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<SEC-DOCUMENT>0000950152-01-500336.txt : 20010314
<SEC-HEADER>0000950152-01-500336.hdr.sgml : 20010314
ACCESSION NUMBER:		0000950152-01-500336
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010313

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHERWIN WILLIAMS CO
		CENTRAL INDEX KEY:			0000089800
		STANDARD INDUSTRIAL CLASSIFICATION:	PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851]
		IRS NUMBER:				340526850
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-04851
		FILM NUMBER:		1567015

	BUSINESS ADDRESS:	
		STREET 1:		101 PROSPECT AVE NW
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44115
		BUSINESS PHONE:		2165662200
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>l85264be10-k.txt
<DESCRIPTION>THE SHERWIN-WILLIAMS COMPANY  FORM 10-K
<TEXT>

<PAGE>   1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       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, 2000

                         COMMISSION FILE NUMBER 1-4851

                          ----------------------------

                          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 PROSPECT AVENUE, N.W., 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:

<TABLE>
<CAPTION>
       TITLE OF EACH CLASS                                         NAME OF EXCHANGE ON WHICH REGISTERED
       -------------------                                         ------------------------------------
       <S>                                                         <C>

       9.875% Debentures due 2016                                  New York Stock Exchange
       Common Stock, Par Value $1.00                               New York Stock Exchange
       Preferred Stock Purchase Rights                             New York Stock Exchange
</TABLE>

          Securities Registered Pursuant to Section 12(g) of the Act:

                                      None

    Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   Yes X   No __

    Indicate 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. [  ]

    At January 31, 2001, 159,776,823 shares of common stock were outstanding,
net of treasury shares. The aggregate market value of such voting stock held by
non-affiliates on January 31, 2001 was $4,263,541,169.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 2000 ("2000 Annual Report") are incorporated by reference into
Parts I, II and IV of this report.

    Portions of the Proxy Statement for the 2001 Annual Meeting of Shareholders
("Proxy Statement") are incorporated by reference into Part III of this report.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

     The Sherwin-Williams Company, founded in 1866 and incorporated in 1884, is
engaged in the manufacture, distribution and sale of coatings and related
products to professional, industrial, commercial and retail customers primarily
in North and South America. As used in this report, the terms "Sherwin-Williams"
and "Company" mean The Sherwin-Williams Company and its consolidated
subsidiaries unless the context indicates otherwise.

BASIS OF REPORTABLE SEGMENTS

     The Company reports its segment information in five reportable
segments -- the Paint Stores, Consumer, Automotive Finishes, International
Coatings (collectively, the "Operating Segments") and Administrative
Segments -- in accordance with Statement of Financial Accounting Standards
(SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 131 requires an enterprise to report segment information
in the same way that management internally organizes its business for assessing
performance and making decisions regarding allocation of resources.

     The Company's chief operating decision maker has been identified as the
Chief Executive Officer because he has final authority over performance
assessment and resource allocation decisions. Because of the global, diverse
operations of the Company, the chief operating decision maker regularly receives
discrete financial information about each reportable segment as well as a
significant amount of additional financial information about certain aggregated
divisions, operating units and subsidiaries of the Company. The chief operating
decision maker uses all such financial information for performance assessment
and resource allocation decisions. Factors considered in determining the five
reportable segments of the Company include the nature of the business
activities, existence of managers responsible for the operating and
administrative activities and information presented to the Board of Directors.
The Company evaluates the performance of operating segments and allocates
resources based on profit or loss and cash generated from operations before
income taxes, excluding corporate expenses and financing gains and losses. The
accounting policies of the reportable segments are the same as those described
in Note 1 of the Notes to Consolidated Financial Statements on pages 27 and 28
of the 2000 Annual Report, which is incorporated herein by reference.

PAINT STORES SEGMENT

     The Paint Stores Segment consists of 2,488 company-operated specialty paint
stores in the United States, Canada, Virgin Islands, Puerto Rico and Mexico.
Each of the stores has the same business activity of selling identical national
and similar regional products to similar types of customers. During 2000, this
Segment opened or acquired 92 net new stores, remodeled 52 and relocated 36. The
net new stores consisted of 79 stores in the United States, 3 in Canada, 1 in
the Virgin Islands, 4 in Puerto Rico and 5 in Mexico. In 1999, there were 73 net
new stores opened (66 in the United States). In 1998, 64 net new stores were
opened (55 in the United States). This Segment also manufactures original
equipment manufacturer (OEM) product finishes sold through the paint stores and
by direct outside sales representatives. In addition to stores, operations in
Mexico include a manufacturing facility, distribution activities and outside
selling functions to dealers and other distributors.

     The Paint Stores Segment is the exclusive North American marketer and
seller of Sherwin-Williams(R) branded architectural coatings, industrial and
marine products, OEM product finishes and related items produced by its Mexican
operations, its product finishes manufacturing and by the Consumer Segment. The
loss of any single customer would not have a material adverse effect on the
business of this Segment.

CONSUMER SEGMENT

     The Consumer Segment develops, manufactures and distributes a variety of
paint, coatings and related products to third party customers and the Paint
Stores Segment. Approximately 41 percent of the total sales of the Consumer
Segment in 2000, including inter-segment transfers, represented products sold
through the Paint Stores

                                        1
<PAGE>   3

Segment. Sales and marketing of certain control-branded 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 Segment has 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 incurs most of the Company's capital
expenditures related to ongoing environmental compliance measures.

AUTOMOTIVE FINISHES SEGMENT

     The Automotive Finishes Segment develops, manufactures and distributes a
variety of motor vehicle finish, refinish and touch-up products primarily
throughout North and South America, the Caribbean Islands and Italy. This
Segment also licenses certain technology and trade names worldwide.
Sherwin-Williams(R) branded automotive finish and refinish products are
distributed throughout North America solely through this Segment's network of
127 company-operated automotive branches in the United States and 17 in Canada.
Additional automotive branches in Jamaica (14) and Chile (17) complete this
Segment's worldwide network. At December 31, 2000, this Segment included 11
foreign wholly-owned subsidiaries in 8 foreign countries and 11 licensing
agreements in 15 foreign countries. During 2000, the Automotive Finishes Segment
opened or acquired three net new branches worldwide.

INTERNATIONAL COATINGS SEGMENT

     The International Coatings Segment develops, licenses, manufactures and
distributes a variety of paint, coatings and related products worldwide. The
majority of the sales from licensees and subsidiaries occur in South America,
the Segment's most important international market. This Segment sells its
products through 29 company-operated specialty paint stores in Chile and 16 in
Brazil and by outside selling functions to dealers and other distributors. At
December 31, 2000, this Segment included 12 foreign wholly-owned subsidiaries in
8 foreign countries, 4 foreign joint ventures and 29 licensing agreements in 20
foreign countries.

ADMINISTRATIVE SEGMENT

     The Administrative Segment includes the administrative expenses of the
Company's and certain consolidated subsidiaries' headquarters sites. This
Segment includes interest expense which is unrelated to retail real estate
leasing activities, investment income, certain foreign currency transaction
losses related to dollar-denominated debt, certain provisions for disposition
and environmental-related matters, and other expenses which are not directly
associated with any Operating Segment. Administrative expenses do not include
any significant foreign operations. Also included in the Administrative Segment
is 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 the Administrative Segment represent external leