect on our sales, earnings or cash flow.

Adverse weather conditions may temporarily reduce the demand for some of our products and could have a negative effect on our sales, earnings or cash flow.

From time to time, adverse weather conditions in certain parts of the United States have had an adverse effect on our sales of paint, coatings and related products. For example, unusually cold and rainy weather, especially during the exterior painting season, could have an adverse effect on sales of our exterior paint products. An adverse effect on sales may cause a reduction in our earnings or cash flow.

Increased competition may reduce our sales, earnings or cash flow performance.

We face substantial competition from many international, national, regional and local competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products. Some of our competitors are larger than us and have greater financial resources to compete. Other competitors are smaller and may be able to

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offer more specialized products. Technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price are the key competitive factors for our business. Competition in any of these areas may reduce our sales and adversely affect our earnings or cash flow by resulting in decreased sales volumes, reduced prices and increased costs of manufacturing, distributing and selling our products.

Our results of operations, cash flow or financial condition may be negatively impacted if we do not successfully integrate past and future acquisitions into our existing operations and if the performance of the businesses we acquire do not meet our expectations.

We have historically made strategic acquisitions of businesses in the paint and coatings industry and will likely acquire additional businesses in the future as part of our long term growth strategy. These acquisitions involve challenges and risks. In the event that we do not successfully integrate these acquisitions into our existing operations so as to realize the expected return on our investment, our results of operations, cash flow or financial condition could be adversely affected.

Risks and uncertainties associated with our expansion into and our operations in Asia, Mexico, South America and other foreign markets could adversely affect our results of operations, cash flow, liquidity or financial condition.

Net external sales of our consolidated foreign subsidiaries totaled approximately $1.03 billion in 2009, or 14.5% of our total consolidated net sales. Sales outside of the United States make up an important part of our current business and future strategic plans. Our results of operations, cash flow, liquidity or financial condition could be adversely affected by a variety of international factors, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign currency exchange controls, interest rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest, difficulties in staffing and managing foreign operations and other external economic and political factors. Our inability to successfully manage the risks and uncertainties relating to these factors could adversely affect our results of operations, cash flow, liquidity or financial condition.

In many foreign countries, it is acceptable to engage in certain business practices that we are prohibited from engaging in because of regulations that are applicable to us, such as the Foreign Corrupt Practices Act. Although we have internal control policies and procedures designed to ensure compliance with these regulations, there can be no assurance that our policies and procedures will prevent a violation of these regulations. Any violation could cause an adverse effect on our results of operations, cash flow or financial condition.

Fluctuations in foreign currency exchange rates could adversely affect our results of operations, cash flow, liquidity or financial condition.

Because of our international operations, we are exposed to risk associated with interest rates and value changes in foreign currencies, which may adversely affect our business. Historically, our reported net sales, earnings, cash flow and financial condition have been subjected to fluctuations in foreign exchange rates. Our primary exchange rate exposure is with the euro, the British pound, the Argentine peso, the Brazilian real, the Chilean peso, the Canadian dollar and the Mexican peso against the U.S. dollar. While we actively manage the exposure of our foreign currency risk as part of our overall financial risk management policy, we believe we may experience losses from foreign currency exchange rate fluctuations, and such losses could adversely affect our sales, earnings, cash flow, liquidity or financial condition.

We are subject to a wide variety of complex domestic and foreign laws and regulations, for which compliance could adversely affect our results of operations, cash flow or financial condition.

We are subject to a wide variety of complex domestic and foreign laws and regulations, and legal compliance risks, including securities laws, tax laws, employment and pension-related laws, competition laws, U.S. and foreign export and trading laws, and laws governing improper business practices. We are affected by new laws and regulations, and changes to existing laws and regulations, including interpretations by courts and regulators. From time to time, our Company, our operations and the industries in which we operate are being reviewed or investigated by regulators, which could lead to enforcement actions or the assertion of private litigation claims and damages.

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Although we believe that we have adopted appropriate risk management and compliance programs to mitigate these risks, the global and diverse nature of our operations means that compliance risks will continue to exist. Investigations, examinations and other proceedings, the nature and outcome of which cannot be predicted, will likely arise from time to time. These investigations, examinations and other proceedings could subject us to significant liability and require us to take significant accruals or pay significant settlements, fines and penalties, which could have a material adverse effect on our results of operations, cash flow or financial condition.

We are subject to tax laws and regulations in the United States and multiple foreign jurisdictions. We are affected by changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance. In the ordinary course of our business, we are subject to examinations and investigations by various tax authorities. In addition to existing examinations and investigations, there could be additional examinations and investigations in the future, and existing examinations and investigations could be expanded.

For non-income tax risks, we estimate material loss contingencies and accrue for such loss contingencies as required by U.S. generally accepted accounting principles based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time. Subsequent developments may affect our assessment and estimates of the loss contingency. In the event the loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material adverse effect on our results of operations or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and cannot be reasonably estimated, any potential liability ultimately determined to be attributable to us may result in a material adverse effect on our results of operations, cash flow or financial condition for the annual or interim period during which such liability is accrued or paid. For income tax risks, we recognize tax benefits based on our assessment that a tax benefit has a greater than 50% likelihood of being sustained upon ultimate settlement with the applicable taxing authority that has full knowledge of all relevant facts. For those income tax positions where we assess that there is not a greater than 50% likelihood that such tax benefits will be sustained, we do not recognize a tax benefit in our financial statements. Subsequent events may cause us to change our assessment of the likelihood of sustaining a previously-recognized benefit which could result in a material adverse effect on our results of operations, cash flow or financial position for the annual or interim period during which such liability is accrued or paid.

We are required to comply with numerous complex and increasingly stringent domestic and foreign health, safety and environmental laws and regulations, the cost of which is likely to increase and may adversely affect our results of operations, cash flow or financial condition.

Our operations are subject to various domestic and foreign health, safety and environmental laws and regulations. These laws and regulations not only govern our current operations and products, but also impose potential liability on us for our past operations. We expect health, safety and environmental laws and regulations to impose increasingly stringent requirements upon our industry and us in the future. Our costs to comply with these laws and regulations may increase as these requirements become more stringent in the future, and these increased costs may adversely affect our results of operations, cash flow or financial condition.

We are involved with environmental investigation and remediation activities at some of our currently and formerly owned sites, as well as a number of third-party sites, for which our ultimate liability may exceed the current amount we have accrued.

We are involved with environmental investigation and remediation activities at some of our currently and formerly owned sites and a number of third-party sites. We accrue for estimated costs of investigation and remediation activities at these sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are based on currently available facts regarding each site. We continuously assess our potential liability for investigation and remediation activities and adjust our environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated. Due to the uncertainties surrounding environmental investigation and remediation activities, our liability may result in costs that are significantly higher than currently accrued and may have an adverse affect on our earnings.

9

The nature, cost, quantity and outcome of pending and future litigation, such as litigation arising from the historical manufacture and sale of lead pigments and lead-based paint, could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition.

In the course of our business, we are subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to us. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, we accrue for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that a loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on our results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and cannot be reasonably estimated, any potential liability ultimately determined to be attributable to us may result in a material impact on our results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred even if the possibility may be remote.

Our past operations included the manufacture and sale of lead pigments and lead-based paints. Along with other companies, we are a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs are seeking recovery based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. We are also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints which seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. We believe that the litigation brought to date is without merit or subject to meritorious defenses and are vigorously defending such litigation. We expect that additional lead pigment and lead-based paint litigation may be filed against us in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

Notwithstanding our views on the merits, litigation is inherently subject to many uncertainties, and we ultimately may not prevail. Adverse court rulings, such as the jury verdict against us and other defendants in the State of Rhode Island action and the Wisconsin State Supreme Court’s determination that Wisconsin’s risk contribution theory may apply in the lead pigment litigation, or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against us and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which we and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against us. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or any such legislation and regulations. We have not accrued any amounts for such litigation. Any potential liability that may result from such litigation or such legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to us relating to such litigation, the recording of the liability

10

may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to us arising out of such litigation may have a material adverse effect on our results of operations, cash flow, liquidity or financial condition. An estimate of the potential impact on our results of operations, cash flow, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

We discuss the risks and uncertainties related to litigation, including the lead pigment and lead-based paint litigation, in more detail on page 18 of our 2009 Annual Report under the caption “Litigation and Other Contingent Liabilities,” and pages 26 through 29 of our 2009 Annual Report under the caption “Litigation” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 10 of the Notes to Consolidated Financial Statements on pages 65 through 68 of our 2009 Annual Report.

The costs or potential liability ultimately determined to be attributable to us through our ownership of Life Shield could have an adverse effect on our results of operations, cash flow, liquidity or financial condition.

We own Life Shield Engineered Systems, LLC. Life Shield develops and manufactures blast and fragment mitigating systems and ballistic resistant systems. The blast and fragment mitigating systems and ballistic resistant systems create a potentially higher level of product liability for us than is normally associated with coatings and related products we manufacture, distribute and sell. Depending upon the extent of any potential liability ultimately determined to be attributable to us relating to Life Shield, such liability could have an adverse effect on our results of operations, cash flow, liquidity or financial condition. We discuss these risks and uncertainties in more detail on pages 25 and 26 of our 2009 Annual Report under the caption “Contingent Liabilities” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

We own our world headquarters located in Cleveland, Ohio, which includes the world headquarters for the Paint Stores Group, Consumer Group and Global Finishes Group. Our principal manufacturing and distribution facilities are located as set forth below. We believe our manufacturing and distribution facilities are well-maintained and are suitable and adequate, and have sufficient productive capacity, to meet our current needs.

CONSUMER GROUP

Manufacturing Facilities

Andover, Kansas
Baltimore, Maryland
Bedford Heights, Ohio
Beltsville, Maryland
Chicago, Illinois
Cincinnati, Ohio
Coffeyville, Kansas
Crisfield, Maryland
Ennis, Texas
Fernley, Nevada
Flora, Illinois
Fort Erie, Ontario, Canada
Garland, Texas
Greensboro, North Carolina Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned Grodzisk Wielkopolski, Poland
Holland, Michigan
Homewood, Illinois
Lawrenceville, Georgia
Memphis, Tennessee
Morrow, Georgia
Norfolk, Virginia
Orlando, Florida
Portland, Oregon
Sheffield, England
South Holland, Illinois
Szamotuly, Poland
Terre Haute, Indiana
Victorville, California Leased
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Owned
Owned
Owned
Owned
Owned

11

Distribution Facilities

Buford, Georgia
Effingham, Illinois
Fredericksburg, Pennsylvania
Reno, Nevada
Sheffield, England Leased
Leased
Owned
Leased
Owned Swaffham, England
Szamotuly, Poland
Waco, Texas
Winter Haven, Florida Leased
Owned
Leased
Owned

GLOBAL FINISHES GROUP

Manufacturing Facilities

Arlington, Texas
Binh Duong Province, Vietnam
Buenos Aires, Argentina
Columbus, Ohio
Dongguan, China
Greensboro, North Carolina
Grimsby, Ontario, Canada
Grove City, Ohio
Manchester, Georgia
Monterrey, Mexico (2)
Montevideo City, Uruguay
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Mumbai (Paloja), India
Ontario, California
Pasir Gudang, Johor, Malaysia
Richmond, Kentucky
Rockford, Illinois
Santiago, Chile
Sao Paulo, Brazil (3)
Shanghai, China
Texcoco, Mexico
Vallejo, Mexico
Zhao Qing, China Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased

Distribution Facilities

Buenos Aires, Argentina
Guadalajara, Mexico
Hermosilla, Mexico
Lima, Peru
Maceio, Brazil
Mechelen, Belgium
Mexico City, Mexico
Monterrey, Mexico (3)
Montevideo City, Uruguay
Perpignan, France
Owned
Leased
Leased
Leased
Leased
Leased
Owned
Owned
Owned
Leased Richmond, Kentucky
Santiago, Chile
Santiago, Chile
Sao Paulo, Brazil (3)
Shanghai, China
Texcoco, Mexico
Tijuana, Mexico
Valencia, Venezuela
Vallejo, Mexico Owned
Leased
Owned
Owned
Owned
Owned
Leased
Leased
Owned

The operations of the Paint Stores Group included a manufacturing and distribution facility in Jamaica and 3,354 company-operated specialty paint stores, of which 215 were owned, in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten and Jamaica at December 31, 2009. These paint stores are divided into four separate operating divisions that are responsible for the sale of predominantly architectural, industrial maintenance and related products through the paint stores located within their geographical region. At the end of 2009:

•  the Mid Western Division operated 888 paint stores primarily located in the midwestern and upper west coast states;

•  the Eastern Division operated 799 paint stores along the upper east coast and New England states and Canada;

•  the Southeastern Division operated a manufacturing and distribution facility in Jamaica and 868 paint stores principally covering the lower east and gulf coast states, Puerto Rico, Jamaica, Trinidad and Tobago, St. Maarten and Virgin Islands; and

•  the South Western Division operated 799 paint stores in the central plains and the lower west coast states.

In 2009, the Paint Stores Group opened 8 net new paint stores, consisting of 53 new stores opened (44 in the United States) and 45 stores closed (in the United States).

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The Global Finishes Group operated 252 branches in the United States, of which 9 were owned, at December 31, 2009. The Global Finishes Group also operated 287 branches, of which 7 were owned, at December 31, 2009, consisting of branches in Mexico (106), Brazil (84), Chile (48), Canada (26), Uruguay (10), Argentina (5), India (5) and Peru (3). During 2009, the Global Finishes Group opened 18 new branches (8 in the United States, 1 in Canada, 6 in South America and 3 in India) and closed 20 (15 in the United States, 4 in Mexico and 1 in South America).

All real property within the Administrative segment is owned by us. For additional information regarding real property within the Administrative segment, see the information set forth in Item 1 of this report, which is incorporated herein by reference.

For additional information regarding real property leases, see Note 18 of the Notes to Consolidated Financial Statements on page 75 of our 2009 Annual Report, which is incorporated herein by reference.

ITEM 3.  LEGAL PROCEEDINGS

For information regarding environmental-related matters and other legal proceedings, see pages 22 through 24, and 26 through 29, of our 2009 Annual Report under the captions “Environmental-Related Liabilities” and “Litigation” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 1, 9, 10 and 14 of the Notes to Consolidated Financial Statements on pages 46, 63 through 65, 65 through 68, and 72, respectively, of our 2009 Annual Report, which is incorporated herein by reference.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our security holders during the fourth quarter of 2009.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following is the name, age and present position of each of our executive officers at February 17, 2010, as well as all prior positions held by each during the last five years and the date when each was first elected or appointed as an executive officer. Executive officers are generally elected annually by the Board of Directors and hold office until their successors are elected and qualified or until their earlier death, resignation or removal.

				Date When
				First Elected
Name	Age		Present Position	or Appointed
Christopher M. Connor		53	Chairman and Chief Executive Officer, Director		1994
John G. Morikis		46	President and Chief Operating Officer		1999
Sean P. Hennessy		52	Senior Vice President — Finance and Chief Financial Officer		2001
Thomas E. Hopkins		52	Senior Vice President — Human Resources		1997
Timothy A. Knight		45	Senior Vice President — Corporate Planning and Development		2005
Thomas W. Seitz		61	Senior Vice President — Strategic Excellence Initiatives		1999
Louis E. Stellato		59	Senior Vice President, General Counsel and Secretary		1989
Robert J. Wells		52	Senior Vice President — Corporate Communications and Public Affairs		2006
John L. Ault		63	Vice President — Corporate Controller		1987
George E. Heath		44	President, Global Finishes Group		2008
Steven J. Oberfeld		57	President, Paint Stores Group		2006

Mr. Connor has served as Chairman since April 2000 and Chief Executive Officer since October 1999. Mr. Connor served as President from July 2005 to October 2006. Mr. Connor has served as a Director since October 1999 and has been employed with the Company since January 1983.

Mr. Morikis has served as President and Chief Operating Officer since October 2006. Mr. Morikis served as President, Paint Stores Group from October 1999 to October 2006. Mr. Morikis has been employed with the Company since December 1984.

Mr. Hennessy has served as Senior Vice President — Finance and Chief Financial Officer since August 2001. Mr. Hennessy has been employed with the Company since September 1984.

Mr. Hopkins has served as Senior Vice President — Human Resources since February 2002. Mr. Hopkins has been employed with the Company since September 1981.

Mr. Knight has served as Senior Vice President — Corporate Planning and Development since February 2007. Mr. Knight served as President, Global Group from August 2005 to February 2007 and President & General Manager, Diversified Brands Division from February 2002 to August 2005. Mr. Knight has been employed with the Company since December 1994.

Mr. Seitz has served as Senior Vice President — Strategic Excellence Initiatives since February 2007. Mr. Seitz served as President, Consumer Group from August 2005 to February 2007 and President & General Manager, Consumer Division from January 2001 to August 2005. Mr. Seitz has been employed with the Company since June 1970.

Mr. Stellato has served as Senior Vice President, General Counsel and Secretary since February 2009. Mr. Stellato served as Vice President, General Counsel and Secretary from July 1991 to February 2009. Mr. Stellato has been employed with the Company since July 1981.

14

Mr. Wells has served as Senior Vice President — Corporate Communications and Public Affairs since February 2009. Mr. Wells served as Vice President — Corporate Communications and Public Affairs from January 2006 to February 2009 and Vice President — Corporate Planning and Communication from July 2002 to January 2006. Mr. Wells has been employed with the Company since May 1998.

Mr. Ault has served as Vice President — Corporate Controller since January 1987. Mr. Ault has been employed with the Company since June 1976.

Mr. Heath has served as President, Global Finishes Group since September 2008. Mr. Heath served as President & General Manager, Chemical Coatings Division from November 2005 to September 2008 and Vice President, Marketing of Chemical Coatings Division from May 2004 to November 2005. Mr. Heath has been employed with the Company since May 2004.

Mr. Oberfeld has served as President, Paint Stores Group since October 2006. Mr. Oberfeld served as President & General Manager, South Western Division, Paint Stores Group from September 1992 to October 2006. Mr. Oberfeld has been employed with the Company since October 1984.

PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange and traded under the symbol SHW. The number of shareholders of record at January 31, 2010 was 9,113.

Information regarding market prices and dividend information with respect to our common stock is set forth on page 79 of our 2009 Annual Report, which is incorporated herein by reference. The performance graph set forth on page 9 of our 2009 Annual Report is incorporated herein by reference. The information with respect to securities authorized for issuance under the Company’s equity compensation plans is set forth under the caption “Equity Compensation Plan Information” in our Proxy Statement, which is incorporated herein by reference.

Issuer Purchases of Equity Securities

The following table sets forth a summary of the Company’s purchases of common stock during the fourth quarter of 2009.

					Total Number		Maximum Number
					of Shares		of Shares
	Total				Purchased as		That May
	Number of		Average Price		Part of		Yet Be
	Shares		Paid Per		Publicly		Purchased Under
Period	Purchased		Share		Announced Plan		the Plan
October 1 – October 31
Share repurchase program(1)		392,937	$	57.25		392,937		14,479,458
November 1 – November 30
Share repurchase program(1)		1,890,709	$	59.94		1,890,709		12,588,749
December 1 – December 31
Share repurchase program(1)		1,838,749	$	61.86		1,838,749		10,750,000
Total
Share repurchase program(1)		4,122,395	$	60.54		4,122,395		10,750,000

(1)  All shares were purchased through the Company’s publicly announced share repurchase program. On October 19, 2007, the Board of Directors of the Company authorized the Company to purchase, in the aggregate, 30,000,000 shares of its common stock and rescinded the previous authorization limit. The Company had remaining authorization at December 31, 2009 to purchase 10,750,000 shares. There is no expiration date specified for the program. The Company intends to repurchase stock under the program in the future.

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ITEM 6.  SELECTED FINANCIAL DATA

(millions of dollars, except per common share data)

	2009			2008			2007			2006			2005
Operations
Net sales	$	7,094		$	7,980		$	8,005		$	7,810		$	7,191
Net income		436			477			616			576			463
Financial Position
Total assets	$	4,324		$	4,416		$	4,855		$	4,995		$	4,369
Long-term debt		783			304			293			292			487
Ratio of earnings to fixed charges (a)		5.6	x		5.6	x		7.0	x		7.0	x		6.7	x
Per Common Share Data
Net income — basic	$	3.84		$	4.08		$	4.84		$	4.31		$	3.39
Net income — diluted		3.78			4.00			4.70			4.19			3.28
Cash dividends		1.42			1.40			1.26			1.00			.82

(a)  For purposes of calculating the ratio of earnings to fixed charges, earnings represents income before income taxes and minority interest plus fixed charges. Fixed charges consist of interest expense, net, including amortization of discount and financing costs and the portion of operating rental expense which management believes is representative of the interest component of rent expense. The following schedule includes the figures used to calculate the ratios:

	2009		2008		2007		2006		2005
Earnings	$	623	$	714	$	913	$	834	$	656
Fixed charges:
Interest expense, net		40		66		72		67		50
Interest component of rent expense		94		90		81		72		65
Total fixed charges		134		156		153		139		115
Earnings and fixed charges	$	757	$	870	$	1,066	$	973	$	771

ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required by this item is set forth on pages 13 through 35 of our 2009 Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk associated with interest rates, foreign currency and commodity fluctuations. We occasionally utilize derivative instruments as part of our overall financial risk management policy, but do not use derivative instruments for speculative or trading purposes. The Company entered into foreign currency option and forward currency exchange contracts and commodity swaps during 2009 to hedge against value changes in foreign currency and commodities. There were no contracts outstanding at December 31, 2009. Foreign currency option and forward contracts are described in Note 14 of the Notes to Consolidated Financial Statements on page 72 of our 2009 Annual Report. Commodity swaps are described in Note 1 of the Notes to Consolidated Financial Statements on page 45 of our 2009 Annual Report. We believe we may experience continuing losses from foreign currency and commodity price fluctuations. However, we do not expect currency translation, transaction, commodity price fluctuations or hedging contract losses to have a material adverse effect on our financial condition, results of operations or cash flows.

16

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item is set forth on pages 38 through 77 of our 2009 Annual Report under the captions “Report of Management on the Consolidated Financial Statements,” “Report of the Independent Registered Public Accounting Firm on the Consolidated Financial Statements,” “Statements of Consolidated Income,” “Consolidated Balance Sheets,” “Statements of Consolidated Cash Flows,” “Statements of Consolidated Shareholders’ Equity and Comprehensive Income,” and “Notes to Consolidated Financial Statements,” which is incorporated herein by reference. Unaudited quarterly data is set forth in Note 17 of the Notes to Consolidated Financial Statements on pages 74 and 75 of our 2009 Annual Report, which is incorporated herein by reference.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chairman and Chief Executive Officer and our Senior Vice President — Finance and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based upon that evaluation, our Chairman and Chief Executive Officer and our Senior Vice President — Finance and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and accumulated and communicated to our management including our Chairman and Chief Executive Officer and our Senior Vice President — Finance and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

The “Report of Management on Internal Control over Financial Reporting” is set forth on page 36 of our 2009 Annual Report, which is incorporated herein by reference.

The “Report of the Independent Registered Public Accounting Firm on Internal Control over Financial Reporting” is set forth on page 37 of our 2009 Annual Report, which is incorporated herein by reference.

There were no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

None.

17

PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

The information regarding our directors is set forth under the captions “Election of Directors (Proposal 1)” and “Experience, Qualifications, Attributes and Skills of Directors and Nominees” in our Proxy Statement, which is incorporated herein by reference.

There were no material changes to the procedures by which security holders may recommend nominees to our Board of Directors during 2009. Please refer to the information set forth under the caption “Board Meetings and Committee Membership — Nominating and Corporate Governance Committee” in our Proxy Statement, which is incorporated herein by reference.

Executive Officers

The information regarding our executive officers is set forth under the caption “Executive Officers of the Registrant” in Part I of this report, which is incorporated herein by reference.

Section 16(a) Beneficial Ownership Reporting Compliance

The information regarding compliance with Section 16 of the Securities Exchange Act of 1934 is set forth under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement, which is incorporated herein by reference.

Audit Committee

The information regarding the Audit Committee of our Board of Directors and the information regarding audit committee financial experts are set forth under the caption “Board Meetings and Committee Membership” in our Proxy Statement, which is incorporated herein by reference.

Code of Ethics

We have adopted a Business Ethics Policy, which applies to all of our directors, officers and employees. Our Business Ethics Policy includes additional ethical obligations for our senior financial management (which includes our chief executive officer, our chief financial officer, and the controller, treasurer and principal financial and accounting personnel in our operating groups and corporate departments). Please refer to the information set forth under the caption “Corporate Governance — Business Ethics Policy” in our Proxy Statement, which is incorporated herein by reference. Our Business Ethics Policy is available in the “Corporate Governance” section on the “Investor Relations” page of our website at www.sherwin.com.

We intend to disclose on our website any amendment to, or waiver from, a provision of our Business Ethics Policy that applies to our directors and executive officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or any persons performing similar functions, and that is required to be publicly disclosed pursuant to the rules of the Securities and Exchange Commission.

ITEM 11.   EXECUTIVE COMPENSATION

The information required by this item is set forth on pages 35 through 48 of our Proxy Statement and under the captions “Compensation Committee Report,” “ Compensation Risk Assessment,” “Compensation Discussion and Analysis,” “2009 Director Compensation Table” and “Director Compensation Program” in our Proxy Statement, which is incorporated herein by reference.

18

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information regarding security ownership of certain beneficial owners and management is set forth under the captions “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners” in our Proxy Statement, which is incorporated herein by reference.

The information regarding securities authorized for issuance under the Company’s equity compensation plans is set forth under the caption “Equity Compensation Plan Information” in our Proxy Statement, which is incorporated herein by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is set forth under the captions “Certain Relationships and Transactions with Related Persons,” and “Independence of Directors” in our Proxy Statement, which is incorporated herein by reference.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is set forth under the caption “Matters Relating to the Independent Registered Public Accounting Firm” in our Proxy Statement, which is incorporated herein by reference.

19

PART IV

ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	(1)	Financial Statements
		The following consolidated financial statements of the Company included in our 2009 Annual Report are incorporated by reference in Item 8.
		(i)	Report of Management on the Consolidated Financial Statements (page 38 of our 2009 Annual Report);
		(ii)	Report of the Independent Registered Public Accounting Firm on the Consolidated Financial Statements (page 39 of our 2009 Annual Report);
		(iii)	Statements of Consolidated Income for the years ended December 31, 2009, 2008 and 2007 (page 40 of our 2009 Annual Report);
		(iv)	Consolidated Balance Sheets at December 31, 2009, 2008 and 2007 (page 41 of our 2009 Annual Report);
		(v)	Statements of Consolidated Cash Flows for the years ended December 31, 2009, 2008 and 2007 (page 42 of our 2009 Annual Report);
		(vi)	Statements of Consolidated Shareholders’ Equity and Comprehensive Income for the years ended December 31, 2009, 2008 and 2007 (page 43 of our 2009 Annual Report); and
		(vii)	Notes to Consolidated Financial Statements for the years ended December 31, 2009, 2008 and 2007 (pages 44 through 77 of our 2009 Annual Report).
	(2)	Financial Statement Schedule
			Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2009, 2008 and 2007 is set forth below. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

Valuation and Qualifying Accounts and Reserves

(Schedule II)

Changes in the allowance for doubtful accounts were as follows:

(thousands of dollars)	2009			2008			2007
Beginning balance	$	40,760		$	29,593		$	23,072
Amount acquired through acquisitions		92			91			7,513
Bad debt expense		36,219			59,157			37,070
Uncollectible accounts written off, net of recoveries		(32,316	)		(48,081	)		(38,062	)
Ending balance	$	44,755		$	40,760		$	29,593

Bad debt expense and uncollectible accounts written off increased in 2008 primarily due to increased activity in accounts doubtful of collection.

(3)	Exhibits
		See the Exhibit Index on pages 22 through 25 of this report.

20

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 24, 2010.

THE SHERWIN-WILLIAMS COMPANY

By:  /s/  L. E. Stellato

  L. E. Stellato, Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 24, 2010.

* C. M. Connor   C. M. Connor	Chairman and Chief Executive Officer, Director (Principal Executive Officer)
* S. P. Hennessy   S. P. Hennessy	Senior Vice President — Finance and Chief Financial Officer (Principal Financial Officer)
* J. L. Ault   J. L. Ault	Vice President — Corporate Controller (Principal Accounting Officer)
* A. F. Anton   A. F. Anton	Director
* J. C. Boland   J. C. Boland	Director
* D. F. Hodnik   D. F. Hodnik	Director
* T. G. Kadien   T. G. Kadien	Director
* S. J. Kropf   S. J. Kropf	Director
* G. E. McCullough   G. E. McCullough	Director
* A. M. Mixon, III   A. M. Mixon, III	Director
* C. E. Moll   C. E. Moll	Director
* R. K. Smucker   R. K. Smucker	Director
* J. M. Stropki, JR.   J. M. Stropki, Jr.	Director

*  The undersigned, by signing his name hereto, does sign this report on behalf of the designated officers and directors of The Sherwin-Williams Company pursuant to Powers of Attorney executed on behalf of each such officer and director and filed as exhibits to this report.

By: /s/ L. E. Stellato
             L. E. Stellato, Attorney-in-fact February 24, 2010

21

EXHIBIT INDEX

3.	(a)	Amended and Restated Articles of Incorporation of the Company, as amended through July 26, 2006, filed as Exhibit 3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, and incorporated herein by reference.
	(b)	Regulations of the Company, as amended and restated April 28, 2004, filed as Exhibit 3 to the Company’s Current Report on Form 8-K dated June 10, 2004, and incorporated herein by reference.
4.	(a)	Indenture between the Company and The Bank of New York Mellon (as successor to Chemical Bank), as trustee, dated as of February 1, 1996, filed as Exhibit 4(a) to Form S-3 Registration Statement Number 333-01093, dated February 20, 1996, and incorporated herein by reference.
	(b)	First Supplemental Indenture between the Company and The Bank of New York Mellon, as trustee, dated as of December 21, 2009 (filed herewith).
	(c)	Indenture between Sherwin-Williams Development Corporation, as issuer, the Company, as guarantor, and Harris Trust and Savings Bank, as trustee, dated June 15, 1986, filed as Exhibit 4(b) to Form S-3 Registration Statement Number 33-6626, dated June 20, 1986, and incorporated herein by reference.
	(d)	Credit Agreement, dated as of January 8, 2010, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A. and Citibank, N.A., as co-documentation agents, Bank of America, N.A., as administrative agent, and Wells Fargo Bank, N.A., as syndication agent, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated January 8, 2010, and incorporated herein by reference.
	(e)	Second Amendment and Restatement Agreement, dated as of December 8, 2005, in respect of the Five-Year Competitive Advance and Revolving Credit Facility Agreement, dated as of July 19, 2004, as amended and restated as of July 20, 2005, among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders party thereto filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated December 8, 2005, and incorporated herein by reference.
	(f)	Modification, dated as of March 15, 2006, to the Second Amended and Restated Credit Agreement, dated as of December 8, 2005, by and among the Company, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated March 15, 2006, and incorporated herein by reference.
	(g)	First Amendment, dated as of May 30, 2008, to the Second Amended and Restated Five-Year Competitive Advance and Revolving Credit Facility Agreement, dated as of December 8, 2005, by and among the Company, the Lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated May 30, 2008, and incorporated herein by reference.
	(h)	Five Year Credit Agreement, dated as of May 23, 2006, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as paying agent, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated May 23, 2006, and incorporated herein by reference.
	(i)	Agreement for Letter of Credit, dated as of May 23, 2006, by and between the Company and Citibank, N.A. filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated May 23, 2006, and incorporated herein by reference.
	(j)	Five Year Credit Agreement Amendment, dated as of July 24, 2006, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as paying agent, filed as Exhibit 4 to the Company’s Current Report of Form 8-K dated July 24, 2006, and incorporated herein by reference.
	(k)	Five Year Credit Agreement, dated as of April 26, 2007, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and The Bank of New York Mellon, as paying agent, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated April 26, 2007, and incorporated herein by reference.
	(l)	Agreement for Letter of Credit, dated as of April 26, 2007, by and between the Company and Citibank, N.A. filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated April 26, 2007, and incorporated herein by reference.

22

	(m)	Five Year Credit Agreement, dated as of August 28, 2007, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and The Bank of New York Mellon, as paying agent, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 28, 2007, and incorporated herein by reference.
	(n)	Agreement for Letter of Credit, dated as of August 28, 2007, by and between the Company and Citibank, N.A. filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated August 28, 2007, and incorporated herein by reference.
	(o)	Five Year Credit Agreement Amendment No. 1, dated as of September 17, 2007, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and The Bank of New York Mellon, as paying agent, filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated September 17, 2007, and incorporated herein by reference.
	(p)	Five Year Credit Agreement Amendment No. 2, dated as of September 25, 2007, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, the Lenders party thereto, and The Bank of New York Mellon, as paying agent, filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated September 25, 2007, and incorporated herein by reference.
10.	*(a)	Form of Director, Executive Officer and Corporate Officer Indemnity Agreement filed as Exhibit 10(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, and incorporated herein by reference.
	*(b)	Summary of Compensation Payable to Non-Employee Directors (filed herewith).
	*(c)	Summary of Base Salary and Annual Incentive Compensation Payable to Named Executive Officers (filed herewith).
	*(d)	Forms of Amended and Restated Severance Agreements (filed herewith).
	*(e)	Schedule of Executive Officers who are Parties to the Amended and Restated Severance Agreements in the forms referred to in Exhibit 10(d) (filed herewith).
	*(f)	The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan (as Amended and Restated) (filed herewith).
	*(g)	The Sherwin-Williams Company 2005 Key Management Deferred Compensation Plan (as Amended and Restated) (filed herewith).
	*(h)	The Sherwin-Williams Company Director Deferred Fee Plan (1997 Amendment and Restatement), dated April 23, 1997, filed as Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997, and incorporated herein by reference.
	*(i)	2004-1 Amendment to The Sherwin-Williams Company Director Deferred Fee Plan (1997 Amendment and Restatement) filed as Exhibit 10(d) to the Company’s Current Report on Form 8-K dated July 20, 2005, and incorporated herein by reference.
	*(j)	The Sherwin-Williams Company 2005 Director Deferred Fee Plan (as Amended and Restated) (filed herewith).
	*(k)	The Sherwin-Williams Company Executive Disability Income Plan filed as Exhibit 10(g) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991, and incorporated herein by reference.
	*(l)	Amendment Number One to The Sherwin-Williams Company Executive Disability Income Plan (filed herewith).
	*(m)	The Sherwin-Williams Company 2008 Amended and Restated Executive Life Insurance Plan (filed herewith).
	*(n)	The Sherwin-Williams Company 1994 Stock Plan, as amended and restated in its entirety, effective July 26, 2000, filed as Exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000, and incorporated herein by reference.
	*(o)	The Sherwin-Williams Company 2003 Stock Plan, dated January 1, 2003, filed as Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002, and incorporated herein by reference.

23

	*(p)	Form of Restricted Stock Grant under The Sherwin-Williams Company 2003 Stock Plan filed as Exhibit 10(a) to the Company’s Current Report on Form 8-K dated February 2, 2005, and incorporated herein by reference.
	*(q)	Form of Stock Option Grant under The Sherwin-Williams Company 2003 Stock Plan filed as Exhibit 10(b) to the Company’s Current Report on Form 8-K dated February 2, 2005, and incorporated herein by reference.
	*(r)	The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors, dated April 23, 1997, filed as Exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1997, and incorporated herein by reference.
	*(s)	Form of Stock Option Grant under The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors filed as Exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, and incorporated herein by reference.
	*(t)	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(b) to the Company’s Current Report on Form 8-K dated April 19, 2006, and incorporated herein by reference.
	*(u)	Form of Nonqualified Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(y) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
	*(v)	Form of Incentive Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(z) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
	*(w)	Form of Restricted Stock Grant (Performance-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(c) to the Company’s Current Report on Form 8-K dated April 19, 2006, and incorporated herein by reference.
	*(x)	Form of Restricted Stock Grant (Performance-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(aa) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
	*(y)	Form of Restricted Stock Grant (Performance-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(aa) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and incorporated herein by reference.
	*(z)	Form of Restricted Stock Grant (Performance and Time-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(a) to the Company’s Current Report on Form 8-K dated February 16, 2010, and incorporated herein by reference.
	*(aa)	The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors filed as Exhibit 10(c) to the Company’s Current Report on Form 8-K dated April 19, 2006, and incorporated herein by reference.
	*(bb)	Form of Restricted Stock Grant under The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors filed as Exhibit 10(d) to the Company’s Current Report on Form 8-K dated July 19, 2006, and incorporated herein by reference.
	*(cc)	Form of Individual Grantor Trust Participation Agreement filed as Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003, and incorporated herein by reference.
	*(dd)	The Sherwin-Williams Company Business Travel Accident Insurance Plan filed as Exhibit 10(z) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, and incorporated herein by reference.
	*(ee)	The Sherwin-Williams Company 2007 Executive Performance Bonus Plan filed as Exhibit 10(a) to the Company’s Current Report on Form 8-K dated February 21, 2007, and incorporated herein by reference.
13.		Our 2009 Annual Report, portions of which are incorporated herein by reference (filed herewith). With the exception of those portions of our 2009 Annual Report which are specifically incorporated by reference in this report, our 2009 Annual Report shall not be deemed “filed” as part of this report.

24

21.		Subsidiaries (filed herewith).
23.		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith).
24.	(a)	Powers of Attorney (filed herewith).
	(b)	Certified Resolution Authorizing Signature by Power of Attorney (filed herewith).
31.	(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith).
	(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith).
32.	(a)	Section 1350 Certification of Chief Executive Officer (filed herewith).
	(b)	Section 1350 Certification of Chief Financial Officer (filed herewith).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
*Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.

25

EX-4.B

EXHIBIT 4(b)

FIRST SUPPLEMENTAL INDENTURE

     THIS FIRST SUPPLEMENTAL INDENTURE, dated as of December 21, 2009 (this “Supplemental Indenture”), is between The Sherwin-Williams Company, an Ohio corporation (the “Company”), and The Bank of New York Mellon, a corporation duly organized and existing under the laws of the State of New York and successor to Chemical Bank, as trustee (the “Trustee”).

WITNESSETH

     WHEREAS, pursuant to the Indenture, dated as of February 1, 1996, between the Company and the Trustee, as successor trustee (the “Indenture”), the Company may from time to time issue and sell debt securities in one or more series;

     WHEREAS, the Company desires to create and authorize a series of Debt Securities entitled “3.125% Senior Notes due 2014”, limited initially to $500,000,000 in aggregate principal amount (the “Notes”), and to provide the terms and conditions upon which the Notes are to be executed, registered, authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Supplemental Indenture;

     WHEREAS, the Notes are a series of Debt Securities and are being issued under the Indenture, as supplemented by this Supplemental Indenture, and are subject to the terms contained therein and herein;

     WHEREAS, the Notes are to be substantially in the form attached hereto as Exhibit A; and

     WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by or on behalf of the Trustee as provided in this Supplemental Indenture, the valid, binding and legal obligations of the Company, and to make this Supplemental Indenture a legal, binding and enforceable agreement, have been done and performed.

     NOW, THEREFORE, in order to declare the terms and conditions upon which the Notes are executed, registered, authenticated, issued and delivered, and in consideration of the foregoing premises and the purchase of such Notes by the Holders thereof, the Company and the Trustee mutually covenant and agree, for the equal and proportionate benefit of the Holders from time to time of the Notes, as follows:

     Section 1. Definitions. Terms used in this Supplemental Indenture and not defined herein shall have the respective meanings given such terms in the Indenture.

     Section 2. Creation and Authorization of Series.

     (a) There is hereby created and authorized the following new series of Debt Securities to be issued under the Indenture, to be designated as the “3.125% Senior Notes due 2014.”

     (b) The Notes shall be limited initially to $500,000,000 in aggregate principal amount. Notwithstanding the foregoing initial aggregate principal amount, the Company may, from time to time, without notice to or consent of the Holders of the Notes, increase the principal amount of the Notes that may be issued under this Supplemental Indenture and issue such increased principal amount (or any portion thereof), in which case any additional notes so issued will have the same terms (other than the date of issuance and, under certain circumstances, the initial interest payment date, the date from which interest thereon will begin to accrue and the issue price), and will carry the same right to receive accrued and unpaid interest, as the Notes previously issued, and such additional notes will form a single series with the Notes, including for purposes of voting, redemptions and offers to purchase and will rank equally and ratably with the Notes previously issued.

     (c) The date on which the principal is payable on the Notes shall be as provided in the form of security attached hereto as Exhibit A.

     (d) The Notes shall bear interest as provided in the form of security attached hereto as Exhibit A. The interest payment dates and the record dates for the determination of Holders of the Notes to whom such interest is payable shall be as provided in the form of security attached hereto as Exhibit A.

     (e) The Notes shall be redeemable at the option of the Company as set forth in Section 4 of the form of security attached hereto as Exhibit A.

     (f) The provisions of Section 3.06 of the Indenture entitled “Redemption of Debt Securities for Sinking Fund” shall not be applicable to the Notes.

     (g) Upon a Change of Control Triggering Event (as defined in the Notes), the Company shall be required to make an offer to repurchase the Notes as provided in Section 5 of the form of securities attached hereto as Exhibit A.

     (h) The Notes will be issued only in fully registered form, without coupons, in denominations provided in Section 9 of the form of security attached hereto as Exhibit A.

     (i) Section 11.02(b) of the Indenture shall be applicable to the Notes. The covenant described in Section 5 of the form of security attached hereto as Exhibit A shall be subject to the covenant defeasance option set forth in Section 11.02(b)(ii) of the Indenture.

     (j) The Notes shall be issued in the form of a Global Security substantially in the form of Exhibit A attached hereto. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Notes. Additional provisions applicable to the Notes issued in the form of a Global Security are set forth in Section 11 of the form of Security attached hereto as Exhibit A. To the extent inconsistent therewith, such provisions supersede the provisions set forth in Section 2.15 of the Indenture.

     (k) The Trustee, initial paying agent and Registrar for the Notes will be The Bank of New York Mellon and the Place of Payment will be The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286.

2

     (l) The covenants and definitions set forth in the Indenture and the terms set forth in Article X of the Indenture shall be applicable to the Notes.

     (m) Except as otherwise set forth herein and in the Notes, the terms of the Notes shall be as set forth in the Indenture, including those made part of the Indenture by reference to the Trust Indenture Act of 1939.

     Section 3. Effect of Supplemental Indenture. The provisions of this Supplemental Indenture are intended to supplement those of the Indenture as in effect immediately prior to the execution and delivery hereof. The Indenture shall remain in full force and effect except to the extent that the provisions of the Indenture are expressly modified by the terms of this Supplemental Indenture.

     Section 4. Governing Law. This Supplemental Indenture shall be deemed to be a New York contract, and for all purposes shall be construed in accordance with the laws of said State (without reference to principles of conflicts of law).

     Section 5. Trustee Not Responsible for Recitals or Issuance of Notes. The recitals contained herein shall be taken as statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Notes other than with respect to the Trustee’s authentication and execution. The Trustee shall not be accountable for the use or application by the Company of the Notes or the proceeds thereof.

     Section 6. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939 that is required under such Act to be a part of and govern this Supplemental Indenture, the latter provisions shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act of 1939 that may be so modified or excluded, the latter provision shall be deemed to apply to this Supplemental Indenture as so modified or to be excluded, as the case may be.

     Section 7. Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

[The remainder of this page is left blank intentionally]

3

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first above written.

THE SHERWIN-WILLIAMS COMPANY
By:	/s/
	Name:	Sean P. Hennessy
	Title:	Senior Vice President—Finance and Chief Financial Officer
THE BANK OF NEW YORK MELLON, as Trustee
By:	/s/
	Name:	Laurence J. O’Brien
	Title:	Vice President

4

EXHIBIT 4(b)

Exhibit A

FORM OF LEGEND FOR GLOBAL NOTE

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITARY”) AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     [Insert if Global Security: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL DEBT SECURITIES REPRESENTED HEREBY, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY]

Registered
No. THE SHERWIN-WILLIAMS COMPANY
3.125% SENIOR NOTE DUE 2014 Registered
CUSIP 824348 AN6

Original Issue Date:	Maturity Date:
December 21, 2009	December 15, 2014
Principal Amount:
$
Interest Rate:	Specified Currency:
3.125%	U.S. Dollars
Interest Payment Dates:	Regular Record Dates:
June 15	June 1
December 15	December 1
Redemption at Option of the Company:
Redemption Date(s)	Redemption Price(s)
At Any Time	As set forth in Section 4 on the reverse side hereof.

     This security (this “Security”) is a registered security of THE SHERWIN-WILLIAMS COMPANY, an Ohio corporation (together with its successors, if any, the “Company”). This Security is one of a series of Debt Securities (as defined on the reverse hereof) issued under the Indenture referred to on the reverse hereof designated as the 3.125% Senior Notes due 2014. Subject to the provisions hereof, the Company, for value received, hereby promises to pay to [•]

A-1

[Insert if Global Security: CEDE & CO.], or registered assigns, the Principal Amount set forth on the face hereof on the Maturity Date shown above and to pay the premium, if any, and interest thereon, as described on the reverse hereof.

     The principal of (and premium, if any) and interest on this Security are payable by the Company in such coin or currency of the United States as at the time of payment shall be legal tender for the payment of public and private debts.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture by an authorized signatory thereof, this Security shall not be entitled to any benefits under the Indenture, or be valid or obligatory for any purpose.

	THE SHERWIN-WILLIAMS COMPANY
Dated:
	By:
		Name:
		Title:
	By:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Debt Securities of the series designated therein and referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON, as Trustee

By:
	Authorized Signatory

A-2

REVERSE OF SECURITY

THE SHERWIN-WILLIAMS COMPANY
3.125% SENIOR NOTE DUE 2014

1. This Security is one of the duly authorized issue of debentures, notes, bonds or other evidences of indebtedness (hereinafter called the “Debt Securities”) of the Company, of the series hereinafter specified, all issued or to be issued under and pursuant to the Indenture dated as of February 1, 1996, between the Company and The Bank of New York Mellon, as successor to Chemical Bank, as Trustee (herein called the “Trustee”) and the First Supplemental Indenture, dated as of December 21, 2009, between the Company and the Trustee (collectively, the “Indenture”), to which Indenture and all other indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations and duties thereunder of the Trustee and any agent of the Trustee or the Company, any paying agent for this Security (a “Paying Agent”), the Company and the Holders of the Debt Securities and the terms upon which the Debt Securities are issued and are to be authenticated and delivered.

This Security is one of the series of Debt Securities of the Company issued pursuant to the Indenture designated as the 3.125% Senior Notes due 2014 (the “Notes”).

2. A. The regular record date (the “Regular Record Date”) with respect to any Interest Payment Date (as defined below) shall be the applicable date specified as such on the face hereof (whether or not such date shall be a Business Day (as defined below)) immediately preceding such Interest Payment Date. Interest which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date next preceding such Interest Payment Date. “Business Day” means, with respect to any Place of Payment, any day that is not a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies in such location are authorized or obligated by law to be closed.

     B. The Company promises to pay interest on the Principal Amount at the rate per annum shown on the face hereof until the Principal Amount hereof is paid or made available for payment or upon earlier redemption or repayment. The Company will pay interest semiannually in arrears on the Interest Payment Dates set forth on the face hereof (each such date, an “Interest Payment Date”), commencing with the first Interest Payment Date following the Original Issue Date shown on the face hereof and on the Maturity Date. Interest shall accrue from and including the most recent Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from and including the Original Issue Date shown on the face hereof, to but excluding the next succeeding Interest Payment Date. The amount of such interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. If an Interest Payment Date with respect to this Security would otherwise be a day that is not a Business Day, such Interest Payment Date shall not be postponed; provided, however, that any payment required to be made in respect of this Security on a date (including the Maturity Date, a redemption date, a Change of Control Payment date or an Interest Payment Date) that is not a Business Day for this Security need not be made on such date, but may be made on the next succeeding Business Day with the same force and

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effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment.

3. As long as the Notes are represented by one or more Global Securities, all payments of interest will be made by the Company in immediately available funds to the accounts specified by the Depositary or a nominee of the Depositary. Otherwise, payments of interest on the Notes due on Interest Payment Dates will be made by immediately available funds to accounts with financial institutions in the United States specified by the Persons entitled thereto by notice given to the paying agent at least ten calendar days prior to the applicable Interest Payment Date or, if no such account is so specified, by check mailed to the Persons entitled thereto. Principal and any premium and (if such day is not an Interest Payment Date) interest payable at the Stated Maturity, on redemption or repayment of a Note will be paid in immediately available funds upon surrender of such Note at the Place of Payment in The City of New York. Initially, The Bank of New York Mellon will be the paying agent and the Registrar with respect to the Notes. The Company reserves the right at any time to vary or terminate the appointment of any paying agent or Registrar and to appoint additional or other paying agents and a different Registrar and to approve any change in the office through which any paying agent or Registrar acts; provided that there will at all times be a Place of Payment and Registrar in The City of New York.

4. At any time and from time to time, the Notes are redeemable, in whole or in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of interest and principal thereon (exclusive of interest accrued and unpaid to, but not including, the date of redemption) discounted to the date of redemption on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 12.5 basis points, plus, in either case, accrued and unpaid interest to, but not including, the date of redemption.

     For purposes of determining the redemption price, the following definitions shall apply:

     “Comparable Treasury Issue” means the United States Treasury security or securities selected by a Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (A) the arithmetic average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations or (B) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the arithmetic average of all such quotations for such redemption date.

     “Primary Treasury Dealer” means a primary U.S. Government securities dealer in The City of New York.

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     “Quotation Agent” means one of the Reference Treasury Dealers appointed by the Company; provided, however, that if such Reference Treasury Dealer ceases to be a Primary Treasury Dealer, the Company will substitute another Primary Treasury Dealer.

     “Reference Treasury Dealer” means any of Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. or their respective affiliates that are Primary Treasury Dealers, and their respective successors plus two other Primary Treasury Dealers selected by the Company; provided, however, that if any of the foregoing or their affiliates shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the arithmetic average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 3:30 p.m., New York City time on the third Business Day preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

     If less than all of the Notes are to be redeemed, and such Notes are in the form of Global Securities held by the Depositary, the Depositary will select the interests in the Notes to be redeemed in accordance with its operational arrangements. If the Notes are not in the form of Global Securities held by the Depositary, the Trustee shall select the Notes or portions thereof (in denominations of $2,000 and integral multiples of $1,000 in excess thereof) to be redeemed by lot or by such other method as the Trustee considers fair and appropriate.

     Notice of redemption shall be given as provided in Section 3.03 of the Indenture except that any notice of redemption need not specify the redemption price but only the manner of calculation thereof. The Trustee shall not be responsible for the calculation of the redemption price. The Company shall calculate the redemption price and promptly notify the Trustee thereof.

5. If a Change of Control Triggering Event occurs, unless the Company has exercised its option to redeem the Notes as described above by giving notice of such redemption to the Holders thereof, the Company shall be required to make an offer (the “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or any integral multiple of $1,000 in excess thereof) of that Holder’s Notes on the terms set forth herein. In the Change of Control Offer, the Company will be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased up to, but not including, the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of the Company, prior to any Change of Control, but after public announcement of the transaction that

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constitutes or may constitute the Change of Control, a notice shall be mailed to Holders of the Notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed or, if the notice is mailed prior to the Change of Control, no earlier than 30 days and no later than 60 days from the date on which the Change of Control Triggering Event occurs (the “Change of Control Payment Date”). The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.

     On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer, (2) deposit with the paying agent (or, if the Company is acting as the Company’s own paying agent, segregate and hold in trust) an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered and (3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased.

     The Company shall publicly announce the results of the Change of Control Offer on or as soon as possible after the date of purchase.

     The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the time and otherwise in compliance with the requirements for an offer made by the Company and the third party purchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.

     The Company shall comply in all material respects with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934 (the “Exchange Act”) and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the provisions of this Section 5, the Company shall comply with those securities laws and regulations and shall not be deemed to have breached the Company’s obligations under this Section 5 by virtue of any such conflict.

     For purposes of this Section 5, the following terms shall be applicable:

     “Change of Control” means the occurrence of any of the following:

     (1) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d) of the Exchange Act) (other than the Company or one of its Subsidiaries)

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becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (as defined below) or other Voting Stock into which the Voting Stock of the Company is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;

     (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and the assets of its Subsidiaries, taken as a whole, to one or more “persons” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than to the Company or one of its Subsidiaries);

     (3) the Company consolidates with, or merges with or into, any “person” (as that term is used in Section 13(d) of the Exchange Act) or any such person consolidates with, or merges with or into, the Company, in either case, pursuant to a transaction in which any of the outstanding Voting Stock of the Company or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than pursuant to a transaction in which shares of the Voting Stock of the Company outstanding immediately prior to the transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction;

     (4) the adoption of a plan relating to the liquidation or dissolution of the Company; or

     (5) the first day on which a majority of the members of the board of directors of the Company are not Continuing Directors.

     Notwithstanding the foregoing, a transaction shall not be deemed to involve a Change of Control if (i) the Company becomes a direct or indirect wholly owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Company immediately prior to that transaction.

     “Change of Control Triggering Event” means the occurrence of both (1) a Change of Control and (2) a Rating Event.

     “Continuing Director” means, as of any date of determination, any member of the board of directors of the Company who (1) was a member of such board of directors on the date the Notes were issued, (2) was nominated for election to such board of directors with the approval of a committee of the board of directors consisting of a majority of independent continuing directors or (3) was nominated for election, elected or appointed to such board of directors with the approval of a majority of the continuing directors who were members of such board of directors at the time of such nomination, election or appointment (either by a specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director, without objection to such nomination).

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     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or, if applicable, the equivalent investment grade credit rating from any substitute rating agency selected by the Company.

     “Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.

     “Rating Agencies” means (1) each of Moody’s and S&P and (2) if any of Moody’s and S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a Substitute Rating Agency (as defined below) in lieu thereof.

     “Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day during the period commencing on the earlier of (i) the occurrence of the Change of Control and (ii) the first public announcement by the Company of any Change of Control and ending 60 days following consummation of such Change of Control (which period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies); provided that a Rating Event will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if each Rating Agency making the reduction in rating does not publicly announce or confirm or inform the Trustee in writing at the request of the Company that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event).

     “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. or any successor thereto.

     “Substitute Rating Agency” means a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company (as certified by a resolution of the board of directors of the Company).

     “Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d) of the Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

6. If an Event of Default with respect to the Notes shall occur and be continuing, the principal and interest thereon of all of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

7. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into supplemental indentures to the Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Debt Securities of each series under the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Debt Securities at the time outstanding of each series to be affected thereby on behalf of the Holders of all Debt Securities of such series. In addition, the Indenture permits the

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Company and the Trustee to enter into supplemental indentures to the Indenture, without the consent of Holders, for certain purposes, including to cure any ambiguity or to correct or supplement any provision contained in the Indenture and to make changes that do not adversely affect the rights of any Holder. The Indenture also permits the Holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding of each series on behalf of the Holders of all Debt Securities of such series, to waive certain past defaults and their consequences with respect to such series under the Indenture. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Notes.

8. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and any premium of and any interest on this Security at the place, rate and respective times and in the coin or currency herein and in the Indenture prescribed.

9. The authorized denominations of the Notes are $2,000 and any larger amount that is an integral multiple of $1,000. As provided in the Indenture and except as provided therein and herein, the Notes are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the Holder surrendering the same.

10. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Debt Security Register, upon surrender of this Security for registration of transfer at the office of the Registrar or at the offices of any transfer agent designated by the Company for such purpose. Every Note presented or surrendered for registration of transfer, exchange or payment shall (if so required by the Company, the Trustee or the Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder or its attorney duly authorized in writing.

     Prior to due presentment for registration of transfer, the Company, the Trustee, any paying agent and any Registrar may treat the Person in whose name this Security is registered as the absolute owner thereof for all purposes (subject to Section 2.A hereof), whether or not such Security is overdue and notwithstanding any notation of ownership or other writing thereon, and neither the Company nor the Trustee nor any paying agent nor any Registrar shall be affected by notice to the contrary.

     No service charge shall be made for any exchange or registration of transfer of any Note, with certain exceptions, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

11. This Security is a Global Security. Accordingly, this Security may not be transferred except as a whole by the Depositary to a nominee of such Depositary or by a nominee of such Depositary to the Depositary or another nominee of the Depositary, or by the Depositary or any nominee to a successor Depositary selected or approved by the Company or to any nominee of

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such successor Depositary. Ownership of beneficial interests in this Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interest of participants) and the records of participants (with respect to interests of persons other than participants).

     So long as the Depositary or its nominee is the registered owner of this Security, the Depositary or that nominee, as the case may be, will be considered the sole legal owner or Holder of the Notes represented by this Security for all purposes of the Notes and the Indenture. Except as provided below, owners of beneficial interests in this Security (1) will not be entitled to have the Notes represented by this Security registered in their names, (2) will not receive or be entitled to receive physical delivery of certificated securities and (3) will not be considered the owners or Holders of the Notes represented by that beneficial interest under the Indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the Trustee. Accordingly, each Person owning a beneficial interest in this Security must rely on the procedures of the Depositary and, if that Person is not a Depositary participant or indirect participant, on the procedures of the participant through which that Person owns its interest, to exercise any rights of a Holder of Notes under the Indenture or this Security.

     Except as provided in this paragraph, beneficial interests in this Security may not be exchanged for certificated securities. In addition to the provisions set forth in Sections 2.15(c)(i) and (ii) of the Indenture, if there is an Event of Default under the Notes, the Depositary will exchange this Global Security for certificated Notes that it will distribute to its participants.

     Payments with respect to the principal of and interest on this Security will be payable by the Trustee to or at the direction of the Depositary or its nominee in its capacity as the registered Holder of this Security under the Indenture. Under the terms of the Indenture, the Company and the Trustee may treat the persons in whose names this Security are registered as the owners hereof for the purpose of receiving payment thereon (except as provided in Section 2.A hereof) and for any and all other purposes whatsoever. None of the Company, the Trustee, any Registrar, the paying agent or any agent of the Company or the Trustee will have any responsibility or liability for (a) any aspect of the records relating to or payments made on account of beneficial ownership interests in this Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, (b) the payments to the beneficial owners of this Security of amounts paid to the Depositary or its nominee or (c) any other matter relating to the actions or practices of the Depositary, its nominee or any of its direct or indirect participants.

12. Unless otherwise defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

13. The Notes shall be deemed to be New York contracts, and for all purposes shall be construed in accordance with the laws of said State (without reference to principles of conflicts of law).

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CERTIFICATE OF TRANSFER

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.:

Please print or typewrite name and address including zip code of assignee

the within Note and all rights thereunder, and hereby irrevocably constituting and appointing                                          attorney to transfer said Note on the books of the Registrar with full power of substitution in the premises.

Dated:                                         

NOTICE:
	The signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever.

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EX-10.B

EXHIBIT 10(b)

SUMMARY OF COMPENSATION
PAYABLE TO NON-EMPLOYEE DIRECTORS
Effective January 1, 2010

     Director Fees. Effective January 1, 2010, the cash compensation payable to Sherwin-Williams’ non-employee directors is as follows:

• An annual cash retainer of $85,000;

• An additional annual cash retainer of $21,000 for the chair of the Audit Committee;

• An additional annual cash retainer of $15,000 for the chair of the Compensation and Management Development Committee;

• An additional annual cash retainer of $11,000 for the chair of the Nominating and Corporate Governance Committee; and

• A meeting fee of $1,750 for each Board or Committee meeting attended in excess of twelve meetings during a calendar year. For purposes of calculating the number of meetings during a calendar year, any Board and Committee meetings held within 24 hours shall constitute one meeting.

     All retainer amounts are payable in quarterly installments in advance. All meeting fees are payable on the date of the meeting.

     In addition, non-employee directors receive an annual grant of restricted stock valued at approximately $95,000 at the time of the grant pursuant to The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors.

     Other Benefits. All directors are reimbursed for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors and of committees of the Board of Directors.

     Sherwin-Williams pays the premiums for liability insurance and business travel accident insurance for all directors, including $225,000 accidental death and dismemberment coverage and $225,000 permanent total disability coverage, while the directors are traveling on Sherwin-Williams’ business.

     Directors may also receive the same discounts as Sherwin-Williams’ employees on the purchase of products at Sherwin-Williams’ stores and are eligible to participate in Sherwin-Williams’ matching gifts on the same basis as employees. These programs provide for annual matches for gifts of up to $5,000 under the matching gifts to education program and $1,000 under the matching gifts for volunteer leaders program, as well as annual grants of up to $200 under the grants for volunteers program.

     Deferral of Director Fees. In accordance with the Director Deferred Fee Plan, directors may elect to defer all or a part of their retainer and meeting fees. Deferred fees may be credited in a common stock account, a shadow stock account or an interest bearing cash account. The value of the shadow stock account reflects changes in the market price of Sherwin-Williams common stock and the payment of dividend equivalents at the same rate as paid on the common stock. Amounts deferred may be distributed either in annual installments over a period up to ten years or in a lump sum pursuant to a director’s payment election. Amounts credited to a shadow stock account are distributed in cash.

EX-10.C

EXHIBIT 10(c)

SUMMARY OF BASE SALARY AND ANNUAL INCENTIVE
COMPENSATION PAYABLE TO NAMED EXECUTIVE OFFICERS

     2010 Base Salary. On February 16, 2010, the Compensation and Management Development Committee (the “Compensation Committee”) of the Board of Directors of The Sherwin-Williams Company (“Sherwin-Williams”) set the 2010 base salaries of the executive officers who were named in the Summary Compensation Table of Sherwin-Williams’ 2009 Proxy Statement and who are expected to be named in the Summary Compensation Table of Sherwin-Williams’ 2010 Proxy Statement (the “Named Executive Officers”). The base salaries of the Named Executive Officers for 2010 are as follows: C.M. Connor, Chairman and Chief Executive Officer ($1,221,987); J.G. Morikis, President and Chief Operating Officer ($760,205); S.P. Hennessy, Senior Vice President — Finance and Chief Financial Officer ($573,370); S.J. Oberfeld, President, Paint Stores Group ($523,259); and T. W. Seitz, Senior Vice President — Strategic Excellence Initiatives ($483,385).

     Annual Incentive Compensation to Be Earned in 2010. The Compensation Committee also approved the following minimum, target and maximum cash bonus award levels, as a percent of salary, for the Named Executive Officers for 2010 under The Sherwin-Williams Company 2007 Executive Performance Bonus Plan based upon each Named Executive Officer achieving 0%, 100% and 125%, respectively, of his performance goals.

	Incentive Award as a Percentage of Base Salary
Named Executive Officer	Minimum		Target		Maximum
C.M. Connor		0		105		210
J.G. Morikis		0		75		150
S.P. Hennessy		0		75		150
S.J. Oberfeld		0		60		120
T.W. Seitz		0		60		120

EX-10.D

EXHIBIT 10(d)

THE SHERWIN-WILLIAMS COMPANY

FORM A — AMENDED AND RESTATED
SEVERANCE AGREEMENT
(3 Times Base Pay Amount)

          THIS SEVERANCE AGREEMENT (this “Agreement”), dated as of _________, ______, is made and entered into by and between THE SHERWIN-WILLIAMS COMPANY, an Ohio corporation (“Company”) and ___________________________(“Executive”).

RECITALS:

A.	Executive is a senior executive of Company or one or more of its Subsidiaries (as defined below) and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of Company.
B.	Company recognizes that the possibility of a Change in Control (as defined below) exists and that such possibility, and the uncertainty it may create among management, may result in the distraction or departure of management personnel, to the detriment of Company and its stockholders.
C.	Company desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including Executive, applicable in the event of a Change in Control.
D.	Company wishes to ensure that its senior executives are not unduly distracted by the circumstances attendant to the possibility of a Change in Control and to encourage the continued attention and dedication of such executives, including Executive, to their assigned duties with Company.
E.	Company desires to provide additional inducement for Executive to continue to remain in the employ of Company.
F.	Company and Executive are parties to a Severance Agreement dated as of February 1, 2007 (the “Effective Date”), which agreement is hereby amended, restated and replaced in its entirety with this Agreement in order to comply with the final regulations issued under Section 409A of the Code.

     NOW, THEREFORE, Company and Executive agree as follows:

          1. Certain Defined Terms. In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

               (a) “Base Pay” means Executive’s annual base salary rate as in effect from time to time.

               (b) “Board” means the Board of Directors of Company.

               (c) “Cause” means that, prior to any termination pursuant to Section 3(a)(iii), Executive shall have:

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                    (i) been convicted of a criminal violation involving, in each case, fraud, embezzlement or theft in connection with Executive’s duties or in the course of Executive’s employment with Company or any Subsidiary;

                    (ii) committed intentional wrongful damage to property of Company or any Subsidiary; or

                    (iii) committed intentional wrongful disclosure of secret processes or confidential information of Company or any Subsidiary;

and any such act shall have been demonstrably and materially harmful to Company. For purposes of this Agreement, no act or failure to act on the part of Executive will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interest of Company. Notwithstanding the foregoing, Executive will not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Board then in office (excluding Executive if Executive is then a member of the Board) at a meeting of the Board called and held for such purpose, after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel (if Executive chooses to have counsel present at such meeting), to be heard before the Board, finding that, in the good faith opinion of the Board, Executive had committed an act constituting “Cause” as herein defined and specifying the particulars thereof in reasonable detail. Nothing herein will limit the right of Executive or Executive’s beneficiaries to contest the validity or propriety of any such determination.

               (d) “Change in Control” means the occurrence during the Term of any of the following events:

                    (i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the combined voting power of the then-outstanding Voting Stock of Company; provided, however, that:

               (1) for purposes of this Section 1(d)(i), the following acquisitions will not constitute a Change in Control: (A) any acquisition of Voting Stock directly from Company that is approved by a majority of the Incumbent Directors, (B) any acquisition of Voting Stock by Company or any Subsidiary, (C) any acquisition of Voting Stock by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by Company or any Subsidiary, and (D) any acquisition of Voting Stock by any Person pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(d)(iii) below;

               (2) if any Person is or becomes the beneficial owner of 30% or more of combined voting power of the then-outstanding Voting Stock as a result of a transaction described in clause (A) of Section 1(d)(i)(1) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock representing 1% or more of the then-outstanding Voting Stock, other than in an acquisition directly from Company that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by Company in which all

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holders of Voting Stock are treated equally, such subsequent acquisition shall be treated as a Change in Control;

               (3) a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 30% or more of the Voting Stock as a result of a reduction in the number of shares of Voting Stock outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock representing 1% or more of the then-outstanding Voting Stock, other than as a result of a stock dividend, stock split or similar transaction effected by Company in which all holders of Voting Stock are treated equally; and

               (4) if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 30% or more of the Voting Stock inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Incumbent Board a sufficient number of shares so that such Person beneficially owns less than 30% of the Voting Stock, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

                    (ii) a majority of the Board ceases to be comprised of Incumbent Directors; or

                    (iii) the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of Company or the acquisition of the stock or assets of another corporation, or other transaction (each, a “Business Transaction”), unless, in each case, immediately following such Business Transaction (A) the Voting Stock outstanding immediately prior to such Business Transaction continues to represent (either by remaining outstanding or by being converted into voting stock of the surviving entity or any parent thereof), more than 50% of the combined voting power of the then outstanding shares of voting stock of the entity resulting from such Business Transaction (including, without limitation, an entity which as a result of such transaction owns Company or all or substantially all of Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than Company, such entity resulting from such Business Transaction, or any employee benefit plan (or related trust) sponsored or maintained by Company, any Subsidiary or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, 30% or more of the combined voting power of the then outstanding shares of voting stock of the entity resulting from such Business Transaction, and (C) at least a majority of the members of the board of directors of the entity resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or

                    (iv) approval by the shareholders of Company of a complete liquidation or dissolution of Company, except pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(d)(iii).

                    (v) For purposes of this Section 1(d), the term “Incumbent Directors” shall mean, during any period of two consecutive years, individuals who at the beginning of such period constituted the Board and any new director (other than a director initially elected or nominated as a director as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of such director) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were

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directors at the beginning of the period or whose election or nomination for election was previously so approved.

               (e) “Code” means the Internal Revenue Code of 1986, as amended.

               (f) “Common Shares” means shares of common stock, no par value, of Company.

               (g) “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and welfare benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by Company or a Subsidiary, providing benefits and service credit for benefits at least as great in the aggregate as are payable thereunder immediately prior to a Change in Control.

               (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

               (i) “Good Reason” means the occurrence of one or more of the following events:

               (i) Failure to elect or reelect or otherwise to maintain Executive in the office or the position, or a substantially equivalent or better office or position, of or with Company and/or a Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be, which Executive held immediately prior to a Change in Control, or the removal of Executive as a Director of Company and/or a Subsidiary (or any successor thereto) if Executive shall have been a Director of Company and/or a Subsidiary immediately prior to the Change in Control;

               (ii) Failure of Company to remedy any of the following within 10 calendar days after receipt by Company of written notice thereof from Executive: (A) a significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with Company and any Subsidiary which Executive held immediately prior to the Change in Control, (B) a reduction in Executive’s Base Pay received from Company and any Subsidiary, (C) a reduction in Executive’s Incentive Pay opportunity as compared with the Incentive Pay opportunity most recently paid prior to the Change in Control, or (D) the termination or denial of Executive’s rights to Employee Benefits or a reduction in the scope or value thereof;

               (iii) The liquidation, dissolution, merger, consolidation or reorganization of Company or the transfer of all or substantially all of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to which all or substantially all of its business and/or assets have been transferred (by operation of law or otherwise) assumed all duties and obligations of Company under this Agreement pursuant to Section 10(a);

               (iv) Company requires Executive to have Executive’s principal location of work changed to any location that is in excess of 30 miles from the location thereof immediately prior to the Change in Control, or requires Executive to travel away from Executive’s office in the course of discharging Executive’s responsibilities or duties hereunder at least 20% more (in

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terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than was required of Executive in any of the three full years immediately prior to the Change in Control without, in either case, Executive’s prior written consent; or

               (v) Without limiting the generality or effect of the foregoing, any material breach of this Agreement by Company or any successor thereto.

               (j) “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of Company or a Subsidiary, or any successor thereto. “Incentive Pay” does not include any stock option, stock appreciation, stock purchase, restricted stock, private equity, long-term incentive or similar plan, program, arrangement or grant, whether or not provided under a plan, program or arrangement described in the preceding sentence.

               (k) “Severance Period” means the period of time commencing on the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) Executive’s death;

               (l) “Subsidiary” means an entity in which Company directly or indirectly beneficially owns 50% or more of the outstanding voting stock of such entity.

               (m) “Term” means the period commencing as of the Effective Date and expiring on the close of business on December 31, 2008; provided, however, that (i) commencing on January 1, 2008 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, Company or Executive shall have given notice that Company or Executive, as the case may be, does not wish to have the Term extended; (ii) if a Change in Control occurs during the Term, the Term will expire on the last day of the Severance Period; and (iii) subject to Section 3(c), if, prior to a Change in Control, the Executive ceases for any reason to be a corporate officer or operating president of Company and any Subsidiary, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect; provided however, that this Section 1(m)(iii) shall not apply to terminate the Agreement with respect to any Executive who had a Severance Pay Agreement or Amended and Restated Severance Pay Agreement between Company and Executive in effect on February 20, 2007 and who entered into this Agreement effective February 21, 2007. For purposes of this Section 1(m), the Executive shall not be deemed to have ceased to be an employee of Company and any Subsidiary by reason of the transfer of the Executive’s employment between Company and any Subsidiary, or among any Subsidiaries.

               (n) “Termination Date” means the date on which Executive’s employment is terminated (the effective date of which will be the date of termination, or such other date that may be specified by Executive if the termination is pursuant to Section 3(b)).

               (o) “Voting Stock” means at any time, the then-outstanding securities entitled to vote generally in the election of directors of Company.

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     2. Operation of Agreement. This Agreement will be effective and binding immediately upon its execution, but, anything in this Agreement to the contrary notwithstanding, except as provided in Section 3(c), this Agreement will not be operative unless and until a Change in Control occurs. Upon the occurrence of a Change in Control at any time during the Term, without further action, this Agreement will become immediately operative.

     3. Termination Following a Change in Control.

          (a) In the event of the occurrence of a Change in Control, Executive’s employment may be terminated by Company or a Subsidiary during the Severance Period (or pursuant to Section 3(c)) and Executive will be entitled to the benefits provided by Section 4 unless such termination is the result of the occurrence of one or more of the following events:

                    (i) Executive’s death;

                    (ii) If Executive becomes permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, Executive immediately prior to the Change in Control; or

                    (iii) Cause.

If, during the Severance Period, Executive’s employment is terminated by Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), Executive will be entitled to the benefits provided by Section 4.

               (b) In the event of the occurrence of a Change in Control, Executive may terminate employment with Company and any Subsidiary during the Severance Period for Good Reason with the right to severance compensation as provided in Section 4 regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment.

               (c) Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and not more than 90 days prior to the date on which the Change in Control occurs, Executive’s employment with Company is terminated by Company, such termination of employment will be deemed to be a termination of employment immediately after a Change in Control for purposes of determining whether Executive is entitled to benefits under this Agreement if Executive has reasonably demonstrated that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control, or (ii) otherwise arose in connection with or in anticipation of a Change in Control.

               (d) A termination of employment pursuant to Section 3(a), 3(b) or 3(c) will not affect any rights that Executive may have pursuant to any agreement, policy, plan, program or arrangement of Company or Subsidiary providing Employee Benefits, which rights will be governed by the terms thereof. Notwithstanding the foregoing, any severance benefits received by Executive pursuant to Section 4 of this Agreement shall be in lieu of any severance benefits to which Executive would otherwise be entitled under any severance plan, program, policy or practice or contract or agreement of Company or its affiliates (other than a retirement plan or other deferred compensation arrangement, equity award, welfare benefit plan or any similar plan or agreement which may contain provisions that become operative on, or that may incidentally refer to accelerated vesting or accelerated payment upon, a termination of Executive’s employment).

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     4. Severance Compensation.

     (a) If, following the occurrence of a Change in Control, Company or Subsidiary terminates Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if Executive terminates Executive’s employment pursuant to Section 3(b), Company will be obligated to make the following payments and provide the following benefits to Executive.

               (i) Within ten business days after the occurrence of an event described in Section 4(a) above (or in the case of an event described in Section 3(c), within 10 business days after the Change in Control), Company shall pay, in a lump sum, an amount equal to three (3) times the sum of (A) Base Pay (at the highest rate in effect for any period within three years prior to the Termination Date), plus (B) an amount equal to the greater of: (x) the average of the Incentive Pay earned or received by Executive during the three year period immediately preceding the Termination Date, or (y) the Executive’s target Incentive Pay for the year in which the Termination Date occurs (assuming the Executive achieves 100% of any stated goals); provided, however, that if payment to Executive would constitute a “deferral of compensation” under Section 409A of the Code, Executive (or Executive’s beneficiary) will receive payment of the amounts described in this Section 4(a)(i) upon the earlier of (i) six (6) months following Executive’s “separation from service” with Company (as such phrase is defined in Section 409A of the Code) or (ii) within 90 days after Executive’s death.

               (ii) For a period of eighteen (18) months following the Termination Date (the “Continuation Period”), Company shall arrange to provide Executive, at no cost to Executive, with medical and dental benefits substantially similar to those that Executive was receiving or entitled to receive immediately prior to the Termination Date (or, if greater, immediately prior to the reduction, termination, or denial described in Section 1(i)(ii)). The Continuation Period shall be considered to be the period during which Executive shall be eligible for continuation coverage under Section 4980B of the Code, and Company shall reimburse Executive for the amount of the premiums for such continuation coverage; provided, however that without otherwise limiting the purposes or effect of Section 6, the benefits otherwise receivable by Executive pursuant to this Section 4(a)(ii) will be reduced to the extent comparable welfare benefits are actually received by Executive from another employer during the Continuation Period following Executive’s Termination Date, and any such benefits actually received by Executive shall be reported by Executive to Company. If any benefit described in this Section 4(a)(ii) is subject to tax, Company will pay to Executive an additional amount such that after payment by Executive or Executive’s dependents or beneficiaries, as the case may be, of all taxes so imposed, the recipient retains an amount equal to such taxes.

               (iii) Executive shall be entitled to outplacement services by a firm selected by Executive, at the expense of Company in an amount not to exceed ten percent (10%) of Base Pay; provided, however, that all such outplacement services must be completed, and all payments by Company must be made, by December 31 of the second calendar year following the calendar year in which the Termination Date occurs.

               (b) Without limiting the rights of Executive at law or in equity, if Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column. Such interest will be payable at the time the related payment or benefit is paid to Executive. Any change in such prime rate will be effective on and as of the date of such change.

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               (c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, Company will pay in cash to Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that would have been earned, accrued, allocated or awarded to Executive for any performance period ending prior to the Change in Control (regardless of whether (x) payment of such compensation is contingent on the continuing performance of services by Executive or (y) the bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement pursuant to which such Incentive Pay would otherwise be payable permits pro-ration), plus (ii) the value of any annual bonus or long-term Incentive Pay (including, without limitation, incentive-based annual cash bonuses and performance units, but not including any equity-based compensation or compensation provided under a qualified plan) payable pursuant to any performance period that is outstanding on the date of the Change in Control. Such payment will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement, and (y) within five business days after the Change in Control. In the case of clauses (i) and (ii), any applicable vesting requirements will be disregarded. In the case of clause (ii), the amount will be calculated at the greater of (1) the plan target or payout rate and (2) the amount determined based on Company’s actual results relative to the applicable performance criteria as if the performance period had ended on the date of the Change in Control, which amount will be prorated on the basis of the number of days of Executive’s participation during the applicable performance period to which the incentive pay related divided by the aggregate number of days in such performance period, taking into account service rendered through the payment date.

          5. Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding, but subject to Paragraph 7 of Annex A, in the event that this Agreement becomes operative and it is determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for in this Section 5 and Annex A) or distribution by Company or any of its affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then Executive will be entitled to receive an additional payment or payments (collectively, a “Gross-Up Payment”); provided, however, that no Gross-up Payment will be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i). The Gross-Up Payment will be in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

          (b) The obligations set forth in Section 5(a) will be subject to the procedural provisions described in Annex A.

          6. No Mitigation Obligation. Company hereby acknowledges that it will be difficult and may be impossible for Executive to find reasonably comparable employment following Termination Date. Accordingly, the payment of the severance compensation by Company to Executive in accordance with

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the terms of this Agreement is hereby acknowledged by Company to be reasonable, and Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of Executive hereunder or otherwise.

          7. Legal Fees and Expenses.

          (a) It is the intent of Company that Executive not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of Executive’s rights in connection with any dispute arising under this Agreement because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. Accordingly, if it should appear to Executive that Company has failed to comply with any of its obligations under this Agreement or in the event that Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any proceeding designed to deny, or to recover from, Executive the benefits provided or intended to be provided to Executive hereunder, Company irrevocably authorizes Executive from time to time to retain counsel of Executive’s choice, at the expense of Company as hereafter provided, to advise and represent Executive in connection with any such dispute or proceeding. Notwithstanding any existing or prior attorney-client relationship between Company and such counsel, Company irrevocably consents to Executive’s entering into an attorney-client relationship with such counsel, and in that connection Company and Executive agree that a confidential relationship will exist between Executive and such counsel. Without respect to whether Executive prevails, in whole or in part, in connection with any of the foregoing, Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by Executive at any time from the Effective Date through Executive’s remaining lifetime, (or, if longer, through the 20th anniversary of the Effective Date) in connection with any of the foregoing. Such payments will be made within five business days after delivery of Executive’s written requests for payment, accompanied by such evidence of fees and expenses incurred as Company may reasonably require; provided that Executive shall have submitted all required documentation at least 14 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.

               (b) In order to secure the benefits to be received by Executive pursuant to this Agreement and similar arrangements with other executives, Company shall establish one or more trust funds (the “Trust”). Company will deposit in such Trust, within five (5) business days after the occurrence of an event that in the reasonable opinion of the Board will likely result in a Change in Control, an amount equal to approximately the maximum aggregate benefits that could be payable to Executive under the terms of this Agreement; provided, however, that (i) the Trust shall not be funded if the funding thereof would result in taxable income to Executive by reason of Section 409A(b) of the Code; and (ii) in no event shall any Trust assets at any time be located or transferred outside of the United States, within the meaning of Section 409A(b) of the Code. Any funds which may be placed into the Trust under this Agreement shall continue for all purposes to be a part of the general funds of Company subject to the claims of Company’s creditors in the event of Company’s insolvency and no person shall by virtue of this Agreement have any interest in such funds. To the extent that any person acquires a right to receive payments from Company under this Agreement, such rights shall be no greater than the right of any unsecured general creditor of Company. Executive shall be entitled to receive distributions from the funds held in the Trust pursuant to the terms and conditions of this Agreement and the agreement establishing the Trust between Company and the trustee. If prior to the date of a Change in Control, the Board has actual knowledge that all third parties have abandoned or terminated their efforts to effect a Change in Control and a Change in Control at that time is unlikely and the Board so advises Executive, the trust funds and interest earned thereon, if any, shall be returned to Company by the trustee. Notwithstanding the provisions of this Section 6(b), failure by Company to place such funds in Trust in

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no way relieves Company from its financial obligations and responsibilities to Executive under the terms of this Agreement.

               (c) All benefits to be paid pursuant to this Agreement, including any amounts paid pursuant to Section 6(a) which were not paid through the Trust established pursuant to Section 6(b), shall be paid from the general assets of the Company.

          8. Employment Rights. Nothing expressed or implied in this Agreement will create any right or duty on the part of Company or Executive to have Executive remain in the employment of Company or any Subsidiary prior to or following any Change in Control.

          9. Withholding of Taxes. Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as Company is required to withhold pursuant to any applicable law, regulation or ruling.

          10. Successors and Binding Agreement.

          (a) Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of Company, by agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent Company would be required to perform if no such succession had taken place. This Agreement will be binding upon and inure to the benefit of Company and any successor to Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by Company.

          (b) This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

          (c) This Agreement is personal in nature and neither of the parties hereto will, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 10(a) and 10(b). Without limiting the generality or effect of the foregoing, Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 10(c), Company will have no liability to pay any amount so attempted to be assigned, transferred or delegated.

          11. Notices. For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as FedEx or UPS, addressed to Company (to the attention of the Secretary of Company) at its principal executive office and to Executive at Executive’s principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

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          12. Governing Law. The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Ohio and federal law, without giving effect to the principles of conflict of laws of such State, except as expressly provided herein.

          13. Validity. If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid or otherwise unenforceable, the remainder of this Agreement and the application of such provision to any other person or circumstance will not be affected, and the provision so held to be invalid or otherwise unenforceable will be reformed to the extent (and only to the extent) necessary to make it enforceable or valid.

          14. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. The headings used in this Agreement are intended for convenience or reference only and will not in any manner amplify, limit, modify or otherwise be used in the construction or interpretation of any provision of this Agreement. References to Sections are to Sections of this Agreement. Any reference in this Agreement to a provision of a statute, rule or regulation will also include any successor provision thereto.

          15. Effect on Prior Agreements. This Agreement shall expressly supersede and render null, void and invalid any prior severance pay agreement or agreements of a similar nature previously entered into by and between Company and Executive with respect to the subject matter of this Agreement, including but not limited to any Amended and Restated Severance Pay Agreement, effective as of April 23, 1997, Severance Agreement between the Company and Executive dated as of February 21, 2007, or Severance Pay Agreement effective as of a subsequent date but prior to the effective date of this Agreement, between Company and Executive.

          16. Dispute Resolution. Any dispute between the parties under this Agreement will be resolved (except as provided below) through informal arbitration by an arbitrator selected under the rules of the American Arbitration Association for arbitration of employment disputes (located in the city in which Company’s principal executive offices in the United States are based) and the arbitration will be conducted in that location under the rules of said Association. Each party will be entitled to present evidence and argument to the arbitrator. The arbitrator will have the right only to interpret and apply the provisions of this Agreement and may not change any of its provisions, except as expressly provided in Section 13. The arbitrator will permit reasonable pre-hearing discovery of facts, to the extent necessary to establish a claim or a defense to a claim, subject to supervision by the arbitrator. The determination of the arbitrator will be conclusive and binding upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof. The arbitrator will give written notice to the parties stating the arbitrator’s determination, and will furnish to each party a signed copy of such determination. The expenses of arbitration will be borne equally by Company and Executive or as the arbitrator equitably determines consistent with the application of state or federal law; provided, however, that Executive’s share of such expenses will not exceed the maximum permitted by law. Any arbitration or action pursuant to this Section 16 will be governed by and construed in accordance with the substantive laws of the State of Ohio and, where applicable, federal law, without giving effect to the principles of conflict of laws of such State.

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          17. Survival. Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under Sections 3(d), 4, 5, 7, 9, 10(b), 16, 18 and 20 will survive any termination or expiration of this Agreement or the termination of Executive’s employment following a Change in Control for any reason whatsoever.

          18. Beneficiaries. Executive will be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive’s death, and may change such election, in either case by giving Company written notice thereof in accordance with Section 11. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to “Executive” will be deemed, where appropriate, to Executive’s beneficiary, estate or other legal representative.

          19. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same agreement.

          20. Section 409A of the Code.

               (a) The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code (“Section 409A”) or are exempt therefrom and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies Company (with specificity as to the reason therefor) that Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section 409A and Company concurs with such belief or Company (without any obligation whatsoever to do so) independently makes such determination, Company shall, after consulting with Executive, reform such provision in a manner that is economically neutral to Company to attempt to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A.

               (b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and Executive is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to Company or its affiliates as an employee or consultant, and for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A.

               (c) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments shall be made on or before the last day of the calendar year immediately following the calendar year in which the expense occurred, or such earlier date as required hereunder.

               (d) With regard to any provision herein that provides for a gross-up payment or other reimbursement for Executive’s taxes (or audit or litigation expenses attributable to the tax gross-up or reimbursement), the applicable taxes or related expenses shall be reimbursed no later than the earlier of (i) the date specified for payment under the Arrangement, or (ii) the end of the calendar year immediately

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following the calendar year in which the applicable taxes are remitted or, in the case of reimbursement of expenses incurred due to a tax audit or litigation to which there is no remittance of taxes, the end of the calendar year following the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

               (e) Notwithstanding anything contained in this Agreement to the contrary, if Executive is a “specified employee,” as determined under Company’s policy for identifying specified employees on the Termination Date, then to the extent required in order to comply with Section 409A, all payments, benefits, tax gross-ups or other reimbursements paid or provided under this Agreement that constitute a “deferral of compensation” within the meaning of Section 409A, that are provided as a result of a “separation from service” within the meaning of Section 409A and that would otherwise be paid or provided during the first six months following such Termination Date shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date), within 30 days after the first business day that is more than six months after the date of his separation from service (or, if Executive dies during such six-month period, within 90 days after Executive’s death).

               (f) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within 30 days after the Termination Date”), the actual date of payment within the specified period shall be within the sole discretion of Company. For purposes of Section 409A, Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

THE SHERWIN-WILLIAMS COMPANY

EXECUTIVE

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Annex A

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

     (1) Subject to the provisions of Paragraph 5, all determinations required to be made under Section 5 and Annex A, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by Company to Executive and the amount of such Gross-Up Payment, if any, will be made by a nationally recognized accounting firm or benefits consulting firm (the “National Firm”) selected by the Executive in Executive’s sole discretion. Executive will direct the National Firm to submit its determination and detailed supporting calculations to both Company and Executive within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by Company or Executive. If the National Firm determines that any Excise Tax is payable by Executive, Company will pay the required Gross-Up Payment to Executive within 5 business days after receipt of such determination and calculations with respect to any Payment to Executive. If the National Firm determines that no Excise Tax is payable by Executive with respect to any material benefit or amount (or portion thereof), it will, at the same time as it makes such determination, furnish Company and Executive with an opinion that Executive has substantial authority not to report any Excise Tax on Executive’s federal, state or local income or other tax return with respect to such benefit or amount. As a result of the uncertainty in the application of Section 4999 of the Code and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the National Firm hereunder, it is possible that Gross-Up Payments that will not have been made by Company should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts or fails to pursue its remedies pursuant to Paragraph 5 and Executive thereafter is required to make a payment of any Excise Tax, Executive will direct the National Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by Company to, or for the benefit of, Executive within 5 business days after receipt of such determination and calculations.

     (2) Company and Executive will each provide the National Firm access to and copies of any books, records and documents in the possession of Company or Executive, as the case may be, reasonably requested by the National Firm, and otherwise cooperate with the National Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Paragraph 1. Any determination by the National Firm as to the amount of the Gross-Up Payment will be binding upon Company and Executive.

     (3) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the National Firm with respect to the Excise Tax payable by Executive. Executive will report and make proper payment of the amount of any Excise Tax, and at the request of Company, provide to Company true and correct copies (with any amendments) of Executive’s federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by Company, evidencing such payment. If prior to the filing of Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the National Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within 5 business days pay to Company the amount of such reduction.

     (4) The fees and expenses of the National Firm for its services in connection with the determinations and calculations contemplated by Paragraph 1 at any time from the Effective Date through Executive’s remaining lifetime, (or, if longer, through the 20th anniversary of the Effective Date) will be borne by Company. If such fees and expenses are initially paid by Executive, Company will reimburse Executive the full amount of such fees and expenses within 5 business days after receipt from Executive

of a statement therefor and reasonable evidence of Executive’s payment thereof; provided that Executive shall have submitted all required documentation at least 14 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.

     (5) Executive will notify Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than 10 business days after Executive actually receives notice of such claim and Executive will further apprise Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the expiration of the 30-calendar-day period following the date on which Executive gives such notice to Company or, if earlier, the date that any payment of amount with respect to such claim is due. If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:

     (A) provide Company with any written records or documents in Executive’s possession relating to such claim reasonably requested by Company;

     (B) take such action in connection with contesting such claim as Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by Company;

     (C) cooperate with Company in good faith in order effectively to contest such claim; and

     (D) permit Company to participate in any proceedings relating to such claim;

provided, however, that Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income or other tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Paragraph 5, Company will control all proceedings taken in connection with the contest of any claim contemplated by this Paragraph 5 and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that Executive may participate therein at Executive’s own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Company determines; provided, however, that if Company directs Executive to pay the tax claimed and sue for a refund, Company will, as permitted by applicable law, advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Company’s control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

     (6) If, after the receipt by Executive of an amount advanced by Company pursuant to Paragraph 5, Executive receives any refund with respect to such claim, Executive will (subject to Company’s complying with the requirements of Paragraph 5) promptly pay to Company the amount of

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such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Company pursuant to Paragraph 5, a determination is made that Executive is not entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of any such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by Company to Executive pursuant to Section 5 and this Annex C.

     (7) Notwithstanding any provision of this Agreement to the contrary, but giving effect to any redetermination of the amount of Gross-Up payments otherwise required by this Annex A, if (A) but for this sentence, Company would be obligated to make a Gross-Up Payment to Executive and (B) the aggregate “present value” of the “parachute payments” to be paid or provided to Executive under this Agreement or otherwise does not exceed 1.15 multiplied by three times Executive’s “base amount,” then the payments and benefits to be paid or provided under this Agreement will be reduced (or repaid to Company, if previously paid or provided) to the minimum extent necessary so that no portion of any payment or benefit to Executive, as so reduced or repaid, constitutes an “excess parachute payment.” For purposes of this Paragraph 7, the terms “excess parachute payment,” “present value,” “parachute payment,” and “base amount” will have the meanings assigned to them by Section 280G of the Code. The determination of whether any reduction in or repayment of such payments or benefits to be provided under this Agreement is required pursuant to this Paragraph 7 will be made at the expense of Company, if requested by Executive or Company, by the National Firm. Appropriate adjustments will be made to amounts previously paid to Executive, or to amounts not paid pursuant to this Paragraph 7, as the case may be, to reflect properly a subsequent determination that Executive owes more or less Excise Tax than the amount previously determined to be due. In the event that any payment or benefit intended to be provided under this Agreement or otherwise is required to be reduced or repaid pursuant to this Paragraph 7, the reduction shall be made by reducing the amounts to be paid or provided under the following sections of this Agreement in the following order: (i) Section 4(a)(i), (ii) Section 4(c), (iii) Section 4(a)(iii), and (iv) Section 4(a)(ii).

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THE SHERWIN-WILLIAMS COMPANY

FORM B — AMENDED AND RESTATED
SEVERANCE AGREEMENT
(2.5 Times Base Pay Amount)

     THIS SEVERANCE AGREEMENT (this “Agreement”), dated as of                     ,            , is made and entered into by and between THE SHERWIN-WILLIAMS COMPANY, an Ohio corporation (“Company”) and                                          (“Executive”).

RECITALS:

G.	Executive is a senior executive of Company or one or more of its Subsidiaries (as defined below) and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of Company.
H.	Company recognizes that the possibility of a Change in Control (as defined below) exists and that such possibility, and the uncertainty it may create among management, may result in the distraction or departure of management personnel, to the detriment of Company and its stockholders.
I.	Company desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including Executive, applicable in the event of a Change in Control.
J.	Company wishes to ensure that its senior executives are not unduly distracted by the circumstances attendant to the possibility of a Change in Control and to encourage the continued attention and dedication of such executives, including Executive, to their assigned duties with Company.
K.	Company desires to provide additional inducement for Executive to continue to remain in the employ of Company.
L.	Company and Executive are parties to a Severance Agreement dated as of February 21, 2007 (the “Effective Date”), which agreement is hereby amended, restated and replaced in its entirety with this Agreement in order to comply with the final regulations issued under Section 409A of the Code.

     NOW, THEREFORE, Company and Executive agree as follows:

     21. Certain Defined Terms. In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

               (a) “Base Pay” means Executive’s annual base salary rate as in effect from time to time.

               (b) “Board” means the Board of Directors of Company.

               (c) “Cause” means that, prior to any termination pursuant to Section 3(a)(iii), Executive shall have:

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          (i) been convicted of a criminal violation involving, in each case, fraud, embezzlement or theft in connection with Executive’s duties or in the course of Executive’s employment with Company or any Subsidiary;

          (ii) committed intentional wrongful damage to property of Company or any Subsidiary; or

          (iii) committed intentional wrongful disclosure of secret processes or confidential information of Company or any Subsidiary;

and any such act shall have been demonstrably and materially harmful to Company. For purposes of this Agreement, no act or failure to act on the part of Executive will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interest of Company. Notwithstanding the foregoing, Executive will not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Board then in office (excluding Executive if Executive is then a member of the Board) at a meeting of the Board called and held for such purpose, after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel (if Executive chooses to have counsel present at such meeting), to be heard before the Board, finding that, in the good faith opinion of the Board, Executive had committed an act constituting “Cause” as herein defined and specifying the particulars thereof in reasonable detail. Nothing herein will limit the right of Executive or Executive’s beneficiaries to contest the validity or propriety of any such determination.

          (d) “Change in Control” means the occurrence during the Term of any of the following events:

          (i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the combined voting power of the then-outstanding Voting Stock of Company; provided, however, that:

     (1) for purposes of this Section 1(d)(i), the following acquisitions will not constitute a Change in Control: (A) any acquisition of Voting Stock directly from Company that is approved by a majority of the Incumbent Directors, (B) any acquisition of Voting Stock by Company or any Subsidiary, (C) any acquisition of Voting Stock by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by Company or any Subsidiary, and (D) any acquisition of Voting Stock by any Person pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(d)(iii) below;

     (2) if any Person is or becomes the beneficial owner of 30% or more of combined voting power of the then-outstanding Voting Stock as a result of a transaction described in clause (A) of Section 1(d)(i)(1) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock representing 1% or more of the then-outstanding Voting Stock, other than in an acquisition directly from Company that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by Company in which all holders of Voting Stock are

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treated equally, such subsequent acquisition shall be treated as a Change in Control;

     (3) a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 30% or more of the Voting Stock as a result of a reduction in the number of shares of Voting Stock outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock representing 1% or more of the then-outstanding Voting Stock, other than as a result of a stock dividend, stock split or similar transaction effected by Company in which all holders of Voting Stock are treated equally; and

     (4) if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 30% or more of the Voting Stock inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Incumbent Board a sufficient number of shares so that such Person beneficially owns less than 30% of the Voting Stock, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

          (ii) a majority of the Board ceases to be comprised of Incumbent Directors; or

          (iii) the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of Company or the acquisition of the stock or assets of another corporation, or other transaction (each, a “Business Transaction”), unless, in each case, immediately following such Business Transaction (A) the Voting Stock outstanding immediately prior to such Business Transaction continues to represent (either by remaining outstanding or by being converted into voting stock of the surviving entity or any parent thereof), more than 50% of the combined voting power of the then outstanding shares of voting stock of the entity resulting from such Business Transaction (including, without limitation, an entity which as a result of such transaction owns Company or all or substantially all of Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than Company, such entity resulting from such Business Transaction, or any employee benefit plan (or related trust) sponsored or maintained by Company, any Subsidiary or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, 30% or more of the combined voting power of the then outstanding shares of voting stock of the entity resulting from such Business Transaction, and (C) at least a majority of the members of the board of directors of the entity resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or

          (iv) approval by the shareholders of Company of a complete liquidation or dissolution of Company, except pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(d)(iii).

          (v) For purposes of this Section 1(d), the term “Incumbent Directors” shall mean, during any period of two consecutive years, individuals who at the beginning of such period constituted the Board and any new director (other than a director initially elected or nominated as a director as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of such director) whose election by the Board or nomination for election by the Company’s shareholders was

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approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved.

          (e) “Code” means the Internal Revenue Code of 1986, as amended.

          (f) “Common Shares” means shares of common stock, no par value, of Company.

          (g) “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and welfare benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by Company or a Subsidiary, providing benefits and service credit for benefits at least as great in the aggregate as are payable thereunder immediately prior to a Change in Control.

          (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (i) “Good Reason” means the occurrence of one or more of the following events:

     (ii) Failure to elect or reelect or otherwise to maintain Executive in the office or the position, or a substantially equivalent or better office or position, of or with Company and/or a Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be, which Executive held immediately prior to a Change in Control, or the removal of Executive as a Director of Company and/or a Subsidiary (or any successor thereto) if Executive shall have been a Director of Company and/or a Subsidiary immediately prior to the Change in Control;

     (iii) Failure of Company to remedy any of the following within 10 calendar days after receipt by Company of written notice thereof from Executive: (A) a significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with Company and any Subsidiary which Executive held immediately prior to the Change in Control, (B) a reduction in Executive’s Base Pay received from Company and any Subsidiary, (C) a reduction in Executive’s Incentive Pay opportunity as compared with the Incentive Pay opportunity most recently paid prior to the Change in Control, or (D) the termination or denial of Executive’s rights to Employee Benefits or a reduction in the scope or value thereof;

     (iv) The liquidation, dissolution, merger, consolidation or reorganization of Company or the transfer of all or substantially all of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to which all or substantially all of its business and/or assets have been transferred (by operation of law or otherwise) assumed all duties and obligations of Company under this Agreement pursuant to Section 10(a);

     (v) Company requires Executive to have Executive’s principal location of work changed to any location that is in excess of 30 miles from the location thereof

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immediately prior to the Change in Control, or requires Executive to travel away from Executive’s office in the course of discharging Executive’s responsibilities or duties hereunder at least 20% more (in terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than was required of Executive in any of the three full years immediately prior to the Change in Control without, in either case, Executive’s prior written consent; or

     (vi) Without limiting the generality or effect of the foregoing, any material breach of this Agreement by Company or any successor thereto.

          (i) “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of Company or a Subsidiary, or any successor thereto. “Incentive Pay” does not include any stock option, stock appreciation, stock purchase, restricted stock, private equity, long-term incentive or similar plan, program, arrangement or grant, whether or not provided under a plan, program or arrangement described in the preceding sentence.

          (j) “Severance Period” means the period of time commencing on the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) Executive’s death;

          (k) “Subsidiary” means an entity in which Company directly or indirectly beneficially owns 50% or more of the outstanding voting stock of such entity.

          (l) “Term” means the period commencing as of the Effective Date and expiring on the close of business on December 31, 2008; provided, however, that (i) commencing on January 1, 2008 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, Company or Executive shall have given notice that Company or Executive, as the case may be, does not wish to have the Term extended; (ii) if a Change in Control occurs during the Term, the Term will expire on the last day of the Severance Period; and (iii) subject to Section 3(c), if, prior to a Change in Control, the Executive ceases for any reason to be a corporate officer or operating president of Company and any Subsidiary, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect; provided however, that this Section 1(m)(iii) shall not apply to terminate the Agreement with respect to any Executive who had a Severance Pay Agreement or Amended and Restated Severance Pay Agreement between Company and Executive in effect on February 20, 2007 and who entered into this Agreement effective February 21, 2007. For purposes of this Section 1(m), the Executive shall not be deemed to have ceased to be an employee of Company and any Subsidiary by reason of the transfer of the Executive’s employment between Company and any Subsidiary, or among any Subsidiaries.

          (m) “Termination Date” means the date on which Executive’s employment is terminated (the effective date of which will be the date of termination, or such other date that may be specified by Executive if the termination is pursuant to Section 3(b)).

          (n) “Voting Stock” means at any time, the then-outstanding securities entitled to vote generally in the election of directors of Company.

     22. Operation of Agreement. This Agreement will be effective and binding immediately upon its execution, but, anything in this Agreement to the contrary notwithstanding, except as provided in Section 3(c), this Agreement will not be operative unless and until a Change in Control occurs. Upon the

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occurrence of a Change in Control at any time during the Term, without further action, this Agreement will become immediately operative.

     23. Termination Following a Change in Control.

     (a) In the event of the occurrence of a Change in Control, Executive’s employment may be terminated by Company or a Subsidiary during the Severance Period (or pursuant to Section 3(c)) and Executive will be entitled to the benefits provided by Section 4 unless such termination is the result of the occurrence of one or more of the following events:

     (i) Executive’s death;

     (ii) If Executive becomes permanently disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, Executive immediately prior to the Change in Control; or

     (iii) Cause.

If, during the Severance Period, Executive’s employment is terminated by Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), Executive will be entitled to the benefits provided by Section 4.

          (b) In the event of the occurrence of a Change in Control, Executive may terminate employment with Company and any Subsidiary during the Severance Period for Good Reason with the right to severance compensation as provided in Section 4 regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment.

          (c) Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and not more than 90 days prior to the date on which the Change in Control occurs, Executive’s employment with Company is terminated by Company, such termination of employment will be deemed to be a termination of employment immediately after a Change in Control for purposes of determining whether Executive is entitled to benefits under this Agreement if Executive has reasonably demonstrated that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control, or (ii) otherwise arose in connection with or in anticipation of a Change in Control.

          (d) A termination of employment pursuant to Section 3(a), 3(b) or 3(c) will not affect any rights that Executive may have pursuant to any agreement, policy, plan, program or arrangement of Company or Subsidiary providing Employee Benefits, which rights will be governed by the terms thereof. Notwithstanding the foregoing, any severance benefits received by Executive pursuant to Section 4 of this Agreement shall be in lieu of any severance benefits to which Executive would otherwise be entitled under any severance plan, program, policy or practice or contract or agreement of Company or its affiliates (other than a retirement plan or other deferred compensation arrangement, equity award, welfare benefit plan or any similar plan or agreement which may contain provisions that become operative on, or that may incidentally refer to accelerated vesting or accelerated payment upon, a termination of Executive’s employment).

     24. Severance Compensation.

          (a) If, following the occurrence of a Change in Control, Company or Subsidiary terminates Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if Executive terminates Executive’s employment pursuant to Section 3(b),

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Company will be obligated to make the following payments and provide the following benefits to Executive.

          (i) Within ten business days after the occurrence of an event described in Section 4(a) above (or in the case of an event described in Section 3(c), within 10 business days after the Change in Control), Company shall pay, in a lump sum, an amount equal to two and one-half (2-¹/2) times the sum of (A) Base Pay (at the highest rate in effect for any period within three years prior to the Termination Date), plus (B) an amount equal to the greater of: (x) the average of the Incentive Pay earned or received by Executive during the three year period immediately preceding the Termination Date, or (y) the Executive’s target Incentive Pay for the year in which the Termination Date occurs (assuming the Executive achieves 100% of any stated goals); provided, however, that if payment to Executive would constitute a “deferral of compensation” under Section 409A of the Code, Executive (or Executive’s beneficiary) will receive payment of the amounts described in this Section 4(a)(i) upon the earlier of (i) six (6) months following Executive’s “separation from service” with Company (as such phrase is defined in Section 409A of the Code) or (ii) within 90 days after Executive’s death.

          (ii) For a period of eighteen (18) months following the Termination Date (the “Continuation Period”), Company shall arrange to provide Executive, at no cost to Executive, with medical and dental benefits substantially similar to those that Executive was receiving or entitled to receive immediately prior to the Termination Date (or, if greater, immediately prior to the reduction, termination, or denial described in Section 1(i)(ii)). The Continuation Period shall be considered to be the period during which Executive shall be eligible for continuation coverage under Section 4980B of the Code, and Company shall reimburse Executive for the amount of the premiums for such continuation coverage; provided, however that without otherwise limiting the purposes or effect of Section 6, the benefits otherwise receivable by Executive pursuant to this Section 4(a)(ii) will be reduced to the extent comparable welfare benefits are actually received by Executive from another employer during the Continuation Period following Executive’s Termination Date, and any such benefits actually received by Executive shall be reported by Executive to Company. If any benefit described in this Section 4(a)(ii) is subject to tax, Company will pay to Executive an additional amount such that after payment by Executive or Executive’s dependents or beneficiaries, as the case may be, of all taxes so imposed, the recipient retains an amount equal to such taxes.

          (iii) Executive shall be entitled to outplacement services by a firm selected by Executive, at the expense of Company in an amount not to exceed ten percent (10%) of Base Pay; provided, however, that all such outplacement services must be completed, and all payments by Company must be made, by December 31 of the second calendar year following the calendar year in which the Termination Date occurs.

          (b) Without limiting the rights of Executive at law or in equity, if Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column. Such interest will be payable at the time the related payment or benefit is paid to Executive. Any change in such prime rate will be effective on and as of the date of such change.

          (c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, Company will pay in cash to Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that would have been earned, accrued, allocated or awarded to Executive for any performance period ending prior to the Change in Control (regardless of whether (x) payment of such compensation is contingent on the continuing performance of

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services by Executive or (y) the bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement pursuant to which such Incentive Pay would otherwise be payable permits pro-ration), plus (ii) the value of any annual bonus or long-term Incentive Pay (including, without limitation, incentive-based annual cash bonuses and performance units, but not including any equity-based compensation or compensation provided under a qualified plan) payable pursuant to any performance period that is outstanding on the date of the Change in Control. Such payment will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement, and (y) within five business days after the Change in Control. In the case of clauses (i) and (ii), any applicable vesting requirements will be disregarded. In the case of clause (ii), the amount will be calculated at the greater of (1) the plan target or payout rate and (2) the amount determined based on Company’s actual results relative to the applicable performance criteria as if the performance period had ended on the date of the Change in Control, which amount will be prorated on the basis of the number of days of Executive’s participation during the applicable performance period to which the incentive pay related divided by the aggregate number of days in such performance period, taking into account service rendered through the payment date.

     25. Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding, but subject to Paragraph 7 of Annex A, in the event that this Agreement becomes operative and it is determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for in this Section 5 and Annex A) or distribution by Company or any of its affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then Executive will be entitled to receive an additional payment or payments (collectively, a “Gross-Up Payment”); provided, however, that no Gross-up Payment will be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i). The Gross-Up Payment will be in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

          (b) The obligations set forth in Section 5(a) will be subject to the procedural provisions described in Annex A.

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     26. No Mitigation Obligation. Company hereby acknowledges that it will be difficult and may be impossible for Executive to find reasonably comparable employment following Termination Date. Accordingly, the payment of the severance compensation by Company to Executive in accordance with the terms of this Agreement is hereby acknowledged by Company to be reasonable, and Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of Executive hereunder or otherwise.

     27. Legal Fees and Expenses.

          (a) It is the intent of Company that Executive not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of Executive’s rights in connection with any dispute arising under this Agreement because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. Accordingly, if it should appear to Executive that Company has failed to comply with any of its obligations under this Agreement or in the event that Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any proceeding designed to deny, or to recover from, Executive the benefits provided or intended to be provided to Executive hereunder, Company irrevocably authorizes Executive from time to time to retain counsel of Executive’s choice, at the expense of Company as hereafter provided, to advise and represent Executive in connection with any such dispute or proceeding. Notwithstanding any existing or prior attorney-client relationship between Company and such counsel, Company irrevocably consents to Executive’s entering into an attorney-client relationship with such counsel, and in that connection Company and Executive agree that a confidential relationship will exist between Executive and such counsel. Without respect to whether Executive prevails, in whole or in part, in connection with any of the foregoing, Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by Executive at any time from the Effective Date through Executive’s remaining lifetime, (or, if longer, through the 20th anniversary of the Effective Date) in connection with any of the foregoing. Such payments will be made within five business days after delivery of Executive’s written requests for payment, accompanied by such evidence of fees and expenses incurred as Company may reasonably require; provided that Executive shall have submitted all required documentation at least 14 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.

          (b) In order to secure the benefits to be received by Executive pursuant to this Agreement and similar arrangements with other executives, Company shall establish one or more trust funds (the “Trust”). Company will deposit in such Trust, within five (5) business days after the occurrence of an event that in the reasonable opinion of the Board will likely result in a Change in Control, an amount equal to approximately the maximum aggregate benefits that could be payable to Executive under the terms of this Agreement; provided, however, that (i) the Trust shall not be funded if the funding thereof would result in taxable income to Executive by reason of Section 409A(b) of the Code; and (ii) in no event shall any Trust assets at any time be located or transferred outside of the United States, within the meaning of Section 409A(b) of the Code. Any funds which may be placed into the Trust under this Agreement shall continue for all purposes to be a part of the general funds of Company subject to the claims of Company’s creditors in the event of Company’s insolvency and no person shall by virtue of this Agreement have any interest in such funds. To the extent that any person acquires a right to receive payments from Company under this Agreement, such rights shall be no greater than the right of any unsecured general creditor of Company. Executive shall be entitled to receive distributions from the funds held in the Trust pursuant to the terms and conditions of this Agreement and the agreement establishing the Trust between Company and the trustee. If prior to the date of a Change in Control, the Board has actual knowledge that all third parties have abandoned or terminated their efforts to effect a Change in Control and a Change in Control at that time is unlikely and the Board so advises Executive,

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the trust funds and interest earned thereon, if any, shall be returned to Company by the trustee. Notwithstanding the provisions of this Section 6(b), failure by Company to place such funds in Trust in no way relieves Company from its financial obligations and responsibilities to Executive under the terms of this Agreement.

          (c) All benefits to be paid pursuant to this Agreement, including any amounts paid pursuant to Section 6(a) which were not paid through the Trust established pursuant to Section 6(b), shall be paid from the general assets of the Company.

     28. Employment Rights. Nothing expressed or implied in this Agreement will create any right or duty on the part of Company or Executive to have Executive remain in the employment of Company or any Subsidiary prior to or following any Change in Control.

     29. Withholding of Taxes. Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as Company is required to withhold pursuant to any applicable law, regulation or ruling.

     30. Successors and Binding Agreement.

          (a) Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of Company, by agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent Company would be required to perform if no such succession had taken place. This Agreement will be binding upon and inure to the benefit of Company and any successor to Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by Company.

          (b) This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

          (c) This Agreement is personal in nature and neither of the parties hereto will, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 10(a) and 10(b). Without limiting the generality or effect of the foregoing, Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 10(c), Company will have no liability to pay any amount so attempted to be assigned, transferred or delegated.

     31. Notices. For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as FedEx or UPS, addressed to Company (to the attention of the Secretary of Company) at its principal executive office and to Executive at Executive’s principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

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     32. Governing Law. The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Ohio and federal law, without giving effect to the principles of conflict of laws of such State, except as expressly provided herein.

     33. Validity. If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid or otherwise unenforceable, the remainder of this Agreement and the application of such provision to any other person or circumstance will not be affected, and the provision so held to be invalid or otherwise unenforceable will be reformed to the extent (and only to the extent) necessary to make it enforceable or valid.

     34. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. The headings used in this Agreement are intended for convenience or reference only and will not in any manner amplify, limit, modify or otherwise be used in the construction or interpretation of any provision of this Agreement. References to Sections are to Sections of this Agreement. Any reference in this Agreement to a provision of a statute, rule or regulation will also include any successor provision thereto.

     35. Effect on Prior Agreements. This Agreement shall expressly supersede and render null, void and invalid any prior severance pay agreement or agreements of a similar nature previously entered into by and between Company and Executive with respect to the subject matter of this Agreement, including but not limited to any Amended and Restated Severance Pay Agreement, effective as of April 23, 1997, Severance Agreement between the Company and Executive dated as of February 21, 2007, or Severance Pay Agreement effective as of a subsequent date but prior to the effective date of this Agreement, between Company and Executive.

     36. Dispute Resolution. Any dispute between the parties under this Agreement will be resolved (except as provided below) through informal arbitration by an arbitrator selected under the rules of the American Arbitration Association for arbitration of employment disputes (located in the city in which Company’s principal executive offices in the United States are based) and the arbitration will be conducted in that location under the rules of said Association. Each party will be entitled to present evidence and argument to the arbitrator. The arbitrator will have the right only to interpret and apply the provisions of this Agreement and may not change any of its provisions, except as expressly provided in Section 13. The arbitrator will permit reasonable pre-hearing discovery of facts, to the extent necessary to establish a claim or a defense to a claim, subject to supervision by the arbitrator. The determination of the arbitrator will be conclusive and binding upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof. The arbitrator will give written notice to the parties stating the arbitrator’s determination, and will furnish to each party a signed copy of such determination. The expenses of arbitration will be borne equally by Company and Executive or as the arbitrator equitably determines consistent with the application of state or federal law; provided, however, that Executive’s share of such expenses will not exceed the maximum permitted by law. Any arbitration or action pursuant to this Section 16 will be governed by and construed in accordance with the substantive laws of the State of Ohio and, where applicable, federal law, without giving effect to the principles of conflict of laws of such State.

     37. Survival. Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under Sections 3(d), 4, 5, 7, 9, 10(b), 16, 18 and 20 will survive any

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termination or expiration of this Agreement or the termination of Executive’s employment following a Change in Control for any reason whatsoever.

     38. Beneficiaries. Executive will be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive’s death, and may change such election, in either case by giving Company written notice thereof in accordance with Section 11. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to “Executive” will be deemed, where appropriate, to Executive’s beneficiary, estate or other legal representative.

     39. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same agreement.

     40. Section 409A of the Code.

          (a) The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code (“Section 409A”) or are exempt therefrom and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies Company (with specificity as to the reason therefore) that Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section 409A and Company concurs with such belief or Company (without any obligation whatsoever to do so) independently makes such determination, Company shall, after consulting with Executive, reform such provision in a manner that is economically neutral to Company to attempt to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A.

          (b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and Executive is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to Company or its affiliates as an employee or consultant, and for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A.

          (c) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments shall be made on or before the last day of the calendar year immediately following the calendar year in which the expense occurred, or such earlier date as required hereunder.

          (d) With regard to any provision herein that provides for a gross-up payment or other reimbursement for Executive’s taxes (or audit or litigation expenses attributable to the tax gross-up or reimbursement), the applicable taxes or related expenses shall be reimbursed no later than the earlier of (i) the date specified for payment under the Arrangement, or (ii) the end of the calendar year immediately following the calendar year in which the applicable taxes are remitted or, in the case of reimbursement of expenses incurred due to a tax audit or litigation to which there is no remittance of taxes, the end of the

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calendar year following the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

          (e) Notwithstanding anything contained in this Agreement to the contrary, if Executive is a “specified employee,” as determined under Company’s policy for identifying specified employees on the Termination Date, then to the extent required in order to comply with Section 409A, all payments, benefits, tax gross-ups or other reimbursements paid or provided under this Agreement that constitute a “deferral of compensation” within the meaning of Section 409A, that are provided as a result of a “separation from service” within the meaning of Section 409A and that would otherwise be paid or provided during the first six months following such Termination Date shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date), within 30 days after the first business day that is more than six months after the date of his separation from service (or, if Executive dies during such six-month period, within 90 days after Executive’s death).

          (f) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within 30 days after the Termination Date”), the actual date of payment within the specified period shall be within the sole discretion of Company. For purposes of Section 409A, Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

THE SHERWIN-WILLIAMS COMPANY

EXECUTIVE

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Annex A

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

     (1) Subject to the provisions of Paragraph 5, all determinations required to be made under Section 5 and Annex A, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by Company to Executive and the amount of such Gross-Up Payment, if any, will be made by a nationally recognized accounting firm or benefits consulting firm (the “National Firm”) selected by the Executive in Executive’s sole discretion. Executive will direct the National Firm to submit its determination and detailed supporting calculations to both Company and Executive within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by Company or Executive. If the National Firm determines that any Excise Tax is payable by Executive, Company will pay the required Gross-Up Payment to Executive within 5 business days after receipt of such determination and calculations with respect to any Payment to Executive. If the National Firm determines that no Excise Tax is payable by Executive with respect to any material benefit or amount (or portion thereof), it will, at the same time as it makes such determination, furnish Company and Executive with an opinion that Executive has substantial authority not to report any Excise Tax on Executive’s federal, state or local income or other tax return with respect to such benefit or amount. As a result of the uncertainty in the application of Section 4999 of the Code and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the National Firm hereunder, it is possible that Gross-Up Payments that will not have been made by Company should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts or fails to pursue its remedies pursuant to Paragraph 5 and Executive thereafter is required to make a payment of any Excise Tax, Executive will direct the National Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by Company to, or for the benefit of, Executive within 5 business days after receipt of such determination and calculations.

     (2) Company and Executive will each provide the National Firm access to and copies of any books, records and documents in the possession of Company or Executive, as the case may be, reasonably requested by the National Firm, and otherwise cooperate with the National Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Paragraph 1. Any determination by the National Firm as to the amount of the Gross-Up Payment will be binding upon Company and Executive.

     (3) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the National Firm with respect to the Excise Tax payable by Executive. Executive will report and make proper payment of the amount of any Excise Tax, and at the request of Company, provide to Company true and correct copies (with any amendments) of Executive’s federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by Company, evidencing such payment. If prior to the filing of Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the National Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within 5 business days pay to Company the amount of such reduction.

     (4) The fees and expenses of the National Firm for its services in connection with the determinations and calculations contemplated by Paragraph 1 at any time from the Effective Date through Executive’s remaining lifetime, (or, if longer, through the 20th anniversary of the Effective Date)

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will be borne by Company. If such fees and expenses are initially paid by Executive, Company will reimburse Executive the full amount of such fees and expenses within 5 business days after receipt from Executive of a statement therefore and reasonable evidence of Executive’s payment thereof; provided that Executive shall have submitted all required documentation at least 14 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.

     (5) Executive will notify Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than 10 business days after Executive actually receives notice of such claim and Executive will further apprise Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the expiration of the 30-calendar-day period following the date on which Executive gives such notice to Company or, if earlier, the date that any payment of amount with respect to such claim is due. If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:

     (A) provide Company with any written records or documents in Executive’s possession relating to such claim reasonably requested by Company;

     (B) take such action in connection with contesting such claim as Company reasonably requests in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by Company;

     (C) cooperate with Company in good faith in order effectively to contest such claim; and

     (D) permit Company to participate in any proceedings relating to such claim;

provided, however, that Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income or other tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Paragraph 5, Company will control all proceedings taken in connection with the contest of any claim contemplated by this Paragraph 5 and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that Executive may participate therein at Executive’s own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Company determines; provided, however, that if Company directs Executive to pay the tax claimed and sue for a refund, Company will, as permitted by applicable law, advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Company’s control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

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     (6) If, after the receipt by Executive of an amount advanced by Company pursuant to Paragraph 5, Executive receives any refund with respect to such claim, Executive will (subject to Company’s complying with the requirements of Paragraph 5) promptly pay to Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Company pursuant to Paragraph 5, a determination is made that Executive is not entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of any such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by Company to Executive pursuant to Section 5 and this Annex C.

     (7) Notwithstanding any provision of this Agreement to the contrary, but giving effect to any redetermination of the amount of Gross-Up payments otherwise required by this Annex A, if (A) but for this sentence, Company would be obligated to make a Gross-Up Payment to Executive and (B) the aggregate “present value” of the “parachute payments” to be paid or provided to Executive under this Agreement or otherwise does not exceed 1.15 multiplied by three times Executive’s “base amount,” then the payments and benefits to be paid or provided under this Agreement will be reduced (or repaid to Company, if previously paid or provided) to the minimum extent necessary so that no portion of any payment or benefit to Executive, as so reduced or repaid, constitutes an “excess parachute payment.” For purposes of this Paragraph 7, the terms “excess parachute payment,” “present value,” “parachute payment,” and “base amount” will have the meanings assigned to them by Section 280G of the Code. The determination of whether any reduction in or repayment of such payments or benefits to be provided under this Agreement is required pursuant to this Paragraph 7 will be made at the expense of Company, if requested by Executive or Company, by the National Firm. Appropriate adjustments will be made to amounts previously paid to Executive, or to amounts not paid pursuant to this Paragraph 7, as the case may be, to reflect properly a subsequent determination that Executive owes more or less Excise Tax than the amount previously determined to be due. In the event that any payment or benefit intended to be provided under this Agreement or otherwise is required to be reduced or repaid pursuant to this Paragraph 7, the reduction shall be made by reducing the amounts to be paid or provided under the following sections of this Agreement in the following order: (i) Section 4(a)(i), (ii) Section 4(c), (iii) Section 4(a)(iii), and (iv) Section 4(a)(ii).

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EX-10.E

EXHIBIT 10(e)

Schedule of Executive Officers who are Parties
to the Amended and Restated Severance Agreements in the Forms Filed as
Exhibit 10(d) to the Company’s Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2009

Form A of Severance Pay Agreement

Christopher M. Connor
John G. Morikis
Sean P. Hennessy

Form B of Severance Pay Agreement

John L. Ault
George E. Heath
Thomas E. Hopkins
Timothy A. Knight
Steven J. Oberfeld
Thomas W. Seitz
Louis E. Stellato
Robert J. Wells

EX-10.F

Exhibit 10(f)

THE SHERWIN-WILLIAMS COMPANY 2005
DEFERRED COMPENSATION SAVINGS AND PENSION EQUALIZATION PLAN
(AS AMENDED AND RESTATED)

          The Sherwin-Williams Company, an Ohio corporation (the “Company”), established this 2005 Deferred Compensation Savings and Pension Equalization Plan (the “Plan”), effective January 1, 2005, for the purpose of attracting high quality executives and promoting in its key executives increased efficiency and an interest in the successful operation of the Company. This Plan is intended to supplement benefits provided under the Company’s qualified plans for a select group of management or highly compensated employees by accepting contributions which may not be placed in the qualified plans because of limitations imposed by one or more limitations on contributions or benefits in the Internal Revenue Code. The terms of the Plan, amended and restated as set forth herein, apply to amounts that are deferred and vested under the Plan after December 31, 2004 and that are subject to Section 409A of the Code. Notwithstanding anything to the contrary contained herein, all amounts that were deferred and vested under the Plan prior to January 1, 2005 and any additional amounts that are not subject to Section 409A of the Code shall continue to be subject solely to the terms of the separate Plan in effect on October 3, 2004.

ARTICLE 1

Definitions

1.1 Account shall mean the account or accounts established for a particular Participant pursuant to Article 3 of the Plan.

1.2 Administration Committee shall have the meaning given to such term under the Qualified SPP.

1.3 Affiliated Group shall mean the Company and all entities with which the Company would be considered a single employer under Sections 414(b) and 414(c) of the Code, provided that in applying Section 1563(a)(1), (2), and (3) of the Code for purposes of determining a controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Section 1563(a)(1), (2), and (3) of the Code, and in applying Treasury Regulation § 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, “at least 50 percent” is used instead of “at least 80 percent” each place it appears in that regulation. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Section 409A of the Code.

1.4 Base Salary shall mean the Participant’s annual base salary excluding incentive and discretionary bonuses and other non-regular forms of compensation, determined before reductions for contributions to or deferrals under any pension, deferred compensation or other benefit plans sponsored by the Company.

1.5 Beneficiary shall mean the person(s) or entity designated as such in accordance with Article 10 of the Plan.

1.6 Bonus shall mean amounts paid to the Participant by the Company annually in the form of a discretionary or incentive compensation or any other bonus designated by the Administration Committee, determined before reductions for contributions to or deferrals under any pension, deferred compensation or other benefit plans sponsored by the Company.

1.7 Code shall mean the Internal Revenue Code of 1986, as amended.

1.8 Company shall mean The Sherwin-Williams Company.

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1.9   Company Match Contributions shall mean contributions credited by the Company to a Participant’s Account pursuant to Section 2.2 of the Plan.

1.10 Company Makeup Contributions shall mean makeup contributions credited by the Company to a Participant’s Account pursuant to Section 2.3 of the Plan.

1.11 Crediting Rate shall mean the notional gains and losses credited on the Participant’s Account balance which are based on the Participant’s choice among the investment alternatives made available by the Administration Committee pursuant to Article 3 of the Plan.

1.12 Designated Participant shall mean a Participant designated on Exhibit A attached hereto as eligible to receive benefits pursuant to Section 2.4 of this Plan.

1.13 Disability shall mean the condition whereby a Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under any accident and health plan covering employees of the Company.

1.14 Eligible Compensation shall mean, with respect to any Plan Year, the portion of a Participant’s Base Salary and Bonus payable to the Participant during such Plan Year that exceeds the limit in effect for such Plan Year under Section 401(a)(17) of the Code.

1.15 Eligible Executive shall mean any management employee of the Company, its subsidiaries or affiliates as may be designated by the Administration Committee to be eligible to participate in the Plan.

1.16 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.

1.17 Financial Hardship shall mean a severe financial hardship resulting from the Participant’s or the Participant’s dependent’s (as defined in Section 152(a) of the Code) sudden and unexpected illness or accident, the Participant’s sudden and unexpected property casualty loss, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, which is not covered by insurance and may not be relieved by cessation of Plan deferrals or by the liquidation of the Participant’s assets provided that such liquidation would not cause a severe Financial Hardship, and which is determined to qualify as a Financial Hardship by the Administration Committee. Cash needs arising from foreseeable events such as the purchase of a residence or education expenses for children shall not, alone, be considered a Financial Hardship.

1.18 Participant shall mean an Eligible Executive who has been credited with a Company Match Contribution, Company Makeup Contribution or other benefit pursuant to Article 2 of the Plan.

1.19 Participant Election Form shall mean the agreement, in a form acceptable to the Administration Committee, to make an election regarding the time or form of payment of a Participant’s benefits, submitted by the Participant to the Administration Committee on a timely basis pursuant to Articles 2 and 4 of the Plan. The Participant Election Form may take the form of an electronic communication followed by appropriate written confirmation from the Administration Committee according to specifications established by the Administration Committee.

1.20 Plan Year shall mean the calendar year.

1.21 Qualified Plans shall mean the Qualified PIP, Qualified SEPIP and the Qualified SPP.

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1.22 Qualified PIP shall mean The Sherwin-Williams Company Salaried Employees’ Revised Pension Investment Plan, as it may be amended from time to time.

1.23 Qualified SEPIP shall mean The Sherwin-Williams Company Salaried Employees’ Pension Investment Plan, as it may be amended from time to time.

1.24 Qualified SPP shall mean The Sherwin-Williams Company Employee Stock Purchase and Savings Plan, as it may be amended from time to time.

1.25 Retirement shall mean Termination of Employment on or after the Retirement Eligibility Date, other than as a result of the Participant’s death.

1.26 Retirement Eligibility Date shall mean the date on which the Participant attains age fifty-five (55).

1.27 Settlement Date shall mean the date by which a lump sum payment shall be made or the date by which installment payments shall commence. The Settlement Date shall be no later than ninety (90) days following the occurrence of the event triggering the payout; provided, however, that if the event triggering the payout is the Participant’s Retirement, the Settlement Date shall be the last day of January of the Plan Year following the year in which the Participant’s Retirement occurs. Notwithstanding the foregoing, with respect to any Participant who is a Specified Employee, to the extent required by Section 409A of the Code, the Settlement Date shall be the first business day which is no less than six (6) months from the Participant’s Termination of Employment.

1.28 Specified Employee shall mean a Participant who is a “Key Employee” as determined by the Company pursuant to Section 416 of the Code and Treasury Regulation § 1.409A-1(i).

1.29 Statutory Limitations shall mean any statutory or regulatory limitations imposed by one or more of Sections 401(a)(17), 401(k), 401(m), 402(g), 403(b), 408(k) or 415 or any other limitation on contributions or benefits in the Code. The impact of such limits on the Participant for purposes of this Plan shall be determined by the Administration Committee based upon reasonable estimates and shall be final and binding as of the date the Company Makeup Contribution is credited to the Participant’s Account. No subsequent adjustments shall be made to increase a Company Makeup Contribution under this Plan as a result of any adjustments ultimately required under the Qualified Plans due to actual employee contributions or other factors.

1.30 Termination of Employment shall mean the date of the Participant’s separation from service (within the meaning of Treasury Regulation § 1.409A-1(h)) with the Affiliated Group for any reason whatsoever, whether voluntary or involuntary, including as a result of the Participant’s Retirement or death. Upon a sale or other disposition of the assets of the Company or any other member of the Affiliated Group to an unrelated purchaser, the Company reserves the right, to the extent permitted by Section 409A of the Code, to determine whether Participants providing services to the purchaser after and in connection with such transaction have experienced a Termination of Employment.

1.31 Valuation Date shall mean the date through which earnings are credited and shall, if a business day, be the date on which the payout or other event triggering the valuation occurs; or if not a business day, the next succeeding business day.

ARTICLE 2

Participation

2.1 Elective Deferral. Effective beginning with Plan Year 2010, no Participant may elect to defer any Base Salary or Bonus under the Plan for such Plan Year or any subsequent Plan Year. Any Base Salary and Bonus deferred by a Participant for Plan Years prior to 2010 and credited to a Participant’s Retirement Account shall

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be paid in accordance with the terms of the Plan and the form of payment (lump sum or installments over a specified period of not more than fifteen (15) years) selected by the Participant on a Participant Election Form filed prior to January 1, 2009; provided that such a Participant may change the timing or form of distribution of the Participant’s Account by filing a new Participant Election Form at least twelve (12) months prior to the intended effective date of such change, and the change in the distribution date must, to the extent required by Section 409A of the Code, defer payment for at least an additional five (5) years after the date that payment would otherwise be made or commence.

2.2 Company Match Contributions.

(i) The Company shall credit a Company Match Contribution to this Plan on behalf of each Participant with respect to each Plan Year. The amount of the Company Match Contribution shall equal the sum of the following:

(a)	One hundred percent (100%) of the first three percent (3%) of the Participant’s Eligible Compensation for the Plan Year; and
(b)	Fifty percent (50%) of the next two percent (2%) of the Participant’s Eligible Compensation for the Plan Year.

(ii) In addition to the Company Match Contribution amount determined in accordance with Section 2.2(i), the Company may make an additional discretionary Company Match Contribution on behalf of a Participant with respect to any Plan Year, provided that the maximum amount of the additional discretionary Company Match Contribution that the Company may credit to a Participant’s Account under this Section 2.2(ii) for any Plan Year is (a) minus (b), where (a) and (b) are as follows:

(a)	One hundred percent (100%) of the first six percent (6%) of the Participant’s Eligible Compensation for the Plan Year.
(b)	The total amount of the Company Match Contribution credited to the Participant’s Account for the Plan Year pursuant to Section 2.2(i).

2.3

Qualified PIP or Qualified SEPIP Makeup Contribution. The Company shall credit a Company Makeup Contribution under this Plan to the Account of each Participant for each Plan Year. The Qualified PIP or Qualified SEPIP Makeup Contribution shall equal the total Company contributions that would have been made to Qualified PIP or Qualified SEPIP, as applicable, on behalf of the Participant absent any Statutory Limitations. The Qualified PIP or Qualified SEPIP Makeup Contribution shall be reduced by the amount of Company contributions actually credited to the Participant under Qualified PIP or Qualified SEPIP for such Plan Year.

2.4

Crediting of Accrued Benefit. To the extent a Designated Participant accrues a benefit pursuant to the final average pay formula applicable to certain participants covered by Appendix B of the Qualified SEPIP, such Designated Participant shall be entitled to a benefit hereunder equal to the total accrued benefit the Designated Participant would have been entitled to receive based upon such formula absent any Statutory Limitations, reduced by the amount of benefits actually payable from the Qualified SEPIP pursuant to the formula specified in Appendix B thereof.

ARTICLE 3

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Accounts

3.1 Participant Accounts. Solely for recordkeeping purposes an Account shall be maintained for each Participant and shall be credited with the Participant’s Company Match Contributions and Company Makeup Contributions on or before March 15 of the Plan Year following the Plan Year to which the Company Match Contributions and Company Makeup Contributions relate, provided that the Participant is continuously employed by the Company, a subsidiary or an affiliate through the last day of the Plan Year to which the Company Match Contributions and Company Makeup Contributions relate. In addition, a Participant’s elective deferrals with respect to Plan Years prior to 2010 shall have been credited to the Participant’s Account at the time such amounts would otherwise have been paid to the Participant. Accounts shall be deemed to be credited with notional gains or losses as provided in Section 3.2 from the date amounts are credited to the Account through the Valuation Date. Amounts credited to a Participant’s Account shall be fully vested at all times.

3.2 Crediting Rate. The Crediting Rate on amounts in a Participant’s Account shall be based on the Participant’s choice among the investment alternatives made available from time to time by the Administration Committee. The Administration Committee shall establish a procedure by which a Participant may elect to have the Crediting Rate based on one or more investment alternatives and by which the Participant may change investment elections at least quarterly. The Administration Committee may provide only one investment option for a particular class of contributions and may establish a separate subaccount for such contributions which shall be paid out at the same time and under the same circumstances as the Participant’s Account. The Participant’s Account balance shall reflect the investments selected by the Participant. If an investment selected by a Participant sustains a loss, the Participant’s Account shall be reduced to reflect such loss. The Participant’s choice among investments shall be solely for purposes of calculation of the Crediting Rate. If the Participant fails to elect an investment alternative the Crediting Rate shall be based on the investment alternative selected for this purpose by the Administration Committee. The Company shall have no obligation to set aside or invest funds as directed by the Participant and, if the Company elects to invest funds as directed by the Participant, the Participant shall have no more right to such investments than any other unsecured general creditor of the Company. During payout, the Participant’s Account shall continue to be credited at the Crediting Rate selected by the Participant from among the investment alternatives or rates made available by the Administration Committee for such purpose.

3.3 Statement of Accounts. The Administration Committee shall provide each Participant with statements at least annually setting forth the Participant’s Account balance as of the end of each Plan Year.

ARTICLE 4

Benefits

4.1 Retirement Benefits Attributable to Account. In the event of the Participant’s Retirement, the Participant shall be entitled to receive an amount equal to the total balance of the Participant’s Account credited with notional earnings as provided in Article 3 through the Valuation Date. The benefits shall be paid as follows:

(i) For an Eligible Executive who is a Participant in the Plan as of December 31, 2009, in a single lump sum on the Settlement Date following Retirement unless, prior to January 1, 2009 the Participant made a timely election to have the benefits paid in substantially level annual installments over a specified period of not more than fifteen (15) years.

(ii) For an Eligible Executive who becomes a Participant in the Plan on or after January 1, 2010, in a single lump sum on the Settlement Date following Retirement.

Except as otherwise provided herein, payments shall be made or commence on the Settlement Date following Retirement. Notwithstanding the foregoing, a Participant may elect, at any time at least twelve (12) months

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prior to the intended effective date of such change, to change the time form of payment of benefits to installments over a specified period of not more than fifteen (15) years, provided that any such change must , to the extent required by Section 409A of the Code, defer payment, or the commencement of payment, for at least an additional five (5) years after the date payment would otherwise be made or commence pursuant to this Section 4.1. If benefits are payable in the form of annual installments pursuant to this Section 4.1, annual payments will be made commencing on the Settlement Date following Retirement (or the applicable anniversary thereof) and shall continue on each anniversary thereof until the number of annual installments specified in the Participant’s timely election has been paid. The amount of each such installment shall be determined by dividing the Participant’s Account balance, determined as of December 31 of the year last preceding the installment payment date, by the number of installment payments remaining, without regard to anticipated earnings.

4.2 Retirement Benefits Attributable to Accrued Benefit. Notwithstanding anything herein to the contrary, a Designated Participant or his Beneficiary shall receive a distribution of his accrued benefit credited pursuant to Section 2.4 hereof in the form of a single life annuity, with annual annuity payments commencing on the Settlement Date following the later of Termination of Employment or the Participant’s Retirement Eligibility Date. Notwithstanding the foregoing, a Designated Participant may elect, at any time prior to the Settlement Date, to receive his accrued benefit credited pursuant to Section 2.4 hereof in the form of any other actuarially equivalent (within the meaning of Treasury Regulation § 1.409A-2(b)(2)(ii)) form of annuity permitted under the Qualified SEPIP.

4.3 Termination Benefit. Upon Termination of Employment other than by reason of Retirement or death, the Company shall pay to the Participant a termination benefit equal to the balance on Termination of Employment of the Participant’s Account credited with notional earnings as provided in Article 3 through the Valuation Date. The termination benefits shall be paid in a single lump sum on the Settlement Date following Termination of Employment.

4.4 Cash-Out Limit. Notwithstanding the foregoing, in the event the sum of all benefits payable to the Participant under the Plan and any other plan or arrangement that is aggregated with the Plan (or, as applicable, aggregated with a portion of the Plan) pursuant to Treasury Regulation § 1.409A-1(c) is less than or equal to the applicable dollar amount then in effect under section 402(g)(1)(B) of the Code, the Company may, in its sole discretion, elect to pay such benefits in a single lump sum as provided in Treasury Regulation § 1.409A-3(j)(4)(v).

ARTICLE 5

Death Benefits

5.1 Death Benefit. In the event of Termination of Employment as a result of the Participant’s death, the Company shall pay to the Participant’s Beneficiary a death benefit equal to the total balance of the Participant’s Account as of the date of the Participant’s death credited with notional earnings as provided in Article 3 through the Valuation Date and any accrued benefit credited to such Participant pursuant to Section 2.4 hereof. The death benefit shall be paid in the same form as the Participant’s Retirement benefit would have been paid under Article 4 and such payment shall be made or commence on the Settlement Date following the Participant’s death, without regard to any 5-year deferral that may have been applicable to benefits that would have been paid under Article 4.

5.2 Cash-Out Limit. Notwithstanding the foregoing, in the event the sum of all benefits payable to a Beneficiary under the Plan and any other plan or arrangement that is aggregated with the Plan (or, as applicable, aggregated with a portion of the Plan) pursuant to Treasury Regulation § 1.409A-1(c) is less than or equal to the applicable dollar amount then in effect under section 402(g)(1)(B) of the Code, the Company may, in its

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sole discretion, elect to pay such benefits in a single lump sum as provided in Treasury Regulation § 1.409A-3(j)(4)(v).

ARTICLE 6

Disability

In the event of a Participant’s Disability, deferral elections shall cease and the Company shall pay to the Participant a Disability benefit equal to the balance of the Participant’s Account credited with notional earnings as provided in Article 3 through the Valuation Date and any accrued benefit credited to such Participant pursuant to Section 2.4 hereof. The Disability benefit shall be paid in the same form as the Participant’s Retirement benefit would have been paid under Article 4 and such payment shall be made or commence on the Settlement Date following the Participant’s Disability, without regard to any 5-year deferral that may have been applicable to benefits that would have been paid under Article 4.

ARTICLE 7

Financial Hardship Distribution

Upon a finding that the Participant (or, after the Participant’s death, a Beneficiary) has suffered a Financial Hardship, the Administration Committee may in its sole discretion, accelerate distributions of benefits, in whole or in part, or approve reduction or cessation of current deferrals under the Plan in the amount reasonably necessary to alleviate such Financial Hardship. Notwithstanding the foregoing, in no event shall any amounts, or the present value thereof, accrued pursuant to Section 2.4 hereof, be available for accelerated distribution under this Article 7.

ARTICLE 8

Amendment and Termination of Plan

8.1 Amendment and Termination in General. The Company may, at any time, amend or terminate the Plan, except that (i) no such amendment or termination may reduce a Participant’s Account balance or benefit credited under Section 2.4 of the Plan, and (ii) no such amendment or termination may result in the acceleration of payment of any benefits to any Participant, Beneficiary or other person, except as may be permitted under Section 409A of the Code.

8.2 Payment of Benefits Following Termination. In the event that the Plan is terminated, a Participant’s benefits shall be distributed to the Participant or Beneficiary on the dates on which the Participant or Beneficiary would otherwise receive benefits hereunder without regard to the termination of the Plan. Notwithstanding the preceding sentence, and to the extent permitted under Section 409A of the Code, the Company, by action taken by its Board of Directors or its designee, may terminate the Plan and accelerate the payment of Participants’ benefits subject to the following conditions:

(i) Company’s Discretion. The termination does not occur “proximate to a downturn in the financial health” of the Company (within the meaning of Treasury Regulation §1.409A-3(j)(4)(ix)), and all other arrangements required to be aggregated with the Plan (or any portion thereof) under Section 409A of the Code are also terminated and liquidated. In such event, the entire benefits of all Participants shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no earlier than twelve (12) months, and no later than twenty-four (24) months, after the date the Board of Directors or its designee irrevocably approves the termination of the Plan. Notwithstanding the foregoing, any payment that would otherwise be paid

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pursuant to the terms of the Plan prior to the twelve (12) month anniversary of the date that the Board of Directors or its designee irrevocably approves the termination of the Plan shall continue to be paid in accordance with the terms of the Plan. If the Plan is terminated pursuant to this Section 8.2(i), the Company shall be prohibited from adopting a new plan or arrangement that would be aggregated with this Plan (or any portion thereof) under Section 409A of the Code within three (3) years following the date that the Board of Directors or its designee irrevocably approves the termination and liquidation of the Plan.

(ii) Change of Control. The termination occurs pursuant to an irrevocable action of the Board of Directors or its designee that is taken within the thirty (30) days preceding or the twelve (12) months following a Change of Control (as defined in Article 11), and all other plans sponsored by the Company (determined immediately after the Change of Control) that are required to be aggregated with this Plan under Section 409A of the Code are also terminated with respect to each participant therein who experienced the Change of Control (each a “Change of Control Participant”). In such event, the entire benefits of each Participant under the Plan and each Change in Control Participant under all aggregated plans shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no later than twelve (12) months after the date that the Board of Directors or its designee irrevocably approves the termination.

(iii) Dissolution; Bankruptcy Court Order. The termination occurs within twelve (12) months after a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A). In such event, the entire benefits of each Participant shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made by the latest of: (A) the end of the calendar year in which the Plan termination occurs, (B) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (C) the first calendar year in which payment is administratively practicable.

(iv) Other Events. The termination occurs upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

Notwithstanding anything contained in this Section 8.2 to the contrary, in no event may a payment be accelerated following a Specified Employee’s Termination of Employment to a date that is prior to the first business day which is no less than six (6) months following the Specified Employee’s Termination of Employment (or if earlier, upon the Specified Employee’s death).

The provisions of paragraphs (i), (ii), (iii) and (iv) of this Section 8.2 are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j)(4)(ix) and shall be interpreted and administered accordingly. The term “Company” as used in paragraphs (i) and (ii) of this Section 8.2 shall include the Company and any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code.

ARTICLE 9

Beneficiaries

9.1 Beneficiary Designation. The Participant shall have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall be effective when it is submitted in writing to and acknowledged by the Administration Committee during the Participant’s lifetime on a form prescribed by the Administration Committee.

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9.2 Revision of Designation. The submission of a new Beneficiary designation shall cancel all prior Beneficiary designations. Any finalized divorce or marriage (other than a common law marriage) of a Participant subsequent to the date of a Beneficiary designation shall revoke such designation, unless in the case of divorce the previous spouse was not designated as Beneficiary and unless in the case of marriage the Participant’s new spouse has previously been designated as Beneficiary.

9.3 Successor Beneficiary. If the primary Beneficiary dies prior to complete distribution of the benefits provided in Article 5, the remaining Account balance shall be paid to the contingent Beneficiary elected by the Participant.

9.4 Absence of Valid Designation. If a Participant fails to designate a Beneficiary as provided above, or if the Beneficiary designation is revoked by marriage, divorce, or otherwise without execution of a new designation, or if every person designated as Beneficiary predeceases the Participant or dies prior to complete distribution of the Participant’s benefits, then the Administration Committee shall direct the distribution of such benefits to the relevant estate.

ARTICLE 10

Administration/Claims Procedures

10.1 Administration. The Plan shall be administered by the Administration Committee, which shall have the exclusive right and full discretion (i) to interpret the Plan, (ii) to decide any and all matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or admissions), (iii) to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan and (iv) to make all other determinations necessary or advisable for the administration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of the Administration Committee with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member of the Administration Committee shall be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify and hold harmless the members of the Administration Committee from and against any and all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission, in connection with the performance of such persons’ duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

10.2 Claims Procedure. Any Participant, former Participant or Beneficiary may file a written claim with the Administration Committee setting forth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement to such benefit. The Administration Committee shall determine the validity of the claim and communicate a decision to the claimant promptly and, in any event, not later than ninety (90) days after the date of the claim. The claim may be deemed by the claimant to have been denied for purposes of further review described below in the event a decision is not furnished to the claimant within such ninety (90) day period. If additional information is necessary to make a determination on a claim, the claimant shall be advised of the need for such additional information within forty-five (45) days after the date of the claim. The claimant shall have up to one hundred and eighty (180) days to supplement the claim information, and the claimant shall be advised of the decision on the claim within forty-five (45) days after the earlier of the date the supplemental information is supplied or the end of the one hundred and eighty (180) day period. Every claim for benefits which is denied shall be denied by written notice setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the denial, (ii) specific reference to any provisions of the Plan (including any internal rules, guidelines, protocols, criteria, etc.) on which the denial is based, (iii) description of any additional material or information that is necessary to process the claim, and (iv) an explanation of the procedure for further reviewing the denial of the claim.

10.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a claim, a claimant or his/her authorized representative may file a written request for review of such denial. Such review shall be

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undertaken by the Administration Committee and shall be a full and fair review. The claimant shall have the right to review all pertinent documents. The Administration Committee shall issue a decision not later than sixty (60) days after receipt of a request for review from a claimant unless special circumstances, such as the need to hold a hearing, require a longer period of time, in which case a decision shall be rendered as soon as possible but not later than one hundred and twenty (120) days after receipt of the claimant’s request for review. The decision on review shall be in writing and shall include specific reasons for the decision written in a manner calculated to be understood by the claimant with specific reference to any provisions of the Plan on which the decision is based.

ARTICLE 11

Change of Control

In the event of a Change of Control, the amounts to which Participants are entitled under this Plan shall be immediately distributed in a lump sum cash payment to Participants within ninety (90) days following the date of such Change of Control; provided, however, that with respect to any Participant who is a Specified Employee and who Terminated Employment prior to the Change of Control, to the extent required by Section 409A of the Code, such payment shall be made on the first business day which is no less than six (6) months from the Participant’s Termination of Employment. For purposes of this Plan, a Change of Control shall be deemed to occur on the date of any of the following events:

(i) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. Notwithstanding the foregoing, if any one person or group is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 50% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

(ii) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the Company possessing 30% or more of the total voting power of the Company. Notwithstanding the foregoing, if any one person or group is considered to own 30% or more of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 30% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

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(iii) A majority of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election was not endorsed by at least two-thirds (2/3) of the members of the Board of Directors prior to the date of such appointment or election.

(iv) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all the assets of the Company immediately before such acquisition or acquisitions. The gross fair market value of assets shall be determined without regard to liabilities associated with such assets. Notwithstanding the foregoing, a transfer of assets shall not result in a Change of Control if such transfer is to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock, (b) an entity 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person or group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) that owns, directly or indirectly, 50% or more of the total value or voting power of the stock of the Company, or (d) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly by a person or group described in clause (c) of this sentence.

Notwithstanding the foregoing, an acquisition of stock of the Company described in (i) or (ii) above shall not be deemed to be a Change of Control by virtue of any of the following situations: (a) an acquisition by the Company; (b) an acquisition by any of the Company’s subsidiaries in which a majority of the voting power of the equity securities or equity interests of such subsidiary is owned, directly or indirectly, by the Company; or (c) any employee benefit or stock ownership plan of the Company or any trustee or fiduciary with respect to such a plan acting in such capacity.

ARTICLE 12

Conditions Related to Benefits

12.1 Nonassignability. No amount payable to a Participant or Beneficiary under the Plan will be subject in any manner to anticipation, alienation, attachment, garnishment, sale, transfer, assignment (either at law or in equity), levy, execution, pledge, encumbrance, charge or any other legal or equitable process by a Participant or Beneficiary, and any attempt to do so will be void; nor will any benefit be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled thereto. However, (i) the withholding of taxes from Plan benefit payments, or (ii) the direct deposit of benefit payments to an account in a banking institution (if not actually part of an arrangement constituting an assignment or alienation) shall not be construed as an assignment or alienation.

12.2 No Right to Company Assets. The benefits paid under the Plan shall be paid from the general funds of the Company, and the Participant and any Beneficiary shall be no more than unsecured general creditors of the Company with no special or prior right to any assets of the Company for payment of any obligations hereunder and the Plan constitutes a mere promise by the Company to make benefit payments in the future.

12.3 Protective Provisions. The Participant shall cooperate with the Company by furnishing any and all information requested by the Administration Committee in order to facilitate the payment of benefits hereunder, and taking such other actions as may be requested by the Administration Committee. If the Participant refuses to so cooperate, the Company shall have no further obligation to the Participant under the Plan.

12.4 Section 16b Eligible Executives. In the event any Eligible Executive subject to Rule 16b issued under the Securities Exchange Act of 1934 (or any successor rule to the same effect) has, at any time, a Crediting Rate based upon an investment alternative consisting of or the value of which is determined based upon the value of the Company’s common stock or any security into which such common stock may be

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changed by reason of: (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company; (b) any merger, consolidation, separation, reorganization or partial or complete liquidation; or (c) any other corporate transaction or event having an effect similar to the foregoing,, unless the transaction is otherwise exempt under Rule 16b-3, no transaction with respect to the portion of the Participant’s Account attributable to such investment alternative shall be permitted pursuant to this Plan until a date which is not less than six (6) months and one (1) day from the date on which the investment alternative was selected or transferred within the Participant’s Account.

12.5 Withholding. The Participant shall make appropriate arrangements with the Company for satisfaction of any federal, state or local income tax withholding requirements and Social Security, Medicare or other employee tax requirements applicable to the payment of benefits under the Plan. If no other arrangements are made, the Company may provide, at its discretion, for such withholding and tax payments as may be required, including, without limitation, by the reduction of other amounts payable to the Participant.

12.6 Assumptions and Methodology. The Administration Committee shall establish the actuarial assumptions and method of calculation used in determining the present or future value of benefits, earnings, payments, fees, expenses or any other amounts required to be calculated under the terms of the Plan. Such assumptions and methodology shall be outlined in detail in procedures established by the Administration Committee and made available to Participants and may be changed from time to time by the Administration Committee.

12.7 Trust. The Company shall be responsible for the payment of all benefits under the Plan. At its discretion, the Company may establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan; provided, however, that no such trust shall be funded if the funding thereof would result in taxable income to a Participant (i) due to the assets of such a trust being located or transferred outside of the United States; (ii) due to the assets of such a trust being restricted to the provision of benefits under the Plan in connection with a change in the employer’s financial health; (iii) due to the assets being set aside, reserved or transferred to such a trust during any restricted period (as defined in Section 409A(b)(3)(B) of the Code); or (iv) as otherwise provided pursuant to Section 409A(b) of the Code. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the Participant from any such trust or trusts shall be considered paid by the Company for purposes of meeting the obligations of the Company under the Plan. Neither the establishment of the Plan or trust or any modification thereof, or the creation of any fund or account, or the payment of any benefits shall be construed as giving to any Participant or other person any legal or equitable right against the Company or any officer or employee thereof, except as provided by law or by any Plan provision. The amounts in the Accounts shall remain the sole property of the Company unless and until required to be distributed in accordance with the provisions of the Plan, and shall not constitute a trust or be deemed to be held in trust for the benefit of any Participant or Beneficiary hereunder or their personal representative. The Company does not in any way guarantee the trust or any Participant’s benefit from loss or depreciation. In no event shall the Company’s employees, officers, directors or stockholders be liable to any person on account of any claim arising by reason of the provisions of the Plan or of any instrument or instruments implementing its provisions, or for the failure of any Participant, Beneficiary or other person to be entitled to any particular tax consequences with respect to the Plan, the trust(s) or any contribution thereto or distribution therefrom.

ARTICLE 13

Miscellaneous

13.1 Successors of the Company. The rights and obligations of the Company under the Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

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13.2 Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to continued employment with the Company.

13.3 Gender, Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.

13.4 Captions. The captions of the articles, paragraphs and sections of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

13.5 Validity. In the event any provision of the Plan is held invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provisions of the Plan.

13.6 Waiver of Breach. The waiver by the Company of any breach of any provision of the Plan shall not operate or be construed as a waiver of any subsequent breach by that Participant or any other Participant.

13.7 Notice. Any notice or filing required or permitted to be given to the Company or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by first class mail, in the case of the Company, to the principal office of the Company, directed to the attention of the Administration Committee, and in the case of the Participant, to the last known address of the Participant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Notices to the Company may be permitted by electronic communication according to specifications established by the Administration Committee.

13.8 Errors in Benefit Statement or Distributions. In the event an error is made in a benefit statement, such error shall be corrected on the next benefit statement following the date such error is discovered.

13.9 ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA.

13.10 Applicable Law. In the event any provision of, or legal issue relating to, this Plan is not fully preempted by ERISA, such issue or provision shall be governed by the laws of the State of Ohio.

13.11 Effect of Legislative or Regulatory Changes. Notwithstanding anything in this Plan to the contrary, in the event of the enactment of any legislation or regulations which, in the sole discretion of the Company, have an unfavorable impact on the Company and/or Participants, the Company shall have the unilateral right to amend the Plan in whatever manner it deems appropriate to mitigate the effects of such legislation or regulations, without the necessity of obtaining further Board approval.

13.12 Section 409A of the Code.

(i) In General. It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to Participants or Beneficiaries. The Plan shall be construed, administered and governed in a manner that effects such intent.

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(ii) Discretionary Acceleration of Payments. To the extent permitted by Section 409A of the Code, the Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan as provided in this Section. The provisions of this Section are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j) and shall be interpreted and administered accordingly.

(a)	Domestic Relations Orders. The Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan to an individual other than the Participant as may be necessary to fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the Code).
(b)	Conflicts of Interest. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to the extent necessary for any federal officer or employee in the executive branch to comply with an ethics agreement with the federal government. Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan the to the extent reasonably necessary to avoid the violation of an applicable federal, state, local, or foreign ethics law or conflicts of interest law (including where such payment is reasonably necessary to permit the Participant to participate in activities in the normal course of his or her position in which the Participant would otherwise not be able to participate under an applicable rule).
(c)	Employment Taxes. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to pay the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a), and 3121(v)(2) of the Code, or the Railroad Retirement Act (RRTA) tax imposed under Sections 3201, 3211, 3231(e)(1), and 3231(e)(8) of the Code, where applicable, on compensation deferred under the Plan (the FICA or RRTA amount). Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment, to pay the income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA or RRTA amount, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. However, the total payment under this acceleration provision must not exceed the aggregate of the FICA or RRTA amount, and the income tax withholding related to such FICA or RRTA amount.
(d)	Cash-Out Limit. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as provided in Sections 4.4 and 5.2 hereof.
(e)	Payment Upon Income Inclusion Under Section 409A. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan at any time the Plan fails to meet the requirements of Section 409A of the Code. The payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Section 409A of the Code.
(f)	Certain Payments to Avoid a Nonallocation Year under Section 409(p). The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to prevent the occurrence of a nonallocation year (within the meaning of Section 409(p)(3) of the Code) in the plan year of an employee stock ownership plan next following the plan year in which such payment is made, provided that the amount

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paid may not exceed 125 percent of the minimum amount of payment necessary to avoid the occurrence of a nonallocation year.

(g)	Payment of State, Local, or Foreign Taxes. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to reflect payment of state, local, or foreign tax obligations arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the participant (the state, local, or foreign tax amount). Such payment may not exceed the amount of such taxes due as a result of participation in the Plan. The payment may be made in the form of withholding pursuant to provisions of applicable state, local, or foreign law or by payment directly to the participant. Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to pay the income tax at source on wages imposed under Section 3401 of the Code as a result of such payment and to pay the additional income tax at source on wages imposed under Section 3401 of the Code attributable to such additional wages and taxes. However, the total payment under this acceleration provision must not exceed the aggregate of the state, local, and foreign tax amount, and the income tax withholding related to such state, local, and foreign tax amount.
(h)	Certain Offsets. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as satisfaction of a debt of the Participant to the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code), where such debt is incurred in the ordinary course of the service relationship between the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) and the Participant, the entire amount of reduction in any of the taxable years of the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.
(i)	Bona Fide Disputes as to a Right to a Payment. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan where such payment occurs as part of a settlement between the Participant and the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) of an arm’s length, bona fide dispute as to the Participant’s right to the deferred amount.
(j)	Plan Terminations and Liquidations. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as provided in Section 8.2 hereof.
(k)	Other Events and Conditions. A payment may be accelerated upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

Notwithstanding anything contained in this Section 13.12(ii) to the contrary, in no event may a payment be accelerated under Sections 13.12(ii)(d), (e), (f), (g), (h), (i) or (j) following a Specified Employee’s Termination of Employment to a date that is prior to the first business day which is no less than six (6) months following the Specified Employee’s Termination of Employment (or if earlier, upon the Specified Employee’s death). Except as otherwise specifically provided in this Plan, including but not limited to Section 4.4, Section 5.2, Article 6, Article 7, Section 8.2 and this Section

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13.12(ii) hereof, the Administration Committee may not accelerate the time or schedule of any payment or amount scheduled to be paid under the Plan within the meaning of Section 409A of the Code.

(iii) Delay of Payments. To the extent permitted under Section 409A of the Code, the Administration Committee may, in its sole discretion, delay payment under any of the following circumstances, provided that the Administration Committee treats all payments to similarly situated Participants on a reasonably consistent basis:

(a)	Federal Securities Laws or Other Applicable Law. A payment may be delayed where the Administration Committee reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law; provided that the delayed payment is made at the earliest date at which the Administration Committee reasonably anticipates that the making of the payment will not cause such violation. For purposes of the preceding sentence, the making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.
(b)	Payments Subject to Section 162(m) of the Code. A payment may be delayed to the extent that the Administration Committee reasonably anticipates that if the payment were made as scheduled, the Company’s deduction with respect to such payment would not be permitted due to the application of Section 162(m) of the Code. If a payment is delayed pursuant to this Section 13.12(iii)(b), then the payment must be made either (i) during the Company’s first taxable year in which the Administration Committee reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by application of Section 162(m) of the Code, or (ii) during the period beginning with the first business day that is at least six (6) months following the Participant’s Termination of Employment (the “six-month date”) and ending on the later of (x) the last day of the taxable year of the Company in which the Participant’s six-month date occurs or (y) the 15th day of the third month following the six-month date. Where any scheduled payment to a specific Participant in the Company’s taxable year is delayed in accordance with this paragraph, all scheduled payments to that Participant that could be delayed in accordance with this paragraph must also be delayed. The Administration Committee may not provide the Participant an election with respect to the timing of the payment under this Section 13.12(iii)(b). For purposes of this Section 13.12(iii)(b), the term Company includes any entity which would be considered to be a single employer with the Company under Section 414(b) or Section 414(c) of the Code.
(c)	Other Events and Conditions. A payment may be delayed upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

               IN WITNESS WHEREOF, the Company has caused this Plan to be amended and restated this 17th day of December, 2009.

THE SHERWIN-WILLIAMS COMPANY
 

/s/  

Louis E. Stellato, Senior Vice President, 

General Counsel and Secretary 

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EXHIBIT A
DESIGNATED PARTICIPANTS
ELIGIBLE TO RECEIVE BENEFITS UNDER SECTION 2.4

• Tom Coy

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EX-10.G

Exhibit 10(g)

THE SHERWIN-WILLIAMS COMPANY 2005
KEY MANAGEMENT DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED)

     The Sherwin-Williams Company, an Ohio corporation (the “Company”), established this 2005 Key Management Deferred Compensation Plan (the “Plan”), effective as of January 1, 2005, for the purpose of attracting high quality executives and promoting in its key executives increased efficiency and an interest in the successful operation of the Company. The Plan is intended to offer a select group of management or highly compensated employees the ability to defer compensation in excess of compensation available to be deferred under other qualified and nonqualified plans sponsored by the Company. The terms of the Plan, amended and restated as set forth herein, apply to amounts that are deferred and vested under the Plan after December 31, 2004 and that are subject to Section 409A of the Code. Notwithstanding anything to the contrary contained herein, all amounts that were deferred and vested under the Plan prior to January 1, 2005 and any additional amounts that are not subject to Section 409A of the Code shall continue to be subject solely to the terms of the separate Plan in effect on October 3, 2004.

ARTICLE 1

Definitions

          1.1 Account shall mean the account or accounts established for a particular Participant pursuant to Article 3 of the Plan.

          1.2 Administration Committee shall have the meaning given to such term under the Qualified Plan.

          1.3 Affiliated Group shall mean the Company and all entities with which the Company would be considered a single employer under Sections 414(b) and 414(c) of the Code, provided that in applying Section 1563(a)(1), (2), and (3) of the Code for purposes of determining a controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Section 1563(a)(1), (2), and (3) of the Code, and in applying Treasury Regulation § 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, “at least 50 percent” is used instead of “at least 80 percent” each place it appears in that regulation. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Section 409A of the Code.

          1.4 Base Salary shall mean the Participant’s annual base salary excluding incentive and discretionary bonuses and other non-regular forms of compensation, after reductions for Social Security and Medicare taxes and contributions to or deferrals under any pension, deferred compensation or other benefit plans sponsored by the Company.

          1.5 Beneficiary shall mean the person(s) or entity designated as such in accordance with Article 11 of the Plan.

          1.6 Bonus shall mean amounts paid to the Participant by the Company annually in the form of a discretionary or incentive compensation or any other bonus designated by the Administration Committee after reductions for contributions to or deferrals under any pension, deferred compensation or benefit plans sponsored by the Company.

          1.7 Code shall mean the Internal Revenue Code of 1986, as amended.

          1.8 Company shall mean The Sherwin-Williams Company.

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          1.9 Crediting Rate shall mean the notional gains and losses credited on the Participant’s Account balance which are based on the Participant’s choice among the investment alternatives made available by the Administration Committee pursuant to Article 3 of the Plan.

          1.10 Disability shall mean the condition whereby a Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under any accident and health plan covering employees of the Company.

          1.11 Eligible Executive shall mean an employee of the Company, its subsidiaries or affiliates eligible to participate in The Sherwin-Williams Company Management Incentive Plan, or such other management employee, as may be designated by the Administration Committee to be eligible to participate in the Plan.

          1.12 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.

          1.13 Financial Hardship shall mean a severe financial hardship resulting from the Participant’s or the Participant’s dependent’s (as defined in Section 152(a) of the Code) sudden and unexpected illness or accident, the Participant’s sudden and unexpected property casualty loss, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, which is not covered by insurance and may not be relieved by cessation of Plan deferrals or by the liquidation of the Participant’s assets provided that such liquidation would not cause a severe Financial Hardship, and which is determined to qualify as a Financial Hardship by the Administration Committee. Cash needs arising from foreseeable events such as the purchase of a residence or education expenses for children shall not, alone, be considered a Financial Hardship.

          1.14 Participant shall mean an Eligible Executive who has elected to participate and has completed a Participant Election Form pursuant to Article 2 of the Plan.

          1.15 Participant Election Form shall mean the agreement in a form acceptable to the Administration Committee, to make a deferral submitted by the Participant to the Administration Committee on a timely basis pursuant to Article 2 of the Plan. The Participant Election Form may take the form of an electronic communication followed by appropriate written confirmation from the Administration Committee according to specifications established by the Administration Committee.

          1.16 Plan Year shall mean the calendar year.

          1.17 Qualified Plan shall mean the The Sherwin-Williams Company Employee Stock Purchase and Savings Plan, as amended from time to time, or any successor plan.

          1.18 Retirement shall mean Termination of Employment on or after the Retirement Eligibility Date, other than as a result of the Participant’s death.

          1.19 Retirement Eligibility Date shall mean the date on which the Participant attains age fifty-five (55).

          1.20 Scheduled Withdrawal shall mean the distribution elected by the Participant pursuant to Article 7 of the Plan.

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          1.21 Settlement Date shall mean the date by which a lump sum payment shall be made or the date by which installment payments shall commence. The Settlement Date shall be no later than ninety (90) days following the occurrence of the event triggering the payout; provided, however, that if the event triggering the payout is the Participant’s Retirement, the Settlement Date shall be the last day of January of the Plan Year following the year in which the Participant’s Retirement occurs. Notwithstanding the foregoing, with respect to any Participant who is a Specified Employee, to the extent required by Section 409A of the Code, the Settlement Date shall be the first business day which is no less than six (6) months from the Participant’s Termination of Employment.

          1.22 Specified Employee shall mean a Participant who is a “Key Employee” as determined by the Company pursuant to Section 416 of the Code and Treasury Regulation § 1.409A-1(i).

          1.23 Termination of Employment shall mean the date of the Participant’s separation from service (within the meaning of Treasury Regulation § 1.409A-1(h)) with the Affiliated Group for any reason whatsoever, whether voluntary or involuntary, including as a result of the Participant’s Retirement or death. Upon a sale or other disposition of the assets of the Company or any other member of the Affiliated Group to an unrelated purchaser, the Company reserves the right, to the extent permitted by Section 409A of the Code, to determine whether Participants providing services to the purchaser after and in connection with such transaction have experienced a Termination of Employment.

          1.24 Valuation Date shall mean the date through which earnings are credited and shall, if a business day, be the date on which the payout or other event triggering the valuation occurs; or if not a business day, the next succeeding business day.

ARTICLE 2
Participation

     2.1 Elective Deferral. An Eligible Executive may elect, in accordance with Section 2.2 below, to defer any whole percentage up to one hundred percent (100%) of Base Salary and/or Bonus earned by the Eligible Executive during any Plan Year. Pursuant to such rules as the Administration Committee may establish at the beginning of any enrollment period described in Section 2.2 below, the Administration Committee may further limit the minimum or maximum amount deferred by any Participant or group of Participants, or waive the foregoing limits for any Participant or group of Participants, for any Plan Year. If a Participant ceases to meet the eligibility requirements, the Participant shall continue as an inactive Participant in the Plan but shall no longer be eligible to make further deferrals under the Plan.

     2.2 Participant Election Form. In order to make a deferral, an Eligible Executive must submit a Participant Election Form to the Administration Committee during the enrollment period established by the Administration Committee ending prior to the Plan Year in which the Base Salary or Bonus will be earned, except that, with respect to elections for the deferral of Bonuses which the Administration Committee determines constitute “performance-based compensation” within the meaning of Treasury Regulation § 1.409A-1(e), the Administration Committee may permit Participants to submit Participant Election Forms during an enrollment period ending no later than six (6) months prior to the end of the period in which the Bonus will be earned. Any deferral election shall be irrevocable as of the last day of the applicable enrollment period, or upon such earlier date as may be specified by the Administration Committee. A Participant’s initial Participant Election Form shall specify the form of payment of the Participant’s Retirement Account (lump sum or installments over a specified period of not more than fifteen (15) years), and in the event that a Participant fails to make such a specification on the initial Participant Election Form, the form of payment of the Participant’s Retirement Account shall be single lump sum. The Participant shall be required to submit a new Participant Election Form each year in order to make additional deferrals in such subsequent Plan Years. An Election Form to change deferral elections shall be considered timely if submitted during a period prescribed by the Administration Committee and, in the case of a

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change to the timing or form of distribution, such Election Form must be submitted at least twelve (12) months prior to the intended effective date of such change, and the change in the distribution date must, to the extent required by Section 409A of the Code, defer payment for at least an additional five (5) years.

ARTICLE 3

Accounts

     3.1 Participant Accounts. Solely for recordkeeping purposes, separate Accounts shall be maintained for each Participant. One Retirement Account and Scheduled Withdrawal Accounts, in a number appropriate to the Participant’s elections to make Scheduled Withdrawals, shall be maintained for the Participant and credited with the Participant’s deferrals directed by the Participant to each Account at the time such amounts would otherwise have been paid to the Participant. Accounts shall be deemed to be credited with notional gains or losses as provided in Section 3.2 from the date amounts are credited to the Account through the Valuation Date. Amounts credited to a Participant’s Account shall be fully vested at all times.

     3.2 Crediting Rate. The Crediting Rate on amounts in a Participant’s Account shall be based on the Participant’s choice among the investment alternatives made available from time to time by the Administration Committee. The Administration Committee shall establish a procedure by which a Participant may elect to have the Crediting Rate based on one or more investment alternatives and by which the Participant may change investment elections at least quarterly. The Participant’s Account balance shall reflect the investments selected by the Participant. If an investment selected by a Participant sustains a loss, the Participant’s Account shall be reduced to reflect such loss. The Participant’s choice among investments shall be solely for purposes of calculation of the Crediting Rate. If the Participant fails to elect an investment alternative the Crediting Rate shall be based on the investment alternative selected for this purpose by the Administration Committee. The Company shall have no obligation to set aside or invest funds as directed by the Participant and, if the Company elects to invest funds as directed by the Participant, the Participant shall have no more right to such investments than any other unsecured general creditor of the Company. During payout, the Participant’s Account shall continue to be credited at the Crediting Rate selected by the Participant from among the investment alternatives or rates made available by the Administration Committee for such purpose.

     3.3 Statement of Accounts. The Administration Committee shall provide each Participant with statements at least annually setting forth the Participant’s Account balance as of the end of each Plan Year.

ARTICLE 4

Benefits

     4.1 Retirement Benefits. In the event of the Participant’s Retirement, the Participant shall be entitled to receive an amount equal to the total balance of the Participant’s Accounts credited with notional earnings as provided in Article 3 through the Valuation Date. The benefits shall be paid in a single lump sum on the Settlement Date following Retirement unless the Participant makes a timely election to have the benefits paid in substantially level annual installments over a specified period of not more than fifteen (15) years. Except as otherwise provided herein, payment shall be made or commence on the Settlement Date following Retirement. If benefits are payable in the form of annual installments pursuant to this Section 4.1, annual payments will be made commencing on the Settlement Date following Retirement and shall continue on each anniversary thereof until the number of annual installments specified in the Participant’s timely election has been paid. The amount of each such installment payment shall be determined by dividing the Participant’s Account balance, determined as of December 31 of the year last preceding the installment payment date, by the number of installment payments remaining, without regard to anticipated earnings. An Election Form to change the form of benefit payout shall

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be considered timely if submitted during a period prescribed by the Administration Committee, which period cannot be less than twelve (12) months prior to the intended effective date of such change. Any change in the distribution date must defer payment, or commencement of payment, for at least an additional five (5) years.

     4.2 Termination Benefit. Upon Termination of Employment other than by reason of Retirement or death, the Company shall pay to the Participant a termination benefit equal to the balance on Termination of Employment of the Participant’s Accounts credited with notional earnings as provided in Article 3 through the Valuation Date. The termination benefits shall be paid in a single lump sum on the Settlement Date following Termination of Employment.

     4.3 Cash-Out Limit. Notwithstanding the foregoing, in the event the sum of all benefits payable to the Participant under the Plan and any other plan or arrangement that is aggregated with the Plan pursuant to Treasury Regulation § 1.409A-1(c) is less than or equal to the applicable dollar amount then in effect under section 402(g)(1)(B) of the Code, the Company may, in its sole discretion, elect to pay such benefits in a single lump sum as provided in Treasury Regulation § 1.409A-3(j)(4)(v).

ARTICLE 5

Death Benefits

     5.1 Death Benefit. In the event of Termination of Employment as a result of the Participant’s death, the Company shall pay to the Participant’s Beneficiary a death benefit equal to the total balance of the Participant’s Accounts as of the date of the Participant’s death credited with notional earnings as provided in Article 3 through the Valuation Date. The death benefit shall be paid in the same form (lump sum or installments) as the Participant’s Retirement benefit would have been paid under Section 4.1 and such payment shall be made or commence on the Settlement Date following the Participant’s death, without regard to any 5-year deferral that may have been applicable to benefits that would have been paid under Section 4.1.

     5.2 Cash-Out Limit. Notwithstanding the foregoing, in the event the sum of all benefits payable to a Beneficiary under the Plan and any other plan or arrangement that is aggregated with the Plan pursuant to Treasury Regulation § 1.409A-1(c) is less than or equal to the applicable dollar amount then in effect under section 402(g)(1)(B) of the Code, the Company may, in its sole discretion, elect to pay such benefits in a single lump sum as provided in Treasury Regulation § 1.409A-3(j)(4)(v).

ARTICLE 6

Disability

In the event of a Participant’s Disability, deferral elections shall cease and the Company shall pay to the Participant a Disability benefit equal to the balance of the Participant’s Accounts credited with notional earnings as provided in Article 3 through the Valuation Date. The Disability benefit shall be paid in the same form (lump sum or installments) as the Participant’s Retirement benefit would have been paid under Section 4.1 and such payment shall be made or commence on the Settlement Date following the Participant’s Disability, without regard to any 5-year deferral that may have been applicable to benefits that would have been paid under Section 4.1.

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ARTICLE 7

Scheduled Withdrawal

     7.1 Election. The Participant may make an irrevocable election on the Participant Election Form at the time of making a deferral to take a Scheduled Withdrawal from the Account established by the Participant for such purpose, including any earnings credited thereon. The Participant may elect to receive the Scheduled Withdrawal in any Plan Year on or after the fourth Plan Year following the enrollment period in which such Scheduled Withdrawal is elected. The Participant may irrevocably elect to make additional deferrals into such Scheduled Withdrawal Account in subsequent Participant Election Forms but may not elect another Scheduled Withdrawal date for such Account until all of the amounts in the original Scheduled Withdrawal Account have been paid out.

     7.2 Maximum Scheduled Withdrawal. The Participant shall be entitled to elect a Scheduled Withdrawal of up to one hundred percent (100%) of the amount of the relevant deferral credited with notional interest as provided in Article 3 through the Valuation Date.

     7.3 Timing of Scheduled Withdrawal. The Scheduled Withdrawal shall be paid by the Company to the Participant in a single lump sum during the month of January of the Plan Year elected by the Participant in the Participant Election Form unless preceded by Termination of Employment or Disability. In the event of Termination of Employment prior to January 1 of the Plan Year elected for the Scheduled Withdrawal, the Scheduled Withdrawal shall be paid in the form provided in Article 4 or Article 5 of the Plan, as applicable. In the event of the Participant’s Disability prior to January 1 of the Plan Year elected for the Scheduled Withdrawal, the Scheduled Withdrawal shall be paid as provided in Article 6 of the Plan.

ARTICLE 8

Financial Hardship Distribution

Upon a finding that the Participant (or, after the Participant’s death, a Beneficiary) has suffered a Financial Hardship, the Administration Committee may in its sole discretion, accelerate distributions of benefits, in whole or in part, or approve reduction or cessation of current deferrals under the Plan in the amount reasonably necessary to alleviate such Financial Hardship.

ARTICLE 9

Amendment and Termination of Plan

     9.1 Amendment and Termination in General. The Company may, at any time, amend or terminate the Plan, except that (i) no such amendment or termination may reduce a Participant’s Account balance, and (ii) no such amendment or termination may result in the acceleration of payment of any benefits to any Participant, Beneficiary or other person, except as may be permitted under Section 409A of the Code.

     9.2 Payment of Accounts Following Termination. In the event that the Plan is terminated, a Participant’s Accounts shall be distributed to the Participant or Beneficiary on the dates on which the Participant or Beneficiary would otherwise receive benefits hereunder without regard to the termination of the Plan. Notwithstanding the preceding sentence, and to the extent permitted under Section 409A of the Code, the Company, by action taken by its Board of Directors or its designee, may terminate the Plan and accelerate the payment of Participants’ Accounts subject to the following conditions:

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          (i) Company’s Discretion. The termination does not occur “proximate to a downturn in the financial health” of the Company (within the meaning of Treasury Regulation §1.409A-3(j)(4)(ix)), and all other arrangements required to be aggregated with the Plan under Section 409A of the Code are also terminated and liquidated. In such event, the entire Accounts of all Participants shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no earlier than twelve (12) months, and no later than twenty-four (24) months, after the date the Board of Directors or its designee irrevocably approves the termination of the Plan. Notwithstanding the foregoing, any payment that would otherwise be paid pursuant to the terms of the Plan prior to the twelve (12) month anniversary of the date that the Board of Directors or its designee irrevocably approves the termination of the Plan shall continue to be paid in accordance with the terms of the Plan. If the Plan is terminated pursuant to this Section 9.2(i), the Company shall be prohibited from adopting a new plan or arrangement that would be aggregated with this Plan under Section 409A of the Code within three (3) years following the date that the Board of Directors or its designee irrevocably approves the termination and liquidation of the Plan.

          (ii) Change of Control. The termination occurs pursuant to an irrevocable action of the Board of Directors or its designee that is taken within the thirty (30) days preceding or the twelve (12) months following a Change of Control (as defined in Article 12), and all other plans sponsored by the Company (determined immediately after the Change of Control) that are required to be aggregated with this Plan under Section 409A of the Code are also terminated with respect to each participant therein who experienced the Change of Control (each a “Change of Control Participant”). In such event, the entire Accounts of each Participant under the Plan and each Change in Control Participant under all aggregated plans shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no later than twelve (12) months after the date that the Board of Directors or its designee irrevocably approves the termination.

          (iii) Dissolution; Bankruptcy Court Order. The termination occurs within twelve (12) months after a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A). In such event, the entire Accounts of each Participant shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made by the latest of: (A) the end of the calendar year in which the Plan termination occurs, (B) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (C) the first calendar year in which payment is administratively practicable.

          (iv) Other Events. The termination occurs upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

Notwithstanding anything contained in this Section 9.2 to the contrary, in no event may a payment be accelerated following a Specified Employee’s Termination of Employment to a date that is prior to the first Business Day which is no less than six (6) months following the Specified Employee’s Termination of Employment (or if earlier, upon the Specified Employee’s death).

The provisions of paragraphs (i), (ii), (iii) and (iv) of this Section 9.2 are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j)(4)(ix) and shall be interpreted and administered accordingly. The term “Company” as used in paragraphs (i) and (ii) of this Section 9.2 shall include the Company and any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code.

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ARTICLE 10

Beneficiaries

     10.1 Beneficiary Designation. The Participant shall have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall be effective when it is submitted in writing to and acknowledged by the Administration Committee during the Participant’s lifetime on a form prescribed by the Administration Committee.

     10.2 Revision of Designation. The submission of a new Beneficiary designation shall cancel all prior Beneficiary designations. Any finalized divorce or marriage (other than a common law marriage) of a Participant subsequent to the date of a Beneficiary designation shall revoke such designation, unless in the case of divorce the previous spouse was not designated as Beneficiary and unless in the case of marriage the Participant’s new spouse has previously been designated as Beneficiary.

     10.3 Successor Beneficiary. If the primary Beneficiary dies prior to complete distribution of the benefits provided in Article 5, the remaining Account balance shall be paid to the contingent Beneficiary elected by the Participant.

     10.4 Absence of Valid Designation. If a Participant fails to designate a Beneficiary as provided above, or if the Beneficiary designation is revoked by marriage, divorce, or otherwise without execution of a new designation, or if every person designated as Beneficiary predeceases the Participant or dies prior to complete distribution of the Participant’s benefits, then the Administration Committee shall direct the distribution of such benefits to the relevant estate.

ARTICLE 11

Administration/Claims Procedures

     11.1 Administration. The Plan shall be administered by the Administration Committee, which shall have the exclusive right and full discretion (i) to interpret the Plan, (ii) to decide any and all matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or admissions), (iii) to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan and (iv) to make all other determinations necessary or advisable for the administration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of the Administration Committee with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member of the Administration Committee shall be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify and hold harmless the members of the Administration Committee from and against any and all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission, in connection with the performance of such persons’ duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

     11.2 Claims Procedure. Any Participant, former Participant or Beneficiary may file a written claim with the Administration Committee setting forth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement to such benefit. The Administration Committee shall determine the validity of the claim and communicate a decision to the claimant promptly and, in any event, not later than ninety (90) days after the date of the claim. The claim may be deemed by the claimant to have been denied for purposes of further review described below in the event a decision is not furnished to the claimant within such ninety (90) day period. If additional information is necessary to make a determination on a claim, the claimant shall be advised of the need for such additional information within forty-five (45) days after the date of the claim. The claimant

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shall have up to one hundred and eighty (180) days to supplement the claim information, and the claimant shall be advised of the decision on the claim within forty-five (45) days after the earlier of the date the supplemental information is supplied or the end of the one hundred and eighty (180) day period. Every claim for benefits which is denied shall be denied by written notice setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the denial, (ii) specific reference to any provisions of the Plan (including any internal rules, guidelines, protocols, criteria, etc.) on which the denial is based, (iii) description of any additional material or information that is necessary to process the claim, and (iv) an explanation of the procedure for further reviewing the denial of the claim.

     11.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a claim, a claimant or his/her authorized representative may file a written request for review of such denial. Such review shall be undertaken by the Administration Committee and shall be a full and fair review. The claimant shall have the right to review all pertinent documents. The Administration Committee shall issue a decision not later than sixty (60) days after receipt of a request for review from a claimant unless special circumstances, such as the need to hold a hearing, require a longer period of time, in which case a decision shall be rendered as soon as possible but not later than one hundred and twenty (120) days after receipt of the claimant’s request for review. The decision on review shall be in writing and shall include specific reasons for the decision written in a manner calculated to be understood by the claimant with specific reference to any provisions of the Plan on which the decision is based.

ARTICLE 12

Change of Control

In the event of a Change of Control, the amounts to which Participants are entitled under this Plan shall be immediately distributed in a lump sum cash payment to Participants within ninety (90) days following the date of such Change of Control; provided, however, that with respect to any Participant who is a Specified Employee and who Terminated Employment prior to the Change of Control, to the extent required by Section 409A of the Code, such payment shall be made on the first business day which is no less than six (6) months from the Participant’s Termination of Employment. For purposes of this Plan, a Change of Control shall be deemed to occur on the date of any of the following events:

          (i) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. Notwithstanding the foregoing, if any one person or group is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 50% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

          (ii) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the Company possessing 30% or more of the total voting power of the Company. Notwithstanding the foregoing, if any one person or group is considered to own 30% or more of the total voting power of the stock of the Company, the acquisition of

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additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 30% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

          (iii) A majority of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election was not endorsed by at least two-thirds (2/3) of the members of the Board of Directors prior to the date of such appointment or election.

          (iv) Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all the assets of the Company immediately before such acquisition or acquisitions. The gross fair market value of assets shall be determined without regard to liabilities associated with such assets. Notwithstanding the foregoing, a transfer of assets shall not result in a Change of Control if such transfer is to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock, (b) an entity 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person or group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) that owns, directly or indirectly, 50% or more of the total value or voting power of the stock of the Company, or (d) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly by a person or group described in clause (c) of this sentence.

Notwithstanding the foregoing, an acquisition of stock of the Company described in (i) or (ii) above shall not be deemed to be a Change of Control by virtue of any of the following situations: (a) an acquisition by the Company; (b) an acquisition by any of the Company’s subsidiaries in which a majority of the voting power of the equity securities or equity interests of such subsidiary is owned, directly or indirectly, by the Company; or (c) any employee benefit or stock ownership plan of the Company or any trustee or fiduciary with respect to such a plan acting in such capacity.

ARTICLE 13

Conditions Related to Benefits

     13.1 Nonassignability. No amount payable to a Participant or Beneficiary under the Plan will be subject in any manner to anticipation, alienation, attachment, garnishment, sale, transfer, assignment (either at law or in equity), levy, execution, pledge, encumbrance, charge or any other legal or equitable process by a Participant or Beneficiary, and any attempt to do so will be void; nor will any benefit be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled thereto. However, (i) the withholding of taxes from Plan benefit payments, or (ii) the direct deposit of benefit payments to an account in a banking institution (if not actually part of an arrangement constituting an assignment or alienation) shall not be construed as an assignment or alienation.

     13.2 No Right to Company Assets. The benefits paid under the Plan shall be paid from the general funds of the Company, and the Participant and any Beneficiary shall be no more than unsecured general creditors

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of the Company with no special or prior right to any assets of the Company for payment of any obligations hereunder and the Plan constitutes a mere promise by the Company to make benefit payments in the future.

     13.3 Protective Provisions. The Participant shall cooperate with the Company by furnishing any and all information requested by the Administration Committee, in order to facilitate the payment of benefits hereunder, and taking such other actions as may be requested by the Administration Committee. If the Participant refuses to so cooperate, the Company shall have no further obligation to the Participant under the Plan.

     13.4 Section 16b Eligible Executives. In the event any Eligible Executive subject to Rule 16b issued under the Securities Exchange Act of 1934 (or any successor rule to the same effect) has, at any time, a Crediting Rate based upon an investment alternative consisting of or the value of which is determined based upon the value of the Company’s common stock or any security into which such common stock may be changed by reason of: (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company; (b) any merger, consolidation, separation, reorganization or partial or complete liquidation; or (c) any other corporate transaction or event having an effect similar to the foregoing, unless the transaction is otherwise exempt under Rule 16b-3, no transaction with respect to the portion of the Participant’s Account attributable to such investment alternative shall be permitted pursuant to this Plan until a date which is not less than six (6) months and one (1) day from the date on which the investment alternative was selected or transferred within the Participant’s Account.

     13.5 Withholding. The Participant shall make appropriate arrangements with the Company for satisfaction of any federal, state or local income tax withholding requirements and Social Security, Medicare or other employee tax requirements applicable to benefits under the Plan. If the Participant elects to defer one hundred percent (100%) of Base Salary, such deferral shall be net of the amount of any Social Security taxes payable by the Participant as a result of compensation received from the Company for such Plan Year. If no other arrangements are made, the Company may provide, at its discretion, for such withholding and tax payments as may be required, including, without limitation, by the reduction of other amounts payable to the Participant.

     13.6 Assumptions and Methodology. The Administration Committee shall establish the actuarial assumptions and method of calculation used in determining the present or future value of benefits, earnings, payments, fees, expenses or any other amounts required to be calculated under the terms of the Plan. Such assumptions and methodology shall be outlined in detail in procedures established by the Administration Committee and made available to Participants and may be changed from time to time by the Administration Committee.

     13.7 Trust. The Company shall be responsible for the payment of all benefits under the Plan. At its discretion, the Company may establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan; provided, however, that no such trust shall be funded if the funding thereof would result in taxable income to a Participant (i) due to the assets of such a trust being located or transferred outside of the United States; (ii) due to the assets of such a trust being restricted to the provision of benefits under the Plan in connection with a change in the employer’s financial health; (iii) due to the assets being set aside, reserved or transferred to such a trust during any restricted period (as defined in Section 409A(b)(3)(B) of the Code); or (iv) as otherwise provided pursuant to Section 409A(b) of the Code. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the Participant from any such trust or trusts shall be considered paid by the Company for purposes of meeting the obligations of the Company under the Plan. Neither the establishment of the Plan or Trust or any modification thereof, or the creation of any fund or account, or the payment of any benefits shall be construed as giving to any Participant or other person any legal or equitable right against the Company or any officer or employee thereof, except as provided by law or by any Plan provision. The amounts in the Accounts shall remain the sole property of the Company unless and until required to be distributed in accordance with the provisions of the Plan, and shall not

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constitute a trust or be deemed to be held in trust for the benefit of any Participant or Beneficiary hereunder or their personal representative. The Company does not in any way guarantee the trust or any Participant’s benefit from loss or depreciation. In no event shall the Company’s employees, officers, directors or stockholders be liable to any person on account of any claim arising by reason of the provisions of the Plan or of any instrument or instruments implementing its provisions, or for the failure of any Participant, Beneficiary or other person to be entitled to any particular tax consequences with respect to the Plan, the trust(s) or any contribution thereto or distribution therefrom.

ARTICLE 14

Miscellaneous

     14.1 Successors of the Company. The rights and obligations of the Company under the Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

     14.2 Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to continued employment with the Company.

     14.3 Gender, Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.

     14.4 Captions. The captions of the articles, paragraphs and sections of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

     14.5 Validity. In the event any provision of the Plan is held invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provisions of the Plan.

     14.6 Waiver of Breach. The waiver by the Company of any breach of any provision of the Plan shall not operate or be construed as a waiver of any subsequent breach by that Participant or any other Participant.

     14.7 Notice. Any notice or filing required or permitted to be given to the Company or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by first class mail, in the case of the Company, to the principal office of the Company, directed to the attention of the Administration Committee, and in the case of the Participant, to the last known address of the Participant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Notices to the Company may be permitted by electronic communication according to specifications established by the Administration Committee.

     14.8 Errors in Benefit Statement. In the event an error is made in a benefit statement, such error shall be corrected on the next benefit statement following the date such error is discovered.

     14.9 ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA.

     14.10 Applicable Law. In the event any provision of, or legal issue relating to, this Plan is not fully preempted by ERISA, such issue or provision shall be governed by the laws of the State of Ohio.

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     14.11 Effect of Legislative or Regulatory Changes. Notwithstanding anything in this Plan to the contrary, in the event of the enactment of any legislation or regulations which, in the sole discretion of the Company, have an unfavorable impact on the Company and/or Participants, the Company shall have the unilateral right to amend the Plan in whatever manner it deems appropriate to mitigate the effects of such legislation or regulations, without the necessity of obtaining further Board approval.

     14.12 Section 409A of the Code.

          (i) In General. It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to Participants or Beneficiaries. The Plan shall be construed, administered and governed in a manner that effects such intent.

          (ii) Discretionary Acceleration of Payments. To the extent permitted by Section 409A of the Code, the Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan as provided in this Section. The provisions of this Section are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j) and shall be interpreted and administered accordingly.

               (a) Domestic Relations Orders. The Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan to an individual other than the Participant as may be necessary to fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the Code).

               (b) Conflicts of Interest. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to the extent necessary for any federal officer or employee in the executive branch to comply with an ethics agreement with the federal government. Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan the to the extent reasonably necessary to avoid the violation of an applicable federal, state, local, or foreign ethics law or conflicts of interest law (including where such payment is reasonably necessary to permit the Participant to participate in activities in the normal course of his or her position in which the Participant would otherwise not be able to participate under an applicable rule).

               (c) Employment Taxes. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to pay the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a), and 3121(v)(2) of the Code, or the Railroad Retirement Act (RRTA) tax imposed under Sections 3201, 3211, 3231(e)(1), and 3231(e)(8) of the Code, where applicable, on compensation deferred under the Plan (the FICA or RRTA amount). Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment, to pay the income tax at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA or RRTA amount, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. However, the total payment under this acceleration provision must not exceed the aggregate of the FICA or RRTA amount, and the income tax withholding related to such FICA or RRTA amount.

               (d) Cash-Out Limit. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as provided in Sections 4.3 and 5.2 hereof.

               (e) Payment Upon Income Inclusion Under Section 409A. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the

13

Plan at any time the Plan fails to meet the requirements of Section 409A of the Code. The payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Section 409A of the Code.

               (f) Certain Payments to Avoid a Nonallocation Year under Section 409(p). The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to prevent the occurrence of a nonallocation year (within the meaning of Section 409(p)(3) of the Code) in the plan year of an employee stock ownership plan next following the plan year in which such payment is made, provided that the amount paid may not exceed 125 percent of the minimum amount of payment necessary to avoid the occurrence of a nonallocation year.

               (g) Payment of State, Local, or Foreign Taxes. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to reflect payment of state, local, or foreign tax obligations arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the participant (the state, local, or foreign tax amount). Such payment may not exceed the amount of such taxes due as a result of participation in the Plan. The payment may be made in the form of withholding pursuant to provisions of applicable state, local, or foreign law or by payment directly to the participant. Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to pay the income tax at source on wages imposed under Section 3401 of the Code as a result of such payment and to pay the additional income tax at source on wages imposed under Section 3401 of the Code attributable to such additional wages and taxes. However, the total payment under this acceleration provision must not exceed the aggregate of the state, local, and foreign tax amount, and the income tax withholding related to such state, local, and foreign tax amount.

               (h) Certain Offsets. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as satisfaction of a debt of the Participant to the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code), where such debt is incurred in the ordinary course of the service relationship between the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) and the Participant, the entire amount of reduction in any of the taxable years of the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.

               (i) Bona Fide Disputes as to a Right to a Payment. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan where such payment occurs as part of a settlement between the Participant and the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) of an arm’s length, bona fide dispute as to the Participant’s right to the deferred amount.

               (j) Plan Terminations and Liquidations. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as provided in Section 9.2 hereof.

               (k) Other Events and Conditions. A payment may be accelerated upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

Notwithstanding anything contained in this Section 14.12(ii) to the contrary, in no event may a payment be accelerated under Sections 14.12(ii)(d), (e), (f), (g), (h), (i) or (j) following a Specified Employee’s Termination of Employment to a date that is prior to the first business day which is no less than six (6) months following the

14

Specified Employee’s Termination of Employment (or if earlier, upon the Specified Employee’s death). Except as otherwise specifically provided in this Plan, including but not limited to Section 4.3, Section 5.2, Article 6, Article 8, Section 9.2 and this Section 14.12(ii) hereof, the Administration Committee may not accelerate the time or schedule of any payment or amount scheduled to be paid under the Plan within the meaning of Code Section 409A.

          (iii) Delay of Payments. To the extent permitted under Section 409A of the Code, the Administration Committee may, in its sole discretion, delay payment under any of the following circumstances, provided that the Administration Committee treats all payments to similarly situated Participants on a reasonably consistent basis:

               (a) Federal Securities Laws or Other Applicable Law. A payment may be delayed where the Administration Committee reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law; provided that the delayed payment is made at the earliest date at which the Administration Committee reasonably anticipates that the making of the payment will not cause such violation. For purposes of the preceding sentence, the making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.

               (b) Payments Subject to Section 162(m) of the Code. A payment may be delayed to the extent that the Administration Committee reasonably anticipates that if the payment were made as scheduled, the Company’s deduction with respect to such payment would not be permitted due to the application of Section 162(m) of the Code. If a payment is delayed pursuant to this Section 14.12(iii)(b), then the payment must be made either (i) during the Company’s first taxable year in which the Administration Committee reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by application of Section 162(m) of the Code, or (ii) during the period beginning with the first business day that is at least six (6) months following the Participant’s Termination of Employment (the “six-month date”) and ending on the later of (x) the last day of the taxable year of the Company in which the Participant’s six-month date occurs or (y) the 15th day of the third month following the six-month date. Where any scheduled payment to a specific Participant in the Company’s taxable year is delayed in accordance with this paragraph, all scheduled payments to that Participant that could be delayed in accordance with this paragraph must also be delayed. The Administration Committee may not provide the Participant an election with respect to the timing of the payment under this Section 14.12(iii)(b). For purposes of this Section 14.12(iii)(b), the term Company includes any entity which would be considered to be a single employer with the Company under Section 414(b) or Section 414(c) of the Code.

               (c) Other Events and Conditions. A payment may be delayed upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

          IN WITNESS WHEREOF, the Company has caused this Plan to be amended and restated this 17th day of December, 2009.

THE SHERWIN-WILLIAMS COMPANY
	/s/
	Louis E. Stellato, Senior Vice President,
	General Counsel and Secretary

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EX-10.J

Exhibit 10(j)

THE SHERWIN-WILLIAMS COMPANY 2005
DIRECTOR DEFERRED FEE PLAN
(AS AMENDED AND RESTATED)

1.

PURPOSE. The purpose of The Sherwin-Williams Company 2005 Director Deferred Fee Plan (the “Plan”) is to provide non-employee Directors of the Company with the opportunity to defer taxation of all or a portion of such Director’s Board Retainer and/or Meeting Fees and to help build loyalty to the Company through increased opportunity to invest in Company Common Stock. The terms of the Plan, amended and restated as set forth herein, apply to amounts that are deferred and vested under the Plan after December 31, 2004 and that are subject to Section 409A of the Code. Notwithstanding anything to the contrary contained herein, all amounts that were deferred and vested under the Plan prior to January 1, 2005 and any additional amounts that are not subject to Section 409A of the Code shall continue to be subject solely to the terms of the separate Plan in effect on October 3, 2004.

2.

DEFINITIONS. The following terms when used herein with initial capital letters shall have the following respective meanings unless the text clearly indicates otherwise:

(a)	Administration Committee. “Administration Committee” shall have the meaning given to such term under the Qualified Plan.
(b)	Board of Directors. “Board of Directors” means the Board of Directors of the Company.
(c)	Board Retainer. “Board Retainer” means the compensation payable monthly to Directors.
(d)	Code. “Code” means the Internal Revenue Code of 1986, as amended.
(e)	Common Stock. “Common Stock” means the common stock of the Company or any security into which such Common Stock may be changed by reason of: (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.
(f)	Common Stock Account. “Common Stock Account” means the bookkeeping account established and maintained under this Plan which is credited with Common Stock in accordance with paragraph 5(b).
(g)	Company. “Company” means The Sherwin-Williams Company, an Ohio corporation or its successor(s) in interest.
(h)	Deferred Cash Account. “Deferred Cash Account” means the bookkeeping account established and maintained under this Plan which is valued in accordance with paragraph 5(a).
(i)	Deferred Compensation. “Deferred Compensation” means the amount of the Board Retainer and/or Meeting Fee of the Participant deferred pursuant to this Plan.
(j)	Director. “Director” means a member of the Board of Directors.

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(k)	Eligible Director. “Eligible Director” means a Director who is not an employee of the Company or a Subsidiary.
(l)	Fair Market Value. “Fair Market Value” of Common Stock means 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.
(m)	Fees. “Fees” means the compensation payable to Directors for their services as a director, including the Board Retainer and Meeting Fee.
(n)	Meeting Fee. “Meeting Fee” means the compensation payable at the time of a meeting to a Director for each meeting of the Board of Directors or committee of the Board of Directors that such Director attends and/or chairs.
(o)	Participant. “Participant” means an Eligible Director who has elected to participate in the Plan.
(p)	Payment Date. “Payment Date” means (i) with respect to the payment of a Board Retainer, the first business day of each calendar month or (ii) with respect to the payment of a Meeting Fee, the date on which a meeting of the Board of Directors or a committee of the Board of Directors was held.
(q)	Plan. “Plan” means the plan set forth in this instrument, and known as “The Sherwin-Williams Company Director Deferred Fee Plan”, as adopted at the meeting of the Board of Directors held July 20, 2005, amended and restated as set forth herein.
(r)	Plan Year. “Plan Year” means a calendar year.
(s)	Qualified Plan. “Qualified Plan” means The Sherwin-Williams Company Employee Stock Purchase and Savings Plan, as amended from time to time, or any successor plan.
(s)	Shadow Stock. “Shadow Stock” means a unit of interest equivalent to a share of Common Stock.
(t)	Shadow Stock Account. “Shadow Stock Account” means the bookkeeping account established and maintained under this Plan credited with Shadow Stock in accordance with paragraph 5(c).
(u)	Subsidiary. Any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if, at the time of the time of investment in the Common Stock, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
(v)	Trust. “Trust” means one or more trust funds established for the purpose of (i) providing a source from which to pay benefits under the Plan and (ii) purchasing and holding assets, including shares of Common Stock. Any such trust funds shall be subject to the claims of the Company’s creditors in the event of the Company’s insolvency, though such trust funds may not necessarily hold sufficient assets to satisfy all of the benefits to be provided under the Plan.
(w)	Unforeseeable Emergency. “Unforeseeable Emergency” means a severe financial hardship arising from (i) the illness or accident of the Participant, the Participant’s

2

spouse, or the Participant’s dependent (as defined in Section 152(a) of the Code), (ii) loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The determination of whether a Participant has incurred an Unforeseeable Emergency shall be made by the Administration Committee, in its sole discretion, in accordance with Section 409A of the Code and Treasury Regulations thereunder.

3.	ELIGIBILITY. An Eligible Director shall become a Participant upon satisfaction of the following: (i) the later of the effective date of the Plan or the date such Director becomes an Eligible Director; and (ii) completion of an Election (as defined in paragraph 4).
4.	ELECTION PROCEDURE. An Eligible Director wishing to participate in the Plan must file a written notice on the Notice of Election form, attached as Exhibit A, electing to defer payment for a Plan Year of all or a portion of his Fees as a Director (“Election”). Such Election shall be made within thirty (30) days after the date such Director initially becomes an Eligible Director. Any such Election shall be effective only with respect to Fees earned after the effective date of the Election. Thereafter, a Director for whom an Election is not in effect may only elect to participate in the Plan by filing a timely Election on or before the December 31st of the Plan Year immediately preceding the Plan Year for which the Election is to become effective. An Election shall not be effective until receipt of the fully and properly completed Notice of Election form by the Secretary of the Company. A fully and properly completed Notice of Election form must indicate: (i) the percentage of Fees to be deferred; (ii) manner of payment upon distribution; (iii) payment commencement date; and (iv) deemed investment election. Once effective for a Plan Year, an Election is irrevocable and may not be changed for that Plan Year. No subsequent election may change the manner of payment, the payment commencement date or the deemed investment of the Fees previously deferred. An Election shall apply to Fees payable with respect to each subsequent Plan Year, unless terminated or modified as described herein. An effective Election may be terminated or modified for any subsequent Plan Year by filing either a new Notice of Election form to effect modifications, or a Notice of Termination form, attached as Exhibit B, to effect terminations, on or before the December 31st immediately preceding the Plan Year for which such modification or termination is to be effective. A person for whom an effective Election is terminated may thereafter file a new Notice of Election form, in the manner described above, for future Plan Years for which he is eligible to participate in the Plan.
5.	INVESTMENT ACCOUNTS. The amount of a Participant’s Deferred Compensation pursuant to an Election shall be deemed credited to the investment options specified in this paragraph 5 in the manner elected by the Participant. A Participant’s election as to the investment options in which his Deferred Compensation for a Plan Year shall be deemed to be invested shall be irrevocable with respect to Deferred Compensation and deemed earnings thereon, and Deferred Compensation and deemed earnings thereon cannot be transferred

3

between investment accounts. A Participant may elect to credit no less than twenty-five percent (25%) of his Deferred Compensation for a Plan Year (the “Minimum Election”) to any particular investment option. Any amounts in excess of the Minimum Election shall be made in five percent (5%) increments. If a Participant fails to direct the investment of any Deferred Compensation, all such Deferred Compensation will be credited to the Participant’s Deferred Cash Account. A Participant may elect to have his Deferred Compensation deemed to be invested in one of the following investment accounts:

(a)	DEFERRED CASH ACCOUNT. Each Participant’s Deferred Cash Account shall accrue interest computed using the base lending rate of interest as announced by Key Bank, Cleveland, Ohio in effect during the immediately preceding calendar quarter. The interest shall be computed on the actual balance in each Participant’s Deferred Cash Account during the previous calendar quarter.
(b)	COMMON STOCK ACCOUNT. The Participant’s Common Stock Account shall be credited with that quantity of Common Stock equal to the number of full and fractional shares (to the nearest thousandths) which could have been purchased by the Trust with the portion of Deferred Compensation a Participant has elected to allocate to the Common Stock Account based on the Fair Market Value of such Common Stock on each Payment Date. There will be credited to each Participant’s Common Stock Account amounts equal to the cash dividends, and other distributions, paid on shares of issued and outstanding Common Stock represented by the Participant’s Common Stock Account which the Participant would have received had he been a record owner of shares of Common Stock equal to the amount of Common Stock in his Common Stock Account at the time of payment of such cash dividends or other distributions. The Participant’s Common Stock Account shall be credited with a quantity of shares of Common Stock and fractions thereof (to the nearest thousandths) that could have been purchased with the dividends or other distributions based on the Fair Market Value of Common Stock on the date of payment of such dividends or other distributions.
(c)	SHADOW STOCK ACCOUNT. The Participant’s Shadow Stock Account shall be credited with a quantity of Shadow Stock units and fractions thereof (to the nearest thousandths) equal to the value of Common Stock that could have been purchased with the portion of the Deferred Compensation credited to the Shadow Stock Account on each Payment Date based on the Fair Market Value of Common Stock on such Payment Date. There will be credited to each Participant’s Shadow Stock Account amounts equal to the cash dividends, and other distributions, paid on shares of issued and outstanding Common Stock represented by the Participant’s Shadow Stock Account which the Participant would have received had he been a record owner of a number of shares of Common Stock equal to the amount of Shadow Stock in his Shadow Stock Account at the time of payment of such cash dividends or other distributions. The Participant’s Shadow Stock Account shall be credited with a quantity of Shadow Stock units and fractions thereof (to the nearest thousandths) that could have been purchased with the dividends or other distributions based on the Fair

4

Market Value of Common Stock on the date of payment of such dividends or other distributions.

6.

DEPOSITS TO THE TRUST. The Company shall transfer to the Trust, within sixty (60) days of the date Fees would otherwise be paid, amounts which a Participant has directed to be deferred in accordance with the Plan. In addition, as of the first day of each calendar quarter, the Company shall deposit into the Trust the following cash amounts accrued during the immediately preceding calendar quarter: (i) all accrued interest on Participants’ Deferred Cash Accounts; (ii) an amount equal to cash dividends and other distributions paid on shares of Common Stock represented by units of Shadow Stock and shares of Common Stock credited to Participants’ Shadow Stock Accounts and Common Stock Accounts; (iii) an amount equal to the appreciation in the value of a unit of Shadow Stock multiplied times the number of units of Shadow Stock credit to Participants’ Shadow Stock Accounts; and (iv) an amount equal to the appreciation in the value of a share of Common Stock multiplied by the number of shares of Common Stock credited to Participants’ Common Stock Accounts. Notwithstanding the foregoing, the Trust shall not be funded if the funding thereof would result in taxable income to a Participant (i) due to the assets of the Trust being located or transferred outside of the United States; (ii) due to the assets of the Trust being restricted to the provision of benefits under the Plan in connection with a change in the employer’s financial health; (iii) due to the assets being set aside, reserved or transferred to the Trust during any restricted period (as defined in Section 409A(b)(3)(B) of the Code); or (iv) as otherwise provided pursuant to Section 409A(b) of the Code.

7.

PAYMENT OF DEFERRED COMPENSATION.

(a)

Amount of Payment. The benefit that a Participant will receive from the Company in accordance with the Plan shall be: (i) the number of full shares of Common Stock credited to the Participant’s Common Stock Account; and (ii) cash equal to the sum of (I) the amount credited to the Participant’s Deferred Cash Account; (II) the Fair Market Value of the fractional shares (to the nearest thousandths) of Common Stock on the date such fractional shares were credited to the Participant’s Common Stock Account; and (III) the value of the Shadow Stock units and fractions thereof (to the nearest thousandths) credited to the Participant’s Shadow Stock Account. The value of a Participant’s Deferred Cash Account, fractional shares of Common Stock and Shadow Stock Account shall be determined by the Company as of the end of the calendar quarter immediately preceding the calendar quarter in which a Participant is entitled to a distribution hereunder in accordance with paragraph 7(c) below. Notwithstanding the preceding sentence to the contrary, in the event of a Change of Control or termination and liquidation of the Plan as provided in paragraphs 9 and 13, respectively, the value of a Participant’s Deferred Cash Account, Shadow Stock Account and Common Stock Account shall be determined by the Company immediately following such an event.

(b)

Manner of Payment. A Participant’s Deferred Compensation for a Plan Year, as adjusted for deemed earnings or losses thereon, will be paid by the Company to him

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or, in the event of his death, to the Participant’s beneficiary, in kind, in a lump sum unless the Participant makes a timely election to have the benefits paid in substantially equal annual cash installments over a period not exceeding ten (10) years. To the extent that benefits are payable in the form of annual installments pursuant to this Section 7(b), annual payments will be made commencing on the payment commencement date determined pursuant to Section 7(c) and shall continue on each anniversary thereof until the number of annual installments specified in the Participant’s timely election has been paid. The amount of each such installment payment shall be determined by dividing the sum of the balances of the Participant’s Deferred Cash Account and Shadow Stock Account, determined as of December 31 of the year last preceding the installment payment date, by the number of installment payments remaining, without regard to anticipated earnings. Notwithstanding the foregoing, a Participant’s Deferred Compensation invested in the Common Stock Account shall only be distributed to the Participant in kind in a lump sum. Upon the commencement of installment payments hereunder, if so elected, the value (as determined under paragraph 7(a) above) of the Participant’s Shadow Stock Account shall be transferred to his Deferred Cash Account and the Participant’s Shadow Stock Account shall be eliminated. Amounts credited to a Participant’s Deferred Cash Account held pending distribution pursuant to this paragraph shall continue to be credited with interest in accordance with the provisions of paragraph 5(a) above.

(c)

Payment Commencement Date. Payments of Deferred Compensation and earnings thereon shall commence within two (2) business days following the first business day of the first calendar quarter beginning after the earlier of the date the Participant elects to receive payment or ceases to be a Director. Notwithstanding a Participant’s manner of payment election hereunder, if a Participant ceases to be a Director as a result of the Participant’s death, the Company shall pay to the Participant’s beneficiary or beneficiaries a lump sum on the first business day of the first calendar quarter beginning after the Participant’s death.

(d)

Unforeseeable Emergency. In the event a Participant has elected to receive distribution from the plan in the form of installment payments, the Administration Committee may, nonetheless, upon request of the Participant, in its sole discretion, accelerate payment of all or any portion of the Participant’s remaining account under the Plan, if the Administration Committee determines that the Participant has experienced an Unforeseeable Emergency. The amount of any such accelerated payment shall be limited to the amount necessary to alleviate the Unforeseeable Emergency.

8. BENEFICIARIES. A Participant may, by executing and delivering to the Secretary of the Company prior to the Participant’s death a Beneficiary Election form attached hereto as Exhibit C, designate a beneficiary or beneficiaries to whom distribution of his interest under this Plan shall be made in the event of his death prior to the full receipt of his interest under this Plan, and he may designate the portions to be distributed to each such designated beneficiary if there is more than one. Any such designation may be revoked or changed by

6

the Participant at any time and from time to time by filing, prior to the Participant’s death, with the Secretary of the Company an executed Beneficiary Election form. If there is no such designated beneficiary living upon the death of the Participant, or if all such designated beneficiaries die prior to the full distribution of the Participant’s interest, then any remaining unpaid amounts shall be paid to the estate of the Participant or Participant’s beneficiaries.

9. CHANGE OF CONTROL. In the event of a Change of Control, the amounts to which Participants are entitled under this Plan shall be immediately distributed in a lump sum cash payment to Participants within ninety (90) days following the date of such Change of Control. For purposes of this Plan, a Change of Control shall be deemed to occur on the date of any of the following events:

(a)

Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. Notwithstanding the foregoing, if any one person or group is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 50% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

(b)

Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the Company possessing 30% or more of the total voting power of the Company. Notwithstanding the foregoing, if any one person or group is considered to own 30% or more of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group is not considered to cause a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires ownership of more than 30% of the total voting power of the stock of the Company as a result of the acquisition by the Company of stock of the Company which, by reducing the number of shares outstanding, increases the percentage of shares

7

beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company’s acquisition such person becomes the beneficial owner of additional stock of the Company that increases the percentage of outstanding shares of stock of the Company owned by such person, a Change of Control shall then occur.

(c)

A majority of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election was not endorsed by at least two-thirds (2/3) of the members of the Board of Directors prior to the date of such appointment or election.

(d)

Any one person or more than one person acting as a group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all the assets of the Company immediately before such acquisition or acquisitions. The gross fair market value of assets shall be determined without regard to liabilities associated with such assets. Notwithstanding the foregoing, a transfer of assets shall not result in a Change of Control if such transfer is to (i) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock, (ii) an entity 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (iii) a person or group (within the meaning of the Treasury Regulation § 1.409A-3(i)(5)(v)(B)) that owns, directly or indirectly, 50% or more of the total value or voting power of the stock of the Company, or (iv) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly by a person or group described in clause (iii) of this sentence.

Notwithstanding the foregoing, an acquisition of stock of the Company described in (a) or (b) above shall not be deemed to be a Change of Control by virtue of any of the following situations: (i) an acquisition by the Company; (ii) an acquisition by any of the Company’s subsidiaries in which a majority of the voting power of the equity securities or equity interests of such subsidiary is owned, directly or indirectly, by the Company; or (iii) any employee benefit or stock ownership plan of the Company or any trustee or fiduciary with respect to such a plan acting in such capacity.

10.	NON-ASSIGNABILITY. Neither a Participant nor any beneficiary designated by him shall have any right to, directly or indirectly, alienate, assign or encumber any amount that is or may be payable hereunder.
11.	ADMINISTRATION OF PLAN. Full discretionary power and authority to construe, interpret and administer the Plan shall be vested in the Administration Committee. The Administration Committee shall have the power and authority to allocate among themselves

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and to delegate any responsibility or power reserved to it hereunder to any person or persons or any committee of the Board of Directors, as it may, in its sole discretion, deem appropriate. Decisions of the Administration Committee or its designee shall be final, conclusive and binding upon all persons affected thereby.

12.	GOVERNING LAW. To the extent not preempted by federal law, the provisions of this Plan shall be interpreted and construed in accordance with the laws of the State of Ohio.
13.	AMENDMENT/TERMINATION.

(a)

Amendment and Termination in General. The Board of Directors may amend, suspend or terminate this Plan at any time; provided that no such amendment, suspension or termination shall adversely effect the amounts in any then-existing account. Further, no amendment, suspension or termination of the Plan may result in the acceleration of payment of any benefits to any Participant, beneficiary or other person, except as may be permitted under Section 409A of the Code.

(b)

Payment of Benefits Following Termination. In the event that the Plan is terminated, a Participant’s benefits shall be distributed to the Participant or beneficiary on the dates on which the Participant or beneficiary would otherwise receive benefits hereunder without regard to the termination of the Plan. Notwithstanding the preceding sentence, and to the extent permitted under Section 409A of the Code, the Board of Directors may terminate the Plan and accelerate the payment of Participants’ benefits subject to the following conditions:

(i) Company’s Discretion. The termination does not occur “proximate to a downturn in the financial health” of the Company (within the meaning of Treasury Regulation §1.409A-3(j)(4)(ix)), and all other arrangements required to be aggregated with the Plan under Section 409A of the Code are also terminated and liquidated. In such event, the entire benefits of all Participants shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no earlier than twelve (12) months, and no later than twenty-four (24) months, after the date the Board of Directors irrevocably approves the termination of the Plan. Notwithstanding the foregoing, any payment that would otherwise be paid pursuant to the terms of the Plan prior to the twelve (12) month anniversary of the date that the Board of Directors irrevocably approves the termination of the Plan shall continue to be paid in accordance with the terms of the Plan. If the Plan is terminated pursuant to this Section 13(b)(i), the Company shall be prohibited from adopting a new plan or arrangement that would be aggregated with this Plan under Section 409A of the Code within three (3) years following the date that the Board of Directors irrevocably approves the termination and liquidation of the Plan.

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(ii)	Change of Control. The termination occurs pursuant to an irrevocable action of the Board of Directors that is taken within the thirty (30) days preceding or the twelve (12) months following a Change of Control (as defined in Section 9), and all other plans sponsored by the Company (determined immediately after the Change of Control) that are required to be aggregated with this Plan under Section 409A of the Code are also terminated with respect to each participant therein who experienced the Change of Control (each a “Change of Control Participant”). In such event, the entire benefits of each Participant under the Plan and each Change in Control Participant under all aggregated plans shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made no later than twelve (12) months after the date that the Board of Directors irrevocably approves the termination.
(iii)	Dissolution; Bankruptcy Court Order. The termination occurs within twelve (12) months after a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A). In such event, the entire benefits of each Participant shall be paid at the time and pursuant to the schedule specified by the Company, so long as all payments are required to be made by the latest of: (A) the end of the calendar year in which the Plan termination occurs, (B) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (C) the first calendar year in which payment is administratively practicable.
(iv)	Other Events. The termination occurs upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

The provisions of paragraphs (i), (ii), (iii) and (iv) of this Section 13(b) are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j)(4)(ix) and shall be interpreted and administered accordingly. The term “Company” as used in paragraphs (i) and (ii) of this Section 13(b) shall include the Company and any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code.

14. SECTION 409A OF THE CODE.

(a) It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to Participants or beneficiaries. The Plan shall be construed, administered and governed in a manner that effects such intent. In furtherance of that intent, to the extent necessary to comply with Section

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409A of the Code: (i) a Participant will be deemed to cease to be a Director on the date of the Participant’s “separation from service” (within the meaning of Section 409A of the Code); and (ii) notwithstanding any other provision of the Plan to the contrary other than Sections 14(b)(i) and 14(b)(ii), in the event that a Participant is a “specified employee” (within the meaning of Section 409A of the Code), any payment that would otherwise be made or commence as a result of such separation from service shall be paid or commence on the first business day which is no less that six (6) months after the Participant’s separation from service.

(b) Discretionary Acceleration of Payments. To the extent permitted by Section 409A of the Code, the Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan as provided in this Section. The provisions of this Section are intended to comply with the exception to accelerated payments under Treasury Regulation §1.409A-3(j) and shall be interpreted and administered accordingly.

(i)	Domestic Relations Orders. The Administration Committee may, in its sole discretion, accelerate the time or schedule of a payment under the Plan to an individual other than the Participant as may be necessary to fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the Code).
(ii)	Conflicts of Interest. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to the extent necessary for any federal officer or employee in the executive branch to comply with an ethics agreement with the federal government. Additionally, the Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan the to the extent reasonably necessary to avoid the violation of an applicable federal, state, local, or foreign ethics law or conflicts of interest law (including where such payment is reasonably necessary to permit the Participant to participate in activities in the normal course of his or her position in which the Participant would otherwise not be able to participate under an applicable rule).
(iii)	Limited Cash-Outs. The Administration Committee may, in its sole discretion, require a mandatory lump sum payment of amounts deferred under the Plan that do not exceed the applicable dollar amount under Section 402(g)(1)(B) of the Code, provided that the payment results in the termination and liquidation of the entirety of the Participant’s interest under the Plan, including all agreements, methods, programs or other arrangements that are aggregated with the Plan pursuant to Treasury Regulation § 1.409A-1(c).

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(iv)	Payment Upon Income Inclusion Under Section 409A. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan at any time the Plan fails to meet the requirements of Section 409A of the Code. The payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Section 409A of the Code.
(v)	Cancellation of Deferral Election Due to Unforeseeable Emergency. The Administration Committee may, in its sole discretion, cancel a Participant’s deferral election due an Unforeseeable Emergency.
(vi)	Certain Payments to Avoid a Nonallocation Year under Section 409(p). The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to prevent the occurrence of a nonallocation year (within the meaning of Section 409(p)(3) of the Code) in the plan year of an employee stock ownership plan next following the plan year in which such payment is made, provided that the amount paid may not exceed 125 percent of the minimum amount of payment necessary to avoid the occurrence of a nonallocation year.
(vii)	Payment of State, Local, or Foreign Taxes. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan to reflect payment of state, local, or foreign tax obligations arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the Participant (the state, local, or foreign tax amount). Such payment may not exceed the amount of such taxes due as a result of participation in the Plan. The payment may be made in the form of withholding pursuant to provisions of applicable state, local, or foreign law or by payment directly to the Participant.
(viii)	Cancellation of Deferral Election Due to Disability. The Administration Committee may, in its sole discretion, cancel a Participant’s deferral election in the event that a Participant incurs a disability, provided that such cancellation occurs by the later of the end of the calendar year in which the Participant incurs a disability or the 15th day of the third month following the dated the Participant incurs a disability. For purposes of this Section 14(b)(viii), a disability refers to any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months..

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(ix)	Certain Offsets. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as satisfaction of a debt of the Participant to the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code), where such debt is incurred in the ordinary course of the service relationship between the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) and the Participant, the entire amount of reduction in any of the taxable years of the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.
(x)	Bona Fide Disputes as to a Right to a Payment. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan where such payment occurs as part of a settlement between the Participant and the Company (or any entity which would be considered to be a single employer with the Company under Sections 414(b) or 414(c) of the Code) of an arm’s length, bona fide dispute as to the Participant’s right to the deferred amount.
(xi)	Plan Terminations and Liquidations. The Administration Committee may, in its sole discretion, provide for the acceleration of the time or schedule of a payment under the Plan as provided in Section 13(b) hereof.
(xii)	Other Events and Conditions. A payment may be accelerated upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

Except as otherwise specifically provided in this Plan, including but not limited to Section 7(d), Section 13(b) and this Section 14(b) hereof, the Administration Committee may not accelerate the time or schedule of any payment or amount scheduled to be paid under the Plan within the meaning of Code Section 409A.

(c) Delay of Payments. To the extent permitted under Section 409A of the Code, the Administration Committee may, in its sole discretion, delay payment under any of the following circumstances, provided that the Administration Committee treats all payments to similarly situated Participants on a reasonably consistent basis:

(i) Federal Securities Laws or Other Applicable Law. A payment may be delayed where the Administration Committee reasonably anticipates that the making of the payment will violate federal securities laws or other applicable

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law; provided that the delayed payment is made at the earliest date at which the Administration Committee reasonably anticipates that the making of the payment will not cause such violation. For purposes of the preceding sentence, the making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.

(ii) Other Events and Conditions. A payment may be delayed upon such other events and conditions as the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

     IN WITNESS WHEREOF, the Company has caused the Plan to be amended and restated this 17th day of December, 2009.

THE SHERWIN-WILLIAMS COMPANY
	/s/
	Louis E. Stellato, Senior Vice President,
	General Counsel and Secretary

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EX-10.L

Exhibit 10(l)

AMENDMENT NUMBER ONE TO THE SHERWIN-WILLIAMS COMPANY
EXECUTIVE DISABILITY INCOME PLAN

          This Amendment to The Sherwin-Williams Company Executive Disability Income Plan (the “Plan”) is made effective as of the date specified herein.

WITNESSETH:

          WHEREAS, The Sherwin-Williams Company (the “Company”) established the Plan effective April 1, 1991;

          WHEREAS, pursuant to Section 6 of the Plan, the Company retains the right to amend the Plan at any time in whole or in part; and

          WHEREAS, the Company wishes to amend the Plan to freeze all further participation with respect to new participants to the Plan beginning January 1, 2008;

          NOW, THEREFORE, the Plan is hereby amended in the respects hereinafter set forth effective December 31, 2007:

          Section 4, Eligibility To Participate, is hereby amended to include a sentence to the end thereto as follows:

Notwithstanding the foregoing, effective January 1, 2008, participation in the Plan shall be frozen to all Employees who are not Participants in the Plan as of December 31, 2007.

          IN WITNESS WHEREOF, pursuant to the action of its Board of Directors, the Company has caused this amendment to be executed effective December 31, 2007 by its duly authorized officer.

THE SHERWIN-WILLIAMS COMPANY
By:	/s/
	Louis E. Stellato, Senior Vice President,
	General Counsel and Secretary

EX-10.M

Exhibit 10(m)

THE SHERWIN-WILLIAMS COMPANY
2008 AMENDED AND RESTATED
EXECUTIVE LIFE INSURANCE PLAN

     The Sherwin-Williams Company, an Ohio corporation (the “Company”), on behalf of itself and Participating Affiliates, hereby establishes this 2008 Amended and Restated Executive Life Insurance Plan (the “Plan”), effective retroactive to January 1, 2004 to assure compliance with new securities and tax laws and regulations. The Plan has been operated in good faith compliance with and shall hereafter be interpreted in all respects to comply with final split dollar regulations, applicable federal securities laws, Internal Revenue Code Section 409A, to the extent applicable, and those provisions of the Employee Retirement Income Security Act of 1974, as amended, applicable to a welfare benefit plan maintained to provide life insurance benefits to a “select group of management or highly compensated employees.” The purpose of the Plan is to attract and retain high quality executives and to promote in key executives increased efficiency and an interest in the successful operation of the Company. Participation in this Plan is in lieu of participation in any other Company sponsored group life insurance plan.

ARTICLE 1
Definitions

     1.1 Administrator shall mean the Compensation and Management Development Committee or such other person or persons appointed by the Board of Directors of the Company to administer the Plan pursuant to Article 7 of the Plan.

     1.2 Base Salary shall mean the Participant’s base annual salary excluding incentive and discretionary bonuses and other non-regular forms of compensation, before reductions for contributions to or deferrals under any pension, deferred compensation or benefit plans sponsored by the Company.

     1.3 Beneficiary shall mean the person(s) or entity designated as such in accordance with Article 6 of the Plan.

     1.4 Class A Participant shall mean a Participant who has been designated by the Administrator to participate in the Class A Participant Program pursuant to Article 3.

     1.5 Class A Participant Program shall mean the collateral assignment loan structure life insurance program provided to Class A Participants pursuant to Article 3.

     1.6 Class B Participant shall mean a Participant who has been designated by the Administrator to participate in the Class B Participant Program pursuant to Article 4.

     1.7 Class B Participant Program shall mean the endorsement structure life insurance program provided to Class B Participants pursuant to Article 4.

     1.8 Company shall mean The Sherwin-Williams Company except that where the context requires, Company shall mean the Company or the Participating Affiliate whichever is the employer of the Participant.

     1.9 Collateral Assignment shall mean the Collateral Assignment Agreement executed by a Class A Participant assigning the Policy to the Company as collateral security for the return of the Cumulative Company Loan pursuant to Article 3.

     1.10 Coverage Maturity Date unless otherwise specified in the Participant Enrollment Form, the Coverage Maturity Date shall mean the later of the last day of the sixth month commencing after the Participant’s Retirement or the fifteenth (15^th) anniversary date of the Policy (i.e. the end of the 15^th Policy year). The Coverage Maturity Date may be changed by amendment of the Participant Enrollment Form only if such change complies with all requirements of IRC Section 409A without the imposition of excise taxes.

     1.11 Cumulative Company Contribution shall mean the total cumulative premiums actually paid on the Policy of a Class B Participant by the Company as of the relevant date net of any loans or withdrawals from the Policy by the Company and net of any amounts previously reimbursed to the Company by the Participant.

     1.12 Cumulative Company Loan shall mean the total cumulative premiums actually paid on the Policy of a Class A Participant by the Company as of the relevant date net of any loans or withdrawals from the Policy by the Company and net of any amounts previously reimbursed to the Company by the Participant.

     1.13 Disability shall mean that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. The Administrator may require that the Participant submit evidence of such qualification for disability benefits in order to determine the Disability of the Participant under this Plan.

     1.14 Early Retirement Eligibility Date shall mean the date on which the Participant has both attained age fifty-five (55) and completed at least twenty (20) Years of Service.

     1.15 Economic Benefit Amount shall mean the value of the economic benefit of the life insurance coverage provided to a Class B Participant under the Plan as determined in the complete and sole discretion of the Administrator based on Treasury regulations, rulings issued by the Internal Revenue Service and other applicable authorities.

     1.16 Eligible Executive shall mean an executive of the Company or a Participating Affiliate selected by the Administrator to be eligible to participate in the Plan. The Administrator shall designate whether an Eligible Executive is eligible to participate as either a Class A Participant or a Class B Participant.

     1.17 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended, as interpreted by regulations and applicable authorities promulgated thereunder.

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     1.18 Imputed Interest shall mean the interest imputed to the Participant under IRC Section 7872 by reason of the Cumulative Company Loan which shall be based on the blended annual federal statutory short-term rate which is in effect under IRC Section 1274(d) for the Plan Year for which the amount of forgone interest is being determined, compounded annually.

     1.19 IRC shall mean the Internal Revenue Code of 1986, as amended, as interpreted by Treasury regulations and applicable authorities promulgated thereunder.

     1.20 Normal Retirement Date shall mean the date on which the Participant attains age sixty-five (65).

     1.21 Participant shall mean an Eligible Executive who has completed a Participant Enrollment Form pursuant to Article 2 of the Plan and shall include either a Class A Participant or a Class B Participant.

     1.22 Participant Enrollment Form shall mean the written agreement to participate in the Plan submitted by a Participant to the Administrator pursuant to Article 2 of the Plan which shall specify the class in which the Participant shall participate in the Plan and the Coverage Maturity Date. The Participant Enrollment From may only be amended by mutual agreement of the Company and the Participant and in compliance with all requirements of IRC Section 409A, without the imposition of excise taxes. For example, any amendment to change the Coverage Maturity Date shall be made no less twelve (12) months prior to the original Coverage Maturity Date and shall delay the Coverage Maturity Date by a minimum of five (5) years.

     1.23 Participating Affiliate shall mean The Sherwin-Williams Automotive Finishes Corporation and/or such other affiliate of the Company as may be designated by the Administrator to participate in the Plan and which has adopted the Plan and authorized the Administrator and The Sherwin-Williams Company to act on it’s behalf in administration of the Plan, as provided in Section 8.2.

     1.24 Plan Year shall mean the calendar year.

     1.25 Policy shall mean the life insurance policy or policies insuring the life of the Participant made subject to this Plan pursuant to Articles 3 or 4 of the Plan.

     1.26 Retirement shall mean Termination of Employment on or after the earlier of the Early Retirement Eligibility Date or the Normal Retirement Date.

     1.27 Target Death Benefit shall be based on a multiple of the Participant’s approximate projected Base Salary specified on a Schedule A to this Plan. The specified multiple and the approximation of Base Salary for this purpose may be adjusted from time to time by amendment of Schedule A in the complete and sole discretion of the Administrator.

     1.28 Termination of Employment shall mean the date of the cessation of the Participant’s employment with the Company for any reason whatsoever, whether voluntary or involuntary, including by reason of Retirement, Disability or death. A transfer between the Company and a Participating Affiliate or among Participating Affiliates shall not be considered a Termination of Employment.

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     1.29 Years of Service shall mean the cumulative consecutive years of continuous full-time employment with the Company or a Participating Affiliate, beginning on the date the Participant first began service with the Company or Participating Affiliate, and counting each anniversary thereof.

ARTICLE 2
Participation

     2.1 Enrollment. An Eligible Executive shall enroll in the Plan by filing a completed and fully executed Participant Enrollment Form and such other insurance applications and forms as may be reasonably requested by the Administrator. An Eligible Executive shall become a Participant in the Plan when he or she is notified in writing that his or her participation in a particular class of coverage has been approved by the Administrator and that insurance coverage has been secured on his or her behalf.

     2.2 Insurability. Eligible Executives are not automatically entitled to the insurance benefits provided under this Plan. Each Eligible executive must satisfy the requirements for obtaining insurance and be issued a Policy before he or she shall be covered (or coverage may be increased) under the Plan. The Eligible Executive shall cooperate with the Company by furnishing any and all information requested by the Administrator, in order to facilitate the payment of benefits hereunder, taking such physical examinations as the Administrator may deem necessary and taking such other actions as may be requested by the Administrator. If the Eligible Executive refuses to so cooperate, the Company shall have no further obligation to the Eligible Executive under the Plan. In the event of the Eligible Executive’s suicide during the first two (2) years in the Plan, or if the Eligible Executive makes any material misstatement of information or non-disclosure of medical history, then no benefits shall be payable to the Eligible Executive under the Plan, except that benefits may be payable in a reduced amount in the sole discretion of the Administrator.

     2.3 Addition or Removal of Participants. The Administrator may, at any time, in its discretion, designate additional Eligible Executives to participant in the Plan or remove a Participant or class of Participants from eligibility to participate in the Plan. The Administrator shall notify the Participant in writing whenever a Participant is no longer eligible to participate in the Plan, at which time (i) a Class A Participant shall have the right to repay the Cumulative Company Loan and retain the Policy under the same terms and conditions as if the Participant had experienced a Termination of Employment under Section 3.6 of this Plan, and (ii) a Class B Participant shall have the right to purchase the Policy for the net cash surrender value under the same terms and conditions as if the Participant had experienced a Termination of Employment under Section 4.6 of this Plan upon receipt of such notice. In the event that a Class A Participant becomes eligible for the Class B Participant Program, the Company shall purchase the Class A Participant’s Policy from the Participant for its net cash surrender value in excess of the Cumulative Company Loan as of the date of conversion and shall thereafter provide benefits to such Participant through the Class B Participant Program under such terms and conditions as may be specified in the new Participant Enrollment Form. A Class B Participant shall not be eligible for conversion to the Class A Participant Program.

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ARTICLE 3
Class A Participant Life Insurance Program

     3.1 Policy. To provide the insurance benefits to Class A Participants under the Plan, the Participant shall be issued one or more insurance policies covering the life of the Participant (referred to together herein as the “Policy”). The Class A Participant shall be the owner of the Policy and shall hold all incidents of ownership therein. However, the Class A Participant shall execute a Collateral Assignment of the Policy in favor of the Company, securing to the Company, on a nonrecourse basis, the right to return of its Cumulative Company Loan, and the Class A Participant’s ownership rights in the Policy shall be subject to the terms of this Plan and the Collateral Assignment.

     3.2 Premiums. Prior to the earlier of (i) Termination of Employment, other than by reason of Retirement or Disability, and (ii) the Coverage Maturity Date, the Company shall pay premiums on the Policy each Plan Year reasonably calculated to provide a death benefit under the Policy at least equal to the Cumulative Company Loan plus the Target Death Benefit.

     3.3 Imputed Interest. The Company shall include in the Class A Participant’s income for income tax purposes each year Imputed Interest on the balance of the Cumulative Company Loan to the Class A Participant under the Plan for such Plan Year.

     3.4 Policy Loans, Withdrawals, or Surrender. The Company shall have the right to obtain loans or make withdrawals from the Policy of a Class A Participant up to the amount of the Cumulative Company Loan so long as such loans or withdrawals do not reduce the net cash value in the Policy below the level required to provide a death benefit under the Policy at least equal to the remaining Cumulative Company Loan plus the Target Death Benefit. The Class A Participant shall have the right to obtain loans, make withdrawals or surrender the Policy in connection with a termination event and after, or for the purposes of, repayment of the Cumulative Company Loan.

     3.5 Death Benefit. In the event of a Class A Participant’s death prior to release of the Policy and termination of this Plan and the Collateral Assignment, the Company shall be entitled to receive a portion of the death benefits payable under the Policy equal to the outstanding Cumulative Company Loan. The balance of the death benefits payable from the Policy (if any) shall be paid to the Beneficiary designated by the Participant.

     3.6 Termination of Employment. Upon a Class A Participant’s Termination of Employment other than by reason of Retirement, Disability, or death the Company shall be entitled to the return of its Cumulative Company Loan. The Company shall withdraw its Cumulative Company Loan from the Policy and release the Collateral Assignment, and thereafter the Participant shall be the sole owner of the Policy and shall bear any and all costs of keeping the Policy in force.

     3.7 Retirement. In the event of a Class A Participant’s Retirement, the Participant shall continue to be eligible to receive benefits under the Plan (subject to Article 5). The Company shall have the discretion to withdraw its Cumulative Company Loan from the Policy and release the Collateral Assignment at such time as the Administrator determines in its

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complete and sole discretion that the cash value in the policy is sufficient to maintain the Target Death Benefit, and thereafter the Participant shall be the sole owner of the Policy and shall bear any and all costs of keeping the Policy in force.

     3.8 Disability. In the event of a Class A Participant’s Disability prior to the earlier of the Normal Retirement Date or the Early Retirement Eligibility Date, the Participant shall continue to be eligible to receive benefits under the Plan until the earlier of the Normal Retirement Date or the Early Retirement Eligibility Date (subject to Article 5) and thereupon, the Participant shall have the rights specified in Section 3.7. Notwithstanding the forgoing, if Disability does not continue until the earlier of the Normal Retirement Date or the Early Retirement Eligibility Date and the Participant does not return to work with the Company or a Participating Affiliate, the cessation of Disability shall be treated as a Termination of Employment under Section 3.6.

     3.9 Assignment. A Class A Participant may assign to one or more individuals or trustees all or any part of the Participant’s right, title, claim, interest, benefit and any other incidents of ownership in the Policy under the Plan, provided that such assignment shall be subject to the terms and conditions of the Plan.

ARTICLE 4
Class B Participant Life Insurance Program

     4.1 Policy. To provide the insurance benefits to a Class B Participant under this Plan, the Company shall purchase one or more insurance policies covering the life of the Class B Participant (referred to together herein as the “Policy”). The Company shall be the owner of the Policy on the life of the Class B Participant and shall hold all incidents of ownership therein. However, the Company shall take such action as may be necessary to endorse to the Class B Participant a portion of the death benefit under the Policy to provide the benefits to which the Class B Participant is entitled under Article 4 of the Plan. Prior to the Participant’s death, the Coverage Maturity Date or purchase of the Policy by the Participant on termination of this Agreement, a Class B Participant shall have no right, title or interest in the Policy or any cash values in the Policy and the Policy shall remain, at all times, part of the general assets of the Company, subject to the claims of its general creditors.

     4.2 Premiums. Prior to the earlier of (i) Termination of Employment, other than by reason of Retirement or Disability, and (ii) the Coverage Maturity Date, the Company shall pay premiums on the Policy each Plan Year reasonably calculated to provide a death benefit under the Policy at least equal to the Target Death Benefit.

     4.3 Economic Benefit. The Company shall include in the Class B Participant’s income for income tax purposes each year the Economic Benefit of the life insurance coverage provided to the Participant under the Plan.

     4.4 Policy Loans, Withdrawals, or Surrender. The Company shall have the right to obtain loans or make withdrawals from the Policy on the life of a Class B Participant or to surrender or exchange the Policy at all times prior to the Class B Participant’s death, the

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Coverage Maturity Date or purchase of the Policy by the Participant on termination of this Agreement.

     4.5 Death Benefit. In the event of a Class B Participant’s death prior to termination of the Participant’s participation in the Plan, the designated beneficiary of a Class B Participant shall be entitled to receive an amount equal to the Target Death Benefit. The balance of the death benefits payable from the Policy (if any) shall be paid to the Company.

     4.6 Termination of Employment. Upon a Class B Participant’s Termination of Employment, other than be reason of Retirement, Disability or death, the Class B Participant’s right to benefits under the Plan shall cease as of the date of such Termination of Employment and the Company shall continue as the sole owner of the Policy. The Class B Participant shall have the right to purchase the Policy from the Company for an amount equal to the net cash surrender value of the Policy or such other amount as may be reasonably agreed to by the parties.

     4.7 Retirement. In the event of a Class B Participant’s Retirement prior to the Coverage Maturity Date, coverage under this Plan shall continue (subject to Article 5) until the Coverage Maturity Date. Upon the Coverage Maturity Date, if the Participant is still in the employ of the Company or has experienced a Termination of Employment by reason of Retirement or Disability (as provided in Section 4.8), the Company shall withdraw its Cumulative Company Contribution from the Policy and transfer the Policy to the Participant. Thereafter the Participant shall be the sole owner of the Policy and shall bear any and all costs of keeping the Policy in force. Prior to such transfer, the Company shall be the sole owner of the Policy which shall be part of the Company’s general unsecured assets subject to the claims of general creditors as provided in Section 4.1.

     4.8 Disability. In the event of a Class B Participant’s Disability prior to the earlier of the Normal Retirement Date or the Early Retirement Eligibility Date, the Participant shall continue to be eligible to receive benefits under the Plan (subject to Article 5) until the earlier of the Normal Retirement Date or the Early Retirement Eligibility Date and thereupon, the Participant shall have the rights specified in Section 4.7. Notwithstanding the forgoing, if Disability does not continue until the Normal Retirement Date or the Early Retirement Eligibility Date and the Participant does not return to work with the Company or a Participating Affiliate, the cessation of Disability shall be treated as a Termination of Employment under Section 4.6.

     4.9 Assignment. A Class B Participant shall not assign all or any part of the Participant’s right, title, claim, interest or benefit under the Plan except under circumstances where such transfer is ignored for tax purposes and complies with all applicable laws without the acceleration of income taxes or the imposition of excise taxes.

ARTICLE 5
Amendment and Termination of Plan

     5.1 Amendment or Termination of Plan. The Company may, at any time, direct the Administrator to amend or terminate the Plan and/or demand repayment of the Cumulative Company Loan from any Class A Participant, except that any amendment or termination of the Plan which would reduce the rights of a Participant under the Plan or the Policy without the

7

written consent of the Participant shall be treated, solely for the purpose of this Plan, as a Termination of Employment other than by reason of Retirement, Disability or death and the Participant shall have the rights specified in Sections 3.6 and 4.6 as applicable under the same terms and conditions as if the Participant had experienced a Termination of Employment as of the date of such Plan termination. The Company shall not, with or without the written consent of the Participant, terminate or amend the Plan in any manner which would violate the provisions of IRC Section 409A, or any other applicable laws.

ARTICLE 6
Beneficiaries

     6.1 Beneficiary Designation. The Participant shall have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall be effective when it is submitted in writing to and acknowledged by the Administrator during the Participant’s lifetime on a form prescribed by the Administrator.

     6.2 Revision of Designation. The submission of a new Beneficiary designation shall cancel all prior Beneficiary designations. Unless the Participant has made an irrevocable designation or assignment, any finalized divorce or marriage (other than a common law marriage) of a Participant subsequent to the date of a Beneficiary designation shall revoke such Executive’s Beneficiary designation, unless in the case of divorce, the previous spouse was not designated as Beneficiary and unless in the case of marriage, the new spouse has previously been designated as Beneficiary.

     6.3 Absence of Valid Designation. If the Participant fails to designate a Beneficiary as provided above, or if the Beneficiary designation is revoked by marriage, divorce, or otherwise without execution of a new designation, or if every person designated as Beneficiary dies prior to complete distribution of the Policy proceeds, then the Administrator shall direct the distribution of such benefits to the Participant’s estate or, in the case of assignment, to the assignee.

ARTICLE 7
Administration/Claims Procedures

     7.1 Administration. The Plan will be administered by the Administrator, which shall have the exclusive right and full discretion (i) to interpret the Plan, (ii) to decide any and all matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or admissions), (iii) to delegate responsibility to agents or service providers, (iv) to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan and (v) to make all other determinations necessary or advisable for the administration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of the Administrator with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member of the Administrator shall be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify and hold harmless the members of the Administrator from and against any and all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission, in connection

8

with the performance of such persons’ duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

     7.2 Notice of Right to Claim Benefits. The Administrator shall be the “named fiduciary” and the Administrator or its appointed agent shall notify the Participant and, where appropriate, the Beneficiary, of a right to claim benefits under the Plan, shall make forms available for filing of such claims, and shall provide the name of the person or persons with whom such claim should be filed.

     7.3 Claims Procedures. Any Participant, former Participant or Beneficiary may file a written claim with the Administrative Committee setting forth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement to such benefit. The Administrative Committee shall determine the validity of the claim and communicate a decision to the claimant promptly and, in any event, not later than ninety (90) days after receipt of the claim by the Administrative Committee. The claim may be deemed by the claimant to have been approved in the event a decision is not furnished to the claimant within such ninety (90) day period. If additional information is necessary to make a determination on a claim, the claimant shall be advised of the need for such additional information within forty-five (45) days after the date of the claim. The claimant shall have up to one hundred eighty (180) days to supplement the claim information, and the claimant shall be advised of the decision on the claim within forty-five (45) days after the earlier of the date the supplemental information is supplied or the end of the one hundred eighty (180) day period. Every claim for benefits which is denied shall be denied by written notice setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the denial, (ii) specific reference to any provisions of the Plan (including any internal rules, guidelines, protocols, criteria, etc.) on which the denial is based, (iii) description of any additional material or information that is necessary to process the claim, and (iv) an explanation of the procedure for further reviewing the denial of the claim (including applicable time limits and a statement of the claimant’s right submit the claim to binding arbitration following an adverse determination on review).

     7.4 Review Procedures. Within sixty (60) days after the receipt of a denial on a claim, a claimant or his/her authorized representative may file a written request for review of such denial. Such review shall be undertaken by the Administrative Committee and shall be a full and fair review. The claimant shall have the right to review all pertinent documents. The Administrative Committee shall issue a decision not later than sixty (60) days after the receipt of a request for review from a claimant unless special circumstances, such as the need to hold a hearing, require a longer period of time, in which case a decision shall be rendered as soon as possible but not later than one hundred twenty (120) days after the receipt of the claimant’s request for review. The decision on review shall be in writing and shall include specific reasons for the decision written in a manner calculated to be understood by the claimant with specific reference to any provisions of the Plan on which the decision is based.

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ARTICLE 8
Miscellaneous

     8.1 Successors of the Company. The rights and obligations of the Company and any Participating Affiliate under the Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company or such Participating Affiliate.

     8.2 Adoption by Participating Affiliates. The Administrator may authorize any subsidiary or affiliate of the Company to adopt the Plan and become a Participating Affiliate. In order to become a Participating Affiliate, such entity shall deliver to the Administrator a corporate resolution evidencing adoption of the Plan by the Board of Directors of the Participating Affiliate. Each Participating Affiliate, by adopting the Plan agrees to comply with any requirements of the Administrator with respect to administration of the plan and authorizes the Administrator and/or The Sherwin-Williams Company to act as its agent in all transactions in which the Administrator believes such agency will facilitate administration of the Plan including amendment or termination of the Plan. A Participating Affiliate may independently terminate its participation in the Plan under the same terms and conditions provided in Article 5.

     8.3 Tax Liability and Withholding. The Participant shall make appropriate arrangements with the Administrator for satisfaction of any federal, state or local income tax withholding requirements and Social Security or other employee tax requirements applicable to the provision or payment of benefits under the Plan. If no other arrangements are made, the Administrator may provide, at its discretion, for such withholding and tax payments as may be required through the reduction of other amounts payable to the Participant.

     8.4 Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to continued employment with the Company or any Participating Affiliate.

     8.5 Gender, Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.

     8.6 Captions. The captions of the articles and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

     8.7 Validity. In the event any provision of the Plan is held invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provisions of the Plan.

     8.8 Waiver of Breach. The waiver by the Company of any breach of any provision of the Plan shall not operate or be construed as a waiver of any subsequent breach by the Participant.

     8.9 Notice. Any notice or filing required or permitted to be given to the Company or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent

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by registered or certified mail, in the case of the Company or a Participating Affiliate, to the principal office of the Company, directed to the attention of the Administrator, and in the case of the Participant, to the last known address of the Participant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

     8.10 Notice to Insurance Company. The Administrator shall be responsible for notifying the life insurance company which issues the Policy of any changes in the ownership rights and interests of the Participant and the Company and of any changes in the Beneficiary to receive death benefits under the Policy, and the life insurance company shall be entitled to rely upon such notification received from the Administrator.

     8.11 ERISA Plan. The Plan is intended to qualify as a welfare benefit plan covered by Title I of ERISA. To the extent any part of the Plan is determined to constitute pension or deferred compensation benefits, such benefits shall at all times remain unfunded, unsecured benefits maintained primarily for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA.

     8.12 Applicable Law. In the event any provision of, or legal issue relating to, this Plan is not fully preempted by ERISA, such issue or provision shall be governed by the laws of the State of Ohio.

     8.13 Arbitration. Any claim, dispute or other matter in question of any kind relating to this Plan which is not resolved by the claims procedures hereunder shall be settled by arbitration in accordance with the applicable Employment Dispute Resolution Rules of the American Arbitration Association in the state of Ohio. Notice of demand for arbitration shall be made in writing to the opposing party and to the American Arbitration Association within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall a demand for arbitration be made after the date when the applicable statute of limitations would bar the institution of a legal or equitable proceeding based on such claim, dispute or other matter in question. The decision of the arbitrators shall be final and may be enforced in any court of competent jurisdiction. The arbitrators may award reasonable fees and expenses to the prevailing party in any dispute hereunder and shall award reasonable fees and expenses in the event that the arbitrators find that the losing party acted in bad faith or with intent to harass, hinder or delay the prevailing party in the exercise of its rights in connection with the matter under dispute.

          IN WITNESS WHEREOF, the Company has caused this Plan to be executed this 10th day of December, 2008.

THE SHERWIN-WILLIAMS COMPANY
By:	/s/ Thomas E. Hopkins
	Its: Senior Vice President — Human Resources

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SCHEDULE A

TARGET DEATH BENEFIT

SWMIP Level	Pre-Retirement	Post Retirement
I	1.5 X Base Salary	0.75 X Base Salary
II	3.0 X Base Salary	1.75 X Base Salary
III	3.5 X Base Salary	2.0 X Base Salary
IV	4.0 X Base Salary	2.5 X Base Salary
V	4.0 X Base Salary	2.5 X Base Salary

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EX-13

Exhibit 13

FINANCIAL HIGHLIGHTS

(thousands of dollars except per common share data)	2009			2008			2007
Net sales	$	7,094,249		$	7,979,727		$	8,005,292
Net income	$	435,848		$	476,876		$	615,578
Per common share:
Net income — diluted	$	3.78		$	4.00		$	4.70
Net income — basic	$	3.84		$	4.08		$	4.84
Cash dividends	$	1.42		$	1.40		$	1.26
Book value	$	13.62		$	13.72		$	14.54
Average common shares outstanding (thousands)		113,514			116,835			127,222
Return on sales		6.1	%		6.0	%		7.7	%
Return on assets		10.1	%		10.8	%		12.7	%
Return on beginning shareholders’ equity		27.1	%		26.7	%		30.9	%
Total debt to capitalization		35.4	%		34.2	%		35.1	%
Interest coverage (1)		16.6	x		11.9	x		13.7	x
Net operating cash	$	859,186		$	876,233		$	874,545

(1) Ratio of income before income taxes and interest expense to interest expense.

ON THE COVER:

Our “Cover The Earth” logo is shown on a brass medallion, just one of the hundreds of company artifacts on display at the Sherwin-Williams Center of Excellence. The 6,000 square foot archive in Cleveland contains seven three-dimensional multimedia exhibit areas chronicling the company’s 144-year history.

TABLE OF CONTENTS

Letter to Shareholders	1
Paint Stores Group	5
Consumer Group	6
Global Finishes Group	7
Strength In Numbers	8
Stores/Branches/Subsidiaries	10
Financial Performance	11

The Sherwin-Williams Company is an equal opportunity employer that recruits, selects and hires on the basis of individual qualifications and prohibits unlawful discrimination based on race, color, religion, sex, national origin, protected veteran status, disability, age, sexual orientation or any other consideration made unlawful by federal, state or local laws.

2009 WAS A VERY CHALLENGING YEAR for The Sherwin-Williams Company. U.S . architectural paint industry volume plunged more than 11 percent in the year and total coatings industry shipments, including protective and marine coatings and finishes used in manufacturing, fell even more. Domestic new construction activity continued to spiral downward while commercial vacancy rates and residential foreclosures continued to rise. Conditions in most markets outside the U.S. were only marginally better.

     As a result of these difficult market conditions, our results declined for the second consecutive year. Consolidated net sales finished the year at $7.09 billion, down $885 million, or 11.1 percent, from the prior year. Net income declined 8.6 percent to $435.8 million and diluted net income per common share declined 5.5 percent to $3.78 per share from $4.00 per share in 2008.

     Although we are disappointed by the decline in sales and earnings, we made steady improvement over the course of the year, and we ended on a relatively positive note in the fourth quarter. Earnings per share in the second half of 2009 improved by $.42 compared to the first half, and surpassed second half 2008 earnings per share by $.17.

     This positive trend was a function of two noteworthy factors. First, a moderation in the rate of year-over-year sales declines in the second half and particularly in the fourth quarter. Second, the hard work our people have done all year long to manage expenses, improve margins and reduce working capital. Consolidated gross margin rebounded 220 basis points from the prior year’s depressed level finishing the year at 46 percent of sales. Selling, general and administrative expenses for the year declined $108.8 million.

     For the fourth consecutive year, our net operating cash topped 10 percent of net sales. Cash from operations came in at $859.2 million, more than 12 percent of sales. The significant reductions in accounts receivable and inventory we achieved during the year, partially offset by a decrease in accounts payable, added $172 million to net operating cash. Our year-end accounts receivable plus inventories less accounts payable to sales ratio decreased to 10.7 percent in 2009 from 11.2 percent in 2008. Free cash flow for the year, which is net operating cash minus capital expenditures and dividends, increased by approximately $12 million to an all-time high of $605 million.

Free cash flow for the year increased by approximately $12 million to an all-time high of $605 million.

     We continued our long-standing practice of returning a portion of the cash we generate to our shareholders through treasury stock purchases and dividends. In 2009, we acquired 9 million shares of the company’s stock for treasury for a total investment of $530 million. At year-end, our remaining share repurchase authorization stood at 10.75 million shares. We also increased our annual dividend two cents to $1.42, keeping our string of 31 consecutive years of increased dividends intact.

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     In December, we issued $500 million in five-year bonds at a coupon rate of 3.125 percent; the second lowest rate paid on five-year notes in 2009 and the 14th lowest in history for “A” rated companies. Early in 2010, we entered into a new three-year, $500 million credit agreement that we will use to finance working capital requirements and to support commercial paper borrowings. This agreement includes a provision to increase the size of the facility, subject to the discretion of each lender, up to an aggregate amount of $750 million. These two measures enhanced our liquidity and affirmed the confidence lenders have in the financial strength of the Company.

     Across all divisions in 2009 we recruited 530 high caliber people into our respected Management Training Program and invested more than $100 million in research, development and commercialization of new product technologies. We are confident these investments will benefit the company in the near term and deliver appropriate returns in the long term.

PAINT STORES GROUP

     Net sales for our Paint Stores Group finished the year at $4.21 billion, a decline of 12.9 percent from 2008. Segment profit decreased 7.4 percent to $600.2 million, but increased as a percent of sales to 14.3 percent from 13.4 percent in 2008. The improvement in profit margin was primarily a result of higher gross margin and lower SG&A expense and impairment charges.

Sherwin-Williams leads the industry in the sale of environmentally favorable paints and coatings.

     Throughout the year, our Paint Stores Group continued to suffer the brunt of this deep, protracted recession due to our heavy mix of sales to professional painting contractors. Industry-wide coating sales to professional painters declined more sharply than sales to do-it-yourself homeowners in 2009 for two reasons. First, because the hardest hit end markets—new residential and commercial construction —are painted exclusively by professionals. Second, cautious homeowners were understandably hesitant to hire contractors to do work they believe they can do themselves.

     Because we continue to believe the professional painter will be the fastest growing customer segment in the coatings market over the longer term, and pros prefer to shop at specialty paint stores for supplies and equipment, we continued to invest in new store locations in 2009. During the year we opened 53 stores in new markets and consolidated an additional 45 redundant store locations, for a net increase of eight new stores for the year. Our store count in the U.S., Canada and the Caribbean now stands at 3,354.

     Architects, builders, designers and consumers have fully embraced the “green building” movement, and Sherwin-Williams leads the industry in the sale of environmentally favorable paints and coatings. Our Paint Stores Group markets a broad line of low-VOC architectural paints and light industrial coatings, such as Harmony^®, ProGreen™ 200, Pro Industrial 0 VOC, Pro Industrial Pro-Cryl^® Universal Primer, PrepRite^® Block Filler and ProSelect^® Stampede Polyurethane Sealant. These products not only satisfy our own GreenSure™ standards for minimizing environmental impact, but have also earned GreenGuard Indoor Air Quality Certified^® and GreenGuard for Children and Schools^® certification.

CONSUMER GROUP

     Our Consumer Group fulfills a dual mission for the Company—supplying branded and private label products to retailers throughout North America and supporting our Paint Stores Group with new product research and development, manufacturing, distribution and logistics. The group operates 25 manufacturing plants and six distribution centers in North America and maintains the largest, most advanced research and development facility of its kind in the world.

     External net sales for our Consumer Group declined 3.7 percent to $1.23 billion for the year, primarily as a result of weak end market demand across most of the group’s retail customers. Segment profit for the year increased 12.2 percent to $157.4 million and segment profit margin improved to 12.8 percent from 11.0 percent in 2008. The improvement in Consumer Group’s profitability was due primarily to good expense control, reduced asset impairment charges, and favorable freight and other distribution costs that were only partially offset by higher per-unit fixed costs due to reduced manufacturing and distribution volume.

     In response to the continued deterioration in sales volume in North America, Consumer Group took some bold and difficult steps to protect the Company’s profitability. During the year we closed or idled an additional four

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manufacturing facilities and five distribution service centers. Many of the employees affected by these decisions were long-time members of the Sherwin-Williams family who made significant contributions to our success over their many years of service. We thank them for their hard work and dedication. The Group also accelerated the development of many Six Sigma and Lean Continuous Improvement initiatives, which resulted in a 22 percent increase in Operational Excellence savings from 2008 to 2009, marking our eighth consecutive year of increased savings from our OPEX initiative.

     In 2009, four of our manufacturing plants and one distribution facility earned the Occupational Safety & Health Administration’s (OSHA) prestigious Voluntary Protection Program (VPP) certification. VPP status is granted to facilities that implement comprehensive worksite safety and health management systems and measure results against specific performance criteria. In total, Sherwin-Williams operates 23 OSHA VPP certified facilities, more than any other paint manufacturer in North America. Less than one-tenth of one percent of all work sites in America qualify as OSHA VPP sites.

     We have a long history of developing innovative new coatings products that address real consumer needs. In 2009, we introduced the Purdy^® EcoPro™ line of applicators made from recycled and renewable materials, including brushes, roller covers and the first ever biodegradable paint tray. We launched a new line of high-performance lubricants, cleaners and coating removers made with biodegradable, renewable resources under the Sprayon^® Eco-Grade™ brand. We extended our successful Krylon^® Fusion paint for plastic line with the introduction of Krylon^® Fusion Brush-On, the first brush-on paint for plastic. Our new Dutch Boy^® Refresh™ interior paint with Arm & Hammer^® odor-eliminating technology earned GreenGuard Indoor Air Quality Certified^® status.

GLOBAL FINISHES GROUP

     Net sales for our Global Finishes Group decreased 11.4 percent to $1.65 billion. Currency translation rate changes before acquisitions reduced sales in U.S. dollars by 4.8 percent and acquisitions increased the group’s sales in U.S. dollars by 1.5 percent. Segment operating profit for the full year decreased $87.2 million, or 57.3 percent, to $65 million, primarily as a result of reduced sales volume and impairment charges and the loss on dissolution of a foreign subsidiary totaling $25 million that were partially offset by lower SG&A expenses. Currency translation and acquisitions reduced segment profit $5.9 million for the year. As a percent of net sales, Global Finishes Group’s operating profit decreased to 3.9 percent for the year from 8.2 percent in 2008.

Over the past 10 years, our shareholders have enjoyed an average annual return, including dividends, of almost 14 percent.

     Global Finishes Group manufactures and sells original equipment manufacturer (OEM) finishes, automotive finishes, protective and marine coatings and architectural coatings to a growing customer base around the world. We go to market through independent retailers, franchisees and distributors as well as through our own company-operated branches. In 2009, we strengthened our well-established operations in Brazil, Argentina, Chile and Mexico, and increased our presence in many emerging, high-growth markets.

     We expanded our controlled distribution platform, opening 10 new company-operated branches in Latin America and three in India. At the same time, we continued to rationalize our industrial coatings controlled distribution platform in North America, closing seven automotive finishes branches, eight product finishes facilities, as well as two manufacturing plants. Global Finishes Group ended the year with 539 branches in operation compared to 541 a year ago.

     We recently completed construction of a new 215,000 square foot factory in Zhaoqing, China to serve our growing business with electronics and furniture manufacturers in South China, and we announced plans to build a new blending facility in Langfang in North China, scheduled to open in June 2010. We now operate five manufacturing plants and six blending facilities in China, Malaysia, Vietnam, the Philippines and Singapore, and research and development centers in China, Vietnam and Malaysia.

BOARD CHANGES

     In July, John M. Stropki, Chairman, President and Chief Executive Officer of Lincoln Electric Holdings, Inc. was elected to our Board of Directors and appointed to the

3

Compensation and Management Development Committee of the Board. John brings a wealth of global manufacturing and management experience to the Board, and we look forward to receiving many years of his valuable insight and counsel.

     In October, Thomas G. Kadien, Senior Vice President, Consumer Packaging and IP Asia, International Paper Company, was elected to our Board of Directors and appointed to the Audit Committee of the Board. Tom’s demonstrated leadership for more than 30 years with International Paper, and his marketing expertise and international management experience, will be a valuable addition to the Board.

     These two appointments bring the total number of board members to 11 and the number of independent directors to 10.

A DECADE OF GROWTH

     For the past decade, I have been privileged to serve as CEO of The Sherwin-Williams Company. During that time, we weathered two difficult recessions, the combined effects of which prompted the Wall Street Journal to declare this time period “America’s Lost Decade.” In many respects it was.

     In 2001, during the first of these recessions, Sherwin-Williams suffered declines in both sales and earnings. We took that setback pretty hard but it served as a rallying cry for our people, and rally they did. In the subsequent six years, our sales grew from $5 billion to $8 billion. Despite the negative impact of the current recession, from 1999 to 2009 our sales grew at an average annual rate of 3.6 percent. During that same timeframe, U.S. coatings industry volume declined at an annual rate of 2.1 percent. Our diluted net income per common share grew at an annual compounded rate of 7.7 percent, from $1.80 per share in 1999 to $3.78 per share in 2009, compared with annual earnings growth of less than 1 percent for the S&P 500. Our shareholders have been rewarded for this growth, enjoying an average annual return, including dividends, of almost 14 percent, compared to the average annual return for the S&P 500 of 2.6 percent, and 2.2 percent for our peer group.

     I believe our success over the past decade stems from a combination of sound strategy and solid execution, both a direct result of attracting and developing high caliber people. Throughout my 27-year career with the Company, I have always been surrounded by very talented men and women. Two such extraordinary talents, John Morikis, Chief Operating Officer, and Sean Hennessy, Chief Financial Officer, celebrated their 25-year anniversaries with Sherwin-Williams in 2009.

OUTLOOK FOR 2010

     We enter 2010 cautiously optimistic that the worst of the global recession is behind us. At the same time, we acknowledge that economic recovery may be slow and erratic, and coatings demand in many end markets will likely remain weak.

     Over the past three years, we have worked hard to make Sherwin-Williams a leaner, financially stronger and more profitable company. We have fine-tuned our capital structure, tightly managed fixed costs and SG&A expense, reduced inventories and expanded our distribution platform domestically and abroad. These actions, along with our continued focus on serving a diverse and increasingly global customer base, have positioned us to perform well through the balance of this recession and outperform in a recovery. We are confident that 2010 will be a year of improvement for the Company.

     On behalf of the men and women of The Sherwin-Williams Company around the world, we offer our thanks and appreciation to our customers, suppliers and shareholders for their continued trust and confidence.

 

Christopher M. Connor 

Chairman and Chief Executive Officer 

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SHERWIN-WILLIAMS PAINT STORES are the exclusive outlets for Sherwin-Williams^® branded paints, stains, painting tools and equipment. In 2009, the Paint Stores Group recorded sales of $4.21 billion (about 59 percent of total Company sales) and generated $600 million in segment profit.

     Through our 3,354 company-operated stores, we serve a diverse customer base that includes architectural and industrial painting contractors, residential and commercial builders, property owners and managers, OEM product finishers and do-it-yourself homeowners.

     Our stores platform gives us a distinct competitive advantage by providing more opportunities to interact directly with the end users of our products. Ongoing customer dialog is both a powerful feedback loop, enabling us to respond immediately to customer needs and complaints, and a wellspring for new product and service ideas.

     Most of our new product development efforts focus on enhancing the finished appearance of our products, improving durability and shortening application time and effort. We offer the broadest line of high-performance, low-VOC architectural paints in the industry to help our customers comply with increasingly stringent air quality regulations.

     Six of our products — Harmony^®, ProGreen™ 200, Pro Industrial 0 VOC, Pro Industrial Pro-Cryl^® Universal Primer, PrepRite^® Block Filler and ProSelect^® Stampede Polyurethane Sealant — are now GreenGuard Indoor Air Quality Certified^® and GreenGuard for Children & Schools^® by the GreenGuard Environmental Institute, an independent, third-party indoor air quality agency. In 2009, we introduced a new line of primers and a new merchandiser designed to simplify the decision-making process.

     Color continues to be an integral part of our marketing efforts. As part of a joint promotional partnership with Robert Allen, a company recognized by the design community as a source for the world’s finest fabrics, we opened a new color studio in the heart of Manhattan to increase our visibility with residential designers who specify colors and paint products. Our new ColorSnap^® iPhone application matches colors from the Sherwin-Williams palette to photos taken from an iPhone. It even locates the closest Sherwin-Williams store and provides turn-by-turn directions to get there. ColorSnap^® was named one of Advertising Age’s Top 10 Branded Applications of the Decade. Inter-brand, the world’s largest brand consultancy, also named Sherwin-Williams^® one of the most valuable U.S. brands in 2009.

PRODUCTS SOLD:

Paints, stains, coatings, caulks, applicators, wall-coverings, floorcoverings, spray equipment and related products

MARKETS SERVED:

Do-It-Yourselfers, professional painting contractors, home builders, property managers, architects, interior designers, industrial, marine, flooring and original equipment (OEM) product finishers

MAJOR BRANDS SOLD:

Sherwin-Williams^®, ProMar^®, SuperPaint^®, A-100^®, Duron^®, MAB^™, PrepRite^®, Duration^®, ProGreen^®, Harmony^®, ProClassic ^®, WoodScapes^®, DeckScapes^®, Cashmere^®, Classic 99^® and Columbia^™

OUTLETS:

3,354 Sherwin-Williams stores in the United States, Canada, Jamaica, Puerto Rico, St. Maarten, Trinidad and Tobago and the Virgin Islands

5

CONSUMER GROUP CONTRIBUTES to the success of Sherwin-Williams in two important ways: by selling one of the industry’s strongest portfolios of branded and private label products through retailers across North America and by running one of the industry’s most efficient and productive research and development, manufacturing and distribution operations.

     In 2009, the Consumer Group recorded net sales of $1.23 billion (about 17 percent of total Company sales) and generated more than $157 million in segment profit.

     We supply well-known national brand and private label products to a majority of retail paint and coatings outlets in the United States. Brands like Purdy^® paint brushes and rollers, Dutch Boy^® and Pratt & Lambert^® paints, Minwax^® stains and varnishes, Krylon^® aerosol paints, Thompson’s^® WaterSeal^® wood sealers and Dupli-Color^® automotive specialty products lead their respective categories in consumer awareness, perceived value and, in many cases, market share.

     Consumer Group supports our Paint Stores Group with new product research and development, manufacturing, distribution and logistics. In 2009, our Garland, Texas plant celebrated the production of its 1 billionth gallon of paint. We also supply private label products and licensed brand programs to many of the country’s largest retailers, including home centers, mass merchandisers, industrial and construction supply centers, craft stores, independent paint stores and automotive aftermarket retailers. Two out of every three paint and coatings outlets nationwide stock one or more of the branded or private label product lines sold by our Consumer Group.

     Several product advances were made in 2009. We introduced the Purdy^® EcoPro™ line of applicators made from recycled and renewable materials, including brushes and roller covers. We launched a new line of Sprayon^® Eco-Grade™ high-performance lubricants, cleaners and coating removers made with biodegradable, renewable resources. Our new Dutch Boy^® Refresh™ interior paint with Arm & Hammer^® odor-eliminating technology earned Green-Guard Indoor Air Quality Certified^® status.

     In the fall of 2009, the Better Homes and Gardens™ “Editors’ Choice Paint Colors” palette was rolled out to 3,400 Walmart stores nationwide featuring 160 inviting colors available exclusively in Dutch Boy^® paint. Created to help simplify the color selection and decorating process, the palette features oversized color chips, color family brochures and a range of coordinating decorative products, including window treatments, bedding and bath products.

PRODUCTS SOLD:

Branded, private label and licensed brand paints, stains, varnishes, industrial products, wood finishing products, wood preservatives, applicators, corrosion inhibitors, aerosols and related products

MARKETS SERVED:

Do-It-Yourselfers, professional painting contractors, industrial maintenance and flooring contractors

MAJOR BRANDS SOLD:

Dutch Boy^®, Krylon^®, Minwax^®, Cuprinol^®, Thompson’s^® WaterSeal^®, Pratt & Lambert^®, Martin Senour^®, H&C^®, White Lightning^®, Dupli-Color^®, Rubberset^®, Purdy^®, Dobco^™, Bestt Liebco^®, Accurate Dispersions^™, Uniflex^®, VHT^®, Kool Seal^®, Snow Roof^®, Altax^™, Tri- Flow^®, Sprayon^® and Ronseal^™

OUTLETS:

Leading mass merchandisers, home centers, independent paint dealers, hardware stores, automotive retailers and industrial distributors in the United States, Canada, Mexico, Poland and United Kingdom

6

GLOBAL FINISHES GROUP manufactures and sells OEM product finishes, automotive finishes, protective and marine coatings and architectural coatings to a growing customer base in North and South America, Europe and Asia. In 2009, the Group recorded sales of $1.65 billion (about 23 percent of total Company sales) and generated $65 million in segment profit.

     Our product finishes, automotive coatings and protective and marine coatings are sold primarily through a mix of company-operated branches and facilities and wholesale distributors and jobbers around the world. We serve architectural paint customers in markets outside North America through company-operated paint stores, home centers, discount stores and independent paint dealers. During the past year, we opened 10 new company-operated paint stores in Latin America and signed several new dealer and distributor agreements in China and India. At the same time, we continued to rationalize our automotive and product finishes supply chain in North America, closing seven automotive finishes branches, eight product finishes facilities, and two manufacturing plants in the U.S. and Mexico. Global Finishes Group ended the year with 539 branches in operation globally compared to 541 a year ago.

     In these coatings markets, technology can significantly enhance our customers’ productivity and unlock new revenue streams. In 2009, we introduced Express Scratch Repair™, a unique and affordable process for car dealers and collision repair shops to fix small dents, scratches and scrapes in a car’s finish, complementing our industry-leading AWX and HP refinish offerings. We also expanded our line of environmentally friendly protective and marine coatings with ExpressCote HCR, a tank lining system that protects concrete and steel tank interiors from chemicals and solvents at elevated temperatures, Sher-Release Fouling Release System, an effective, nontoxic alternative to conventional antifouling coatings, and Anti-Graffiti Clear Coat, a low VOC coating that requires only a solvent wipe or pressure washer to remove graffiti. And in 2009, we introduced several antimicrobial coatings built on Microban^® technology for finishing the medical equipment and consumer electronic products manufactured by our customers.

     To support the supply of quality product finishes to manufacturers and finishers of furniture, electronics, heavy equipment, wood, composite and metal building products in Asia, the Global Finishes Group completed construction of a new 215,000 square foot factory manufacturing plant in Zhaoqing in South China in 2009, and announced plans to build a new blending facility in Langfang in North China to open in June 2010. We now operate five coatings plants and six blending facilities in China, Malaysia, Vietnam, the Philippines and Singapore, and research and development centers in China, Vietnam and Malaysia.

PRODUCTS SOLD:

Architectural paints, stains, coatings, varnishes, industrial maintenance products, wood finishing products, applicators, aerosols, high performance interior and exterior coatings for the automotive, aviation, fleet and heavy truck markets, OEM product finishes and related products

MARKETS SERVED:

Do-It-Yourselfers, professional painting contractors, independent paint dealers, industrial maintenance, automotive jobbers, automotive wholesale distributors, collision repair facilities, automotive dealerships, fleet owners and refinishers, automotive production shops, body builders, aviation and OEM product finishers

MAJOR BRANDS SOLD:

Sherwin-Williams^®, Dutch Boy^®, Krylon^®, Kem Tone^®, Minwax^®, Thompson’s^® WaterSeal^®, Pratt & Lambert^®, Martin Senour^®, Marson^™, Metalatex^®, Novacor^®, Loxon^®, Colorgin^™, Andina^™, Lazzuril^®, Excelo^®, Napko^™, Baco^®, Planet Color^™, AWX^™, Ultra^™, Ultra-Cure^®, Kem Aqua^®, Sher-Wood^®, Powdura^®, Polane^® , Euronavy^®, Inchem^™ and Sumare^™

OUTLETS:

539 company-operated architectural, automotive, industrial and chemical coatings branches and other operations in the United States, Argentina, Brazil, Canada, Chile, China, India, Malaysia, Mexico, Peru, Philippines, Portugal, Singapore, Uruguay and Vietnam. Distribution in 19 other countries through wholly owned subsidiaries, joint ventures and licensees of technology, trademarks and trade names

7

WORKING CAPITAL TO SALES (percent)

WORKING CAPITAL TO SALES —

Working capital, defined as year-end accounts receivable plus inventories minus accounts payable, decreased in dollars as well as a percent of sales in 2009. Reducing working capital favorably impacts net operating cash. Management expects to maintain control over working capital relative to sales, excluding the impact of any future acquisitions, to maximize net operating cash.

TOTAL DEBT TO CAPITALIZATION (percent)

TOTAL DEBT TO CAPITALIZATION —

Over the past year, the Company maintained a conservative debt to total capitalization ratio while continuing to invest in the business, develop new products and expand into new markets and geographic regions.

NET OPERATING CASH (thousands of dollars)

NET OPERATING CASH — In 2009, net operating cash increased to 12.1% of sales and free cash flow, net operating cash less capital expenditures and dividends, reached an all-time high of $605 million. This cash helped the Company continue to be acquisitive and still return cash to our share-holders in the form of treasury stock purchases and cash dividends.

8

RETURN ON EQUITY
(percent)

RETURN ON EQUITY — Return on equity is based on net income divided by shareholders’ equity at the start of the year. As a measure of our profitability achieved for each dollar invested by our shareholders, the return on equity is indicative of the Company’s ability to maximize shareholder return.

DIVIDENDS PAID
(dollars per comman shares)

DIVIDENDS PAID — On the strength of our net operating cash generation in 2009, we increased our cash dividend per share on common stock for the 31st consecutive year. In a year when aggregate dividends paid by companies in the S&P 500 declined more than 20 percent, continuing this string of uninterrupted dividend increases places us in very exclusive company.

STOCK PURCHASE
(thousands of shares)

STOCK PURCHASE — We believe that Sherwin-Williams’ stock is a good investment and again supported that belief by purchasing shares on the open market in 2009. This stock purchase strategy benefits shareholders by returning their investment at market value and maximizes the ownership value of the remaining outstanding shares.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

THE GRAPH AT RIGHT compares the cumulative five year total shareholder return on Sherwin-Williams common stock with the cumulative five year total return of the companies listed in the Standard & Poor’s (S&P) 500 Stock Index and a peer group of companies selected on a line-of-business basis. The cumulative five year total return assumes $100 was invested on December 31, 2004 in Sherwin-Williams common stock, the S&P 500 and the peer group. The cumulative five year total return, including reinvestment of dividends, represents the cumulative value through December 31, 2009. The “Peer Group” of companies is comprised of the following: Akzo Nobel N.V., BASF Corporation, Ferro Corporation, H.B. Fuller Company, Genuine Parts Company, The Home Depot, Inc., Lowe’s Companies, Inc., Masco Corporation, Newell Rubbermaid Inc., PPG Industries, Inc., RPM International Inc., The Stanley Works, USG Corporation and The Valspar Corporation.

9

FINANCIAL PERFORMANCE

FINANCIAL TABLE OF CONTENTS

Financial Summary	12
Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Reports of Management and the Independent Registered Public Accounting Firm	36
Consolidated Financial Statements and Notes	40
Cautionary Statement Regarding Forward-Looking Information	78
Shareholder Information	79
Corporate Officers and Operating Management	80

11

FINANCIAL SUMMARY

(millions of dollars except as noted and per share data)

	2009			2008			2007			2006			2005
Operations
Net sales	$	7,094		$	7,980		$	8,005		$	7,810		$	7,191
Cost of goods sold		3,831			4,481			4,406			4,395			4,109
Selling, general and administrative expenses		2,535			2,644			2,597			2,512			2,326
Impairments and dissolution		36			55			16			1			23
Interest expense		40			66			72			67			50
Income before income taxes and minority interest		623			714			913			834			656
Net income		436			477			616			576			463
Financial Position
Accounts receivable — net	$	696		$	770		$	871		$	865		$	809
Inventories		738			864			887			825			809
Working capital — net		376			(28	)		(72	)		375			340
Property, plant and equipment — net		819			860			899			829			745
Total assets		4,324			4,416			4,855			4,995			4,369
Long-term debt		783			304			293			292			487
Total debt		818			834			965			875			621
Shareholders’ equity		1,491			1,606			1,786			1,992			1,731
Per Common Share Information
Average shares outstanding (thousands)		113,514			116,835			127,222			133,579			136,817
Book value	$	13.62		$	13.72		$	14.54		$	14.92		$	12.81
Net income — diluted		3.78			4.00			4.70			4.19			3.28
Net income — basic		3.84			4.08			4.84			4.31			3.39
Cash dividends		1.42			1.40			1.26			1.00			.82
Financial Ratios
Return on sales		6.1	%		6.0	%		7.7	%		7.4	%		6.4	%
Asset turnover		1.6	×		1.8	×		1.6	×		1.6	×		1.6	×
Return on assets		10.1	%		10.8	%		12.7	%		11.5	%		10.6	%
Return on equity (1)		27.1	%		26.7	%		30.9	%		33.3	%		28.1	%
Dividend payout ratio (2)		35.5	%		29.8	%		30.1	%		30.5	%		30.1	%
Total debt to capitalization		35.4	%		34.2	%		35.1	%		30.5	%		26.4	%
Current ratio		1.3			1.0			1.0			1.2			1.2
Interest coverage (3)		16.6	×		11.9	×		13.7	×		13.4	×		14.2	×
Net working capital to sales		5.3	%		(0.3	)%		(0.9	)%		4.8	%		4.7	%
Effective income tax rate (4)		30.0	%		33.3	%		32.6	%		31.0	%		29.2	%
General
Capital expenditures	$	91		$	117		$	166		$	210		$	143
Total technical expenditures (5)		102			106			102			101			95
Advertising expenditures		218			234			256			281			257
Repairs and maintenance		69			76			73			69			62
Depreciation		145			143			139			123			120
Amortization of intangible assets		26			22			24			23			23
Shareholders of record (total count)		9,151			9,469			9,803			10,173			10,625
Number of employees (total count)		29,220			30,677			31,572			30,767			29,434
Sales per employee (thousands of dollars)	$	243		$	260		$	254		$	254		$	244
Sales per dollar of assets		1.64			1.81			1.65			1.56			1.65

(1)	Based on net income and shareholders’ equity at beginning of year.
(2)	Based on cash dividends per common share and prior year’s diluted net income per common share.
(3)	Ratio of income before income taxes, minority interest and interest expense to interest expense.
(4)	Based on income before income taxes and minority interest.
(5)	See Note 1, page 47 of this report, for a description of technical expenditures.

12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY

     The Sherwin-Williams Company, founded in 1866, and its consolidated wholly owned subsidiaries (collectively, the “Company”) are engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe and Asia. The Company is structured into three reportable operating segments — Paint Stores Group, Consumer Group and Global Finishes Group (collectively, the “Reportable Operating Segments”) — and an Administrative Segment in the same way it is internally organized for assessing performance and making decisions regarding allocation of resources. See pages 5 through 7 and page 10 of this report and Note 19, on pages 75 through 77 of this report, for more information concerning the Reportable Operating Segments.

     The weak U.S. and global economic conditions that affected architectural paint sales volume in 2008 continued to challenge operations in 2009. The decline in architectural paint sales volume expanded into other markets served by the Company, reduced manufacturing volume demand and spread into foreign markets. In respect to the continuing weak U.S. and global economic conditions in 2009, management of the Company reviewed carrying values periodically during the year to ensure the Company’s assets and liabilities were properly valued based on the latest information available on which to base such valuations. Specifically, management performed in-depth reviews to determine that: the collectibles of accounts receivable was properly estimated; current market values of inventories exceeded cost; the quoted and unavailable market values of deferred pension assets were reasonable; fair market values of goodwill and intangible assets were appropriately and reasonably estimated; the useful lives and fair market values of property, plant and equipment were established in relation to the current lower manufacturing and sales demand; adequate impairments of property, plant and equipment and accrual of qualified exit costs were recorded for all closed sites being held for disposal; and all sales allowances, returns, discounts, warranties and complaint allowances were reasonably stated in respect to the current economic conditions and changing business environment. The results of the procedures performed are evident in some categories, such as impairments of intangible assets, and less evident in other categories. For more information concerning management’s periodic reviews conducted in respect to the current economic environment, see the discussion of critical accounting policies and estimates in the following section.

     The Company’s financial condition, liquidity and cash flow remained strong in 2009 in spite of the continuing challenging U.S. and global economic conditions that included significant reductions in demand, increased manufacturing costs related to lower volume throughput, tight credit markets and severe fluctuations in foreign currency rates. Net working capital improved $403.9 million at December 31, 2009 compared to 2008 due primarily to a larger proportional decrease in current liabilities than current assets. Short-term borrowings decreased $493.8 million, and all other current liabilities decreased $49.3 million. Accounts receivable and Inventories were down $199.6 million. The remaining current assets increased $60.5 million due primarily to an increase in cash and cash equivalents of $43.1 million. The Company’s current ratio improved to 1.27 at December 31, 2009 from 0.99 December 31, 2008. Total debt at December 31, 2009 decreased $16.1 million to $817.6 million from $833.7 at December 31, 2008. Total debt increased as a percentage of total capitalization to 35.4 percent from 34.2 percent at the end of 2008. At December 31, 2009, the Company had remaining borrowing ability of $1.60 billion. Net operating cash decreased $17.0 million to $859.2 million in 2009 from $876.2 million in 2008 due primarily to a reduction in net income adjusted for non-cash items of $105.4 million and higher costs incurred for environmental matters and qualified exit costs of $21.3 million partially offset by a reduction in working capital $115.5 million. Net operating cash increased as a percent to sales to 12.1 percent in 2009 compared to 11.0 percent in 2008. Strong Net operating cash provided the funds necessary to complete an acquisition, sustain the Company’s remaining manufacturing and distribution capabilities, maintain its financial stability and return cash to its shareholders through dividends and treasury stock purchases. In 2009, the Company invested $15.4 million in acquisitions, spent $91.3 million in capital additions and improvements, reduced its total debt $16.1 million, purchased $530.4 million in treasury stock, and paid $162.6 million in cash dividends to its shareholders of common stock.

     Results of operations for the Company in 2009 continued to be pressured by a decrease in end-market demand for coatings and other building materials caused by the effects of the expanding global economic downturn and a lingering depressed U.S. housing market. Consolidated net sales decreased 11.1 percent in 2009 to $7.09 billion from $7.98 billion in 2008 due primarily to sales volume declines resulting from continued weak domestic architectural markets and the global economic slowdown that started in the second half of 2008. Net sales in the Paint Stores Group decreased 12.9 percent in the year to $4.21 billion due primarily to continuing weak residential and commercial architectural paint sales volume and lower sales in industrial coatings and non-paint categories that were partially offset by 2008 selling

13

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

price increases. Net sales in the Paint Stores Group from stores open more than twelve calendar months decreased 12.9 percent. Net sales in the Consumer Group decreased 3.7 percent to $1.23 billion due primarily to lower volume sales to most of the Group’s retail customers. Net sales in the Global Finishes Group decreased 11.4 percent in the year to $1.65 billion when stated in U.S. dollars due primarily to lower paint sales volume and unfavorable currency translation rate changes that were partially offset by acquisitions and selling price increases. Global Finishes Group net sales stated in local currencies decreased 6.6 percent in 2009 compared to 2008. Gross profit as a percent of consolidated net sales increased to 46.0 percent in 2009 from 43.8 percent in 2008 due primarily to stabilizing raw material costs and lower freight and other distribution costs partially offset by higher costs related to lower manufactured volume and unfavorable currency translation rates. Selling, general and administrative expenses (S,G&A) decreased $108.8 million dollars in 2009 compared to 2008 due to good expense control across all Reportable Operating Segments. S,G&A increased as a percent of consolidated net sales to 35.7 percent in 2009 as compared to 33.1 percent in 2008 due primarily to the sales decline. Other general expense — net increased $14.3 million due to increased accruals for environmental-related matters. Trademark impairment charges of $14.1 million occurred in 2009 due to the anticipated shortfall in sales of certain domestic and foreign trademarks. Impairments of trademarks and goodwill were $54.6 million in 2008. In 2009, the Company dissolved a European subsidiary resulting in a pre-tax expense of $21,923. The Company restructured other business units to maintain service to the majority of its European customers. Interest expense decreased $25.7 million in 2009 due to lower short-term borrowings and borrowing rates. The effective income tax rate for 2009 was 30.0 percent compared to 33.3 percent in 2008. Diluted net income per common share, including a loss on the dissolution of a foreign subsidiary and impairment charges totaling $0.13 per share in 2009 and impairment charges of $0.31 per share in 2008, decreased 5.5 percent to $3.78 per share for 2009 from $4.00 per share a year ago.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The preparation and fair presentation of the consolidated financial statements, accompanying notes and related financial information included in this report are the responsibility of management. The consolidated financial statements, accompanying notes and related financial information included in this report have been prepared in accordance with U.S. generally accepted accounting principles. The consolidated financial statements contain certain amounts that were based upon management’s best estimates, judgments and assumptions. Management considered the impact of the continuing global economic recession and utilized certain outside economic sources of information when developing the bases for their estimates and assumptions. The impact of the continuing soft global economic conditions on the estimates and assumptions used by management was believed to be reasonable under the circumstances. Management used assumptions based on historical results, considering the current economic trends, and other assumptions to form the basis for determining appropriate carrying values of assets and liabilities that were not readily available from other sources. Actual results could differ from those estimates. Also, materially different amounts may result under materially different conditions, materially different economic trends or from using materially different assumptions. However, management believes that any materially different amounts resulting from materially different conditions or material changes in facts or circumstances are unlikely to significantly impact the current valuation of assets and liabilities that were not readily available from other sources.

     All of the significant accounting policies that were followed in the preparation of the consolidated financial statements are disclosed in Note 1, on pages 44 through 50 of this report. The following procedures and assumptions utilized by management directly impacted many of the reported amounts in the consolidated financial statements.

Non-Traded Investments

     The Company has invested in the U. S. affordable housing and historic renovation real estate markets. These investments have been identified as variable interest entities. However, the Company is not the primary beneficiary and did not consolidate the operations of the investments. The carrying amounts of these non-traded investments, which approximate market value, were determined based on cost less related income tax credits determined by the effective yield method. The Company’s risk of loss from these non-traded investments is limited to the amount of its contributed capital. The Company has no ongoing capital commitments, loan requirements or guarantees with the general partners that would require any future cash contributions other than the contractually committed capital contributions that are disclosed in the contractual obligations table on page 24 of this report. See Note 1, on page 44 of this report, for more information on non-traded investments.

Accounts Receivable

     Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. Provisions for allowances for doubtful collection of accounts, included in Selling, general and administrative expenses,

14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

were based on management’s best judgment and assessment, including an analysis of historical bad debts, a review of the aging of Accounts receivable and a review of the current creditworthiness of customers. Management recorded allowances for such accounts which were believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices, customer satisfaction claims and pricing discrepancies. However, depending on how such potential issues are resolved, or if the financial condition of any of the Company’s customers were to deteriorate and their ability to make required payments became impaired, increases in these allowances may be required. As of December 31, 2009, no individual customer constituted more than 5 percent of Accounts receivable.

Inventories

     Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method based on inventory quantities and costs determined during the fourth quarter. Inventory quantities were adjusted during the fourth quarter as a result of annual physical inventory counts taken at all locations. If inventories accounted for on the LIFO method are reduced on a year-over-year basis, liquidation of certain quantities carried at costs prevailing in prior years occurs. Management recorded the best estimate of net realizable value for obsolete and discontinued inventories based on historical experience and current trends through reductions to inventory cost by recording a provision included in Cost of goods sold. Where management estimated that the reasonable market value was below cost or determined that future demand was lower than current inventory levels, based on historical experience, current and projected market demand, current and projected volume trends and other relevant current and projected factors associated with the weak global market, a reduction in inventory cost to estimated net realizable value was made. See Note 4, on page 51 of this report, for more information regarding the impact of the LIFO inventory valuation.

Purchase Accounting, Goodwill and Intangible Assets

     In accordance with the Business Combinations Topic of the ASC, the Company used the purchase method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed were recognized as Goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. In addition to using management estimates and negotiated amounts, the Company used a variety of information sources to determine the estimated fair values of acquired assets and liabilities including: third-party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment; third-party actuaries for the estimated obligations of defined benefit pension plans and similar benefit obligations; and legal counsel or other experts to assess the obligations associated with legal, environmental and other contingent liabilities. The business and technical judgment of management was used in determining which intangible assets have indefinite lives and in determining the useful lives of finite-lived intangible assets in accordance with the Goodwill and Other Intangibles Topic of the ASC. Effective January 1, 2009, costs incurred in connection with business combinations, such as legal fees, bank fees and valuation fees as well as indirect costs such as recurring internal costs, are no longer capitalized as part of the purchase price and are expensed as incurred.

     As required by the Goodwill and Other Intangibles Topic of the ASC, management performs impairment tests of goodwill and indefinite-lived intangible assets whenever an event occurs or circumstances change that indicate impairment has more likely than not occurred. Also, as required, management performs impairment testing of goodwill and indefinite-lived intangible assets at least annually during the fourth quarter of each year.

     In accordance with the Goodwill and Other Intangibles Topic of the ASC, management tests goodwill for impairment at the reporting unit level. A reporting unit is a reportable operating segment per the Segment Reporting Topic of the ASC or one level below the reportable operating segment (component level) as determined by the availability of discrete financial information that is regularly reviewed by operating segment management or an aggregate of component levels of a reportable operating segment having similar economic characteristics. At the time of goodwill impairment testing, management determines fair value through the use of a discounted cash flow valuation model incorporating discount rates commensurate with the risks involved for each reporting unit. If the calculated fair value is less than the current carrying value, impairment of the reporting unit may exist. The use of a discounted cash flow valuation model to determine estimated fair value is common practice in impairment testing in the absence of available domestic and international transactional market evidence to determine the fair value. The key assumptions used in the discounted cash flow valuation model for impairment testing include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates are set by using the Weighted Average Cost of Capital (“WACC”) methodology. The WACC methodology considers market and industry data as well as Company-specific risk factors for each reporting unit in determining the appropriate discount rates

15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

to be used. The discount rate utilized for each reporting unit is indicative of the return an investor would expect to receive for investing in such a business. Operational management, considering industry and Company-specific historical and projected data, develops growth rates, sales projections and cash flow projections for each reporting unit. Terminal value rate determination follows common methodology of capturing the present value of perpetual cash flow estimates beyond the last projected period assuming a constant WACC and low long-term growth rates. As an indicator that each reporting unit has been valued appropriately through the use of the discounted cash flow valuation model, the aggregate of all reporting units fair value is reconciled to the total market capitalization of the Company. The discounted cash flow valuation methodology and calculations used in 2009 impairment testing are consistent with prior years.

     In accordance with the Goodwill and Other Intangibles Topic of the ASC, management tests indefinite-lived intangible assets for impairment at the asset level, as determined by appropriate asset valuations at acquisition. Management utilizes the royalty savings method and valuation model to determine the estimated fair value for each indefinite-lived intangible asset or trademark. In this method, management estimates the royalty savings arising from the ownership of the intangible asset. The key assumptions used in estimating the royalty savings for impairment testing include discount rates, royalty rates, growth rates, sales projections and terminal value rates. Discount rates used are similar to the rates developed by the WACC methodology considering any differences in Company-specific risk factors between reporting units and trademarks. Royalty rates are established by management and valuation experts and periodically substantiated by valuation experts. Operational management, considering industry and Company-specific historical and projected data, develops growth rates and sales projections for each significant trademark. Terminal value rate determination follows common methodology of capturing the present value of perpetual sales estimates beyond the last projected period assuming a constant WACC and low long-term growth rates. The royalty savings valuation methodology and calculations used in 2009 impairment testing are consistent with prior years.

     The discounted cash flow and royalty savings valuation methodologies require management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ from these assumptions. Management believes the assumptions used are reflective of what a market participant would have used in calculating fair value considering the current economic conditions. See Notes 2 and 5, pages 50 through 53 of this report, for a discussion of businesses acquired, the estimated fair values of goodwill and identifiable intangible assets recorded at acquisition date and reductions in carrying value of goodwill and indefinite-lived intangible assets recorded as a result of impairment tests in accordance with the Goodwill and Other Intangibles Topic of the ASC.

Property, Plant and Equipment and Impairment of Long Lived Assets

     Property, plant and equipment was stated on the basis of cost and depreciated principally on a straight-line basis using industry standards and historical experience to estimate useful lives. In accordance with the Property, Plant and Equipment Topic of the ASC, if events or changes in circumstances indicated that the carrying value of long-lived assets may not be recoverable or the useful life had changed, impairment tests were performed or the useful life was adjusted. Undiscounted future cash flows were used to calculate the recoverable value of long-lived assets to determine if such assets were impaired. Where impairment was identified, management determined fair values for assets using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. Growth models were developed using both industry and company historical results and forecasts. If the usefulness of an asset was determined to be impaired, management estimated a new useful life based on the period of time for projected uses of the asset. Such models and changes in useful life required management to make certain assumptions based upon information available at the time the valuation or determination was performed. Actual results could differ from these assumptions. Management believes the assumptions used are reflective of what a market participant would have used in calculating fair value or useful life considering the current economic conditions. See Notes 5 and 6, on pages 51 through 56 of this report, for a discussion of the reductions in carrying value or useful life of long-lived assets in accordance with the Property, Plant and Equipment Topic of the ASC.

Exit or Disposal Activities

     Management is continually re-evaluating the Company’s operating facilities against its long-term strategic goals. During 2009 and 2008, management revised some of its long-term strategic goals in line with the continuing weak economic conditions and product demand that are expected to exist globally resulting in the shutdown, closure and potential disposition of certain manufacturing and distribution facilities, administrative offices, stores and branches. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC and property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC. Provisions for qualified exit

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

costs are made at the time a facility is no longer operational, include amounts estimated by management and primarily represent post-closure rent expenses, incremental post-closure costs and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. If impairment of property, plant and equipment exists, the carrying value is reduced to fair value estimated by management. Additional impairment may be recorded for subsequent revisions in estimated fair value. See Note 6, on pages 53 through 56 of this report, for information concerning impairment of property, plant and equipment and accrued qualified exit costs.

Other Liabilities

     The Company is self-insured for certain liabilities, primarily worker’s compensation claims, employee medical and disability benefits, and automobile, property, general and product liability claims. Estimated amounts were accrued for certain worker’s compensation, employee medical and disability benefits, automobile and property claims filed but unsettled and estimated claims incurred but not reported based upon management’s estimated aggregate liability for claims incurred using historical experience, actuarial assumptions followed in the insurance industry and actuarially-developed models for estimating certain liabilities. Certain estimated general and product liability claims filed but unsettled were accrued based on management’s best estimate of ultimate settlement or actuarial calculations of potential liability using industry experience and actuarial assumptions developed for similar types of claims.

Defined Benefit Pension and Other Postretirement Benefit Plans

     To determine the Company’s ultimate obligation under its defined benefit pension plans and postretirement benefit plans other than pensions, management must estimate the future cost of benefits and attribute that cost to the time period during which each covered employee works. To determine the obligations of such benefit plans, management uses actuaries to calculate such amounts using key assumptions such as discount rates, inflation, long-term investment returns, mortality, employee turnover, rate of compensation increases and medical and prescription drug costs. Management reviews all of these assumptions on an ongoing basis to ensure that the most current information available is being considered. An increase or decrease in the assumptions or economic events outside management’s control could have a direct impact on the Company’s results of operations or financial condition.

     In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes each plan’s funded status as an asset for over-funded plans and as a liability for unfunded or under-funded plans. Actuarial gains and losses and prior service costs are recognized and recorded in Cumulative other comprehensive loss, a component of Shareholders’ equity. The amounts recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change, and all such amounts will be amortized to expense over a period of years through the net pension and net periodic benefit costs.

     Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised. Prior to July 1, 2009, the contribution was based on six percent of compensation for certain covered employees. Under the revised plan, such participants are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula.

     A reduction in the over-funded status of the Company’s defined benefit pension plans at December 31, 2008, due to the decrease in market value of equity securities held by the plans, increased the future amortization of actuarial losses recognized in Cumulative comprehensive loss. This amortization, combined with the reduction in estimated returns on assets of the plans due to the lower level of asset values, increased net pension costs in 2009. An increase in market value of equity securities held by the plans during 2009 will decrease the future amortization of actuarial losses recognized in Cumulative comprehensive loss, but not enough to offset the full extent of losses experienced in 2008. This amortization, combined with the change in the domestic salaried defined benefit pension plan and the increase in estimated returns on assets of the plans due to the higher level of asset values, will decrease net pension costs in 2010. See Note 7, on pages 57 through 62 of this report, for information concerning the Company’s defined benefit pension plans and postretirement benefit plans other than pensions.

Debt

     The fair values of the Company’s publicly traded long-term debt were based on quoted market prices. The fair values of the Company’s non-traded long-term debt were estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. See Note 1, on page 44 of this report, for the carrying amounts and fair values of the Company’s long-term debt, and Note 8, on pages 62 and 63 of this report, for a description of the Company’s long-term debt arrangements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Environmental Matters

     The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrues for environmental-related activities for which commitments or clean-up plans have been developed and for which costs can be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, actuarial, consulting and law firms. Due to uncertainties surrounding environmental investigations and remediation activities, the Company’s ultimate liability may result in costs that are significantly higher than currently accrued. See pages 22 through 24 and Note 9, on pages 63 through 65 of this report, for information concerning the accrual for extended environmental-related activities and a discussion concerning unaccrued future loss contingencies.

Litigation and Other Contingent Liabilities

     In the course of its business, the Company is subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial and contractual claims. Management believes that the Company has properly accrued for all known liabilities that existed and those where a loss was deemed probable for which a fair value was available or an amount could be reasonably estimated in accordance with all present U.S. generally accepted accounting principles. However, because litigation is inherently subject to many uncertainties and the ultimate result of any present or future litigation is unpredictable, the Company’s ultimate liability may result in costs that are significantly higher than currently accrued. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties involved, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. See pages 26 through 29 of this report and Note 10, on pages 65 through 68 of this report, for information concerning litigation.

     In addition, the Company may be subject to potential liabilities for which a loss was not deemed probable at this time and a fair value was not available or an amount could not be reasonably estimated due to uncertainties involved. See pages 25 and 26 of this report for more information concerning contingent liabilities.

Income Taxes

     The Company estimated income taxes in each jurisdiction that it operated. This involved estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets and possible exposures related to future tax audits. To the extent these estimates change, adjustments to deferred and accrued income taxes will be made in the period in which the changes occur. Effective January 1, 2007, the Company adopted the Income Taxes Topic of the ASC. The Income Taxes Topic of the ASC clarifies the recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. See Note 15, on pages 72 through 74 of this report, for information concerning the Company’s unrecognized tax benefits, interest and penalties and current and deferred tax expense.

Stock-Based Compensation

     The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The Company follows the “modified prospective” method as described in the Topic whereby compensation cost is recognized for all share-based payments granted after December 31, 2005 and for all unvested awards granted prior to January 1, 2006.

     The Company estimates the fair value of all share-based payments using a Black-Scholes-Merton option pricing model which requires management to make estimates for certain assumptions. Management and a consultant continuously review the following significant assumptions: risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. An increase or decrease in the assumptions or economic events outside management’s control could have a direct impact on the Company’s results of operations. See Note 13, on pages 70 and 71 of this report, for more information on stock-based compensation.

Revenue Recognition

     The Company’s revenue was primarily generated from the sale of products. All sales of products were recognized when shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue is reasonably assured at time of sale. Discounts were recorded as a reduction to sales in the same period as the sale resulting in an

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

appropriate net sales amount for the period. Standard sales terms are final and returns or exchanges are not permitted unless expressly stated. Estimated provisions for returns or exchanges, recorded as a reduction resulting in net sales, were established in cases where the right of return existed. The Company offered a variety of programs, primarily to its retail customers, designed to promote sales of its products. Such programs required periodic payments and allowances based on estimated results of specific programs and were recorded as a reduction resulting in net sales. The Company accrued the estimated total payments and allowances associated with each transaction at the time of sale. Additionally, the Company offered programs directly to consumers to promote the sale of its products. Promotions that reduced the ultimate consumer sale prices were recorded as a reduction resulting in net sales at the time the promotional offer was made, generally using estimated redemption and participation levels. The Company continually assesses the adequacy of accruals for customer and consumer promotional program costs earned but not yet paid. To the extent total program payments differ from estimates, adjustments may be necessary. Historically, these total program payments and adjustments have not been material.

FINANCIAL CONDITION, LIQUIDITY AND CASH FLOW

Overview

     The Company’s financial condition, liquidity and cash flow remained strong in 2009 in spite of the continuing challenging U.S. and global economic conditions that included significant reductions in demand, increased manufacturing costs related to lower volume throughput, tight credit markets and severe fluctuations in foreign currency rates. Net working capital improved $403.9 million at December 31, 2009 compared to 2008 due primarily to a larger proportional decrease in current liabilities than current assets. Short-term borrowings decreased $493.8 million, and all other current liabilities decreased $49.3 million. Accounts receivable and Inventories were down $199.6 million. The remaining current assets increased $60.5 million due primarily to an increase in cash and cash equivalents of $43.1 million. The Company’s current ratio improved to 1.27 at December 31, 2009 from 0.99 December 31, 2008. Total debt at December 31, 2009 decreased $16.1 million to $817.6 million from $833.7 at December 31, 2008. Total debt increased as a percentage of total capitalization to 35.4 percent from 34.2 percent at the end of 2008. At December 31, 2009, the Company had remaining borrowing ability of $1.60 billion. Net operating cash decreased $17.0 million to $859.2 million in 2009 from $876.2 million in 2008 due primarily to a reduction in net income adjusted for non-cash items of $105.4 million and higher costs incurred for environmental matters and qualified exit costs of $21.3 million partially offset by a reduction in working capital of $115.5 million. Net operating cash increased as a percent to sales to 12.1 percent in 2009 compared to 11.0 percent in 2008. Strong Net operating cash provided the funds necessary to complete an acquisition, to sustain the Company’s remaining manufacturing and distribution capabilities, maintain its financial stability and return cash to its shareholders through dividends and treasury stock purchases. In 2009, the Company invested $15.4 million in acquisitions, spent $91.3 million in capital additions and improvements, reduced its total debt $16.1 million, purchased $530.4 million in treasury stock, and paid $162.6 million in cash dividends to its shareholders of common stock.

Net Working Capital

     Total current assets less Total current liabilities (net working capital) improved $403.9 million to a surplus of $376.4 million at December 31, 2009 from a deficit of $27.5 million at December 31, 2008. The improvement in net working capital related to a decrease in Total current liabilities of $543.1 million due primarily to a decrease in Short-term borrowings of $493.8 million and Accounts payables of $63.3 million. The Company has sufficient total available borrowing capacity to fund its current operating needs. A corresponding decrease in Total current assets of $139.2 million was due primarily to a reduction in Accounts receivable and Inventories of $199.6 million partially offset by an increase in Cash and cash equivalents of $43.1 million and Deferred income taxes of $23.7 million. The decrease in Total current liabilities that exceeded the decrease in Total current assets caused the Company’s current ratio to improve to 1.27 at December 31, 2009 from 0.99 at December 31, 2008. Accounts receivable as a percent of Net sales increased to 9.8 percent in 2009 from 9.6 percent in 2008 as accounts receivables decreased less than sales. Accounts receivable days outstanding decreased to 53 days in 2009 from 58 days in 2008. In 2009, provisions for allowance for doubtful collection of accounts increased $4.0 million, or 9.8 percent, due to the increased level of uncollectible accounts being realized due to the continuing weak economic conditions. Inventories improved as a percent of Net sales, to 10.4 percent in 2009 from 10.8 percent in 2008, due primarily to good inventory control. Inventory days outstanding decreased to 96 days in 2009 from 104 days in 2008. Accounts payable decreased in 2009 to $674.8 million compared to $738.1 million last year due primarily to reduced material requirements for lower manufactured paint volumes.

Goodwill and Intangible Assets

     Goodwill, which represents the excess of cost over the fair value of net assets acquired in purchase business combinations, increased $8.1 million in 2009 due primarily to $4.1

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

million additional goodwill resulting from acquisitions and other adjustments, primarily currency translation rate changes, of $4.0 million.

     Intangible assets decreased $20.6 million during 2009. Acquired indefinite-lived intangible assets of $3.2 million, finite-lived intangible assets of $2.6 million, $6.9 million of capitalized software costs, and other adjustments of $6.6 million, primarily currency translation rate changes, of $5.0 million were more than offset by impairments of indefinite-lived intangible assets of $14.1 million and amortization of finite-lived intangible assets of $25.7 million. Acquired finite-lived intangible assets included assets such as covenants not to compete, customer lists and product formulations. Costs related to designing, developing, obtaining and implementing internal use software are capitalized and amortized in accordance with the Goodwill and Other Intangibles Topic of the ASC. See Notes 2 and 5, on pages 50 through 53 of this report, for a description of acquired goodwill, identifiable intangible assets and asset impairments recorded in accordance with the Goodwill and Other Intangibles Topic of the ASC and summaries of the remaining carrying values of goodwill and intangible assets.

Deferred Pension Assets

     Deferred pension assets of $245.3 million at December 31, 2009 represent the excess of the fair market value of assets over the actuarially determined projected benefit obligations of the domestic salaried defined benefit pension plan. The increase in Deferred pension assets during 2009 of $29.7 million, from $215.6 million last year, was due primarily to an increase in the fair market value of equity securities held by the salaried defined benefit pension plan. In accordance with the accounting prescribed by the Retirement Benefits Topic of the ASC, the increase in the value of the Deferred pension assets is offset in Cumulative other comprehensive loss and is amortized as a component of Net pension costs over a defined period of pension service. See Note 7, on pages 57 through 62 of this report, for more information concerning the excess fair value of assets over projected benefit obligations of the salaried defined benefit pension plan and the amortization of actuarial gains or losses relating to changes in the excess assets and other actuarial assumptions.

Property, Plant and Equipment

     Net property, plant and equipment decreased $41.4 million to $818.7 million at December 31, 2009 due primarily to depreciation expense of $145.2 million and the disposal of assets with remaining net book value. Capital expenditures of $91.3 million and acquired assets of $3.2 million partially offset the decreases in property, plant and equipment. Capital expenditures during 2009 in the Paint Stores Group were primarily attributable to the opening of new paint stores and improvements in existing stores. In the Consumer Group, capital expenditures during 2009 were primarily related to efficiency improvements and maintenance items in existing production and distribution facilities. Capital expenditures in the Global Finishes Group were primarily attributable to the opening of new branches and improvements in existing manufacturing and distribution facilities. The Administrative segment incurred capital expenditures primarily for upgrading the Company’s headquarters building and information systems hardware. In 2010, the Company expects to spend only slightly more for capital expenditures than in 2009 due to the continuing impact of the global economic decline on market demand. The predominant share of the capital expenditures in 2010 is expected to be for various productivity improvement and maintenance projects at existing manufacturing and distribution facilities, new store openings and new or upgraded information systems hardware. The Company does not anticipate the need for any specific long-term external financing to support these capital expenditures.

Debt

     At December 31, 2009, there were no borrowings outstanding under the domestic commercial paper program. Borrowings outstanding under the domestic commercial paper program were $83.1 million and $299.2 million with weighted-average interest rates of 2.6 percent and 5.5 percent at December 31, 2008 and December 31, 2007, respectively. Borrowings outstanding under various foreign programs at December 31, 2009 were $22.7 million with a weighted-average interest rate of 8.8 percent. At December 31, 2008 and December 31, 2007, foreign borrowings were $33.4 million and $107.9 million with weighted-average interest rates of 9.5 percent and 8.9 percent, respectively. Long-term debt, including the current portion, increased a net $477.6 million during 2009 due primarily to the issuance of $500.0 million of debt securities consisting of 3.125% senior notes, due December 15, 2014, issued on December 16, 2009. There was no change to the Company’s debt ratings of A3 stable by Moody’s Investors Service. The S&P rating remained at A-, but on August 17, 2009 S&P raised the Company’s outlook from negative to stable and on December 16, 2009 S&P changed the outlook again from stable to positive. Fitch Rating Services maintained the Company’s ratings at A with a stable outlook for the period.

     During 2006, the Company entered into a three-year agreement that gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250.0 million. This agreement matured in 2009 and was not renewed.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     During 2006, the Company entered into an additional five-year credit agreement that gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250.0 million. In 2007, the Company entered into two additional five-year credit agreements giving the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $500.0 million. At December 31, 2009, there were no borrowings outstanding under any of these agreements. At December 31, 2008, $400,000 was outstanding with a weighted average interest rate of 2.8 percent. At December 31, 2007, $250,000 was outstanding with a weighted average interest rate of 5.0 percent.

     At December 31, 2009, the Company had an $845.0 million five-year senior unsecured revolving credit agreement. The agreement was amended in 2008 to extend the maturity date from July 20, 2009 to July 20, 2010. A $500.0 million letter of credit subfacility agreement was reduced to $300.0 million in 2008. The Company uses the revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar liquidity requirement. The Company’s commercial paper program maximum borrowing capacity is $845.0 million. Due to the seasonality of the Company’s business and the need for available cash prior to the primary selling season and collecting accounts receivable, the Company expects to continue to issue commercial paper during 2010. There were no borrowings outstanding under the revolving credit agreement at December 31, 2009, 2008 or 2007.

     On January 8, 2010, the Company terminated its existing $845.0 million credit agreement scheduled to expire on July 20, 2010 and entered into a new $500.0 million three-year senior unsecured revolving credit agreement. The new credit agreement allows the Company to increase the facility to an aggregate amount of $750.0 million, subject to the discretion of each lender to participate in such increase. The new credit agreement will mature on January 8, 2013 and provides the Company with the right to request that the lenders extend the maturity date for two additional periods of one year each. This agreement will be used primarily to support commercial paper borrowings. The maximum borrowing capacity of the Company’s commercial paper program was reduced to $500.0 million effective January 8, 2010.

     See Note 8, on pages 62 and 63 of this report, for a detailed description of the Company’s debt outstanding and other available financing programs.

Defined Benefit Pension and Other Postretirement Benefit Plans

     In accordance with the accounting prescribed by the Retirement Benefits Topic of the ASC, the Company’s total liability for unfunded or under-funded defined benefit pension plans decreased $7.2 million to $26.8 million. Postretirement benefits other than pensions increased $35.7 million to $300.5 million at December 31, 2009. The increase in the liability was due to the increase in the actuarially determined postretirement benefit obligation due primarily to changes in the actuarial assumptions and unfavorable claims experience and other demographics.

     Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised. Prior to July 1, 2009, the contribution was based on six percent of compensation for covered employees. Under the revised plan, such participants are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Amounts previously recorded in Cumulative other comprehensive loss in accordance with the provisions of the Retirement Benefits Topic of the ASC were modified in 2009 resulting in a decrease in comprehensive loss due primarily to the change in the domestic salaried defined benefit pension plan and an increase in the excess plan assets over the actuarially calculated projected benefit obligation in the domestic defined benefit pension plans. Partially offsetting this decreased loss were modifications to actuarial assumptions used to calculate projected benefit obligations.

     The assumed discount rate used to determine the actuarial present value of projected defined benefit pension and other postretirement benefit obligations for domestic plans was decreased from 6.1 percent to 5.5 percent at December 31, 2009 due to decreased rates of high-quality, long-term investments and was slightly higher for foreign defined benefit pension plans. The rate of compensation increases used to determine the projected benefit obligations remained at 4.0 percent for domestic pension plans and was slightly lower on most foreign plans. In deciding on the rate of compensation increases, management considered historical Company increases as well as expectations for future increases. The expected long-term rate of return on assets remained at 7.5 percent for 2009 for domestic pension plans and was slightly lower for most foreign plans. In establishing the expected long-term rate of return on plan assets for 2009, management considered the historical rates of return, the nature of investments and an expectation for future investment strategies. The assumed health care cost trend rates used to determine the net periodic benefit cost of postretirement benefits other than pensions for 2009 were 7.5 percent for medical and 9.0 percent for prescription drug cost increases, both decreasing gradually to 5.0 percent in 2014 for prescription drug cost increases and in 2015 for health care. The assumed health care cost trend rates used to determine the benefit obligation at December 31, 2009 were 8.0 percent for medical and 9.0

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

percent for prescription drug cost increases. In developing the assumed health care cost trend rates, management considered industry data, historical Company experience and expectations for future health care costs.

     For 2010 Net pension cost and Net periodic benefit cost recognition for domestic plans, the Company will use a discount rate of 5.5 percent, an expected long-term rate of return on assets of 7.5 percent, a rate of compensation increase of 4.0 percent and cost trend rates of 7.5 percent for health care and 9.0 percent for prescription drug cost increases. Slightly higher discount rates and rates of compensation increases and lower expected long-term rates of return on plan assets will be used for most foreign plans. Use of these assumptions, a change in the domestic salaried defined benefit pension plan, and amortization of actuarial gains will result in a domestic Net pension cost in 2010 that is expected to be approximately $13.8 million lower than in 2009 and a Net periodic benefit cost for postretirement benefits other than pensions that is expected to increase slightly in 2010 compared to 2009. See Note 7, on pages 57 through 62 of this report, for more information on the Company’s obligations and funded status of its defined benefit pension plans and postretirement benefits other than pensions.

Other Long-Term Liabilities

     Other long-term liabilities increased $51.7 million during 2009 due primarily to an increase of $26.2 million in non-current and deferred tax liabilities. Accruals for extended environmental-related liabilities included in Other long-term liabilities increased $22.0 million in 2009. See below and Note 9, on pages 63 through 65 of this report, for further information on environmental-related long-term liabilities.

Environmental-Related Liabilities

     The operations of the Company, like those of other companies in the same industry, are subject to various federal, state and local environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.

     Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business. The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during 2009. Management does not expect that such capital expenditures, depreciation and other expenses will be material to the Company’s financial condition, liquidity, cash flow or results of operations in 2010.

     The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and 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.

     The Company accrues for estimated costs of investigation and remediation activities at its currently or formerly owned sites and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are based on currently available facts regarding each site. The Company accrues a specific estimated amount when such an amount and a time frame in which the costs will be incurred can be reasonably determined. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is accrued by the Company in accordance with applicable accounting rules and interpretations. The Company continuously assesses its potential liability for investigation and remediation activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated. At December 31, 2009, 2008 and 2007, the Company had total current and long-term accruals for environmental-related activities of $170.9 million, $180.7 million and $193.8 million, respectively.

     Due to the uncertainties of the scope and magnitude of contamination and the degree of investigation and remediation activities that may be necessary at certain currently or formerly owned sites and third-party sites, it is reasonably likely that further extensive investigations may be required and that extensive remedial actions may be necessary not only on such sites but on adjacent properties. Depending on the extent of the additional investigations and remedial actions necessary, the Company’s ultimate liability may result in costs

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

that are significantly higher than currently accrued. If the Company’s future loss contingency is ultimately determined to be at the maximum of the range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s aggregate accruals for environmental-related activities would be $99.5 million higher than the accruals at December 31, 2009.

     Four of the Company’s currently and formerly owned sites, described below, accounted for the majority of the accruals for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2009, 2008 and 2007. At December 31, 2009, $129.4 million, or 75.8 percent, of the total accrual for environmental-related activities related directly to these four sites. Of the aggregate unaccrued exposure at December 31, 2009, $60.9 million, or 61.2 percent, related to these four sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and/or monitoring will likely be required at each site.

     Two of the four sites are formerly owned manufacturing facilities in New Jersey that are in various stages of the environmental-related process. Although contamination determined to be associated with historical operations of the Company exists at the sites and adjacent areas, the extent and magnitude of the contamination has not yet been fully quantified, a final remedial action plan has not yet been formulated or no clean up goals have been approved by the lead governmental agency. It is reasonably likely that further extensive investigations may be required or that extensive remedial actions may be necessary at the formerly owned sites, in adjacent areas or along adjacent waterways. Depending on the extent of the additional investigations or remedial actions necessary, the ultimate liability for these sites may exceed the amounts currently accrued and the maximum of the ranges of reasonably possible outcomes currently estimated by management.

     One additional site is located in Illinois. Two previously separate sites for environmental investigation and remediation have been combined due to similar and concurrent activities taking place at the contiguous properties. The environmental issues at this site have been determined to be associated with historical operations of the Company. The majority of the investigative activities have been completed at the site and some remedial measures have been taken. Agreement has been obtained from the appropriate governmental agency on a proposed remedial action plan for a portion of the site, and further development of that plan is underway for the remaining portion of the site. All non-operating structures on the site have been demolished, and a proposed remedial action plan has been formulated for the remaining portion of the site. No clean up goals have been approved by the lead governmental agency. Due to the uncertainties of the scope and magnitude of contamination and the degree of remediation that may be necessary relating to the remaining portion of the site, it is reasonably likely that further investigations may be required and that extensive remedial actions may be necessary.

     The fourth site is a currently owned non-operating former manufacturing site located in California. The environmental issues at this site have been determined to be associated with historical manufacturing operations of the Company. The majority of the investigative activities have been completed at this site, some interim remedial actions have been taken and a proposed remedial action plan has been formulated but currently no clean up goals have been approved by the lead governmental agency. Due to the uncertainties of the scope and magnitude of contamination and the degree of remediation that may be required relating to this site, it is reasonably likely that extensive remedial actions may be necessary.

     Management cannot presently estimate the ultimate potential loss contingencies related to these four sites or other less significant sites until such time as a substantial portion of the investigative activities at each site is completed and remedial action plans are developed.

     In accordance with the Asset Retirement and Environmental Obligations Topic of the ASC, the Company has identified certain conditional asset retirement obligations at various current manufacturing, distribution and store facilities. These obligations relate primarily to asbestos abatement and closures of hazardous waste containment devices. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated cost of these obligations is not significant.

     In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters or conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

     Management expects these contingent environmental-related liabilities and conditional asset retirement obligations to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

governmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.

Contractual Obligations and Commercial Commitments

     The Company has certain obligations and commitments to make future payments under contractual obligations and commercial commitments. The following table summarizes such obligations and commitments as of December 31, 2009:

(thousands of dollars)	Payments Due by Period
			Less than						More than
Contractual Obligations	Total		1 Year		1–3 Years		3–5 Years		5 Years
Long-term debt	$	794,937	$	12,267	$	11,329	$	500,569	$	270,772
Operating leases		1,017,204		225,355		364,555		233,856		193,438
Short-term borrowings		22,674		22,674
Interest on Long-term debt		1,165,440		40,668		74,307		71,142		979,323
Purchase obligations 1		113,707		113,707
Other contractual obligations 2		115,995		53,089		20,960		10,983		30,963
Total contractual cash obligations	$	3,229,957	$	467,760	$	471,151	$	816,550	$	1,474,496

1	Relate to open purchase orders for raw materials at December 31, 2009.
2	Relate primarily to estimated future capital contributions to investments in the U.S. affordable housing and historic renovation real estate partnerships and various other contractural obligations.

	Amount of Commitment Expiration Per Period
			Less than						More than
Commercial Commitments	Total		1 Year		1–3 Years		3–5 Years		5 Years
Standby letters of credit	$	29,786	$	29,786
Surety bonds		49,436		49,436
Other commercial commitments		20,526		20,526
Total commercial commitments	$	99,748	$	99,748	$	—	$	—	$	—

Warranties

     The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the Company’s accrual for product warranty claims during 2009, 2008 and 2007, including customer satisfaction settlements during the year, were as follows:

(thousands of dollars)	2009			2008			2007
Balance at January 1	$	18,029		$	19,596		$	25,226
Charges to expense		31,367			31,339			31,461
Settlements		(27,182	)		(32,906	)		(37,091	)
Balance at December 31	$	22,214		$	18,029		$	19,596

Shareholders’ Equity

     Shareholders’ equity decreased $114.7 million to $1.49 billion at December 31, 2009 from $1.61 billion last year. The decrease in Shareholders’ equity resulted primarily from the purchase of treasury stock for $530.4 million partially offset by an increase in retained earnings of $273.3 million and a decrease in Cumulative other comprehensive loss of $93.2 million. The Company purchased 9.00 million shares of its common stock during 2009 for treasury. The Company acquires its common stock for general corporate purposes and, depending on its cash position and market conditions, it may acquire additional shares in the future. The Company had remaining authorization from its Board of Directors at December 31, 2009 to purchase 10.75 million shares of its common stock. The decrease of $93.2 million in Cumulative other comprehensive loss was due primarily to favorable foreign currency translation effects of $75.6 million attributable to the strengthening of most foreign operations’ functional currencies against the U.S. dollar and the recognition, net of taxes, of $17.2 million in net actuarial gains and prior service costs of defined benefit pension and other post-retirement benefit plans.

     Total increases in Common stock and Other capital of $54.1 million were due primarily to the recognition of stock-based compensation expense, stock option exercises and related income tax effect and the tax impact of certain employee stock ownership plan (ESOP) transactions. In 2009, no changes occurred in Preferred stock and Unearned ESOP compensation as the Company elected to fund the ESOP with cash rather than redeeming Preferred stock. Retained earnings increased $273.3 million during 2009 due to net income of $435.8 million partially offset by $162.6 million in cash dividends paid. The Company’s cash dividend per common share payout target is 30.0 percent of the prior year’s diluted net income per common share. The 2009 annual cash dividend of $1.42 per common share represented 35.5 percent of 2008 diluted net income per common share. The 2009

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

annual dividend represented the thirty-first consecutive year of dividend payments since the dividend was suspended in 1978. At a meeting held on February 17, 2010, the Board of Directors increased the quarterly cash dividend to $0.36 per common share. This quarterly dividend, if approved in each of the remaining quarters of 2010, would result in an annual dividend for 2010 of $1.44 per common share or a 38.1 percent payout of 2009 diluted net income per common share. The Board of Directors considered the increase in the proposed cash dividend payout appropriate, representing a percentage payout of 2009 diluted net income per common share exceeding 30.0 percent, in respect to the Net operating cash achieved by the Company and the reduced impact of the anticipated less severe economic environment on the Company’s earnings. See the Statements of Consolidated Shareholders’ Equity and Comprehensive Income, on page 43 of this report, and Notes 11, 12 and 13, on pages 68 through 71 of this report, for more information concerning Shareholders’ equity.

Cash Flow

     Net operating cash decreased $17.0 million to $859.2 million in 2009 from $876.2 million in 2008, but increased as a percent to sales to 12.1 percent in 2009 from 11.0 percent in 2008, due primarily to a reduction in net income adjusted for non-cash items of $105.4 million and higher costs incurred for environmental matters and qualified exit costs of $21.3 million partially offset by a reduction in working capital of $115.5 million. Net income adjusted for non-cash items was negatively impacted by a reduction in Net income of $41.0 million and a reduction in Deferred income taxes and the Income tax effect of ESOP of $83.0 million, and favorably impacted by increased provisions for environmental-related matters and qualified exist costs of $27.5 million. The reductions in tax items were primarily due to fluctuations in temporary tax differences. Strong Net operating cash provided the funds necessary to support the Company’s acquisition, sustain its remaining manufacturing and distribution capabilities, maintain its financial stability and return a portion of the cash generated to its shareholders through dividends and treasury stock purchases. In 2009, the Company invested $15.4 million in acquisitions, spent $91.3 million in capital additions and improvements, reduced its total debt $16.1 million, purchased $530.4 million in treasury stock, and paid $162.6 million in cash dividends to its shareholders of common stock.

     Management considers a measurement of cash flow that is not in accordance with U. S. generally accepted accounting principles to be a useful tool in determining the discretionary portion of the Company’s Net operating cash. Management reduces Net operating cash, as shown in the Statements of Consolidated Cash Flows, by the amount reinvested in the business for Capital expenditures and the return of investment to its shareholders by the payments of cash dividends. The resulting value is referred to by management as “Free Cash Flow” which may not be comparable to values considered by other entities using the same terminology. The reader is cautioned that the following value should not be compared to other entities unknowingly. The amount shown below should not be considered an alternative to Net operating cash or other cash flow amounts provided in accordance with U. S. generally accepted accounting principles disclosed in the Statements of Consolidated Cash Flows, on page 42 of this report. Free Cash Flow as defined and used by management is determined as follows:

(thousands of dollars)	2009			2008			2007
Net operating cash	$	859,186		$	876,233		$	874,545
Capital expenditures		(91,328	)		(117,203	)		(165,870	)
Cash dividends		(162,561	)		(165,111	)		(162,301	)
Free cash flow	$	605,297		$	593,919		$	546,374

Contingent Liabilities

     Life Shield Engineered Systems, LLC (Life Shield) is a wholly owned subsidiary of the Company. Life Shield develops and manufactures blast and fragment mitigating systems and ballistic resistant systems. The blast and fragment mitigating systems and ballistic resistant systems create a potentially higher level of product liability for the Company (as an owner of and raw material supplier to Life Shield and as the exclusive distributor of Life Shield’s systems) than is normally associated with coatings and related products currently manufactured, distributed and sold by the Company.

     Certain of Life Shield’s technology has been designated as Qualified Anti-Terrorism Technology and granted a Designation under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act) and the regulations adopted pursuant to the SAFETY Act. Under the SAFETY Act, the potentially higher level of possible product liability for Life Shield relating to the technology granted the Designation is limited to $6.0 million per occurrence in the event any such liability arises from an Act of Terrorism (as defined in the SAFETY Act). The limitation of liability provided for under the SAFETY Act does not apply to any technology not granted a designation or certification as a Qualified Anti-Terrorism Technology, nor in the event that any such liability arises from an act or event other than an Act of Terrorism. Life Shield maintains insurance for liabilities up to the $6.0 million per occurrence limitation caused by failure of its products in the event of an Act of Terrorism. This commercial insurance is also expected to cover product liability claims asserted against the Company as the distributor of Life Shield’s systems. The Company expects to seek

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Designation and Certification under the SAFETY Act for certain products supplied by the Company to Life Shield.

     Management of the Company has reviewed the potential increased liabilities associated with Life Shield’s systems and determined that potential liabilities arising from an Act of Terrorism that could ultimately affect the Company will be appropriately insured or limited by current regulations. However, due to the uncertainties involved in the future development, usage and application of Life Shield’s systems, the number or nature of possible future claims and legal proceedings, or the affect that any change in legislation and/ or administrative regulations may have on the limitations of potential liabilities, management cannot reasonably determine the scope or amount of any potential costs and liabilities for the Company related to Life Shield or to Life Shield’s systems. Any potential liability for the Company that may result from Life Shield or Life Shield’s systems cannot reasonably be estimated. However, based upon, among other things, the limitation of liability under the SAFETY Act in the event of an Act of Terrorism, management does not currently believe that the costs or potential liability ultimately determined to be attributable to the Company through its ownership of Life Shield, as a supplier to Life Shield or as a distributor of Life Shield’s systems arising from the use of Life Shield’s systems will have a material adverse effect on the Company’s results of operations, liquidity or financial conditions.

Litigation

     In the course of its business, the Company is subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred if even the possibility may be remote.

     Lead pigment and lead-based paint litigation. The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs are seeking recovery based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company is also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints which seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

     Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings, such as the jury verdict against the Company and other defendants in the State of Rhode Island action and the Wisconsin State Supreme Court’s determination that Wisconsin’s risk contribution theory may apply in the lead pigment litigation (both discussed in more detail below), or determinations of liability, among other factors, could affect the lead pigment

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. (The jury verdict in the State of Rhode Island action was subsequently reversed by the Rhode Island Supreme Court.) In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

     Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. Any potential liability that may result from such litigation or such legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

     Rhode Island lead pigment litigation. The State of Rhode Island initiated an action in October 1999 against the Company and other companies asserting, in part, that lead pigment in paint constitutes a public nuisance under Rhode Island law. The claim for public nuisance was originally tried to a jury in 2002 and the court declared a mistrial as the jury, which was split four to two in favor of the defendants, was unable to reach a unanimous decision. The State of Rhode Island retried the case and on February 22, 2006, the jury returned a verdict, finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance, and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law. This decision concluded the case in favor of the Company and the other defendants.

     Other public nuisance claim litigation. The Company and other companies are or were defendants in other legal proceedings seeking recovery based on public nuisance liability theories including claims brought by the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California.

     The City of St. Louis proceeding was initiated in January 2000 against the Company and other companies asserting claims for strict liability, negligence, fraudulent misrepresentation, negligent misrepresentation, concert of action, conspiracy, public nuisance, restitution and indemnity. Following various pre-trial proceedings, the City alleged a single count of public nuisance. Following further pre-trial proceedings, the trial court granted the defendants’ motion for summary judgment based on the City’s lack of product identification evidence. The City appealed and, on June 12, 2007, the Missouri Supreme Court affirmed summary judgment for the Company and other defendants, concluding the case in favor of the Company and the other defendants.

     A number of cities and counties in New Jersey individually initiated proceedings in the Superior Court of New Jersey in 2001 and 2002 against the Company and other companies asserting claims for fraud, public nuisance, civil conspiracy, unjust enrichment and indemnity. The cases were consolidated and assigned to the Superior Court in Middlesex County. The Superior Court granted the defendants’ motion to dismiss all complaints. Following an appeal by the plaintiffs, the Appellate Division reinstated the public nuisance claims and affirmed the dismissal of all other claims. On June 15, 2007, the New Jersey Supreme Court reversed the Appellate Division’s decision to reinstate the public nuisance claims, concluding the case in favor of the Company and the other defendants.

     A number of cities in Ohio individually initiated proceedings in state court in 2006 and 2007 against the Company

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

and other companies asserting claims for public nuisance, concert of action, unjust enrichment, indemnity and punitive damages. Also in September 2006, the Company initiated proceedings in the United States District Court, Southern District of Ohio, against those Ohio cities, John Doe cities and public officials seeking declaratory and injunctive relief to prevent the violation of the Company’s federal constitutional rights in relation to such state court proceedings. All of these Ohio cities’ actions have been voluntarily dismissed by the plaintiff cities. Accordingly, on August 28, 2008, the Court granted, with prejudice, the Company’s motion to dismiss the remaining proceedings in the United States District Court, Southern District of Ohio.

     In April 2007, the State of Ohio filed an action against the Company and other companies asserting a claim for public nuisance. The State of Ohio sought compensatory and punitive damages. On February 6, 2009, the State of Ohio voluntarily dismissed this action.

     The City of Milwaukee proceeding was initiated in April 2001 against Mautz Paint Co. and NL Industries, Inc. On November 7, 2001, the Company acquired certain assets of Mautz Paint Co. and agreed (under terms and conditions set forth in the purchase agreement) to defend and indemnify Mautz Paint Co. for its liability, if any, to the City of Milwaukee in this action. The City’s complaint included claims for continuing public nuisance, restitution, conspiracy, negligence, strict liability, failure to warn and violation of Wisconsin’s trade practices statute. Following various pre-trial proceedings during which several of the City’s claims were dismissed by the court or voluntarily dismissed by the City, on August 13, 2003, the trial court granted defendants’ motion for summary judgment on the remaining claims. The City appealed and, on November 9, 2004, the Wisconsin Court of Appeals reversed the trial court’s decision and remanded the claims for public nuisance, conspiracy and restitution to the trial court. On February 13, 2007, the trial court entered an order severing and staying the claims against Mautz Paint Co. The action against NL Industries proceeded to trial and the jury found that the presence of lead paint in Milwaukee is a public nuisance, but that NL Industries was not at fault for the public nuisance. The City of Milwaukee appealed the jury verdict finding that NL Industries did not intentionally cause a public nuisance and the Wisconsin Court of Appeals affirmed the trial court’s final judgment. The City of Milwaukee filed a petition for review with the Wisconsin Supreme Court to review the Wisconsin Court of Appeals’ decision. The Wisconsin Supreme Court denied the City of Milwaukee’s petition to review the Wisconsin Court of Appeals’ decision. On September 25, 2009, the trial court dismissed the case, with prejudice, against Mautz Paint Co. pursuant to a stipulation of the parties. This dismissal concluded the case in favor of the Company.

     The Santa Clara County, California proceeding was initiated in March 2000. The named plaintiffs are the County of Santa Clara, County of Santa Cruz, County of Solano, County of Alameda, County of Kern, City and County of San Francisco, San Francisco Housing Authority, San Francisco Unified School District, City of Oakland, Oakland Housing Authority, Oakland Redevelopment Agency and the Oakland Unified School District. The proceeding purports to be a class action on behalf of all public entities in the State of California except the State and its agencies. The plaintiffs’ second amended complaint asserted claims for fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance and violations of California’s Business and Professions Code, and the third amended complaint alleges similar claims including a claim for public nuisance. Various asserted claims were resolved in favor of the defendants through pre-trial demurrers and motions to strike. In October 2003, the trial court granted the defendants’ motion for summary judgment against the remaining counts on statute of limitation grounds. The plaintiffs appealed the trial court’s decision and, on March 3, 2006, the Court of Appeal, Sixth Appellate District, reversed in part the demurrers and summary judgment entered in favor of the Company and the other defendants. The Court of Appeal reversed the dismissal of the public nuisance claim for abatement brought by the cities of Santa Clara and Oakland and the City and County of San Francisco, and reversed summary judgment on all of the plaintiffs’ fraud claim to the extent that the plaintiffs alleged that the defendants had made fraudulent statements or omissions minimizing the risks of low-level exposure to lead. The Court of Appeal further vacated the summary judgment holding that the statute of limitations barred the plaintiffs’ strict liability and negligence claims, and held that those claims had not yet accrued because physical injury to the plaintiffs’ property had not been alleged. The Court of Appeal affirmed the dismissal of the public nuisance claim for damages to the plaintiffs’ properties, most aspects of the fraud claim, the trespass claim and the unfair business practice claim. The plaintiffs have filed a motion for leave to file a fourth amended complaint. On April 4, 2007, the trial court entered an order granting the defendants’ motion to bar payment of contingent fees to private attorneys. The plaintiffs appealed the trial court’s order and, on April 8, 2008, the California Court of Appeal reversed the trial court’s order. The defendants filed a petition for review with the California Supreme Court and the Supreme Court has decided to review

28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

the Court of Appeal’s decision. Proceedings in the trial court are stayed pending the appeal.

     Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint, claims for damages allegedly incurred by the children’s parents or guardians, and claims for damages allegedly incurred by professional painting contractors. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions.

     The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants include strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. Following various pre-trial proceedings during which certain of the plaintiff’s claims were dismissed by the court, on March 10, 2003, the trial court granted the defendants’ motion for summary judgment, dismissing the case with prejudice and awarding costs to each defendant. The plaintiff appealed and, on June 14, 2004, the Wisconsin Court of Appeals affirmed the trial court’s decision. On July 15, 2005, the Wisconsin Supreme Court reversed in part the trial court’s decision and decided, assuming all of plaintiff’s facts in the summary judgment record to be true, that the risk contribution theory could then apply to excuse the plaintiff’s lack of evidence identifying any of the Company’s or the other defendant’s products as the cause of the alleged injury. The case was remanded to the trial court for further proceedings and a trial commenced on October 1, 2007. On November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff filed post-trial motions for a new trial which were denied by the trial court. On March 4, 2008, final judgment was entered in favor of the Company and other defendants. The plaintiff has filed an appeal of the final judgment.

     Wisconsin is the first jurisdiction to apply a theory of liability with respect to alleged personal injury (i.e.: risk contribution/market share liability) which does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation.

     Insurance coverage litigation. On March 3, 2006, the Company filed a lawsuit in the Common Pleas Court, Cuyahoga County, Ohio against its liability insurers, including certain Underwriters at Lloyd’s of London. The lawsuit seeks, among other things, (i) a declaration from the court that costs associated with the abatement of lead pigment in the State of Rhode Island, or any other jurisdiction, are covered under certain insurance policies issued to the Company and (ii) monetary damages for breach of contract and bad faith against the Lloyd’s Underwriters for unjustified denial of coverage for the cost of complying with any final judgment requiring the Company to abate any alleged nuisance caused by the presence of lead pigment paint in buildings. This lawsuit was filed in response to a lawsuit filed by the Lloyd’s Underwriters against the Company, two other defendants in the Rhode Island litigation and various insurance companies on February 23, 2006. The Lloyd’s Underwriters’ lawsuit asks a New York state court to determine that there is no indemnity insurance coverage for such abatement related costs, or, in the alternative, if such indemnity coverage is found to exist, the proper allocation of liability among the Lloyd’s Underwriters, the defendants and the defendants’ other insurance companies. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Ohio state court action has been stayed and the New York state court action has been dismissed.

Market Risk

     The Company is exposed to market risk associated with interest rate, foreign currency and commodity fluctuations. The Company occasionally utilizes derivative instruments as part of its overall financial risk management policy, but does not use derivative instruments for speculative or trading purposes. In 2009, the Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months to hedge against value changes in foreign currency. The Company also entered into swaps in 2009 to partially hedge forecasted future commodity purchases. These hedging contracts were designated as cash flow hedges. There were no currency option or exchange contracts or commodity swaps outstanding at December 31, 2009. The Company believes

29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

it may be exposed to continuing market risk from foreign currency exchange rate and commodity price fluctuations. However, the Company does not expect that foreign currency exchange rate and commodity price fluctuations or hedging contract losses will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. See Notes 1 and 14 on pages 45 and 72 of this report.

Financial Covenant

     Certain borrowings contain a consolidated leverage covenant. At December 31, 2009, the Company was in compliance with the covenant. The Company’s Notes, Debentures and revolving credit agreement contain various default and cross-default provisions. In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result. See Note 8 on pages 62 and 63 of this report.

Employee Stock Ownership Plan (ESOP)

     Participants in the Company’s ESOP are allowed to contribute up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions. Effective July 1, 2009, the ESOP was amended to change the Company match to one-hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions. The Company’s matching contributions to the ESOP charged to operations were $44.6 million in 2009 compared to $54.0 million in 2008. The Company can fund the ESOP by redeeming a portion of the Preferred stock held by the ESOP or with cash. At December 31, 2009, there were 17,579,750 shares of the Company’s common stock being held by the ESOP, representing 16.0 percent of the total number of voting shares outstanding. See Note 12 on page 69 of this report for more information concerning the Company’s stock purchase plan and preferred stock.

RESULTS OF OPERATIONS — 2009 vs. 2008

     Shown below are net sales and the percentage change for the current period by segment for 2009 and 2008:

(thousands of dollars)	2009		Change			2008
Paint Stores Group	$	4,209,353		–12.9	%	$	4,834,897
Consumer Group		1,225,167		–3.7	%		1,272,068
Global Finishes Group		1,653,475		–11.4	%		1,865,964
Administrative		6,254		–8.0	%		6,798
Net sales	$	7,094,249		–11.1	%	$	7,979,727

     Consolidated net sales for 2009 decreased due primarily to volume declines resulting from continuing weak U.S. and foreign economic conditions. One acquisition completed during 2009 and four acquisitions completed throughout 2008 increased consolidated net sales 0.5 percent. Unfavorable currency translation rate changes decreased 2009 consolidated net sales 1.3 percent. Net sales of all consolidated foreign subsidiaries decreased 8.4 percent to $1.03 billion for 2009 versus $1.12 billion for 2008. Of the decrease in net sales for all consolidated foreign subsidiaries during 2009, 10.0 percent related to unfavorable foreign currency translation rates. Net sales of all operations other than consolidated foreign subsidiaries decreased 11.5 percent to $6.07 billion for 2009 versus $6.86 billion for 2008.

     Net sales in the Paint Stores Group in 2009 decreased primarily due to lower paint volume sales that were partially offset by the remaining impact of 2008 selling price increases. Net sales from stores open for more than twelve calendar months decreased 12.9 percent for the full year. During 2009, the Paint Stores Group opened 53 new stores and closed 45 redundant locations for a net increase of 8 stores, increasing the total number of stores in operation at December 31, 2009 to 3,354 in the United States, Canada and the Caribbean. The Paint Stores Group’s objective is to expand its store base an average of three percent each year, primarily through internal growth. The percentage change in total paint sales volume was a decrease in the mid-teens for the year over 2008 partially offset by impact of selling price increases in the first half of 2008. Sales of products other than paint decreased approximately 15.2 percent for the year over 2008. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.

     Net sales of the Consumer Group decreased due primarily to sluggish DIY demand at most of the Group’s retail customers. Paint volume sales percentage change in the Consumer Group compared to last year was a decrease in the mid-single digits. Sales of aerosols, brushes, rollers, caulk and other paint related products decreased approximately 7.4 percent for the year over 2008. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of paint-related merchandise sold. The Consumer Group plans to continue its aggressive promotions of new and existing products in 2010 and continue expanding its customer base and product assortment at existing customers.

     The Global Finishes Group’s net sales in 2009, when stated in U.S. dollars, decreased due primarily to volume decreases and unfavorable currency translation rate changes partially offset by selling price increases and acquisitions. Paint sales volume percentage decreased in the mid-single

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

digits. Acquisitions increased this Group’s net sales in U.S. dollars by 1.5 percent. Unfavorable currency translation rate changes in the year decreased net sales by 4.8 percent for 2009. In 2009, the Global Finishes Group opened 18 new branches and closed 20 locations for a net decrease of 2 branches decreasing the total to 539 branches open in the United States, Mexico, Chile, Brazil, Canada, Uruguay, Argentina, Peru and India at year-end. In 2010, the Global Finishes Group expects to continue expanding its worldwide presence and improving its customer base.

     Shown below is segment profit and the percent change for the current period by segment for 2009 and 2008:

(thousands of dollars)	2009			Change			2008
Paint Stores Group	$	600,176			–7.4	%	$	647,926
Consumer Group		157,354			12.2	%		140,226
Global Finishes Group		65,014			–57.3	%		152,216
Administrative		(199,727	)		–11.6	%		(225,893	)
Income before income taxes	$	622,817			–12.8	%	$	714,475

     Consolidated income before income taxes in 2009 was lower than a year ago due primarily to a decrease in gross profit of $235.6 million and the impact of a loss on dissolution of a foreign subsidiary of $21.9 million partially offset by a decrease in selling, general and administrative expenses of $108.8 million, a decrease in trademark and goodwill impairment charges of $40.5 million, and a reduction of $16.6 million in interest expense, interest and net investment income and other expenses. Segment profit of all consolidated foreign subsidiaries decreased 63.3 percent to $27.0 million for 2009 versus $73.6 million for 2008 due primarily to a decrease in gross profit of $33.8 million and the loss on the dissolution of a foreign subsidiary of $21.9 million. Acquisitions and unfavorable foreign currency translation rates decreased segment profit of all consolidated foreign subsidiaries by 15.0 percent. Segment profit of all operations other than consolidated foreign subsidiaries decreased 7.0 percent to $595.8 million for 2009 versus $640.9 million for 2008. See Note 3, on page 51 of this report, for more information concerning the dissolution of a foreign subsidiary.

     Consolidated gross profit increased as a percent to net sales to 46.0 percent from 43.8 percent in 2008 due primarily to selling price increases initiated over the past 18 months, cost control efforts primarily in the Consumer Group and improved freight and other distribution costs partially offset by incremental site closing costs and higher fixed costs related to reduced manufacturing and distribution volume. The Paint Stores Group’s gross profit for 2009 decreased $163.2 million compared to 2008, but increased as a percent of sales by 3.5 percent due primarily to lower volume sales that were partially offset by higher selling prices initiated in 2008. The Consumer Group’s gross profit increased $14.4 million for 2009 over 2008 due primarily to cost control efforts and reductions in freight and related distribution costs partially offset by lower sales, lower volume throughput in the manufacturing and distribution facilities and incremental costs related to site closings. As a percent of sales, Consumer Group’s gross profit increased by 3.2 percent. The Global Finishes Group’s gross profit for 2009 decreased $78.9 million and decreased as a percent of sales by 0.7 percent due primarily to decreased sales volumes, unfavorable foreign currency translation exchange rate changes, and increased manufacturing and distribution costs relating to lower production volumes. Acquisitions increased Global Finishes Group’s gross profit by $9.3 million, or 32.3 percent of acquisition net sales, and foreign currency translation rate fluctuations decreased gross profit by $29.6 million for 2009.

     SG&A decreased by $108.8 million due primarily to good expense control. Acquisitions added $15.9 million of SG&A in 2009, representing 40.1 percent of acquisition net sales. SG&A increased as a percent of sales to 35.7 percent in 2009 from 33.1 percent in 2008. In the Paint Stores Group, SG&A decreased $75.9 million for the year due primarily to good SG&A spending control partially offset by increased spending due to the number of new store openings. The Consumer Group’s SG&A increased by $14.7 million for the year due to the impact of acquisition SG&A of $4.3 million, or 39.7 percent of acquisition net sales, and increased spending on customer programs. The Global Finishes Group’s SG&A decreased by $22.1 million for the year relating primarily to foreign currency translation rate fluctuations of $23.7 million and good SG&A spending control that was partially offset by acquisition SG&A of $11.7 million, or 40.3 percent of acquisition net sales. Administrative SG&A expenses decreased $25.5 million in 2009 due primarily to a reduction in compensation and benefit related expenses not allocated directly to the Reportable Operating Segments, including the reduction in expenses related to stock-based compensation.

     Administrative expenses not included in SG&A decreased $8.6 million in 2009 due primarily to a reduction of $25.7 million in Interest expense and increased other income of $3.1 million. Partially offsetting these reductions was an increase of $17.8 million in provisions for environmental-related matters, lower Interest and net investment income of $1.2 million, and an increase of $2.4 million in expenses related to closed facilities.

     The Company recognized $23.3 million in total stock-based compensation expense during 2009, $41.1 million in 2008 and $35.4 million during 2007. Total unrecognized stock-based compensation expense was $50.3 million at December 31, 2009, and recognition is expected to occur over a weighted-average period of 1.60 years. The

31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

weighted-average risk-free rate for 2009 grants of 2.39 percent was based upon the U.S. Treasury yield curve at the time of grant. The weighted-average expected life of options of 5.27 years for 2009 was calculated using a scenario analysis model that uses historical data to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding options. The weighted average expected volatility of stock for 2009 of 31.9 percent was calculated using historical and implied volatilities. The weighted average expected dividend yield of stock for 2009 of 2.69 percent was the Company’s best estimate of the expected future dividend yield using historical activity and expectations about future activity. See Note 13, on pages 70 and 71 of this report, for more information concerning stock based compensation.

     Other general expense — net increased $14.3 million in 2009 compared to 2008. The increase was mainly caused by an increase in provisions for environmental matters of $17.8 million in 2009 and a $2.0 million increase in costs associated with exit or disposal activities. Partially offsetting the increases in general expenses was a decrease in net losses on the disposition of assets of $5.5 million. See Note 14, on page 72 of this report, for more information concerning Other general expense — net.

     As required by the Goodwill and Other Intangibles Topic of the ASC, management performed an annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2009. The impairment test in 2009 resulted in reductions in the carrying value of trademarks with indefinite lives of $14.1 million and no reductions in value of goodwill. The impairment charges are shown as a separate line in the Statements of consolidated income in accordance with the Goodwill and Other Intangibles Topic of the ASC. The impairment of trademarks with indefinite lives was charged to the Paint Stores Group ($11.0 million), the Global Finishes Group ($3.0 million), and the Consumer Group ($0.1 million). The impairments related primarily to lower-than-anticipated projected sales of certain acquired brands. In addition, the Company also records impairments due to changes in circumstances for long-lived assets in accordance with the Property, Plant and Equipment Topic of the ASC. In 2009, a reduction of $6.0 million in the carrying value of the property, plant and equipment associated with certain manufacturing facilities closed during the year or held for disposal was recorded in Cost of goods sold in the Consumer Group ($5.6 million) and Global Finishes Group ($0.4 million). See Notes 5 and 6, on pages 51 through 56 of this report, for more information concerning the impairment of intangible and long-lived assets.

     Interest expense decreased $25.7 million in 2009 versus 2008 due primarily to decreased short-term borrowings at rates that were lower than 2008. Interest and net investment income decreased $1.5 million due to a lower level of short-term investments in 2009 when compared to 2008 at lower overall rates. The net of the two combined for an overall decrease of $24.1 million in the aggregate expense.

     Other expense (income) — net fluctuated to $1.7 million income from $5.1 million expense in 2008. This change was due primarily to a decrease in unfavorable foreign currency related transactions to a loss of $4.9 million in 2009 from a loss of $10.6 million in 2008 and an increase in other miscellaneous income items of $3.9 million. Partially offsetting these increases in income was an increase in Net expense from financing and investing activities of $1.7 million and reduced dividend and royalty income of $1.1 million. See Note 14, on page 72 of this report, for more information concerning Other expense (income) — net.

     Income before income taxes decreased $91.7 million. Selling price increases carried over from 2008 and strict cost control could not fully offset the impact of the decrease in sales volume, resulting in a reduction in Gross profit of $235.6 million. The loss on the dissolution of a foreign subsidiary of $29.1 million and an increase in Other general expense — net of $14.3 million further reduced Income before income taxes. Offsetting the unfavorable impact of these items on Income before income taxes were decreases of $141.3 million in SG&A ($108.8 million), in aggregate interest expense ($25.7 million) and in Other expense (income) — net ($6.8 million). The final component of Income before income taxes was decreased impairment of trademarks and goodwill of $40.5 million below 2008 for the reduction in fair value of certain trademarks and goodwill, which increased Income before income taxes.

     Net income decreased $41.0 million in 2009 due to the decrease in Income before income taxes partially offset by a decrease in the effective tax rate to 30.0 percent in 2009 from 33.3 percent last year. The effective tax rate decrease in 2009 compared to 2008 was due primarily to an increase in tax favorable investments in 2009 compared to 2008 and a decrease in the state and local tax component of the effective tax rate compared to 2008. The state and local income tax component decreased due primarily to the impact of favorable audit settlements, favorable tax deductions available to the Company and the benefits of state tax credits. For the year, diluted net income per common share decreased to $3.78 per share from $4.00 per share in 2008.

     Management considers a measurement that is not in accordance with U.S. generally accepted accounting principles a useful measurement of the operational profitability of the Company. Some investment professionals also utilize such a measurement as an indicator of the value of profits and cash that are generated strictly from operating activities,

32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

putting aside working capital and certain other balance sheet changes. For this measurement, management increases Net income for significant non-operating and non-cash expense items to arrive at an amount known as “Earnings Before Interest, Taxes, Depreciation and Amortization” (EBITDA). The reader is cautioned that the following value for EBITDA should not be compared to other entities unknowingly. EBITDA should not be considered an alternative to Net income or Net operating cash as an indicator of operating performance or as a measure of liquidity. The reader should refer to the determination of Net income and Net operating cash in accordance with U.S. generally accepted accounting principles disclosed in the Statements of Consolidated Income and Statements of Consolidated Cash Flows, on pages 40 and 42 of this report. EBITDA as used by management is calculated as follows:

(thousands of dollars)	2009		2008		2007
Net income	$	435,848	$	476,876	$	615,578
Interest expense		40,026		65,684		71,630
Income taxes		186,969		237,599		297,365
Depreciation		145,186		143,191		139,010
Amortization		25,718		22,320		24,469
EBITDA	$	833,747	$	945,670	$	1,148,052

RESULTS OF OPERATIONS — 2008 vs. 2007

     Shown below are net sales and the percentage change for the current period by segment for 2008 and 2007:

(thousands of dollars)	2008		Change			2007
Paint Stores Group	$	4,834,897		–2.4	%	$	4,955,294
Consumer Group		1,272,068		–3.0	%		1,311,624
Global Finishes Group		1,865,964		7.8	%		1,731,231
Administrative		6,798		–4.8	%		7,143
Net sales	$	7,979,727		–0.3	%	$	8,005,292

     Consolidated net sales for 2008 decreased due primarily to volume declines resulting from worsening U.S. and foreign economic conditions. Four acquisitions completed during 2008 and seven acquisitions completed throughout 2007 increased consolidated net sales 1.9 percent. Favorable currency translation rate changes increased 2008 consolidated net sales 0.4 percent. Net sales of all consolidated foreign subsidiaries were up 16.0 percent to $1.12 billion for 2008 versus $964.9 million for 2007. Of the increase in net sales for all consolidated foreign subsidiaries during 2008, 18.8 percent related to favorable foreign currency translation rates. Net sales of all operations other than consolidated foreign subsidiaries decreased 2.6 percent to $6.86 billion for 2008 versus $7.04 billion for 2007.

     Net sales in the Paint Stores Group in 2008 decreased due to lower paint volume sales that were partially offset by selling price increases. Acquisitions completed in 2007 added $90.9 million, or 1.8 percent, to this Group’s net sales in 2008. Net sales from stores open for more than twelve calendar months decreased 5.3 percent for the full year. During 2008, the Paint Stores Group opened 100 new stores and closed 79 redundant locations for a net increase of 21 stores, increasing the total number of stores in operation at December 31, 2008 to 3,346 in the United States, Canada and the Caribbean. The Paint Stores Group’s objective is to expand its store base an average of three percent each year, primarily through internal growth. The percentage change in total paint sales volume was a decrease in the mid-teens for the year over 2007 partially offset by impact of selling price increases in late 2007 and in the first half of 2008. Sales of products other than paint decreased approximately 5.3 percent for the year over 2007. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.

     Net sales of the Consumer Group decreased due primarily to sluggish DIY demand at most of the Group’s retail customers. Paint volume sales percentage change in the Consumer Group compared to 2007 was a decrease in the high-single digits. Sales of aerosols, brushes, rollers, caulk and other paint related products decreased approximately 3.1 percent for the year over 2007. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of paint-related merchandise sold The Global Finishes Group’s net sales in 2008, when stated in U.S. dollars, increased due primarily to selling price increases, volume gains, favorable currency translation rate changes and acquisitions. Paint sales volume increased in the mid-single digits. Acquisitions increased this Group’s net sales in U.S. dollars by 3.3 percent. Favorable currency translation rate changes in the year increased net sales by 1.7 percent for 2008. In 2008, the Global Finishes Group opened 22 net new branches, including the first two branches in India, increasing the total to 541 branches open in the United States, Mexico, Chile, Brazil, Canada, Uruguay, Argentina, Peru and India at year-end.

     Shown below is segment profit and the percent change for the current period by segment for 2008 and 2007:

(thousands of dollars)	2008			Change			2007
Paint Stores Group	$	647,926			–15.5	%	$	766,462
Consumer Group		140,226			–37.4	%		224,154
Global Finishes Group		152,216			–5.3	%		160,680
Administrative		(225,893	)		–5.2	%		(238,353	)
Income before income taxes	$	714,475			–21.7	%	$	912,943

     Consolidated income before income taxes in 2008 was lower than 2007 primarily due to a decrease in gross profit of

33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

$100.1 million, an increase in selling, general and administrative expenses of $46.5 million, an increase in trademark and goodwill impairment charges of $38.5 million, a reduction of $13.4 million in interest expense, interest and net investment income and other expenses. Segment profit of all consolidated foreign subsidiaries decreased 5.3 percent to $73.6 million for 2008 versus $77.7 million for 2007. Favorable foreign currency translation rates increased segment profit of all consolidated foreign subsidiaries by 5.1 percent. Segment profit of all operations other than consolidated foreign subsidiaries decreased 23.3 percent to $640.9 million for 2008 versus $835.3 million for 2007.

     Consolidated gross profit decreased as a percent to net sales to 43.8 percent from 45.0 percent in 2007 due primarily to higher raw material costs and increased domestic manufacturing direct conversion costs related to lower volume which was partially offset by selling price increases, additional manufacturing volume in international factories and product sales mix. The Paint Stores Group’s gross profit for 2008 decreased $35.6 million and increased as a percent of sales by .5 percent due primarily to higher product costs that were partially offset by acquisitions and higher selling prices. Acquisitions added $34.2 million to the Paint Stores Group’s gross profit in 2008 at a 37.7 percent gross margin. The Consumer Group’s gross profit decreased $85.8 million for 2008 over 2007 due primarily to higher raw material costs and a reduction in manufacturing volume. As a percent of sales, Consumer Group’s gross profit decreased by 2.7 percent. The Global Finishes Group’s gross profit for 2008 increased $19.2 million and decreased as a percent of sales by 1.4 percent due primarily to acquisitions and foreign currency translation exchange rate changes partially offset by higher raw material costs. Acquisitions increased Global Finishes Group’s gross profit by $15.7 million, or 27.8 percent of acquisition net sales, and foreign currency translation rate fluctuations increased gross profit by $10.3 million for 2008.

     Consolidated selling, general and administrative expenses (SG&A) increased by $46.5 million due primarily to the impact of expenses associated with acquisitions partially offset by good expense control. Acquisitions added $58.2 million of SG&A in 2008, representing 38.4 percent of acquisition net sales. SG&A increased as a percent of sales to 33.1 percent in 2008 from 32.4 percent in 2007. In the Paint Stores Group, SG&A increased $25.3 million for the year due primarily to the impact of acquisition SG&A of $38.2 million, or 42.0 percent of acquisition net sales. Partially offsetting the acquisition increase and increased spending due to the number of new store openings was good SG&A spending control. The Consumer Group’s SG&A decreased by $19.1 million for the year due to stringent spending guidelines for all expense categories to partially offset the profit impact of the sales shortfall. The Global Finishes Group’s SG&A increased by $42.6 million for the year relating primarily to acquisition SG&A of $18.8 million, or 33.2 percent of acquisition net sales, foreign currency translation rate fluctuations of $6.6 million, expenses of more branch openings and increased sales volume. Administrative SG&A expenses decreased $2.3 million in 2008 due primarily to a reduction in compensation and benefit related expenses not allocated directly to the Reportable Operating Segments, including the additional expenses related to stock-based compensation, partially offset by increased costs related to certain administrative expenses of the Company’s corporate headquarters site.

     Administrative expenses not included in SG&A decreased $10.1 million in 2008 due primarily to a reduction of $21.4 million in provisions for environmental-related matters and a decrease of $5.9 million in Interest expense. Partially offsetting these reductions was lower Interest and net investment income of $10.1 million, an increase of $3.7 million in expenses related to closed facilities and increased other general expenses.

     The Company recognized $41.1 million in total stock-based compensation expense during 2008, $35.4 million in 2007 and $29.5 million during 2006. Total unrecognized stock-based compensation expense was $61.8 million at December 31, 2008, and recognition is expected to occur over a weighted-average period of 1.66 years. The weighted-average risk-free rate for 2008 grants of 3.01 percent was based upon the U.S. Treasury yield curve at the time of grant. The weighted-average expected life of options of 5.24 years for 2008 was calculated using a scenario analysis model that uses historical data to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding options. The weighted average expected volatility of stock for 2008 of 32.1 percent was calculated using historical and implied volatilities. The weighted average expected dividend yield of stock for 2008 of 2.41 percent was the Company’s best estimate of the expected future dividend yield using historical activity and expectations about future activity. See Note 13, on pages 70 and 71 of this report, for more information concerning stock based compensation.

     Other general expense — net increased $1.8 million in 2008 compared to 2007. The increase was mainly caused by net losses on the disposition of assets in 2008 of $6.4 million, compared to net gains on the disposition of various long-lived assets in 2007 of $10.4 million, and a $6.3 million increase in costs associated with exit or disposal activities. Partially offsetting the increases in general expenses was a decrease of $21.4 million in provisions for environmental-related matters. See Note 14, on page 72 of this report, for more information concerning Other general expense — net.

34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     As required by the Goodwill and Other Intangibles Topic of the ASC, management performed an interim impairment test of certain acquired trademarks during the second quarter of 2008 when it became apparent that current and future sales trends used in determining the fair values of some trademarks were declining substantially. Also, as required by the Goodwill and Other Intangibles Topic of the ASC, management performed an annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2008. These two impairment tests in 2008 resulted in reductions in the carrying value of goodwill of $8.9 million and in trademarks with indefinite lives of $45.7 million. The impairment charges are shown as a separate line in the Statements of consolidated income in accordance with the Goodwill and Other Intangibles Topic of the ASC. The goodwill impairments were charged to the Consumer Group ($8.1 million) and the Global Finishes Group ($.8 million) and were related to projected declines in future cash flow from certain domestic and foreign businesses. The impairment of trademarks with indefinite lives was charged to the Paint Stores Group ($42.8 million) and the Consumer Group ($2.9 million). The impairments related primarily to lower-than-anticipated projected sales of certain acquired brands. In addition, the Company also recorded impairments due to changes in circumstances in accordance with the Property, Plant and Equipment Topic of the ASC for certain manufacturing equipment of $2.0 million, which was charged to Cost of goods sold in the Consumer Group. See Notes 5 and 6, on pages 51 through 56 of this report, for more information concerning the impairment of intangible assets and long-lived assets.

     Interest expense decreased $5.9 million in 2008 versus 2007 due primarily to decreased short-term borrowings at rates that were lower than 2007. More than offsetting the decrease in Interest expense was a decrease in Interest and net investment income of $10.1 million, due to a lower level of short-term investments in 2008 when compared to 2007 at lower overall rates. The two reductions combined for an overall increase of $4.2 million in the aggregate expense.

     Other expense (income) — net fluctuated to $5.1 million expense from $2.3 million income in 2007. This change was due primarily to an unfavorable change in foreign currency related transactions to a loss of $10.6 million from a gain of $.2 million in 2007. Partially offsetting this unfavorable trend in foreign currency transaction losses was a decrease in Net expense from financing and investing activities of $2.4 million. See Note 14, on page 72 of this report, for more information concerning Other expense (income) — net.

     Income before income taxes decreased $198.5 million. Selling price increases implemented throughout 2008 could not fully offset the impact of the decrease in sales volume and raw material cost increases, resulting in a reduction in Gross profit of $100.1 million. Increases totaling $59.9 million in SG&A ($46.5 million), Other general expense — net ($1.8 million), in aggregate interest expense ($4.2 million) and in Other expense (income) — net ($7.4 million) further negatively impacted income before income taxes. Increased Impairment of trademarks and goodwill of $38.5 million over 2007 for the reduction in fair value of certain trademarks and goodwill was the final component of the reduction in Income before income taxes.

     Net income decreased $138.7 million in 2008 due to the decrease in Income before income taxes and to an increase in the effective tax rate to 33.3 percent in 2008 from 32.6 percent in 2007. The effective tax rate increase in 2008 compared to 2007 was due primarily to an increase in the state and local tax component of the effective tax rate compared to 2007. The state and local income tax component increased primarily due to the impact of prior audit settlements and the effects of current state law changes. For the year, diluted net income per common share decreased to $4.00 per share from $4.70 per share in 2007.

35

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Shareholders
The Sherwin-Williams Company

     We are responsible for establishing and maintaining accounting and control systems over financial reporting which are designed to provide reasonable assurance that the Company has the ability to record, process, summarize and report reliable financial information. We recognize that internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and is subject to the possibility of human error or the circumvention or the overriding of internal control. Therefore, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, we believe we have designed into the process safeguards to reduce, though not eliminate, this risk. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In order to ensure that the Company’s internal control over financial reporting was effective as of December 31, 2009, we conducted an assessment of its effectiveness under the supervision and with the participation of our management group. This assessment was based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

     Based on our assessment of internal control over financial reporting under the criteria established in Internal Control — Integrated Framework, we have concluded that, as of December 31, 2009, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting as of December 31, 2009 has been audited by Ernst & Young LLP, an independent registered public accounting firm, and their report on the effectiveness of our internal control over financial reporting is included on page 37 of this report.

C. M. Connor

Chairman and Chief Executive Officer

S. P. Hennessy

Senior Vice President — Finance and Chief Financial Officer

J. L. Ault

Vice President — Corporate Controller

36

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Shareholders and Board of Directors
The Sherwin-Williams Company
Cleveland, Ohio

     We have audited The Sherwin-Williams Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Sherwin-Williams Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In our opinion, The Sherwin-Williams Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

     We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of The Sherwin-Williams Company as of December 31, 2009, 2008 and 2007, and the related statements of consolidated income, cash flows and shareholders’ equity and comprehensive income for each of the three years in the period ended December 31, 2009 and our report dated February 24, 2010 expressed an unqualified opinion thereon.

Cleveland, Ohio
February 24, 2010

37

REPORT OF MANAGEMENT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Shareholders
The Sherwin-Williams Company

     We are responsible for the preparation and fair presentation of the consolidated financial statements, accompanying notes and related financial information included in this report of The Sherwin-Williams Company and its consolidated subsidiaries (collectively, the “Company”) as of December 31, 2009, 2008 and 2007 and for the years then ended in accordance with U.S. generally accepted accounting principles. The consolidated financial information included in this report contains certain amounts that were based upon our best estimates, judgments and assumptions that we believe were reasonable under the circumstances.

     We have conducted an assessment of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As discussed in the Report of Management on Internal Control Over Financial Reporting on page 36 of this report, we concluded that the Company’s internal control over financial reporting was effective as of December 31, 2009.

     The Board of Directors pursues its responsibility for the oversight of the Company’s accounting policies and procedures, financial statement preparation and internal control over financial reporting through the Audit Committee, comprised exclusively of independent directors. The Audit Committee is responsible for the appointment and compensation of the independent registered public accounting firm. The Audit Committee meets at least quarterly with financial management, internal auditors and the independent registered public accounting firm to review the adequacy of financial controls, the effectiveness of the Company’s internal control over financial reporting and the nature, extent and results of the audit effort. Both the internal auditors and the independent registered public accounting firm have private and confidential access to the Audit Committee at all times.

     We believe that the consolidated financial statements, accompanying notes and related financial information included in this report fairly reflect the form and substance of all material financial transactions and fairly present, in all material respects, the consolidated financial position, results of operations and cash flows as of and for the periods presented.

C. M. Connor
Chairman and Chief Executive Officer

S. P. Hennessy
Senior Vice President — Finance and Chief Financial Officer

J. L. Ault
Vice President — Corporate Controller

38

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE CONSOLIDATED FINANCIAL STATEMENTS

Shareholders and Board of Directors
The Sherwin-Williams Company
Cleveland, Ohio

     We have audited the accompanying consolidated balance sheets of The Sherwin-Williams Company as of December 31, 2009, 2008 and 2007, and the related statements of consolidated income, cash flows and shareholders’ equity and comprehensive income for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Sherwin-Williams Company at December 31, 2009, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

     We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Sherwin-Williams Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2010 expressed an unqualified opinion thereon.

Cleveland, Ohio
February 24, 2010

39

STATEMENTS OF CONSOLIDATED INCOME
(thousands of dollars except per common share data)

	Year ended December 31,
	2009			2008			2007
Net sales	$	7,094,249		$	7,979,727		$	8,005,292
Cost of goods sold		3,831,080			4,480,927			4,406,365
Gross profit		3,263,169			3,498,800			3,598,927
Percent to net sales		46.0	%		43.8	%		45.0	%
Selling, general and administrative expenses		2,534,775			2,643,580			2,597,121
Percent to net sales		35.7	%		33.1	%		32.4	%
Other general expense — net		33,620			19,319			17,530
Impairments of trademarks and goodwill		14,144			54,604			16,123
Loss on dissolution of a foreign subsidiary		21,923
Interest expense		40,026			65,684			71,630
Interest and net investment income		(2,393	)		(3,930	)		(14,099	)
Other expense (income) — net		(1,743	)		5,068			(2,321	)
Income before income taxes		622,817			714,475			912,943
Income taxes		186,969			237,599			297,365
Net income	$	435,848		$	476,876		$	615,578
Net income per common share:
Basic	$	3.84		$	4.08		$	4.84
Diluted	$	3.78		$	4.00		$	4.70

See notes to consolidated financial statements.

40

CONSOLIDATED BALANCE SHEETS
(thousands of dollars)

	December 31,
	2009			2008			2007
Assets
Current assets:
Cash and cash equivalents	$	69,329		$	26,212		$	27,325
Accounts receivable, less allowance		696,055			769,985			870,675
Inventories:
Finished goods		630,683			749,405			756,087
Work in process and raw materials		107,805			114,795			131,378
		738,488			864,200			887,465
Deferred income taxes		121,276			97,568			104,600
Other current assets		144,871			151,240			179,515
Total current assets		1,770,019			1,909,205			2,069,580
Goodwill		1,014,825			1,006,712			996,613
Intangible assets		279,413			299,963			351,144
Deferred pension assets		245,301			215,637			400,553
Other assets		195,612			124,117			138,078
Property, plant and equipment:
Land		85,166			85,485			83,008
Buildings		600,687			580,216			561,794
Machinery and equipment		1,512,218			1,564,221			1,516,534
Construction in progress		23,086			26,560			65,322
		2,221,157			2,256,482			2,226,658
Less allowances for depreciation		1,402,472			1,396,357			1,327,286
		818,685			860,125			899,372
Total Assets	$	4,323,855		$	4,415,759		$	4,855,340
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term borrowings	$	22,674		$	516,438		$	657,082
Accounts payable		674,766			738,093			740,797
Compensation and taxes withheld		176,538			194,787			224,300
Accrued taxes		76,499			58,510			70,669
Current portion of long-term debt		12,267			13,570			14,912
Other accruals		430,924			415,338			433,625
Total current liabilities		1,393,668			1,936,736			2,141,385
Long-term debt		782,670			303,727			293,454
Postretirement benefits other than pensions		283,784			248,603			262,720
Other long-term liabilities		372,783			321,045			372,054
Shareholders’ equity:
Common stock — $1.00 par value: 109,436,869, 117,035,117 and 122,814,241 shares outstanding at December 31, 2009, December 31, 2008 and December 31, 2007, respectively		228,647			227,147			225,577
Preferred stock — convertible, no par value: 216,753, 216,753 and 324,733 shares outstanding at December 31, 2009, December 31, 2008 and December 31, 2007, respectively		216,753			216,753			324,733
Unearned ESOP compensation		(216,753	)		(216,753	)		(324,733	)
Other capital		1,068,963			1,016,362			897,656
Retained earnings		4,518,428			4,245,141			3,935,485
Treasury stock, at cost		(4,007,633	)		(3,472,384	)		(3,074,388	)
Cumulative other comprehensive loss		(317,455	)		(410,618	)		(198,603	)
Total shareholders’ equity		1,490,950			1,605,648			1,785,727
Total Liabilities and Shareholders’ Equity	$	4,323,855		$	4,415,759		$	4,855,340

See notes to consolidated financial statements.

41

STATEMENTS OF CONSOLIDATED CASH FLOWS
(thousands of dollars)

	Year Ended December 31,
	2009			2008			2007
Operating Activities
Net income	$	435,848		$	476,876		$	615,578
Adjustments to reconcile net income to net operating cash:
Depreciation		145,186			143,191			139,010
Amortization of intangible assets		25,718			22,320			24,469
Impairment of trademarks and goodwill		14,144			54,604			16,123
Loss on dissolution of a foreign subsidiary		21,923
Provisions for environmental-related matters		24,705			6,947			28,391
Provisions for qualified exit costs		21,832			12,081			2,508
Deferred income taxes		(8,605	)		30,365			32,984
Defined benefit pension plans net credit		31,367			(8,171	)		(6,605	)
Income tax effect of ESOP on other capital		(13,411	)		30,628			21,937
Stock-based compensation expense		23,271			41,114			35,355
Net increase in postretirement liability		1,103			2,223			6,237
Decrease in non-traded investments		42,805			44,480			40,696
(Gain) loss on disposition of assets		(3,387	)		6,440			(10,422	)
Other		3,923			8,760			3,169
Change in working capital accounts:
Decrease in accounts receivable		108,190			68,494			58,783
Decrease (increase) in inventories		145,867			(2,472	)		5,117
(Decrease) increase in accounts payable		(82,607	)		16,349			(68,889	)
Increase (decrease) in accrued taxes		11,836			(5,778	)		6,351
Decrease in accrued compensation and taxes withheld		(21,579	)		(25,610	)		(19,795	)
Increase (decrease) in refundable income taxes		(2,267	)		5,119			(14,551	)
Other		(12,767	)		(24,880	)		(29,942	)
Costs incurred for environmental-related matters		(36,986	)		(22,369	)		(14,486	)
Costs incurred for qualified exit costs		(12,322	)		(5,643	)		(2,223	)
Other		(4,601	)		1,165			4,750
Net operating cash		859,186			876,233			874,545
Investing Activities
Capital expenditures		(91,328	)		(117,203	)		(165,870	)
Acquisitions of businesses, net of cash acquired		(15,440	)		(68,688	)		(282,416	)
Decrease in short-term investments								21,200
Proceeds from sale of assets		5,599			11,130			23,824
Increase in other investments		(29,230	)		(62,067	)		(53,354	)
Net investing cash		(130,399	)		(236,828	)		(456,616	)
Financing Activities
Net (decrease) increase in short-term borrowings		(494,989	)		(136,793	)		270,676
Net increase (decrease) in long-term debt		471,642			13,385			(198,667	)
Payments of cash dividends		(162,561	)		(165,111	)		(162,301	)
Proceeds from stock options exercised		36,596			37,475			71,281
Income tax effect of stock-based compensation exercises and vesting		7,645			11,897			24,176
Treasury stock purchased		(530,363	)		(393,540	)		(863,139	)
Other		(10,800	)		(5,223	)		(8,643	)
Net financing cash		(682,830	)		(637,910	)		(866,617	)
Effect of exchange rate changes on cash		(2,840	)		(2,608	)		6,843
Net increase (decrease) in cash and cash equivalents		43,117			(1,113	)		(441,845	)
Cash and cash equivalents at beginning of year		26,212			27,325			469,170
Cash and cash equivalents at end of year	$	69,329		$	26,212		$	27,325
Taxes paid on income	$	146,385		$	109,408		$	186,737
Interest paid on debt		41,106			64,929			75,260

See notes to consolidated financial statements.

42

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(thousands of dollars except per common share data)

						Unearned												Cumulative
						ESOP												Other
	Common		Preferred			Compen-			Other			Retained			Treasury			Comprehensive
	Stock		Stock			sation			Capital			Earnings			Stock			Loss			Total
Balance at January 1, 2007	$	222,985	$	433,215		$	(433,215	)	$	748,523		$	3,485,564		$	(2,202,248	)	$	(262,464	)	$	1,992,360
Comprehensive income:
Net income													615,578									615,578
Foreign currency translation																			34,837			34,837
Net actuarial gains (losses) and prior service costs recognized for employee benefit plans, net of taxes of ($20,777)																			28,774			28,774
Unrealized net gains on securities and derivative instruments used in cash flow hedges, net of taxes of $(96)																			250			250
Comprehensive income																						679,439
Treasury stock purchased										(1,024	)					(862,115	)					(863,139	)
Redemption of preferred stock				(108,482	)		108,482
Income tax effect of ESOP										21,937												21,937
Stock options exercised		2,344								68,937						(10,025	)					61,256
Income tax effect of stock options exercised										24,176												24,176
Restricted stock and stock option grants (net activity)		248								35,107												35,355
Cash dividends–$1.26 per common share													(162,301	)								(162,301	)
Cumulative-effect adjustment to initially apply new accounting standard related to income taxes													(3,356	)								(3,356	)
Balance at December 31, 2007		225,577		324,733			(324,733	)		897,656			3,935,485			(3,074,388	)		(198,603	)		1,785,727
Comprehensive income:
Net income													476,876									476,876
Foreign currency translation																			(89,116	)		(89,116	)
Net actuarial gains (losses) and prior service costs recognized for employee benefit plans, net of taxes of $75,939																			(121,561	)		(121,561	)
Unrealized net losses on securities and derivative instruments used in cash flow hedges, net of taxes of $515																			(1,338	)		(1,338	)
Comprehensive income																						264,861
Treasury stock purchased										(838	)					(392,702	)					(393,540	)
Redemption of preferred stock				(107,980	)		107,980
Income tax effect of ESOP										30,628												30,628
Stock options exercised		1,275								36,200						(5,294	)					32,181
Income tax effect of stock options exercised										11,897												11,897
Restricted stock and stock option grants (net activity)		295								40,819												41,114
Cash dividends–$1.40 per common share													(165,111	)								(165,111	)
Cumulative-effect adjustment to initially apply new accounting standard related to split-dollar life insurance arrangements													(2,109	)								(2,109	)
Balance at December 31, 2008		227,147		216,753			(216,753	)		1,016,362			4,245,141			(3,472,384	)		(410,618	)		1,605,648
Comprehensive income:
Net income													435,848									435,848
Foreign currency translation																			75,622			75,622
Net actuarial gains (losses) and prior service costs recognized for employee benefit plans, net of taxes of ($10,285)																			17,168			17,168
Unrealized net gains on securities and derivative instruments used in cash flow hedges, net of taxes of ($144)																			373			373
Comprehensive income																						529,011
Treasury stock purchased																(530,363	)					(530,363	)
Income tax effect of ESOP										(13,411	)											(13,411	)
Stock options exercised		1,071								35,525						(4,886	)					31,710
Income tax effect of stock options exercised										7,645												7,645
Restricted stock and stock option grants (net activity)		429								22,842												23,271
Cash dividends–$1.42 per common share													(162,561	)								(162,561	)
Balance at December 31, 2009	$	228,647	$	216,753		$	(216,753	)	$	1,068,963		$	4,518,428		$	(4,007,633	)	$	(317,455	)	$	1,490,950

See notes to consolidated financial statements.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

     Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company.”) Inter-company accounts and transactions have been eliminated.

     Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.

     Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.

     Reportable segments. See Note 19 for further details.

     Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

     Fair value of financial instruments. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

     Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.

     Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.

     Investments in securities: One fund maintained for the payment of non-qualified benefits includes investments classified as available-for-sale securities. The fair value of such investments, based on quoted market prices, was $14,937, $15,475 and $13,643 at December 31, 2009, 2008 and 2007, respectively. The carrying value of investments included in the fund not classified as available-for-sales securities, was $9,211, $8,680 and $8,105 at December 31, 2009, 2008 and 2007, respectively. This fund is reported in Other assets. The Company also has a deferred compensation plan liability that is valued based on quoted market prices. The fair value of the liability was $19,710, $19,443 and $24,246 at December 31, 2009, 2008 and 2007, respectively. See the fair value measurement table on page 45.

     Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These investments have been identified as variable interest entities. However, the Company is not the primary beneficiary and does not consolidate the operations of the investments in accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The Company’s risk of loss from these non-traded investments is limited to the amount of its contributed capital. The carrying amounts of these non-traded investments, included in Other assets, were $88,249, $33,095 and $41,513 at December 31, 2009, 2008 and 2007, respectively. The carrying amounts of these investments, which approximate market value, were determined based on cost less related income tax credits determined by the effective yield method.

     Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.

     Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. See Note 8.

	December 31,
	2009				2008				2007
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value		Amount		Value
Publicly traded debt	$	768,300	$	741,989	$	284,014	$	291,464	$	284,104	$	316,134
Non-traded debt		26,637		25,105		33,283		29,805		24,262		21,999

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into option and forward currency exchange contracts in 2009, 2008 and 2007 primarily to hedge against foreign currency risk exposure. See Note 14. During 2009, 2008 and 2007, the Company entered into swaps to partially hedge forecasted future commodity purchases. These hedges were designated as cash flow hedges under the Derivatives and Hedging Topic of the ASC. There were no contracts outstanding at December 31, 2009. The fair values of these derivative instruments were included in Other current assets or Other accruals and were insignificant at December 31, 2008 and 2007. During 2009, 2008 and 2007, the Company reclassified insignificant gains and losses from Cumulative other comprehensive loss into earnings. The Company does not use derivative instruments for speculative purposes.

     Fair value measurements. Effective January 1, 2008, the Company adopted Financial Accounting Standards (FAS) No. 157, “Fair Value Measurements,” which is now codified in the Fair Value Measurements and Disclosures Topic of the ASC. This statement provides guidance for using fair value to measure financial and non-financial assets and liabilities and it only applies when other standards require or permit the fair value measurement. It does not expand the use of fair value measurements. As of January 1, 2009, FAS No. 157 applies to both financial and non-financial assets and liabilities.

     In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which is now codified in the Financial Instruments Topic of the ASC. FAS No. 159 allows companies to choose to measure many financial assets at fair value. The election is made on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, all subsequent changes in fair value for that instrument are reported in earnings. The standard was effective for fiscal years beginning after November 15, 2007, and adoption is optional. The Company has not elected the fair value measurement for any existing financial instruments other than those that are already being measured at fair value.

Assets and Liabilities Reported at Fair Value on a Recurring Basis

			Quoted Prices in				Significant
	Fair Value at		Active Markets		Significant Other		Unobservable
	December 31,		for Identical		Observable Inputs		Inputs
	2009		Assets (Level 1)		(Level 2)		(Level 3)
Assets:
Deferred compensation plan asset (A)	$	14,937	$	9,900	$	5,037
Total assets at fair value	$	14,937	$	9,900	$	5,037
Liabilities:
Deferred compensation plan liability (B)	$	19,710	$	19,710
Total liabilities at fair value	$	19,710	$	19,710

(A)

The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $13,836.

(B)

The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices.

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

			Quoted Prices in			Significant
	Fair Value at		Active Markets	Significant Other		Unobservable
	December 31,		for Identical	Observable Inputs		Inputs
	2009		Assets (Level 1)	(Level 2)		(Level 3)
Trademarks (A)	$	24,218				$	24,218
Fixed assets (B)		6,736		$	6,736
	$	30,954		$	6,736	$	24,218

(A)	As a result of the 2009 annual impairment test performed in accordance with the Intangibles Topic of the ASC, trademarks with a carrying value of $38,362 were written down to their calculated fair value of $24,218, resulting in an impairment charge of $14,144. See Note 5.
(B)	Fixed assets totaling $18,010 were written down to their estimated net realizable value of $6,736. The write-downs primarily related to the dissolution of a foreign subsidiary ($5,299) and facilities closed during 2009 ($5,404). See Notes 3 and 6.

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Allowance for doubtful accounts. The Company recorded an allowance for doubtful accounts of $44,755, $40,760 and $29,593 at December 31, 2009, 2008 and 2007, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers.

     Reserve for obsolescence. The Company recorded a reserve for obsolescence of $70,941, $57,305 and $77,189 at December 31, 2009, 2008 and 2007, respectively, to reduce Inventories to their estimated net realizable value.

     Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 5.

     Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, trademarks have been classified as indefinite-lived assets and are not amortized. An annual test for impairment is performed and interim tests are performed whenever an event occurs or circumstances indicate potential impairment. See Note 5. The cost of non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:

	Useful Life
Non-compete covenants	3 – 5 years
Certain intangible property rights	3 – 20 years

     Accumulated amortization of finite-lived intangible assets was $199,691, $165,566 and $144,649 at December 31, 2009, 2008 and 2007, respectively. See Note 5.

     Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 5 and 6.

     Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Included in Property, plant and equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:

Buildings	2-1/2% – 20%
Machinery and equipment	5% – 20%
Furniture and fixtures	10% – 33-1/3%
Automobiles and trucks	10% – 33-1/3%

     Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur. Amounts outstanding under these agreements totaled $29,786, $28,358 and $20,142 at December 31, 2009, 2008 and 2007, respectively.

     Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary.

     Changes in the Company’s accrual for product warranty claims during 2009, 2008 and 2007, including customer satisfaction settlements during the year, were as follows:

	2009			2008			2007
Balance at January 1	$	18,029		$	19,596		$	25,226
Charges to expense		31,367			31,339			31,461
Settlements		(27,182	)		(32,906	)		(37,091	)
Balance at December 31	$	22,214		$	18,029		$	19,596

     Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 9 and 14.

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Employee stock purchase and savings plan and preferred stock. The Company accounts for the employee stock purchase and savings plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The Company recognized compensation expense for amounts contributed to the ESOP and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. See Note 12.

     Defined Benefit Pension and Other Postretirement Benefit Plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or under-funded plans. See Note 7.

     Split-dollar life insurance arrangements. Effective January 1, 2008, the Company adopted FASB Emerging Issues Task Force (EITF) Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” and EITF Issue No. 06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements,” both of which are now codified in the Retirement Benefits Topic of the ASC. The EITFs require an employer to recognize the liability for the postretirement benefit related to endorsement and collateral assignment split-dollar life insurance arrangements. As a result of the adoption, the Company recognized a liability of $2,109, representing the present value of the future premium payments to be made under the existing policies. In accordance with the transition provisions of the EITFs, this cumulative-effect adjustment was recorded as a decrease to the January 1, 2008 retained earnings balance.

     Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The Company follows the “modified prospective” method whereby compensation cost is recognized for all share-based payments granted after December 31, 2005 and for all unvested awards granted prior to January 1, 2006. See Note 13.

     Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.

     Cumulative other comprehensive loss. At December 31, 2009, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $156,291, net prior service costs and net actuarial losses related to pension and other postretirement plans of $161,533 and unrealized net gains on marketable equity securities and derivative instruments used in cash flow hedges of $369. At December 31, 2008 and 2007 the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $231,913 and $142,799, respectively, net prior service costs and net actuarial losses related to pension and other postretirement plans of $178,701 and $57,139, respectively, and unrealized losses (gains) on marketable equity securities and derivative instruments used in cash flow hedges of $4 and $(1,335), respectively.

     Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.

     Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.

     Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items. Research and development costs included in technical expenditures were $40,425, $37,469 and $37,266 for 2009, 2008 and 2007 respectively.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $218,370, $233,604 and $256,253 in advertising costs during 2009, 2008 and 2007 respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.

     Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 12) and common stock held in a revocable trust (see Note 11) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 16.

     Subsequent Events. The Company has evaluated events and transactions occurring subsequent to December 31, 2009 through February 24, 2010, the date of the issuance of the financial statements in accordance with the Subsequent Events Topic of the ASC. During this period, there were no recognized subsequent events requiring recognition in the financial statements, and no non-recognized subsequent events requiring disclosure.

     Impact of recently issued accounting standards. In June 2009, the FASB issued FAS No. 166, “Accounting for Transfers of Financial Assets” (now codified in the Transfers and Servicing Topic of the ASC) and FAS No. 167, “Amendments to FASB Interpretation (FIN) No. 46(R)” (now codified in the Consolidation Topic of the ASC). FAS No. 166 removes the concept of a qualifying special-purpose entity (SPE) from FAS No. 140 and eliminates the exception for qualifying SPEs from the consolidation guidance of FIN No. 46(R). FAS No. 167 changes the analysis that must be performed to determine the primary beneficiary of a variable interest entity (VIE), amends certain guidance in FIN No. 46(R) for determining whether an entity is a VIE and requires enhanced disclosures about involvement with VIEs. Both statements are effective for periods beginning on or after January 1, 2010. The statements will not have a significant impact on the Company’s results of operations, financial condition, liquidity, or disclosures.

     Effective December 31, 2009, the Company adopted FASB Staff Position (FSP) FAS No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets,” which is now codified in the Defined Benefit Plans Subtopic of the Compensation – Retirement Benefits Topic of the ASC. The FSP amends FAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on disclosures about plan assets of defined benefit pension and other postretirement benefit plans. The FSP requires disclosures about how investment allocation decisions are made, the major categories of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs and significant concentrations of risk within plan assets. The FSP is effective for fiscal years ending after December 15, 2009, and the provisions are not required for earlier periods presented for comparative purposes. See Note 7. The FSP has no impact on the Company’s results of operations, financial condition or liquidity.

     Effective September 30, 2009, the Company adopted FAS No. 168, “The FASB Accounting Standards Codification (ASC) and the Hierarchy of Generally Accepted Accounting Principles.” The statement makes the ASC the single source of authoritative U.S. accounting and reporting standards, but it does not change U.S. GAAP. As a result of the adoption, financial statements for interim and annual periods ending on or after September 30, 2009 reflect the Codification references. The statement has no impact on the Company’s results of operations, financial condition or liquidity. The guidance in FAS No. 168 is codified in the General Principles Topic of the ASC.

     Effective June 30, 2009, the Company adopted FAS No. 165, “Subsequent Events,” which is now codified in the Subsequent Events Topic of the ASC. FAS No. 165 defines subsequent events as events or transactions that occur after the balance sheet date, but before the financial statements are issued. It defines two types of subsequent events: recognized subsequent events, which provide additional evidence about conditions that existed at the balance sheet date, and non-recognized subsequent events, which provide evidence about conditions that did not exist at the balance sheet date, but arose before the financial statements were issued. Recognized subsequent events are required to be recognized in the financial statements, and non-recognized subsequent events are required to be disclosed. The statement requires entities to disclose the date through which subsequent events have been evaluated, and the basis for that date. FAS No. 165 is consistent with current practice and does not have any impact on the Company’s results of operations, financial condition or liquidity.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Effective June 30, 2009, the Company adopted three fair value-related FSPs: (i) FSP FAS No. 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (FSP FAS No. 115-2, now codified in the Investments Topic of the ASC), (ii) FSP FAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset and Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP FAS No. 157-4, now codified in the Fair Value Measurements and Disclosures Topic of the ASC) and (iii) FSP FAS No. 107-1 and Accounting Principles Board Opinion (APB) No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (FSP FAS No. 107-1, now codified in the Financial Instruments Topic of the ASC). FSP FAS No. 115-2 amends the existing accounting requirements for other-than-temporary impairment for debt securities by modifying the requirement for recognizing other-than-temporary impairments, changing the terminology used to assess the probability of cash flows and requiring additional disclosures. FSP FAS No. 157-4 amends FAS No. 157, “Fair Value Measurements” to provide additional guidance on estimating fair value when the volume and level of transaction activity for an asset or liability have significantly decreased in relation to normal activity for the asset or liability. FSP FAS No. 107-1 extends the disclosure requirements of FAS No. 107, “Disclosures About Fair Value of Financial Instruments” to interim financial statements. The statements do not have a significant impact on the Company’s results of operations, financial condition or liquidity.

     Effective January 1, 2009, the Company adopted FSP EITF No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” which clarifies EITF No. 03-6, “Participating Securities and the Two-Class Method Under FAS No. 128,” and is now codified in the Earnings Per Share Topic of the ASC. Under the FSP, unvested share-based payment awards that contain rights to receive non-forfeitable dividends (whether paid or unpaid) are considered participating securities, and the two-class method of computing earnings per share is required for all periods presented. Because the use of the two-class method does not have a significant impact on the basic and diluted earnings per share calculations, the treasury stock method continues to be disclosed. See Note16.

     Effective January 1, 2009, the Company adopted FSP FAS No. 142-3, now codified in the Intangibles Topic of the ASC, which amends the factors that must be considered in developing renewal or extension assumptions used to determine the useful life over which to amortize the cost of a recognized intangible asset under FAS No. 142, “Goodwill and Other Intangible Assets.” The FSP requires an entity to consider its own assumptions about renewal or extension of the term of the arrangement, consistent with its expected use of the asset. Considering these assumptions will improve consistency between the useful life of a recognized intangible asset under the Intangibles Topic of the ASC and the period of expected cash flows used to measure the fair value of the asset under the Business Combinations Topic of the ASC. The FSP does not have a significant impact on the Company’s results of operations, financial condition or liquidity.

     Effective January 1, 2009, the Company adopted FAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” an amendment of FASB Statement No. 133 “Accounting for Derivative Instruments and Hedging Activities,” which is now codified in the Derivatives and Hedging Topic of the ASC. FAS No. 161 requires entities to provide greater transparency about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FAS No. 133, and how derivative instruments and related hedged items affect an entity’s financial position, results of operations, and cash flows. The statement does not have an impact on the Company’s results of operations, financial condition or liquidity.

     Effective January 1, 2009, the Company adopted FAS No. 141(R), “Applying the Acquisition Method,” which is now codified in the Business Combinations Topic of the ASC. FAS No. 141(R) provides guidance for the recognition of the fair values of the assets acquired upon initially obtaining control, including the elimination of the step acquisition model. The standard does not have a significant impact on the Company’s results of operations, financial condition or liquidity.

     Effective January 1, 2009, the Company adopted FAS No. 160, “Accounting for Noncontrolling Interests,” now codified in the Consolidation Topic of the ASC. FAS No. 160 clarifies the classification of noncontrolling interests in consolidated statements of financial position and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under the standard, noncontrolling interests are considered equity and should be reported as an element of consolidated equity, and net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests. FAS No. 160 does not have a significant impact on the Company’s results of operations, financial condition or liquidity.

     In accordance with FSP FAS No. 157-2, “Effective Date of FASB Statement No. 157” (now codified in the Fair Value Measurements and Disclosures Topic of the ASC), the Company adopted FAS No. 157 for its financial assets and liabilities as of January 1, 2008, and for its non-financial assets and liabilities as of January 1, 2009. FAS No. 157

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

provides guidance for using fair value to measure assets and liabilities and only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not expand the use of fair value measurements. The application of the guidance in FAS No. 157 does not have a significant impact on the Company’s results of operations, financial condition or liquidity.

     Reclassification. Certain amounts in the 2008 and 2007 consolidated financial statements have been reclassified to conform to the 2009 presentation.

NOTE 2 — ACQUISITIONS

     All acquisitions have been accounted for as purchases and their results of operations have been included in the consolidated financial statements since the date of acquisition.

     During the first quarter of 2009, the Company acquired Altax Sp. zo.o. (Altax). Headquartered in Poznan, Poland, Altax is a leading innovator of protective woodcare coatings and serves multiple channels, including industrial, professional and DIY. Included in the Consumer Group, the acquisition provides a platform for further growth in Central Europe. The aggregate consideration paid for Altax was $11,500, net of cash acquired, including the assumption of certain financial obligations. The acquisition resulted in the recognition of goodwill and intangible assets.

     In December 2008, the Company acquired Euronavy-Tintas Maritimas e Industriais S.A. of Portugal (Euronavy). Headquartered in Lisbon, Portugal, Euronavy is a leading innovator of marine and protective coatings applied to ships, off shore platforms, storage tanks, steel, concrete and flooring. Included in the Global Finishes Group, the acquisition strengthens the Company’s global platform of protective and marine coatings.

     In September 2008, the Company purchased certain assets of the Wagman Primus Group, LP (Wagman). The acquired assets are related to imported raw materials of brushes and foreign manufactured applicators and allows greater flexibility and control in the importation of applicators and related products for the Consumer Group.

     In July 2008, the Company acquired the liquid coatings subsidiaries of Inchem Holdings International Limited (Inchem). Headquartered in Singapore, Inchem produces coatings applied to wood and plastic products in Asia. These waterborne, solvent-based, and ultraviolet curable coatings are applied to furniture, cabinets, flooring and electronic products. The coatings are made and sold in China, Vietnam and Malaysia and distributed to 15 other Asian countries. This acquisition strengthens the Global Finishes Group’s product offering throughout Asia.

     In February 2008, the Company acquired Becker Powder Coatings, Inc. (Becker), a subsidiary of Sweden-based AB Wilh. Headquartered in Columbus, Ohio, Becker produces powder coatings applied to appliances, metal furniture, fixtures, equipment and electronic products manufactured throughout North America. This acquisition strengthens Global Finishes Group’s position in the powder coatings market.

     The aggregate consideration paid for Euronavy, Inchem, Wagman and Becker was $64,103, net of cash acquired, including acquisition costs and the assumption of certain financial obligations. The acquisitions resulted in the recognition of intangible assets. The Euronavy, Inchem and Becker acquisitions also resulted in the recognition of goodwill.

     In October 2007, an indirect wholly owned subsidiary of the Company acquired the remaining 75 percent interest in Life Shield Engineered Systems LLC (Life Shield) by acquiring all of the outstanding membership interests. In late December 2007, the Company acquired substantially all the assets and business of Flex Recubrimientos, S.A. de C.V. and related companies (Flex group). The aggregate consideration paid in cash for these acquisitions was $27,056 including costs of acquisition and the assumption of certain financial obligations. Life Shield is a start-up company that develops and manufactures blast and fragment mitigating systems and ballistic resistant systems that will expand the product offering in the Consumer Group. Flex group is a leading manufacturer and distributor of automotive after-market body fillers, putties, primers and other vehicle refinish products headquartered in Monterrey, Mexico. This acquisition will strengthen the Global Finishes Group’s automotive refinish market position in Mexico. These acquisitions resulted in the recognition of goodwill. The acquisition of Flex group resulted in the recognition of identifiable intangible assets.

     During the third quarter of 2007, the Company acquired substantially all of the stock of Pinturas Industriales S.A. (PISA), substantially all of the assets and business of Napko, S.A. de C.V. (Napko), the brand names, formulas and patents of the VHT^® brand paint line (VHT), and 100 percent of the stock of Columbia Paint & Coatings Co. (Columbia) for an aggregate cash consideration of $105,850, net of cash acquired, including costs of acquisition and the assumption of certain financial obligations. The acquisitions of Napko and Columbia resulted in the recognition of goodwill and all four acquisitions resulted in the recognition of identifiable intangible assets. Columbia, included in the Paint Stores Group, is a leading manufacturer and distributor of paints and coatings in the central and northwestern United States. Columbia services the professional painting contractor, builder and do-it-yourself markets through company-operated stores. Columbia was acquired to contribute to the Company’s domestic controlled-distribution growth strategy. VHT,

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

included in the Consumer Group, is the market leader in High Temperature coatings and premium aerosol products. VHT was acquired to broaden the product offering in Consumer Group and add to its growth strategy. Napko, included in the Global Finishes Group, is a leading manufacturer and distributor of industrial maintenance coatings primarily for the government oil and power industries in Mexico primarily through company-operated branches. PISA, also included in the Global Finishes Group, provides industrial paint products in Uruguay to the wood protection and industrial maintenance market. Napko and PISA were acquired to support and broaden the Company’s international growth strategy.

     During the second quarter of 2007, the Company acquired substantially all of the assets and business of Nitco Paints Private Limited (Nitco) and 100 percent of the stock of M. A. Bruder & Sons Incorporated (MAB) for an aggregate consideration in cash of $149,508, net of cash acquired, including costs of acquisition and the assumption of certain financial obligations. Both acquisitions resulted in the recognition of goodwill and identifiable intangible assets. MAB, included in the Paint Stores Group, is a leading manufacturer and distributor of paints and coatings in the eastern and southeastern portions of the United States. MAB services the professional painting contractor, builder and do-it-yourself markets through its own company-operated stores. MAB was acquired as part of the Company’s domestic controlled-distribution growth strategy. Nitco, included in the Global Finishes Group, is a leading manufacturer and distributor, especially in western India, of exterior paints and coatings used in the construction of office buildings, high rise apartments, shopping malls, hospitals and schools. Nitco was acquired to support the Company’s growth strategy into new international markets.

     The following unaudited pro-forma summary presents consolidated financial information as if Altax, Euronavy, Wagman, Inchem, Becker, Flex group, Life Shield, Columbia, VHT, Napko, PISA, MAB and Nitco had been acquired at the beginning of each period presented. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2007 or the future results of operations of the combined companies under ownership and operation of the Company.

	2009		2008		2007
Net sales	$	7,094,519	$	8,025,041	$	8,213,512
Net income		435,470		478,278		622,289
Net income per common share:
Basic		3.84		4.09		4.89
Diluted		3.77		4.01		4.75

NOTE 3 — LOSS ON DISSOLUTION OF A FOREIGN SUBSIDIARY

     In the fourth quarter of 2009, the Company dissolved an insolvent European subsidiary resulting in a pre-tax expense of $21,923 consisting primarily of current and non-current asset write-downs of $11,637 and severance expense of $5,161. The majority of the severance expense is expected to be paid in 2010. The expense was recorded as a separate line item on the Statements of Consolidated Income due to the significant nature of the dissolution. The Company restructured other business units to maintain service to the majority of its European customers. The impact of the expense on basic and diluted net income per common share for the year was $0.05 per share.

NOTE 4 — INVENTORIES

     Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method. The following presents the effect on inventories, net income and net income per common share had the Company used the first-in, first-out (FIFO) inventory valuation method adjusted for income taxes at the statutory rate and assuming no other adjustments. Management believes that the use of LIFO results in a better matching of costs and revenues. This information is presented to enable the reader to make comparisons with companies using the FIFO method of inventory valuation. During 2009, certain inventories accounted for on the LIFO method were reduced, resulting in the liquidation of certain quantities carried at costs prevailing in prior years. The impact on Net income of such liquidations was $8,634.

	2009			2008			2007
Percentage of total inventories on LIFO		83	%		86	%		83	%
Excess of FIFO over LIFO	$	250,454		$	321,280		$	241,579
Increase (decrease) in net income due to LIFO		43,650			(49,184	)		(7,844	)
Increase (decrease) in net income per common share due to LIFO		.38			(.41	)		(.06	)

NOTE 5 — GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

     During 2009, the Company recognized $4,147 of goodwill, $3,211 of trademarks and $2,643 of other intangibles in the acquisition of Altax. Customer relationships valued at $1,572 and intellectual property valued at $1,071 are being amortized over 10 and 8 years, respectively, from the date of acquisition.

     During 2008, the Company recognized $24,383 of goodwill in the acquisitions of Euronavy, Inchem, Becker and Columbia. There was no goodwill recognized in the

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

acquisition of Wagman Primus. Trademarks of $10,265 were recognized in the acquisition valuation of Inchem and Euronavy. Covenants not to compete of $3,000, obtained in the acquisitions of Inchem, Becker and Wagman Primus, are being amortized over five years from the date of acquisition. Customer lists valued at $6,950, recognized in the acquisitions of Inchem and Becker, are being amortized over periods of 4.5 years and 10 years, respectively. A value for formulations acquired of $300, recognized in the acquisition of Becker, is being amortized over 5 years. No significant residual value was estimated for any of the acquired identified intangible assets.

     During 2007, the Company recognized $93,316 of goodwill in the acquisitions of Nitco, MAB, Napko, Columbia, Life Shield and Flex group. There was no goodwill recognized in the acquisitions of PISA and VHT. Trademarks of $37,180 were recognized in the acquisition valuations of Nitco, MAB, Napko, Columbia, VHT and Flex group. Covenants not to compete of $10,028, obtained in the acquisitions of Nitco, MAB, Napko, Columbia and VHT, are being amortized over five years from date of acquisition. Customer lists and a distribution network valued at $25,930, recognized in the acquisitions of Nitco, MAB, Napko, Columbia and VHT, are being amortized over periods of three and one-half to eight years. Additional identified intangible assets of product formulations ($3,680) and other intangible assets ($1,000), recognized as part of the acquisitions of Nitco, MAB, Columbia and VHT are being amortized over periods of three to eight years. No significant residual value was estimated for any of the acquired identified intangible assets. No intangible assets were identified in the Life Shield acquisition.

     In accordance with the Property, Plant and Equipment Topic of the ASC, whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable or the useful life may have changed, impairment tests are to be performed. Undiscounted cash flows are to be used to calculate the recoverable value of long-lived assets to determine if such assets are impaired. Where impairment is identified, a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets, is to be used to determine the fair value for the assets to measure any potential impairment.

     During 2009, reductions in the carrying value of property, plant and equipment associated with two manufacturing facilities closed during the year was recorded (see Note 6). There were no other significant reductions in carrying value of long-lived assets in 2009.

     During 2008, in the Consumer Group, a reduction of $1,980 in the carrying value of certain manufacturing equipment held for disposal was charged to Cost of goods sold. An impairment test was performed due to the consolidation of redundant operations.

     During 2007, in the Consumer Group, a reduction of $660 in the carrying values of certain manufacturing equipment and an impairment of $856 in certain assets held for disposal were charged to Cost of goods sold and Other general expense – net, respectively. An impairment test was performed due to changes in the manner in which the manufacturing equipment was used and changes in the disposition plan for the assets held for disposal.

     In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill and indefinite-lived intangible assets are tested for impairment annually, and interim impairment tests are performed whenever an event occurs or circumstances change that indicate an impairment has more likely than not occurred. October 1 has been established for the annual impairment review. At the time of impairment testing, values are estimated separately for goodwill and trademarks with indefinite lives using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. Impairments of goodwill and trademarks with indefinite lives have been reported as a separate line in the Statements of Consolidated Income.

     The annual impairment review performed as of October 1, 2009 resulted in trademark impairments of $14,144 ($10,998 in the Paint Stores Group, $86 in the Consumer Group and $3,060 in the Global Finishes Group), and no goodwill impairment. The trademark impairments related primarily to lower-than-anticipated sales of certain acquired brands.

     The annual impairment review performed as of October 1, 2008 resulted in reductions in the carrying values of goodwill of $8,113 and trademarks with indefinite lives of $22,579. The goodwill impairment was included in the Consumer Group. The trademark impairments were in the Paint Stores Group ($22,474) and the Consumer Group ($105). The goodwill and trademark impairments related primarily to lower-than-anticipated cash flow in a certain acquired business and lower-than-anticipated sales of certain acquired brands, respectively.

     During the second quarter of 2008, the Company performed an interim impairment review of its goodwill and indefinite-lived intangible assets. Soft domestic architectural paint sales in the new residential, residential repaint, DIY and commercial markets indicated that certain domestic indefinite-lived trademarks might be impaired. In addition, continued low cash flow projections in one foreign business unit indicated that goodwill impairment might be likely. The interim impairment review resulted in reductions in the carrying values of certain trademarks with indefinite lives of $23,121. The trademark impairments were charged to the Paint Stores Group ($20,364) and the Consumer Group ($2,757). The

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

goodwill impairment of a foreign business unit aggregated $791 and was charged to the Global Finishes Group.

     The annual impairment review performed as of October 1, 2007 resulted in reductions in the carrying values of goodwill of $15,176 and trademarks with indefinite lives of $947. The goodwill impairments were included in the Consumer Group ($4,215) and the Global Finishes Group ($10,961). The trademark impairments were included in the Paint Stores Group ($172), the Consumer Group ($175), and in the Global Finishes Group ($600). The goodwill and trademark impairments related primarily to lower-than-anticipated cash flow in certain acquired businesses and lower-than-anticipated sales of certain acquired brands, respectively.

     Amortization of finite-lived intangible assets is as follows for the next five years: $23,300 in 2010, $19,400 in 2011, $19,500 in 2012 and $12,200 in 2013 and $21,600 in 2014.

     A summary of changes in the Company’s carrying value of goodwill by reportable operating segment is as follows:

	Paint Stores		Consumer			Global Finishes			Consolidated
Goodwill	Group		Group			Group			Totals
Balance at January 1, 2007	$	205,149	$	681,405		$	29,910		$	916,464
Acquisitions		69,071		12,371			11,874			93,316
Impairment charged to operations				(4,215	)		(10,961	)		(15,176	)
Currency and other adjustments		30		74			1,905			2,009
Balance at December 31, 2007		274,250		689,635			32,728			996,613
Acquisitions		10,133					14,250			24,383
Impairment charged to operations				(8,113	)		(791	)		(8,904	)
Currency and other adjustments		1,042		1,842			(8,264	)		(5,380	)
Balance at December 31, 2008		285,425		683,364			37,923			1,006,712
Acquisitions				4,147						4,147
Currency and other adjustments		20		(29,970	)		33,916			3,966
Balance at December 31, 2009	$	285,445	$	657,541		$	71,839		$	1,014,825

     A summary of the Company’s carrying value of intangible assets is as follows:

										Trademarks		Total
	Finite-lived intangible assets									with indefinite		intangible
	Software			All other			Subtotal			lives		assets
December 31, 2009
Weighted-average amortization period	9 years			10 years			9 years
Gross	$	90,263		$	218,621		$	308,884
Accumulated amortization		(47,140	)		(152,552	)		(199,691	)
Net value	$	43,123		$	66,069		$	109,193		$	170,221	$	279,413
December 31, 2008
Weighted-average amortization period	9 years			9 years			9 years
Gross	$	81,236		$	199,746		$	280,982
Accumulated amortization		(35,856	)		(129,710	)		(165,566	)
Net value	$	45,380		$	70,036		$	115,416		$	184,547	$	299,963
December 31, 2007
Weighted-average amortization period	10 years			10 years			10 years
Gross	$	71,480		$	189,751		$	261,231
Accumulated amortization		(28,488	)		(116,161	)		(144,649	)
Net value	$	42,992		$	73,590		$	116,582		$	234,562	$	351,144

NOTE 6 — EXIT OR DISPOSAL ACTIVITIES

     Management is continually re-evaluating the Company’s operating facilities, including acquired operating facilities, against its long-term strategic goals. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC. Provisions for qualified exit costs are made at the time a facility is no longer operational or an adjustment to the purchase price is made for acquired facilities planned at acquisition to be exited or disposed. Qualified exit costs primarily include post-closure rent expenses, incremental post-closure costs and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. Concurrently, property, plant and equipment is tested for impairment in

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars otherwise indicated)

accordance with the Property, Plant and Equipment Topic of the ASC, and if impairment exists, the carrying value of the related assets is reduced to estimated fair value. Additional impairment may be recorded for subsequent revisions in estimated fair value.

     In 2009, a reduction of $5,404 in the carrying value of the property, plant and equipment associated with two manufacturing facilities closed during the year was recorded. Also during 2009, reductions of $571 in estimated fair value of property, plant and equipment in certain manufacturing facilities closed in 2008 or prior was recorded. In 2008, a reduction of $468 in the carrying value of the property, plant and equipment associated with two manufacturing facilities closed during the year was recorded. Also during 2008, reductions of $473 in estimated fair value of property, plant and equipment in certain manufacturing facilities closed in 2007 or prior were recorded as additional impairments. During 2007, an impairment charge of $856 occurred relating to the disposition of a manufacturing facility that was closed in 2005. Impairment charges for property, plant and equipment of closed sites being held for disposal are included in Other general expense – net.

     During 2009, four manufacturing facilities and 65 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit costs of $4,766, $9,855 and $5,243 were charged to the Paint Stores Group, Consumer Group and Global Finishes Group, respectively. In addition, there were adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed in 2008. Adjustments to prior provisions of $1,968 were recorded in Other general expense – net.

     During 2008, four manufacturing and three distribution facilities, five administrative offices and 92 stores and branches were closed. The closure and disposal of two manufacturing facilities and two administrative offices in the Paint Stores Group were planned at the time of acquisition. Total qualified exit costs of $1,668 related to the acquired facilities were included as part of the purchase price allocations in accordance with business combination accounting standards in effect at the time of acquisition. One additional manufacturing and two distribution facilities and 79 stores in the Paint Stores Group, one manufacturing and one distribution facility in the Consumer Group, and three administrative offices and 14 branches in the Global Finishes Group were closed due to excess capacity or redundancy. Provisions of $7,090 for qualified exit costs resulting from the closure of these facilities were recorded in Cost of goods sold or Selling, general and administrative expenses in 2008. Of the total provisions, $5,448 was charged to the Paint Stores Group, $915 was charged to the Consumer Group and $727 was charged to the Global Group.

     During 2007, two manufacturing facilities were closed. One closed facility in the Paint Stores Group was planned at the time of acquisition for closure and disposal. Total qualified exit costs of $2,635 related to the acquired facility were included as part of the purchase price allocation in accordance with business combination accounting standards in effect at the time of acquisition. The other closed facility, in the Consumer Group, was an older facility replaced by a new manufacturing facility. Provisions of $1,213 for other qualified exit costs resulting from the closure of the facility were incurred in 2007.

     At December 31, 2009, approximately 10 percent of the remaining accrual for qualified exit costs relating to facilities shutdown prior to 2007 is expected to be incurred by the end of 2010. The remaining portion of the ending accrual for facilities shutdown prior to 2007 primarily represented post-closure contractual and demolition expenses related to certain owned facilities which are closed and being held for disposal or involved in ongoing environmental-related activities. The Company cannot reasonably estimate when such matters will be concluded to permit disposition.

     The following table summarizes the activity and remaining liabilities associated with qualified exit costs:

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

					Actual			Adjustments to
	Balance at		Provisions in		expenditures			prior provisions			Balance at
	December 31,		Cost of goods		charged to			in Other general			December 31,
Exit Plan	2008		sold, SG&A		accrual			expense - net			2009
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs			$	3,898	$	(685	)				$	3,213
Consumer Group manufacturing facilities shutdown in 2009:
Severance and related costs				7,345		(2,813	)					4,532
Other qualified exit costs				2,428		(170	)					2,258
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Severance and related costs				629		(425	)					204
Other qualified exit costs				4,614		(911	)					3,703
Paint Stores Group manufacturing and distribution facilities, administrative offices and stores shutdown in 2008:
Severance and related costs	$	324		868		(937	)	$	(185	)		70
Other qualified exit costs		4,450				(2,602	)		3,578			5,426
Consumer Group manufacturing and distribution facilities shutdown in 2008:
Severance and related costs		449		82		(33	)		(187	)		311
Other qualified exit costs		150				(67	)					83
Global Finishes Group administrative offices and branches shutdown in 2008:
Severance and related costs		397				(397	)
Other qualified exit costs		240				(294	)		142			88
Paint Stores Group manufacturing facility shutdown in 2007:
Severance and related costs		33				(9	)		(24	)
Other qualified exit costs		1,859				(430	)		149			1,578
Consumer Group manufacturing facility shutdown in 2007:
Other qualified exit costs		2,036							130			2,166
Other qualified exit costs for facilities shutdown prior to 2007		11,686				(2,550	)		(1,635	)		7,501
Totals	$	21,624	$	19,864	$	(12,323	)	$	1,968		$	31,133

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

			Provisions in		Actual			Adjustments to
	Balance at		Cost of goods		expenditures			prior provisions			Balance at
	December 31,		sold, SG&A		charged to			in Other general			December 31,
Exit Plan	2007		or acquired		accrual			expense - net			2008
Paint Stores Group manufacturing and distribution facilities, administrative offices and stores shutdown in 2008:
Severance and related costs			$	1,722	$	(1,363	)	$	(35	)	$	324
Other qualified exit costs				5,394		(1,370	)		426			4,450
Consumer Group manufacturing and distribution facilities shutdown in 2008:
Severance and related costs				915		(847	)		381			449
Other qualified exit costs									150			150
Global Finishes Group administrative offices and branches shutdown in 2008:
Severance and related costs				420		(23	)					397
Other qualified exit costs				307		(67	)					240
Paint Stores Group manufacturing facility shutdown in 2007:
Severance and related costs	$	650				(550	)		(67	)		33
Other qualified exit costs		1,726				(433	)		566			1,859
Consumer Group manufacturing facility shutdown in 2007:
Other qualified exit costs									2,036			2,036
Consumer Group manufacturing facilities shutdown in 2005:
Other qualified exit costs		163				(113	)		(50	)
Consumer Group manufacturing facility shutdown in 2004:
Other qualified exit costs		80				(18	)		(62	)
Other qualified exit costs for facilities shutdown prior to 2003		10,899				(859	)		1,646			11,686
Totals	$	13,518	$	8,758	$	(5,643	)	$	4,991		$	21,624

					Actual			Adjustments to
			Provisions in		expenditures			prior provisions			Balance at
	Balance at		Cost of goods		charged to			in Other general			December 31,
Exit Plan	January 1, 2007		sold or acquired		accrual			expense - net			2007
Paint Stores Group manufacturing facility shutdown in 2007:
Severance and related costs			$	909	$	(259	)				$	650
Other qualified exit costs				1,726								1,726
Consumer Group manufacturing facility shutdown in 2007:
Other qualified exit costs				1,213		(1,213	)
Consumer Group manufacturing facilities shutdown in 2005:
Other qualified exit costs	$	947				(325	)	$	(459	)		163
Consumer Group manufacturing facility shutdown in 2004:
Other qualified exit costs		130				(37	)		(13	)		80
Other qualified exit costs for facilities shutdown prior to 2003		12,110				(388	)		(823	)		10,899
Totals	$	13,187	$	3,848	$	(2,222	)	$	(1,295	)	$	13,518

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

NOTE 7 — PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

     The Company provides pension benefits to substantially all employees through primarily noncontributory defined contribution or defined benefit plans and certain health care and life insurance benefits to domestic active employees and eligible retirees. In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes an asset for overfunded defined benefit pension or other postretirement benefit plans and a liability for unfunded or underfunded plans. In addition, actuarial gains and losses and prior service costs of such plans are recorded in Cumulative other comprehensive loss, a component of Shareholders’ equity. The amounts recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change and all such amounts will be amortized to expense over a period of years through the net pension cost (credit) and net periodic benefit cost.

     Health care plans. The Company provides certain domestic health care plans that are contributory and contain cost-sharing features such as deductibles and coinsurance. There were 18,292, 19,403 and 19,339 active employees entitled to receive benefits under these plans as of December 31, 2009, 2008 and 2007, respectively. The cost of these benefits for active employees, which includes claims incurred and claims incurred but not reported, amounted to $152,316, $131,384 and $121,798 for 2009, 2008 and 2007, respectively. In connection with the acquisitions of MAB and Columbia, the Company acquired certain health care benefit plans for employees who met certain eligibility requirements. The Company operated the acquired plans independently from the date of acquisition until December 31, 2007. Beginning January 1, 2008, the participants of these acquired plans became participants in the Company’s health care benefit plan.

     Defined contribution pension plans. The Company’s annual contribution for its domestic defined contribution pension plan was $23,131, $37,210 and $39,050 for 2009, 2008 and 2007, respectively. Prior to July 1, 2009 the contribution was based on six percent of compensation for covered employees. Effective July 1, 2009 the contribution percentage was changed to a range from two percent to seven percent based on an age and service formula. Assets in employee accounts of the domestic defined contribution pension plan are invested in various mutual funds as directed by the participants. These mutual funds did not own a significant number of shares of the Company’s common stock.

     The Company’s annual contribution for its foreign defined contribution pension plans, which is based on various percentages of compensation for covered employees up to certain limits, was $2,636, $2,883 and $3,027 for 2009, 2008 and 2007, respectively. Assets in employee accounts of the foreign defined contribution pension plans are invested in various mutual funds. These mutual funds did not own a significant number of shares of the Company’s common stock.

     Defined benefit pension plans. The Company has one salaried and one hourly domestic defined benefit pension plan, and fourteen foreign defined benefit pension plans. All participants in the domestic salaried defined benefit pension plan prior to January 1, 2002 retain the previous defined benefit formula for computing benefits with certain modifications for active employees. Eligible domestic salaried employees hired or re-hired on or after January 1, 2002 become participants in the revised domestic salaried defined benefit pension plan upon completion of six months of service. All employees who became participants on or after January 1, 2002 and before January 1, 2005 were credited with certain contribution credits equivalent to six percent of their salary. All employees who became participants on or after January 1, 2005 are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised and all employees who become participants on or after January 1, 2002 are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Contribution credits are converted into units to account for each participant’s benefits. Participants will receive a variable annuity benefit upon retirement or a lump sum distribution upon termination (if vested). The variable annuity benefit is subject to the hypothetical returns achieved on each participant’s allocation of units from investments in various investment funds as directed by the participant. Contribution credits to the revised domestic salaried defined benefit pension plan are being funded through existing plan assets.

     In connection with the 2007 acquisition of M.A. Bruder & Sons, the Company acquired a domestic defined benefit pension plan (MAB Plan). The MAB Plan was frozen for new participants by M.A. Bruder & Sons prior to the acquisition, and covered certain employees who met the eligibility requirements based primarily on age, length of service and hours worked per year. The Company operated the MAB Plan independently from the date of acquisition until December 31, 2007, at which time it was merged into the Company’s domestic hourly defined benefit pension plan. The decision to merge the MAB Plan with the Company’s domestic hourly defined benefit pension plan effective December 31, 2007 was made at the acquisition date. Accrued benefits and

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

vesting service under the MAB Plan were credited under the Company’s domestic hourly defined benefit pension plan.

     At December 31, 2009, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $211,635, fair value of plan assets of $454,239 and excess plan assets of $242,604. The domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $127,640, fair value of plan assets of $122,808 and a deficiency of plan assets of $4,832. The hourly plan is funded in accordance with all applicable regulations as of December 31, 2009 and no funding will be required in 2010. At December 31, 2008, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $215,253, fair value of plan assets of $429,878 and excess plan assets of $214,625, and the domestic hourly defined benefit pension plan was under-funded, with a projected benefit obligation of $100,260, fair value of plan assets of $73,609 and a deficiency of plan assets of $26,651. At December 31, 2007, both domestic plans were overfunded.

     At December 31, 2009, seven of the Company’s foreign defined benefit pension plans were underfunded, with combined projected benefit obligations, fair values of net assets and deficiencies of plan assets of $71,530, $51,061 and $20,469, respectively. An increase of $30,282 from 2008 in the combined projected benefit obligations of all foreign defined benefit pension plans was primarily due to one large foreign plan having a lower discount rate and an increase in other actuarial assumptions.

     The Company expects to make the following benefit payments for all domestic and foreign defined benefit pension plans: $28,778 in 2010; $29,731 in 2011; $30,520 in 2012; $31,361 in 2013; $31,958 in 2014; and $168,913 in 2015 through 2019.

     The estimated net actuarial losses and prior service costs for the defined benefit pension plans that are expected to be amortized from Cumulative other comprehensive loss into the net pension costs in 2010 are $20,219 and $1,689, respectively.

     The following table summarizes the components of the net pension costs (credits) and Cumulative other comprehensive loss related to the defined benefit pension plans:

				Domestic									Foreign
	Defined Benefit Pension Plans									Defined Benefit Pension Plans
	2009			2008			2007			2009			2008			2007
Net pension costs (credits):
Service costs	$	17,070		$	20,030		$	18,879		$	1,226		$	2,517		$	2,781
Interest costs		18,124			18,003			17,092			3,036			4,382			3,560
Expected returns on plan assets		(36,828	)		(52,951	)		(50,992	)		(1,810	)		(2,785	)		(2,468	)
Amortization of prior service costs		1,493			1,476			1,220			47			204			159
Amortization of actuarial losses		28,723						1,229			325			962			1,225
Ongoing periodic costs (credits)		28,582			(13,442	)		(12,572	)		2,824			5,280			5,257
Settlement expense (credits)								825			(39	)		(9	)		(115	)
Net pension costs (credits)		28,582			(13,442	)		(11,747	)		2,785			5,271			5,142
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year		(49,250	)		227,878			(717	)		14,922			(7,996	)		(4,065	)
Prior service costs during the year		1,086			239			2,008						171
Amortization of prior service costs		(1,493	)		(1,476	)		(1,220	)		(47	)		(204	)		(163	)
Amortization of actuarial losses		(28,723	)					(1,229	)		(286	)		(953	)		(1,196	)
Exchange rate gain (loss) recognized during the year											1,717			(2,306	)
Total recognized in Cumulative other comprehensive loss		(78,380	)		226,641			(1,158	)		16,306			(11,288	)		(5,424	)
Total recognized in net pension costs (credits) and Cumulative other comprehensive loss	$	(49,798	)	$	213,199		$	(12,905	)	$	19,091		$	(6,017	)	$	(282	)

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     The Company employs a total return investment approach for the domestic and foreign defined benefit pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return of assets for a prudent level of risk. In determining the expected long-term rate of return on defined benefit pension plan assets, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies. The target allocations for plan assets are 45–60 percent equity securities and 35–45 percent fixed income securities.

     The following table summarizes the fair value of the defined benefit pension plan assets at December 31, 2009:

			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Fair Value at		Identical Assets		Observable Inputs		Inputs
	December 31, 2009		(Level 1)		(Level 2)		(Level 3)
Investments at fair value:
Short-term investments (a)	$	51,688			$	51,688
Equity investments (b)		430,550	$	248,138		182,412
Fixed income investments (c)		59,012		17,802		35,945	$	5,265
Other assets (d)		91,667		73,939				17,728
	$	632,917	$	339,879	$	270,045	$	22,993

(a) - - This category includes a full range of high quality, short-term money market securities.

(b) - This category includes actively managed equity assets that track primarily to the S&P 500.

(c) - This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

(d) - This category consists of a fixed income mutual fund (approximately 80%) and venture capital (approximately 20%).

     The following table summarizes the changes in the fair value of the defined benefit pension plan assets classified as level 3:

	Balance at		Acquisitions/		Realized and			Balance at
	12/31/08		(Dispositions)		Unrealized Losses			12/31/09
Fixed income investments	$	2,652	$	2,380	$	233		$	5,265
Other assets		18,669		735		(1,676	)		17,728
	$	21,321	$	3,115	$	(1,443	)	$	22,993

     Included as equity investments in the domestic defined benefit pension plan assets at December 31, 2009 were 855,000 shares of the Company’s common stock with a market value of $52,710, representing 9.1 percent of total plan assets. Dividends received on the Company’s common stock during 2009 totaled $1,214.

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:

				Domestic									Foreign
	Defined Benefit Pension Plans									Defined Benefit Pension Plans
	2009			2008			2007			2009			2008			2007
Accumulated benefit obligations at end of year	$	323,553		$	310,416		$	307,646		$	59,226		$	33,513		$	52,487
Projected benefit obligations:
Balances at beginning of year	$	315,513		$	318,370		$	298,680		$	44,893		$	70,712		$	69,565
Service costs		17,070			20,030			18,879			1,226			2,517			2,781
Interest costs		18,124			18,003			17,092			3,036			4,382			3,560
Actuarial losses (gains)		12,068			(15,562	)		(453	)		18,484			(17,929	)		(5,192	)
Plan amendments, merger and other		1,086			239			10,039			2,745			1,095			792
Effect of foreign exchange											6,427			(14,252	)		1,290
Benefits paid		(24,586	)		(25,567	)		(25,867	)		(1,636	)		(1,632	)		(2,084	)
Balances at end of year		339,275			315,513			318,370			75,175			44,893			70,712
Plan assets:
Balances at beginning of year		503,487			718,812			685,388			38,603			49,807			43,300
Actual returns on plan assets		98,146			(189,758	)		54,886			3,853			(7,149	)		1,340
Plan merger and other — net								4,405			9,902			9,619			6,390
Effect of foreign exchange											5,148			(12,042	)		861
Benefits paid		(24,586	)		(25,567	)		(25,867	)		(1,636	)		(1,632	)		(2,084	)
Balances at end of year		577,047			503,487			718,812			55,870			38,603			49,807
Excess (deficient) plan assets over projected benefit obligations	$	237,772		$	187,974		$	400,442		$	(19,305	)	$	(6,290	)	$	(20,905	)
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	$	242,604		$	214,625		$	400,442		$	2,697		$	1,012		$	111
Other accruals											(497	)		(83	)		(104	)
Other long-term liabilities		(4,832	)		(26,651	)					(21,505	)		(7,219	)		(20,912	)
	$	237,772		$	187,974		$	400,442		$	(19,305	)	$	(6,290	)	$	(20,905	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(198,134	)	$	(276,107	)	$	(48,229	)	$	(24,873	)	$	(8,522	)	$	(19,886	)
Prior service costs		(7,307	)		(7,714	)		(8,951	)		(28	)		(73	)		(56	)
	$	(205,441	)	$	(283,821	)	$	(57,180	)	$	(24,901	)	$	(8,595	)	$	(19,942	)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate		5.50	%		6.10	%		6.00	%		5.78	%		6.71	%		7.17	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		3.85	%		3.73	%		4.79	%
Weighted-average assumptions used to determine net pension costs (credits):
Discount rate		6.10	%		6.00	%		5.60	%		6.85	%		6.14	%		5.07	%
Expected long-term rate of return on assets		7.50	%		7.50	%		7.50	%		6.25	%		6.63	%		6.71	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		3.93	%		4.40	%		4.12	%

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Postretirement Benefits Other Than Pensions.

Employees of the Company hired in the United States prior to January 1, 1993 who are not members of a collective bargaining unit, and certain groups of employees added through acquisitions, are eligible for health care and life insurance benefits upon retirement, subject to the terms of the unfunded plans. There were 4,704, 4,661 and 4,750 retired employees entitled to receive such postretirement benefits as of December 31, 2009, 2008 and 2007, respectively.

     The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2009			2008			2007
Benefit obligation:
Balance at beginning of year — unfunded	$	264,802		$	280,433		$	318,125
Service cost		3,391			3,707			4,057
Interest cost		15,695			16,340			16,464
Actuarial loss (gain)		34,241			(18,274	)		(41,463	)
Benefits paid		(17,603	)		(17,404	)		(16,750	)
Balance at end of year — unfunded	$	300,526		$	264,802		$	280,433
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	$	(283,548	)	$	(248,603	)	$	(262,720	)
Other accruals		(16,978	)		(16,199	)		(17,713	)
	$	(300,526	)	$	(264,802	)	$	(280,433	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(42,274	)	$	(8,309	)	$	(26,796	)
Prior service costs		2,296			2,952			3,586
	$	(39,978	)	$	(5,357	)	$	(23,210	)
Weighted-average assumptions used to determine benefit obligation:
Discount rate		5.50	%		6.10	%		6.00	%
Health care cost trend rate — pre-65		8.00	%		7.50	%		8.00	%
Health care cost trend rate — post-65		8.00	%		7.50	%		8.00	%
Prescription drug cost increases		9.00	%		9.00	%		10.00	%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate		6.10	%		6.00	%		5.60	%
Health care cost trend rate — pre-65		7.50	%		8.00	%		8.50	%
Health care cost trend rate — post-65		7.50	%		8.00	%		8.50	%
Prescription drug cost increases		9.00	%		10.00	%		11.00	%

     The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2009			2008			2007
Net periodic benefit cost:
Service cost	$	3,391		$	3,707		$	4,057
Interest cost		15,695			16,340			16,464
Amortization of actuarial losses		276			213			3,100
Amortization of prior service credit		(656	)		(634	)		(634	)
Net periodic benefit cost		18,706			19,626			22,987
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (loss) gain		34,241			(18,274	)		(41,463	)
Amortization of actuarial losses		(276	)		(213	)		(3,100	)
Amortization of prior service credit		656			634			634
Total recognized in Cumulative other comprehensive loss		34,621			(17,853	)		(43,929	)
Total recognized in net periodic benefit cost and Cumulative other comprehensive loss	$	53,327		$	1,773		$	(20,942	)

61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     The estimated net actuarial loss and prior service credit for postretirement benefits other than pensions that are expected to be amortized from Cumulative other comprehensive loss into net periodic benefit cost in 2010 are $1,304 and $(656), respectively.

     The assumed health care cost trend rate and prescription drug cost increases used to determine the net periodic benefit cost for postretirement health care benefits for 2010 both decrease in each successive year until reaching 5.0 percent in 2014 for prescription drug cost increases and in 2015 for health care. The assumed health care and prescription drug cost trend rates have a significant effect on the amounts reported for the postretirement health care benefit obligation. A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects as of December 31, 2009:

	One-Percentage-Point
	Increase		(Decrease)
Effect on total of service and interest cost components	$	194	$	(199	)
Effect on the postretirement benefit obligation	$	3,352	$	(3,384	)

     The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Medicare Act) introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In accordance with the accounting guidance related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 included in the Retirement Benefits Topic of the ASC, the effects of the federal subsidy resulted in a $21,400 reduction of the accumulated postretirement benefit obligation for benefits attributed to past service, which is being recognized prospectively beginning July 1, 2004. During 2009, this recognition resulted in a $1,934 reduction of the net periodic benefit cost, which consisted of $1,870 reduction in interest cost and a $64 reduction in service cost. During 2008, this recognition resulted in a $3,156 reduction of the net periodic benefit cost, which consisted of $1,168 amortization of the actuarial experience gain, a $1,979 reduction in interest cost, and a $9 reduction in service cost. During 2007, this recognition resulted in a $3,165 reduction of the net periodic benefit cost, which consisted of $1,244 amortization of the actuarial experience gain, a $1,906 reduction in interest cost and a $15 reduction in service cost. The initial effects of the federal subsidy attributable to past service have been fully recognized.

     The Company expects to make retiree health care benefit cash payments and to receive Medicare Part D prescription cash reimbursements as follows:

			Medicare
	Retiree Health		Prescription			Expected Cash
	Care Benefits		Reimbursement			Payments - Net
2010	$	20,275	$	(2,830	)	$	17,445
2011		22,129		(2,992	)		19,137
2012		23,291		(3,214	)		20,077
2013		24,217		(3,466	)		20,751
2014		24,783		(3,770	)		21,013
2015 through 2019		124,055		(15,365	)		108,690
Total expected benefit cash payments	$	238,750	$	(31,637	)	$	207,113

NOTE 8 — DEBT

Long-term debt

	Due Date		2009		2008		2007
3.125% Senior Notes		2014	$	499,777
7.375% Debentures		2027		129,050	$	137,047	$	137,044
7.45% Debentures		2097		139,473		146,967		146,960
1.64% to 13.0% Promissory Notes	Through 2015			14,370		19,713		9,450
			$	782,670	$	303,727	$	293,454

     Maturities of long-term debt are as follows for the next five years: $12,267 in 2010; $11,104 in 2011; $225 in 2012; $225 in 2013 and $500,345 in 2014. Interest expense on long-term debt was $30,984, $31,973 and $39,272 for 2009, 2008 and 2007, respectively.

     Among other restrictions, the Company’s Notes, Debentures and revolving credit agreement contain certain covenants relating to liens, ratings changes, merger and sale of assets, consolidated leverage and change of control as defined in the agreements. In the event of default under any one of

62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

these arrangements, acceleration of the maturity of any one or more of these borrowings may result. The Company was in compliance with all covenants for all years presented.

     On December 16, 2009, the Company issued $500,000 of debt securities consisting of 3.125% senior notes, due December 15, 2014. The debt securities are covered under a shelf registration filed with the Securities and Exchange Commission (SEC) on December 16, 2009.

     Effective December 24, 1997, the Company filed a shelf registration with the SEC covering $150,000 of unsecured debt securities with maturities greater than nine months from the date of issue. Effective September 8, 1998, the Company filed a universal shelf registration statement with the SEC to issue debt securities, common stock and warrants up to $1,500,000. Both shelf registrations expired in December 2008. There were no borrowings outstanding or issuance of common stock or warrants under either registration during all years presented.

     Short-term borrowings. At December 31, 2009, there were no borrowings outstanding under the domestic commercial paper program. At December 31, 2008 and 2007, borrowings outstanding under the domestic commercial paper program totaled $83,064 and $299,191, respectively, and were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 2.6% and 5.5% at December 31, 2008 and 2007, respectively. Borrowings outstanding under various foreign programs of $22,674, $33,374 and $107,891 at December 31, 2009, 2008 and 2007, respectively, were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 8.8%, 9.5% and 8.9% at December 31, 2009, 2008 and 2007, respectively.

     On April 17, 2006, the Company entered into a three year credit agreement, which was amended on April 25, 2006 and May 8, 2006, that gave the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. The credit agreement matured on June 20, 2009 and was not renewed.

     On May 23, 2006, the Company entered into a five-year credit agreement, which was amended on July 24, 2006. This credit agreement gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. On April 26, 2007 and August 28, 2007 the company entered into two additional five-year credit agreements, which were later amended on September 17, 2007 and September 25, 2007. These additional credit agreements give the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $500,000. At December 31, 2009, there were no borrowings outstanding under either of these credit agreements. At December 31, 2008, $400,000 was outstanding, with a weighted-average interest rate of 2.8%. At December 31, 2007, $250,000 was outstanding, with a weighted average interest rate of 5.0%.

     At December 31, 2009, the Company had a five-year senior unsecured revolving credit agreement. The agreement was amended in 2008 to extend the maturity date from July 20, 2009 to July 20, 2010. A $500,000 letter of credit subfacility amendment to the agreement was reduced to $300,000 in 2008. The Company uses the revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar liquidity requirement. The Company’s commercial paper program maximum borrowing capability is $845,000. There were no borrowings outstanding under the revolving credit agreement during all years presented.

     On January 8, 2010, the Company terminated its existing $845,000 five-year senior unsecured revolving credit agreement scheduled to expire on July 20, 2010 and entered into a new $500,000 three-year senior unsecured revolving credit agreement. The new credit agreement allows the Company to increase the facility to an aggregate amount of $750,000 subject to the discretion of each leader to participate. This agreement will be used primarily to support commercial paper borrowings. The maximum borrowing capability of the Company’s commercial paper program was reduced to $500,000 effective January 8, 2010.

     On February 1, 2006, the Company sold or contributed certain of its accounts receivable to SWC Receivables Funding LLC (SWC), a consolidated wholly owned subsidiary. SWC entered into an accounts receivable securitization borrowing facility with a third party program agent. Under this program, SWC could borrow up to $500,000 and secure such borrowings by granting a security interest in certain eligible accounts receivable and related security. On July 11, 2008, SWC terminated the accounts receivable securitization borrowing facility with a third party program agent and SWC was dissolved. There were no outstanding borrowings under the facility at December 31, 2007 or at the time it was terminated and no termination penalties were incurred.

NOTE 9 — OTHER LONG-TERM LIABILITIES

     The operations of the Company, like those of other companies in our industry, are subject to various domestic and foreign environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in

63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.

     The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and 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.

     The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are based on currently available facts regarding each site. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is provided. The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Included in Other long-term liabilities at December 31, 2009, 2008, and 2007 were accruals for extended environmental-related activities of $106,168, $128,179 and $133,333, respectively. Included in Other accruals at December 31, 2009, 2008 and 2007 were accruals for estimated costs of current investigation and remediation activities of $64,685, $52,555 and $60,447, respectively.

     Actual costs incurred may vary from the accrued estimates due to the inherent uncertainties involved 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 attributed 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. If the Company’s future loss contingency is ultimately determined to be at the unaccrued maximum of the estimated range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s accrual for environmental-related activities would be $99,512 higher than the minimum accruals at December 31, 2009.

     Four of the Company’s currently and formerly owned manufacturing sites accounted for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2009. At December 31, 2009, $129,439, or 75.8 percent of the total accrual, related directly to these four sites. In the aggregate unaccrued maximum of $99,512 at December 31, 2009, $60,950, or 61.2 percent, related to these four sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and monitoring will likely be required at each site.

     Management cannot presently estimate the ultimate potential loss contingencies related to these sites or other less significant sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed. In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

     Management expects these contingent environmental-related liabilities to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.

     The Asset Retirement and Environmental Obligations Topic of the ASC requires a liability to be recognized for the fair value of a conditional asset retirement obligation if a settlement date and fair value can be reasonably estimated. The Company recognizes a liability for any conditional asset retirement obligation when sufficient information is available to reasonably estimate a settlement date to determine the fair value of such a liability. The Company has identified certain conditional asset retirement obligations at various current and closed manufacturing, distribution and store facilities.

64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

These obligations relate primarily to asbestos abatement, hazardous waste Resource Conservation and Recovery Act (RCRA) closures, well abandonment, transformers and used oil disposals and underground storage tank closures. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued and are not significant. The recording of additional liabilities for future conditional asset retirement obligations may result in a material impact on net income for the annual or interim period during which the costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time over which sufficient information may become available regarding the closure or modification of any one or group of the Company’s facilities. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

NOTE 10 — LITIGATION

     In the course of its business, the Company is subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred even if the possibility may be remote.

     Lead pigment and lead-based paint litigation. The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs are seeking recovery based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company is also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints which seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

     Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings, such as the jury verdict against the Company and other defendants in the State of Rhode Island action and the Wisconsin State Supreme Court’s determination that Wisconsin’s risk contribution theory may apply in the lead pigment litigation (both discussed in more detail below), or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. (The jury verdict in the State of Rhode Island action was subsequently reversed by the Rhode Island Supreme Court.) In addition, from time to

65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

     Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. Any potential liability that may result from such litigation or such legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

     Rhode Island lead pigment litigation. The State of Rhode Island initiated an action in October 1999 against the Company and other companies asserting, in part, that lead pigment in paint constitutes a public nuisance under Rhode Island law. The claim for public nuisance was originally tried to a jury in 2002 and the court declared a mistrial as the jury, which was split four to two in favor of the defendants, was unable to reach a unanimous decision. The State of Rhode Island retried the case and on February 22, 2006, the jury returned a verdict, finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance, and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law. This decision concluded the case in favor of the Company and the other defendants.

     Other public nuisance claim litigation. The Company and other companies are or were defendants in other legal proceedings seeking recovery based on public nuisance liability theories including claims brought by the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California.

     The City of St. Louis proceeding was initiated in January 2000 against the Company and other companies asserting claims for strict liability, negligence, fraudulent misrepresentation, negligent misrepresentation, concert of action, conspiracy, public nuisance, restitution and indemnity. Following various pre-trial proceedings, the City alleged a single count of public nuisance. Following further pre-trial proceedings, the trial court granted the defendants’ motion for summary judgment based on the City’s lack of product identification evidence. The City appealed and, on June 12, 2007, the Missouri Supreme Court affirmed summary judgment for the Company and other defendants, concluding the case in favor of the Company and the other defendants.

     A number of cities and counties in New Jersey individually initiated proceedings in the Superior Court of New Jersey in 2001 and 2002 against the Company and other companies asserting claims for fraud, public nuisance, civil conspiracy, unjust enrichment and indemnity. The cases were consolidated and assigned to the Superior Court in Middlesex County. The Superior Court granted the defendants’ motion to dismiss all complaints. Following an appeal by the plaintiffs, the Appellate Division reinstated the public nuisance claims and affirmed the dismissal of all other claims. On June 15, 2007, the New Jersey Supreme Court reversed the Appellate Division’s decision to reinstate the public nuisance claims, concluding the case in favor of the Company and the other defendants.

     A number of cities in Ohio individually initiated proceedings in state court in 2006 and 2007 against the Company and other companies asserting claims for public nuisance, concert of action, unjust enrichment, indemnity and punitive damages. Also in September 2006, the Company initiated proceedings in the United States District Court, Southern

66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

District of Ohio, against those Ohio cities, John Doe cities and public officials seeking declaratory and injunctive relief to prevent the violation of the Company’s federal constitutional rights in relation to such state court proceedings. All of these Ohio cities’ actions have been voluntarily dismissed by the plaintiff cities. Accordingly, on August 28, 2008, the Court granted, with prejudice, the Company’s motion to dismiss the remaining proceedings in the United States District Court, Southern District of Ohio.

     In April 2007, the State of Ohio filed an action against the Company and other companies asserting a claim for public nuisance. The State of Ohio sought compensatory and punitive damages. On February 6, 2009, the State of Ohio voluntarily dismissed this action.

     The City of Milwaukee proceeding was initiated in April 2001 against Mautz Paint Co. and NL Industries, Inc. On November 7, 2001, the Company acquired certain assets of Mautz Paint Co. and agreed (under terms and conditions set forth in the purchase agreement) to defend and indemnify Mautz Paint Co. for its liability, if any, to the City of Milwaukee in this action. The City’s complaint included claims for continuing public nuisance, restitution, conspiracy, negligence, strict liability, failure to warn and violation of Wisconsin’s trade practices statute. Following various pre-trial proceedings during which several of the City’s claims were dismissed by the court or voluntarily dismissed by the City, on August 13, 2003, the trial court granted defendants’ motion for summary judgment on the remaining claims. The City appealed and, on November 9, 2004, the Wisconsin Court of Appeals reversed the trial court’s decision and remanded the claims for public nuisance, conspiracy and restitution to the trial court. On February 13, 2007, the trial court entered an order severing and staying the claims against Mautz Paint Co. The action against NL Industries proceeded to trial and the jury found that the presence of lead paint in Milwaukee is a public nuisance, but that NL Industries was not at fault for the public nuisance. The City of Milwaukee appealed the jury verdict finding that NL Industries did not intentionally cause a public nuisance and the Wisconsin Court of Appeals affirmed the trial court’s final judgment. The City of Milwaukee filed a petition for review with the Wisconsin Supreme Court to review the Wisconsin Court of Appeals’ decision. The Wisconsin Supreme Court denied the City of Milwaukee’s petition to review the Wisconsin Court of Appeals’ decision. On September 25, 2009, the trial court dismissed the case, with prejudice, against Mautz Paint Co. pursuant to a stipulation of the parties. This dismissal concluded the case in favor of the Company.

     The Santa Clara County, California proceeding was initiated in March 2000. The named plaintiffs are the County of Santa Clara, County of Santa Cruz, County of Solano, County of Alameda, County of Kern, City and County of San Francisco, San Francisco Housing Authority, San Francisco Unified School District, City of Oakland, Oakland Housing Authority, Oakland Redevelopment Agency and the Oakland Unified School District. The proceeding purports to be a class action on behalf of all public entities in the State of California except the State and its agencies. The plaintiffs’ second amended complaint asserted claims for fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance and violations of California’s Business and Professions Code, and the third amended complaint alleges similar claims including a claim for public nuisance. Various asserted claims were resolved in favor of the defendants through pre-trial demurrers and motions to strike. In October 2003, the trial court granted the defendants’ motion for summary judgment against the remaining counts on statute of limitation grounds. The plaintiffs appealed the trial court’s decision and, on March 3, 2006, the Court of Appeal, Sixth Appellate District, reversed in part the demurrers and summary judgment entered in favor of the Company and the other defendants. The Court of Appeal reversed the dismissal of the public nuisance claim for abatement brought by the cities of Santa Clara and Oakland and the City and County of San Francisco, and reversed summary judgment on all of the plaintiffs’ fraud claim to the extent that the plaintiffs alleged that the defendants had made fraudulent statements or omissions minimizing the risks of low-level exposure to lead. The Court of Appeal further vacated the summary judgment holding that the statute of limitations barred the plaintiffs’ strict liability and negligence claims, and held that those claims had not yet accrued because physical injury to the plaintiffs’ property had not been alleged. The Court of Appeal affirmed the dismissal of the public nuisance claim for damages to the plaintiffs’ properties, most aspects of the fraud claim, the trespass claim and the unfair business practice claim. The plaintiffs have filed a motion for leave to file a fourth amended complaint. On April 4, 2007, the trial court entered an order granting the defendants’ motion to bar payment of contingent fees to private attorneys. The plaintiffs appealed the trial court’s order and, on April 8, 2008, the California Court of Appeal reversed the trial court’s order. The defendants filed a petition for review with the California Supreme Court and the Supreme Court has decided to review the Court of Appeal’s decision. Proceedings in the trial court are stayed pending the appeal.

     Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint, claims for damages allegedly incurred by the children’s parents or guardians, and claims for damages allegedly incurred by professional painting contractors. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions.

     The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants include strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. Following various pre-trial proceedings during which certain of the plaintiff’s claims were dismissed by the court, on March 10, 2003, the trial court granted the defendants’ motion for summary judgment, dismissing the case with prejudice and awarding costs to each defendant. The plaintiff appealed and, on June 14, 2004, the Wisconsin Court of Appeals affirmed the trial court’s decision. On July 15, 2005, the Wisconsin Supreme Court reversed in part the trial court’s decision and decided, assuming all of plaintiff’s facts in the summary judgment record to be true, that the risk contribution theory could then apply to excuse the plaintiff’s lack of evidence identifying any of the Company’s or the other defendant’s products as the cause of the alleged injury. The case was remanded to the trial court for further proceedings and a trial commenced on October 1, 2007. On November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff filed post-trial motions for a new trial which were denied by the trial court. On March 4, 2008, final judgment was entered in favor of the Company and other defendants. The plaintiff has filed an appeal of the final judgment.

     Wisconsin is the first jurisdiction to apply a theory of liability with respect to alleged personal injury (i.e.: risk contribution/market share liability) which does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation.

     Insurance coverage litigation. On March 3, 2006, the Company filed a lawsuit in the Common Pleas Court, Cuyahoga County, Ohio against its liability insurers, including certain Underwriters at Lloyd’s of London. The lawsuit seeks, among other things, (i) a declaration from the court that costs associated with the abatement of lead pigment in the State of Rhode Island, or any other jurisdiction, are covered under certain insurance policies issued to the Company and (ii) monetary damages for breach of contract and bad faith against the Lloyd’s Underwriters for unjustified denial of coverage for the cost of complying with any final judgment requiring the Company to abate any alleged nuisance caused by the presence of lead pigment paint in buildings. This lawsuit was filed in response to a lawsuit filed by the Lloyd’s Underwriters against the Company, two other defendants in the Rhode Island litigation and various insurance companies on February 23, 2006. The Lloyd’s Underwriters’ lawsuit asks a New York state court to determine that there is no indemnity insurance coverage for such abatement related costs, or, in the alternative, if such indemnity coverage is found to exist, the proper allocation of liability among the Lloyd’s Underwriters, the defendants and the defendants’ other insurance companies. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Ohio state court action has been stayed and the New York state court action has been dismissed.

NOTE 11 — CAPITAL STOCK

     At December 31, 2009, there were 300,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance. Of the authorized serial preferred stock, 3,000,000 shares are designated as cumulative redeemable serial preferred and 1,000,000 shares are designated as convertible serial preferred stock (see Note 12). An aggregate of 13,381,449, 14,884,028 and 16,477,802 shares of common stock at December 31, 2009, 2008 and 2007, respectively, were reserved for future grants of restricted stock and the exercise and future grants of option rights (see Note 13). Common shares outstanding shown in the following table included 475,628 shares of common stock held in a revocable trust at December 31, 2009, 2008 and 2007, respectively. The revocable trust is used to accumulate assets for the purpose of funding the ultimate obligation of certain non-qualified benefit plans. Transactions between the Company and the trust are accounted for in accordance with the Deferred Compensation — Rabbi Trusts Subtopic of the Compensation Topic of the ASC, which requires the assets held by the trust be consolidated with the Company’s accounts.

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

	Common Shares		Common Shares
	in Treasury		Outstanding
Balance at January 1, 2007		89,419,575		133,565,287
Shares tendered as payment for option rights exercised		18,593		(18,593	)
Shares issued for exercise of option rights				2,345,069
Shares tendered in connection with grants of restricted stock		125,022		(125,022	)
Net shares issued for grants of restricted stock				247,500
Treasury stock purchased		13,200,000		(13,200,000	)
Balance at December 31, 2007		102,763,190		122,814,241
Shares tendered as payment for option rights exercised		4,706		(4,706	)
Shares issued for exercise of option rights				1,275,151
Shares tendered in connection with grants of restricted stock		93,569		(93,569	)
Net shares issued for grants of restricted stock				294,000
Treasury stock purchased		7,250,000		(7,250,000	)
Balance at December 31, 2008		110,111,465		117,035,117
Shares tendered as payment for option rights exercised		9,743		(9,743	)
Shares issued for exercise of option rights				1,075,395
Shares tendered in connection with grants of restricted stock		88,461		(88,461	)
Net shares issued for grants of restricted stock				424,561
Treasury stock purchased		9,000,000		(9,000,000	)
Balance at December 31, 2009		119,209,669		109,436,869

NOTE 12 — STOCK PURCHASE PLAN AND PREFERRED STOCK

     As of December 31, 2009, 23,520 employees contributed to the Company’s ESOP, a voluntary defined contribution plan available to all eligible salaried employees. Participants are allowed to contribute up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions. Effective July 1, 2009, the ESOP was amended to change the Company match to one-hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions. Such participant contributions may be invested in a variety of mutual funds or a Company common stock fund and may be exchanged between investments as directed by the participant. Effective January 1, 2007, the ESOP was amended to permit participants to diversify both future and prior Company matching contributions previously allocated to the Company common stock fund into a variety of mutual funds.

     The Company made contributions to the ESOP on behalf of participating employees, representing amounts authorized by employees to be withheld from their earnings on a pre-tax basis, of $70,025, $72,812 and $71,691 in 2009, 2008 and 2007, respectively. The Company’s matching contributions to the ESOP charged to operations were $44,587, $54,001 and $52,683 for 2009, 2008 and 2007, respectively.

     At December 31, 2009, there were 17,579,750 shares of the Company’s common stock being held by the ESOP, representing 16.0 percent of the total number of voting shares outstanding. Shares of Company common stock credited to each member’s account under the ESOP are voted by the trustee under instructions from each individual plan member. Shares for which no instructions are received are voted by the trustee in the same proportion as those for which instructions are received.

     On August 1, 2006, the Company issued 500,000 shares of convertible serial preferred stock, no par value (Series 2 Preferred stock) with cumulative quarterly dividends of $11.25 per share, for $500,000 to the ESOP. The ESOP financed the acquisition of the Series 2 Preferred stock by borrowing $500,000 from the Company at the rate of 5.5 percent per annum. This borrowing is payable over ten years in equal quarterly installments. Each share of Series 2 Preferred stock is entitled to one vote upon all matters presented to the Company’s shareholders and generally votes with the common stock together as one class. The Series 2 Preferred stock is held by the ESOP in an unallocated account. As the value of compensation expense related to contributions to the ESOP is earned, the Company has the option of funding the ESOP by redeeming a portion of the preferred stock or with cash. Contributions are credited to the members’ accounts at the time of funding. The Series 2 Preferred stock is redeemable for cash or convertible into common stock or any combination thereof at the option of the ESOP based on the relative fair value of the Series 2 Preferred and common stock at the time of conversion. At December 31, 2009, 2008 and 2007, there were no allocated or committed-to-be released shares of Series 2 Preferred stock outstanding. In 2009, the Company elected to fund the ESOP with cash. The Company redeemed 107,980 and 108,482

69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

shares of the Series 2 Preferred stock for cash in 2008 and 2007, respectively.

NOTE 13 — STOCK-BASED COMPENSATION

     Effective April 19, 2006, the shareholders approved the 2006 Equity and Performance Incentive Plan (Employee Plan), replacing the 2003 Stock Plan and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 10,000,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or cancelled. The Employee Plan permits the granting of option rights, appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible employees. At December 31, 2009, no appreciation rights, restricted stock units, performance shares or performance units had been granted under the Employee Plan. No further grants may be made under the 2003 Stock Plan, all rights granted under that plan remain.

     Effective April 19, 2006, the shareholders also approved the 2006 Stock Plan for Nonemployee Directors (Nonemployee Plan), replacing the 1997 Stock Plan and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 200,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or are cancelled. The Nonemployee Plan permits the granting of option rights, appreciation rights, restricted stock and restricted stock units to members of the Board of Directors who are not employees of the Company. At December 31, 2009, no option rights, appreciation rights or restricted stock units had been granted under the Nonemployee Plan. No further grants may be made under the 1997 Stock Plan, all rights granted under that plan remain.

     The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The Company follows the “modified prospective” method whereby compensation cost is recognized for all share-based payments granted after December 31, 2005 and for all unvested awards granted prior to January 1, 2006. The tax benefits associated with these share-based payments are classified as financing activities in the Statements of Consolidated Cash Flows.

     At December 31, 2009, the Company had total unrecognized stock-based compensation expense of $50,284 that is expected to be recognized over a weighted-average period of 1.60 years. Stock-based compensation expense during 2009, 2008 and 2007 was $23,271, $41,114 and $35,355, respectively. Stock-based compensation was reduced by $21,958 in 2009 related to certain restricted stock awards granted under the Employee plan where the performance conditions are not expected to be fully attained. The Company recognized a total income tax benefit related to stock-based compensation expense of $8,963, $15,799 and $13,651 during 2009, 2008 and 2007, respectively. This change increased net income by $13,501 and increased basic and diluted earnings per share by $.12. The impact of total stock-based compensation expense, net of taxes, on net income reduced both Basic and Diluted net income per common share by $.13 and $.12, respectively, during 2009.

     Option rights. The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:

	2009			2008			2007
Risk-free interest rate		2.39	%		3.01	%		4.03	%
Expected life of option rights	5.27 years			5.24 years			4.67 years
Expected dividend yield of stock		2.69	%		2.41	%		1.80	%
Expected volatility of stock		.319			.321			.279

     The risk-free interest rate is based upon the U.S. Treasury yield curve at the time of grant. The expected life of option rights was calculated using a scenario analysis model. Historical data was used to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding option rights. The expected dividend yield of stock is the Company’s best estimate of the expected future dividend yield. Expected volatility of stock was calculated using historical and implied volatilities. The Company applied an estimated forfeiture rate of 3.16 percent to the 2009 grants. This rate was calculated based upon historical activity and is an estimate of granted shares not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods.

     Grants of option rights for non-qualified and incentive stock options have been awarded to certain officers, key employees and nonemployee directors under the Employee Plan, the 2003 Stock Plan, and the 1997 Plan. The option rights generally become exercisable to the extent of one-third of the optioned shares for each full year following the date of grant and generally expire ten years after the date of grant. Unrecognized compensation expense with respect to option rights granted to eligible employees amounted to $35,928 at December 31, 2009. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.70 years.

     The total intrinsic value of exercised option rights for employees was $26,684, $34,676 and $85,158, and for nonemployee directors was $497, $497 and $252 during

70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

2009, 2008 and 2007, respectively. The outstanding option rights for nonemployee directors were 51,667, 65,667 and 81,667 for 2009, 2008 and 2007, respectively. The Company issues new shares upon exercise of option rights or granting of restricted stock.

     A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31, 2009, 2008 and 2007 is shown in the following table:

	2009							2008							2007
				Weighted-							Weighted-							Weighted-
				Average							Average							Average
				Exercise		Aggregate					Exercise		Aggregate					Exercise		Aggregate
	Optioned			Price		Intrinsic		Optioned			Price		Intrinsic		Optioned			Price		Intrinsic
	Shares			Per Share		Value		Shares			Per Share		Value		Shares			Per Share		Value
Outstanding beginning of year		10,270,899		$	46.48				9,806,292		$	42.95				10,716,711		$	37.30
Granted		1,802,432			62.73				1,809,095			53.96				1,543,594			63.74
Exercised		(1,075,395	)		33.73				(1,275,151	)		29.39				(2,345,069	)		30.34
Forfeited		(70,428	)		60.14				(50,362	)		60.60				(106,024	)		52.10
Expired		(29,856	)		60.45				(18,975	)		48.81				(2,920	)		44.10
Outstanding end of year		10,897,652		$	50.30	$	132,139		10,270,899		$	46.48	$	139,494		9,806,292		$	42.95	$	158,586
Exercisable at end of year		7,434,125		$	45.83	$	121,874		6,864,498		$	40.93	$	129,096		6,431,305		$	34.98	$	148,643
Weighted-average per share fair value of option rights granted during the year	$	15.20						$	13.91						$	16.28
Shares reserved for future grants of option rights restricted stock		2,483,797							4,613,129							6,671,510

     Restricted stock. Grants of restricted stock, which generally require three or four years of continuous employment from the date of grant before vesting and receiving the stock without restriction, have been awarded to certain officers and key employees under the Employee Plan and the 2003 Stock Plan. The shares of stock to be received without restriction under these plans are based on the Company’s achievement of specified financial goals relating to average return on average equity and earnings before interest, taxes, depreciation and amortization. Unrecognized compensation expense with respect to grants of restricted stock to eligible employees amounted to $13,403 at December 31, 2009 and is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted average period of 1.44 years.

     Grants of restricted stock have been awarded to nonemployee directors under the Nonemployee Plan and the 1997 Plan. These grants generally vest and stock is received without restriction to the extent of one-third of the granted stock for each year following the date of grant. Unrecognized compensation expense with respect to grants of restricted stock to nonemployee directors amounted to $953 at December 31, 2009 and is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.65 years.

     A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during 2009, 2008 and 2007 is as follows:

	2009		2008		2007
Restricted stock granted		429,221		295,500		258,905
Weighted-average per share fair value of restricted stock granted during the year	$	45.85	$	53.82	$	70.28

     A summary of the Company’s restricted stock activity for the years ended December 31, 2009, 2008 and 2007 is shown in the following table:

	2009			2008			2007
Outstanding beginning of year		1,166,900			1,142,600			1,232,100
Granted		429,221			295,500			258,905
Vested		(287,075	)		(269,700	)		(337,000	)
Forfeited		(4,660	)		(1,500	)		(11,405	)
Outstanding end of year		1,304,386			1,166,900			1,142,600

71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

NOTE 14 — OTHER

     Other general expense — net. Included in Other general expense — net were the following:

	2009		2008		2007
Provisions for environ-mental matters — net	$	24,705	$	6,947	$	28,391
Loss (gain) on disposition of assets		972		6,440		(10,422	)
Net expense (income) of exit or disposal activities		7,943		5,932		(439	)
Total	$	33,620	$	19,319	$	17,530

     Provisions for environmental matters-net represent initial provisions for site-specific estimated costs of environmental investigation or remediation and increases or decreases to environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Environmental-related accruals are not recorded net of insurance proceeds in accordance with the Offsetting Subtopic of the Balance Sheet Topic of the ASC. See Note 9 for further details on the Company’s environmental-related activities.

     The loss (gain) on disposition of assets represents net realized gains or losses associated with the disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.

     The net expense (income) of exit or disposal activities represents initial impairments of carrying value and additional impairments for subsequent reductions in estimated fair value of property, plant and equipment held for disposal and changes to accrued qualified exit costs as information becomes available upon which more accurate amounts can be reasonably estimated. See Note 6 for further details on the Company’s exit or disposal activities.

     Other expense (income) — net. Included in Other expense (income) — net were the following:

	2009			2008			2007
Dividend and royalty income	$	(3,240	)	$	(4,303	)	$	(4,095	)
Net expense from financing and investing activities		5,302			3,570			5,976
Foreign currency related transaction losses (gains)		4,926			10,587			(243	)
Other income		(16,225	)		(9,369	)		(7,757	)
Other expense		7,494			4,583			3,798
Total	$	(1,743	)	$	5,068		$	(2,321	)

     The Net expense from financing and investing activities includes financing and bank service fees.

     Foreign currency related transaction losses (gains) represent realized losses and gains on U.S. dollar-denominated liabilities of foreign subsidiaries and realized and unrealized losses and gains from foreign currency option and forward contracts. There were no foreign currency option and forward contracts outstanding at December 31, 2009. The Company had foreign currency option and forward contracts outstanding at December 31, 2008, and 2007. All of the contracts had maturity dates of less than twelve months and were undesignated hedges with changes in fair value being recognized in earnings in accordance with the Derivatives and Hedging Topic of the ASC. These derivative instrument values were included in either Other current assets or Other accruals and were insignificant at December 31, 2008 and 2007.

     Other income and Other expense included items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company. Each individual item within the Other income or Other expense caption was immaterial; no single category of items exceeded $1,500.

NOTE 15 — INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using the enacted tax rates and laws that are currently in effect. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2009, 2008 and 2007 were as follows:

	2009		2008		2007
Deferred tax assets:
Exit costs, environ-mental and other similar items	$	82,378	$	76,237	$	77,725
Deferred employee benefit items		65,550		61,340
Other items (each less than 5 percent of total assets)		111,094		106,341		122,938
Total deferred tax assets	$	259,022	$	243,918	$	200,663
Deferred tax liabilities:
Depreciation and amortization	$	161,916	$	144,715	$	111,311
Deferred employee benefit items						16,227
Total deferred tax liabilities	$	161,916	$	144,715	$	127,538

     Netted against the Company’s other deferred tax assets were valuation reserves of $15,735, $6,611 and $3,728 at December 31, 2009, 2008 and 2007, respectively, resulting from the uncertainty as to the realization of the tax benefits from certain foreign net operating losses and certain other foreign assets.

72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

Significant components of the provisions for income taxes were as follows:

	2009			2008			2007
Current:
Federal	$	151,492		$	144,789		$	208,508
Foreign		25,964			34,367			28,388
State and local		18,118			28,078			27,485
Total current		195,574			207,234			264,381
Deferred:
Federal		(4,887	)		25,668			24,770
Foreign		(1,592	)		(666	)		3,602
State and local		(2,126	)		5,363			4,612
Total deferred		(8,605	)		30,365			32,984
Total provisions for income taxes	$	186,969		$	237,599		$	297,365

     The provisions for income taxes included estimated taxes payable on that portion of retained earnings of foreign subsidiaries expected to be received by the Company. The effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC, was $1,899 in 2009, $(1,337) in 2008 and $1,925 in 2007. A provision was not made with respect to $14,971 of retained earnings at December 31, 2009 that have been invested by foreign subsidiaries. It was not practicable to estimate the amount of unrecognized deferred tax liability for undistributed foreign earnings.

     Significant components of income before income taxes as used for income tax purposes, were as follows:

	2009		2008		2007
Domestic	$	591,558	$	602,934	$	802,211
Foreign		31,259		111,541		110,732
	$	622,817	$	714,475	$	912,943

     A reconciliation of the statutory federal income tax rate to the effective tax rate follows:

	2009			2008			2007
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
Effect of:
State and local income taxes		1.7			3.0			2.3
Investment vehicles		(3.6	)		(1.9	)		(1.1	)
ESOP dividends		(2.0	)		(1.8	)		(1.6	)
Other — net		(1.1	)		(1.0	)		(2.0	)
Effective tax rate		30.0	%		33.3	%		32.6	%

     The 2009 state and local income tax component of the effective tax rate decreased compared to 2008 primarily due to the impact of favorable audit settlements, favorable tax deductions available to the Company and the benefits of state tax credits. The increase in the tax deduction related to investment vehicles was the result of an increase in the impact of investments in tax favorable vehicles in 2009 compared to 2008.

     The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Internal Revenue Service (IRS) commenced an examination of the Company’s U.S. income tax returns for the 2006 and 2007 tax years in the fourth quarter of 2008. Fieldwork is anticipated to be completed prior to December 31, 2010. At this time, the Company has determined that $3,135 of additional tax is due. The only open issue for the period 2004 to 2005 relates to the Company’s ESOP. As of December 31, 2009, the Company is subject to non-U.S. income tax examinations for the tax years of 2002 through 2009. In addition, the Company is subject to state and local income tax examinations for the tax years 1992 through 2009.

     Effective January 1, 2007, the Company adopted FIN No. 48, “Accounting for Uncertainty in Income Taxes,” which is now codified in the Income Taxes Topic of the ASC. As a result, the Company recognized a cumulative-effect adjustment of $3.4 million, increasing its liability for unrecognized tax benefits, interest and penalties and reducing the January 1, 2007 balance of Retained Earnings. A reconciliation of the beginning and ending amount of unrecognized tax benefits in 2009, 2008 and 2007 is as follows:

	2009			2008			2007
Balance at beginning of year	$	38,051		$	39,378		$	37,807
Additions based on tax positions related to the current year		3,357			3,709			5,570
Additions for tax positions of prior years		9,170			4,212			4,070
Reductions for tax positions of prior years		(4,111	)		(3,863	)		(4,998	)
Settlements		(7,937	)		(3,212	)		(1,915	)
Lapses of Statutes of Limitations		(1,567	)		(2,173	)		(1,156	)
Balance at end of year.	$	36,963		$	38,051		$	39,378

     Included in the balance of unrecognized tax benefits at December 31, 2009, 2008 and 2007 is $32,543, $32,420 and $34,235 in unrecognized tax benefits, the recognition of which would have an affect on the effective tax rate. This amount differs from the gross unrecognized tax benefits presented in the table due to the decrease in U.S. federal income taxes which would occur upon recognition of the state tax benefits included therein.

     Included in the balance of unrecognized tax benefits at December 31, 2009 is $9,586 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to a payment related

73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

to a federal audit of a partnership investment, assessed state income tax audits, the receipt of outstanding partnership investment filings and state settlement negotiations currently in progress and expiring statutes in foreign jurisdictions.

     The Company classifies all income tax related interest and penalties as income tax expense. During the tax year ended December 31, 2009 and 2008 the Company recognized a release of $3,157 and $215, respectively, in income tax interest and penalties. During the tax year ended December 31, 2007, the Company recognized a net increase of $1,095 in income tax interest and penalties. As of December 31, 2009, 2008 and 2007, the Company has accrued $11,783, $15,563 and $15,812, respectively, for the potential payment of interest and penalties.

NOTE 16 — NET INCOME PER COMMON SHARE

	2009		2008		2007
Basic
Average common shares outstanding		113,514,399		116,835,433		127,222,007
Net income	$	435,848	$	476,876	$	615,578
Net income per common share	$	3.84	$	4.08	$	4.84
Diluted
Average common shares outstanding		113,514,399		116,835,433		127,222,007
Non-vested restricted stock grants		943,089		1,165,250		1,152,162
Stock options and other contingently issuable shares (1)		965,445		1,342,546		2,550,521
Average common shares assuming dilution		115,422,933		119,343,229		130,924,690
Net income	$	435,848	$	476,876	$	615,578
Net income per common share	$	3.78	$	4.00	$	4.70

(1) Stock options and other contingently issuable shares excludes 4,759,922, 3,136,935 and 67,379 shares at December 31, 2009, 2008 and 2007, respectively, due to their anti-dilutive effect.

     Basic and diluted earnings per share are calculated in accordance with the Earnings Per Share Topic of the ASC. Under the Company’s restricted stock award program, non-forfeitable dividends are paid on unvested shares of restricted stock, and the restricted stock is therefore considered a participating security. The use of the two-class method of computing earnings per share does not have a significant impact on the Company’s basic and diluted earnings per share calculations, and the treasury stock method continues to be disclosed.

NOTE 17 — SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

	2009
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	1,550,677	$	1,947,827	$	1,996,909	$	1,598,836	$	7,094,249
Gross profit		680,606		895,342		928,983		758,238		3,263,169
Net income		37,279		158,023		175,208		65,338		435,848
Net income per common share — basic		.32		1.37		1.54		.60		3.84
Net income per common share — diluted		.32		1.35		1.51		.58		3.78

     Net income in the fourth quarter was increased by $28,941 ($.25 per share) due primarily to inventory adjustments and adjustments to compensation and benefit expenses. Gross profit was increased by $39,197 primarily as a result of adjustments of $38,047 based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related costs. Selling, general and administrative expenses decreased $7,938 related to compensation and benefit expense adjustments.

	2008
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	1,781,682	$	2,229,545	$	2,268,658	$	1,699,842	$	7,979,727
Gross profit		780,508		972,903		960,489		784,900		3,498,800
Net income		77,946		171,683		177,081		50,166		476,876
Net income per common share — basic		.65		1.48		1.53		.43		4.08
Net income per common share — diluted		.64		1.45		1.50		.42		4.00

74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

     Net income in the fourth quarter was increased by $18,673 ($.16 per share) due primarily to inventory adjustments and reductions in compensation and benefit expenses. Gross profit was increased by $13,112 primarily as a result of physical inventory adjustments of $12,560. Selling, general and administrative expenses decreased $17,202 related to year-to-date reductions in certain compensation and benefit expenses.

NOTE 18 — OPERATING LEASES

     The Company leases certain stores, warehouses, manufacturing facilities, office space and equipment. Renewal options are available on the majority of leases and, under certain conditions, options exist to purchase certain properties. Rental expense for operating leases, recognized on a straight-line basis over the lease term in accordance with the Leases Topic of the ASC was $284,078, $271,373 and $245,345 for 2009, 2008 and 2007, respectively. Certain store leases require the payment of contingent rentals based on sales in excess of specified minimums. Contingent rentals included in rent expense were $36,228, $32,835 and $30,704 in 2009, 2008 and 2007, respectively. Rental income, as lessor, from real estate leasing activities and sublease rental income for all years presented was not significant. The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2009:

2010	$	225,355
2011		198,566
2012		165,989
2013		132,360
2014		101,496
Later years		193,438
Total minimum lease payments	$	1,017,204

NOTE 19 — REPORTABLE SEGMENT INFORMATION

     The Company reports its segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Reporting Topic of the ASC. The Company has three reportable operating segments: Paint Stores Group, Consumer Group and Global Finishes Group (collectively, the “Reportable Operating Segments”). Factors considered in determining the three reportable segments of the Company include the nature of business activities, existence of managers responsible for the operating and administrative activities and information presented to the Board of Directors. The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment. See pages 5 through 7 of this report for more information about the Reportable Operating Segments.

     The Company’s chief operating decision maker (CODM) has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each reportable operating segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Operating Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Operating Segments are the same as those described in Note 1 of this report.

     The Paint Stores Group consisted of 3,354 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten and Jamaica at December 31, 2009. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams^® branded architectural paint and coatings, industrial and marine products, OEM product finishes and related items. These products are produced by manufacturing facilities in the Consumer and Global Finishes Groups. In addition, each store sells selected purchased associated products. During 2009, this segment opened 8 net new stores, consisting of 53 new stores opened (44 in the United States, 7 in Canada, 1 in Jamaica and 1 in St. Maarten) and 45 stores closed in the United States. In 2008, this segment opened 21 net new stores (14 in the United States). In 2007, there were 172 stores acquired, 107 net new stores opened (81 in the United States). The loss of any single customer would not have a material adverse effect on the business of this segment. A map on page 10 of this report shows the number of paint stores and their geographic location.

     The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third-party customers primarily in the United States and Canada, and the Paint Stores Group. Approximately 51 percent of the total sales of the Consumer Group in 2009, including inter-segment transfers, represented products sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the

75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(thousands of dollars unless otherwise indicated)

loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures.

     The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, industrial and marine products, automotive finishes and refinish products, OEM coatings and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams^® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 539 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. During 2009, this segment opened 18 new branches (8 in the United States, 1 in Canada, 6 in South America and 3 in India) and closed 20 (1 in South America, 15 in the United States and 4 in Mexico) for a net reduction of 2 branches. At December 31, 2009, the Global Finishes Group consisted of operations in the United States, subsidiaries in 14 foreign countries, 4 foreign joint ventures and income from licensing agreements in 16 foreign countries. A map on page 10 of this report shows the number of branches and their geographic locations.

     The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Operating Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

     Net external sales of all consolidated foreign subsidiaries were $1,025,824, $1,119,337 and $964,871 for 2009, 2008 and 2007, respectively. Segment profit of all consolidated foreign subsidiaries was $27,028, $73,569 and $77,656 for 2009, 2008 and 2007, respectively. Domestic operations accounted for the remaining net external sales and segment profits. Long-lived assets consisted of Property, plant and equipment, Goodwill, Intangible assets, Deferred pension assets and Other assets. The aggregate total of long-lived assets for the Company was $2,553,836, $2,506,555 and, $2,785,760 at December 31, 2009, 2008 and 2007, respectively. Long-lived assets of consolidated foreign subsidiaries totaled $249,345, $207,740 and $233,120 at December 31, 2009, 2008 and 2007, respectively. Total Assets of the Company were $4,323,855, $4,415,759 and $4,855,340 at December 31, 2009, 2008 and 2007, respectively. Total assets of consolidated foreign subsidiaries were $753,915, $666,881 and $722,847, which represented 17.4 percent, 15.1 percent and 14.9 percent of the Company’s total assets at December 31, 2009, 2008 and 2007, respectively. No single geographic area outside the United States was significant relative to consolidated net sales or operating profits. Export sales and sales to any individual customer were each less than 10 percent of consolidated sales to unaffiliated customers during all years presented.

     In the reportable segment financial information that follows, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Identifiable assets were those directly identified with each reportable segment. The Administrative segment assets consisted primarily of cash and cash equivalents, investments, deferred pension assets, and headquarters property, plant and equipment. The margin for each reportable operating segment was based upon total net sales and intersegment transfers. Domestic intersegment transfers were accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs. International inter-segment transfers were accounted for at values comparable to normal unaffiliated customer sales.

76

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(millions of dollars)

	2009
	Paint Stores			Consumer			Global Finishes						Consolidated
	Group			Group			Group			Administrative			Totals
Net external sales	$	4,209		$	1,225		$	1,653		$	7		$	7,094
Intersegment transfers					1,253			161			(1,414	)
Total net sales and intersegment transfers	$	4,209		$	2,478		$	1,814		$	(1,407	)	$	7,094
Segment profit	$	600		$	157		$	65					$	822
Interest expense										$	(40	)		(40	)
Administrative expenses and other											(159	)		(159	)
Income before income taxes	$	600		$	157	*	$	65		$	(199	)	$	623
Reportable operating segment margins		14.3	%		6.3	%		3.6	%
Identifiable assets	$	1,187		$	1,495		$	956		$	686		$	4,324
Capital expenditures		40			28			21			2			91
Depreciation		48			50			29			18			145

	2008
	Paint Stores			Consumer			Global Finishes						Consolidated
	Group			Group			Group			Administrative			Totals
Net external sales	$	4,835		$	1,272		$	1,866		$	7		$	7,980
Intersegment transfers					1,652			143			(1,795	)
Total net sales and intersegment transfers	$	4,835		$	2,924		$	2,009		$	(1,788	)	$	7,980
Segment profit	$	648		$	140		$	152					$	940
Interest expense										$	(66	)		(66	)
Administrative expenses and other											(160	)		(160	)
Income before income taxes	$	648		$	140	*	$	152		$	(226	)	$	714
Reportable operating segment margins		13.4	%		4.8	%		7.6	%
Identifiable assets	$	1,371		$	1,573		$	937		$	535		$	4,416
Capital expenditures		57			28			25			7			117
Depreciation		50			44			31			18			143

	2007
	Paint Stores			Consumer			Global Finishes						Consolidated
	Group			Group			Group			Administrative			Totals
Net external sales	$	4,955		$	1,312		$	1,731		$	7		$	8,005
Intersegment transfers					1,660			141			(1,801	)
Total net sales and intersegment transfers	$	4,955		$	2,972		$	1,872		$	(1,794	)	$	8,005
Segment profit	$	766		$	224		$	161					$	1,151
Interest expense										$	(72	)		(72	)
Administrative expenses and other											(166	)		(166	)
Income before income taxes	$	766		$	224	*	$	161		$	(238	)	$	913
Reportable operating segment margins		15.5	%		7.5	%		8.6	%
Identifiable assets	$	1,465		$	1,639		$	954		$	797		$	4,855
Capital expenditures		58			50			38			20			166
Depreciation		51			42			28			18			139

* Segment profit included $19, $26 and $26 of mark-up on intersegment transfers realized as a result of external sales by the Paint Stores Group during 2009, 2008 and 2007, respectively.

77

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

     Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Letter to Shareholders” and elsewhere in this report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “expects,” “anticipates,” “believes,” “will,” “will likely result,” “will continue,” “plans to” and similar expressions.

     Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company, that could cause actual results to differ materially from such statements and from the Company’s historical results and experience. These risks, uncertainties and other factors include such things as: (a) the duration and severity of the current negative global economic and financial conditions; (b) general business conditions, strengths of retail and manufacturing economies and the growth in the coatings industry; (c) competitive factors, including pricing pressures and product innovation and quality; (d) changes in raw material and energy supplies and pricing; (e) changes in the Company’s relationships with customers and suppliers; (f) the Company’s ability to attain cost savings from productivity initiatives; (g) the Company’s ability to successfully integrate past and future acquisitions into its existing operations, as well as the performance of the businesses acquired; (h) risks and uncertainties associated with the Company’s ownership of Life Shield Engineered Systems, LLC; (i) changes in general domestic economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations; (j) risks and uncertainties associated with the Company’s expansion into and its operations in Asia, Mexico, South America and other foreign markets, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest and other external economic and political factors; (k) the achievement of growth in developing markets, such as Asia, Mexico and South America; (l) increasingly stringent domestic and foreign governmental regulations including those affecting health, safety and the environment; (m) inherent uncertainties involved in assessing the Company’s potential liability for environmental-related activities; (n) other changes in governmental policies, laws and regulations, including changes in accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations); (o) the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation and the effect of any legislation and administrative regulations relating thereto; and (p) unusual weather conditions.

     Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

78

Annual Meeting

The annual meeting of shareholders will be held in the Landmark Conference Center, 927 Midland Building, 101 W. Prospect Avenue, Cleveland, Ohio on Tuesday, April 20, 2010 at 9:00 a.m., local time.

Headquarters

101 W. Prospect Avenue
Cleveland, Ohio 44115-1075
(216) 566-2000
www.sherwin.com

Investor Relations

Robert J. Wells
Senior Vice President — Corporate
Communications and Public Affairs
The Sherwin-Williams Company
101 W. Prospect Avenue
Cleveland, Ohio 44115-1075

Independent Registered
Public Accounting Firm

Ernst & Young
LLP Cleveland, Ohio

Stock Trading

Sherwin-Williams Common Stock—Symbol, SHW—is traded on the New York Stock Exchange.

Dividend Reinvestment Program

A dividend reinvestment program is available to shareholders of common stock. For information, contact BNY Mellon Shareowner Services.

Form 10-K

The Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission, is available without charge. To obtain a copy, contact Investor Relations.

Transfer Agent & Registrar

Our transfer agent, BNY Mellon Shareowner Services, maintains the records for our registered shareholders and can help with a wide variety of shareholder related services at no charge, including change of name or address, duplicate mailings, lost certificates, and transfers to another person. Contact:
BNY Mellon Shareowner Services
480 Washington Boulevard
Jersey City, NJ 07310-1900
(866) 537-8703
TDD for hearing impaired:
(800) 231-5469
www.bnymellon.com/shareowner/isd

COMMON STOCK TRADING STATISTICS

	2009		2008		2007		2006		2005
High	$	64.13	$	65.00	$	73.96	$	64.76	$	48.84
Low		42.19		44.51		56.75		37.40		40.47
Close December 31		61.65		59.75		58.04		63.58		45.42
Shareholders of record		9,151		9,469		9,803		10,173		10,625
Shares traded (thousands)		430,216		519,438		299,141		350,754		206,115

QUARTERLY STOCK PRICES AND DIVIDENDS

2009
Quarter	High		Low		Dividend
1st	$	61.42	$	42.19	$	.355
2nd		59.17		49.90		.355
3rd		62.73		51.22		.355
4th		64.13		56.24		.355

2008
Quarter	High		Low		Dividend
1st	$	60.24	$	49.99	$	.35
2nd		60.37		45.89		.35
3rd		65.00		44.51		.35
4th		60.23		48.32		.35

79

Corporate Officers

Christopher M. Connor, 53*
Chairman and
Chief Executive Officer

John G. Morikis, 46*
President and
Chief Operating Officer

Sean P. Hennessy, 52*
Senior Vice President — Finance and
Chief Financial Officer

Thomas E. Hopkins, 52*
Senior Vice President -
Human Resources

Timothy A. Knight, 45*
Senior Vice President — Corporate
Planning and Development

Louis E. Stellato, 59*
Senior Vice President,
General Counsel and Secretary

Robert J. Wells, 52*
Senior Vice President — Corporate
Communications and Public Affairs

John L. Ault, 63*
Vice President — Corporate Controller

Cynthia D. Brogan, 58
Vice President and Treasurer

Michael T. Cummins, 51
Vice President — Taxes and
Assistant Secretary

Mark J. Dvoroznak, 51
Vice President — Corporate Audit
and Loss Prevention

Richard M. Weaver, 55
Vice President — Administration

Operating Management

Joel Baxter, 49
President & General Manager
Paint & Coatings Division
Consumer Group

Robert J. Davisson, 49
President & General Manager
Southeastern Division
Paint Stores Group

Timothy J. Drouilhet, 48
President & General Manager
Eastern Division
Paint Stores Group

Monty J. Griffin, 49
President & General Manager
Mid Western Division
Paint Stores Group

Thomas C. Hablitzel, 47
President & General Manager
Automotive Division
Global Finishes Group

George E. Heath, 44*
President
Global Finishes Group

Peter J. Ippolito, 45

President & General Manager
Protective & Marine
Coatings Division
Global Finishes Group

Drew A. McCandless, 49
President & General Manager
Chemical Coatings Division
Global Finishes Group

Steven J. Oberfeld, 57*
President
Paint Stores Group

Cheri M. Phyfer, 38
President & General Manager
South Western Division
Paint Stores Group

Harvey P. Sass, 52
President & General Manager
Diversified Brands Division
Consumer Group

Thomas W. Seitz, 61*
Senior Vice President -
Strategic Excellence Initiatives

Alexander Zalesky, 50
President & General Manager
Latin America Coatings Group
Global Finishes Group

* Executive Officer as defined by the Securities Exchange Act of 1934

80

1	JOHN M. STROPKI, JR., 59 Chairman, President and Chief Executive Officer Lincoln Electric Holdings, Inc.
2	SUSAN J. KROPF, 61 Retired, former President and Chief Operating Officer Avon Products, Inc.
3	CURTIS E. MOLL, 70 Chairman and Chief Executive Officer MTD Holdings Inc
4	THOMAS G. KADIEN, 53* Senior Vice President Consumer Packaging and IP Asia International Paper Company
5	A. MALACHI MIXON, III, 69 Chairman and Chief Executive Officer Invacare Corporation
6	GARY E. MCCULLOUGH, 51* President and Chief Executive Officer Career Education Corporation
7	RICHARD K. SMUCKER, 61 Executive Chairman and Co-Chief Executive Officer The J. M. Smucker Company
8	CHRISTOPHER M. CONNOR, 53 Chairman and Chief Executive Officer The Sherwin-Williams Company
9	JAMES C. BOLAND, 70* Former President, Chief Executive Officer and Vice Chairman Cavaliers Operating Company, LLC
10	DAVID F. HODNIK, 62* Retired, former President and Chief Executive Officer Ace Hardware Corporation
11	ARTHUR F. ANTON, 52* President and Chief Executive Officer Swagelok Company

EX-21

EXHIBIT 21

	STATE OR JURISDICTION
	OF INCORPORATION OR
SUBSIDIARIES	ORGANIZATION
Domestic Subsidiaries
Contract Transportation Systems Co.		Delaware
Life Shield Engineered Systems, LLC		Nevada
Omega Specialty Products & Services LLC		Ohio
Sherwin-Williams Realty Holdings, Inc.		Illinois
SWIMC, Inc.		Delaware
The Sherwin-Williams Acceptance Corporation		Nevada
Foreign Subsidiaries
Coatings S.R.L.		Peru
Colorman Coatings Pte. Ltd.		Singapore
Compania Sherwin-Williams, S.A. de C.V.		Mexico
Euronavy – Tintas Maritimas e Industriais, S.A.		Portugal
Inchem Vietnam Limited		Vietnam
Inchemcoat Philippines Inc.		Philippines
Intelchem Industries Sdn. Bhd.		Malaysia
Pinturas Industriales S.A.		Uruguay
PQP Monterrey S. de R.L. de C.V.		Mexico
Productos Quimicos y Pinturas, S.A. de C.V.		Mexico
Przedsiebiorstwo Altax sp. z o.o		Poland
Quetzal Pinturas, S.A. de C.V.		Mexico
Ronseal (Ireland) Limited		Ireland
Ronseal Limited		United Kingdom
Sherwin-Williams Argentina I. y C.S.A.		Argentina
Sherwin-Williams Automotive Europe S.p.A.		Italy
Sherwin-Williams Automotive France S.r.l.		France
Sherwin-Williams Automotive Mexico S.de R.L.de C.V.		Mexico
Sherwin-Williams Canada Inc.		Canada
Sherwin-Williams (Caribbean) N.V.		Curacao
Sherwin-Williams Cayman Islands Limited		Cayman Islands
Sherwin-Williams Chile S.A.		Chile
Sherwin-Williams do Brasil Industria e Comercio Ltda.		Brazil
Sherwin-Williams Japan Co., Ltd.		Japan
Sherwin-Williams Paints (Dongguan) Company Limited		China
Sherwin-Williams Paints India Private Limited		India
Sherwin-Williams Paints Limited Liability Company		Russia
Sherwin-Williams (Shanghai) Limited		China
Sherwin-Williams Pinturas de Venezuela S.A.		Venezuela
Sherwin-Williams UK Automotive Limited		UK
Sherwin-Williams Uruguay S.A.		Uruguay
Sherwin-Williams (West Indies) Limited		West Indies
SWAM Monterrey, S. de R.L. de C.V.		Mexico
The Sherwin-Williams Company Resources Limited		Jamaica
Zhaoqing KPS Coatings Co., Ltd.		China

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of The Sherwin-Williams Company of our report dated February 24, 2010 with respect to the consolidated financial statements of The Sherwin-Williams Company and our report dated February 24, 2010 with respect to the effectiveness of internal control over financial reporting of The Sherwin-Williams Company, included in the 2009 Annual Report to Shareholders of The Sherwin-Williams Company.

Our audits also included the financial statement schedule of The Sherwin-Williams Company listed in Item 15(a). This schedule is the responsibility of The Sherwin-Williams Company management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We consent to the incorporation by reference in the following Registration Statements of our report dated February 24, 2010 with respect to the consolidated financial statements of The Sherwin-Williams Company and our report dated February 24, 2010 with respect to the effectiveness of internal control over financial reporting of The Sherwin-Williams Company, incorporated by reference herein, and our report included in the preceding paragraph with respect to the financial statement schedule of The Sherwin-Williams Company included in this Annual Report (Form 10-K) of The Sherwin-Williams Company:

Registration Number	Description
333-163747	The Sherwin-Williams Company Form S-3ASR Registration Statement
333-152443	The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
333-133419	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan and The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors Form S-8 Registration Statement
333-129582	The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan, The Sherwin-Williams 2005 Key Management Deferred Compensation Plan and The Sherwin-Williams Company 2005 Director Deferred Fee Plan Form S-8 Registration Statement
333-105211	The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
333-101229	The Sherwin-Williams Company 2003 Stock Plan Form S-8 Registration Statement
333-66295	The Sherwin-Williams Company Deferred Compensation Savings Plan, The Sherwin-Williams Company Key Management Deferred Compensation Plan and The Sherwin-Williams Company Director Deferred Fee Plan Form S-8 Registration Statement
333-25671	The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors Form S-8 Registration Statement
333-25669	The Sherwin-Williams Company 1994 Stock Plan Form S-8 Registration Statement
333-25607	The Sherwin-Williams Company Form S-4 Registration Statement
333-01093	The Sherwin-Williams Company Form S-3 Registration Statement
333-00725	The Sherwin-Williams Company Form S-4 Registration Statement
33-52227	The Sherwin-Williams Company 1994 Stock Plan Form S-8 Registration Statement
33-22705	The Sherwin-Williams Company Form S-3 Registration Statement

/s/ Ernst & Young LLP
Cleveland, Ohio
February 24, 2010

EX-24.A

EXHIBIT 24(a)

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned officer and director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 12, 2010	/s/ C. M. Connor
	C. M. Connor
	Chairman and Chief Executive Officer, Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned officer of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 15, 2010	/s/ S. P. Hennessy
	S. P. Hennessy
	Senior Vice President - Finance and Chief Financial Officer

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned officer of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S. P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 12, 2010	/s/ J. L. Ault
	J. L. Ault
	Vice President - Corporate Controller

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 16, 2010	/s/ A. F. Anton
	A. F. Anton
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 17, 2010	/s/ J. C. Boland
	J. C. Boland
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 17, 2010	/s/ D. F. Hodnik
	D. F. Hodnik
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 13, 2010	/s/ T. G. Kadien
	T. G. Kadien
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 17, 2010	/s/ S. J. Kropf
	S. J. Kropf
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 16, 2010	/s/ G. E. McCullough
	G. E. McCullough
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 16, 2010	/s/ A. M. Mixon, III
	A. M. Mixon, III
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 17, 2010	/s/ C. E. Moll
	C. E. Moll
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 16, 2010	/s/ R. K. Smucker
	R. K. Smucker
	Director

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

     The undersigned director of The Sherwin-Williams Company, an Ohio corporation, which corporation anticipates filing with the Securities and Exchange Commission (the “SEC”) under the provisions of the Securities Exchange Act of 1934, as amended, and any rules and regulations of the SEC, an Annual Report on Form 10-K for the fiscal year ended December 31, 2009, hereby constitutes and appoints C.M. Connor, S.P. Hennessy and L.E. Stellato, and each of them, with full power of substitution and resubstitution, as true and lawful attorney-in-fact or attorneys-in-fact, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities, to sign and file said Annual Report on Form 10-K and any and all amendments, supplements and exhibits thereto, and any and all applications or other documents to be filed with the SEC or any national securities exchange pertaining thereto, with full power and authority to do and perform any and all acts and things whatsoever required, necessary or desirable to be done in the premises, hereby ratifying and approving the acts of said attorneys and each of them and any substitutes.

     Executed the date set opposite my name.

Date: February 16, 2010	/s/ J. M. Stropki, Jr.
	J. M. Stropki, Jr.
	Director

EX-24.B

EXHIBIT 24(b)

CERTIFICATE

     I, the undersigned, Secretary of The Sherwin-Williams Company (the “Company”), hereby certify that attached hereto is a true and complete copy of a resolution of the Board of Directors of the Company, duly adopted at a meeting held on February 17, 2010, and that such resolution is in full force and effect and has not been amended, modified, revoked or rescinded as of the date hereof.

     IN WITNESS WHEREOF, I have executed this certificate as of this 17th day of February, 2010.

/s/ L.E. Stellato  

L.E. Stellato, Secretary 

RESOLVED, that the appropriate officers of the Company are each hereby authorized to execute and deliver a power of attorney appointing C.M. Connor, S.P. Hennessy and L.E. Stellato or any of them, with full power of substitution and resubstitution, to act as attorneys-in-fact for the Company and for such officers for the purpose of executing and filing with the Securities and Exchange Commission (“SEC”) and any national securities exchange, on behalf of the Company, the Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and any and all amendments, exhibits and other documents in connection therewith, and to take other action deemed necessary and appropriate to effect the filing of such Annual Report on Form 10-K and any and all such amendments, exhibits and other documents in connection therewith.

EX-31.A

EXHIBIT 31(a)

CERTIFICATION

I, Christopher M. Connor, certify that:

1.	I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal

quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2010	/s/ Christopher M. Connor
	Christopher M. Connor
	Chairman and Chief Executive Officer

EX-31.B

EXHIBIT 31(b)

CERTIFICATION

I, Sean P. Hennessy, certify that:

1.	I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal

quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2010	/s/ Sean P. Hennessy
	Sean P. Hennessy
	Senior Vice President — Finance and      Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

SECTION 1350 CERTIFICATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report on Form 10-K of The Sherwin-Williams Company (the “Company”) for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher M. Connor, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 24, 2010	/s/ Christopher M. Connor
	Christopher M.Connor
	Chairman and Chief      Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Sherwin-Williams Company and will be retained by The Sherwin-Williams Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

EXHIBIT 32(b)

SECTION 1350 CERTIFICATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report on Form 10-K of The Sherwin-Williams Company (the “Company”) for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sean P. Hennessy, Senior Vice President — Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 24, 2010	/s/ Sean P. Hennessy
	Sean P.Hennessy
	Senior Vice President — Finance and      Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Sherwin-Williams Company and will be retained by The Sherwin-Williams Company and furnished to the Securities and Exchange Commission or its staff upon request.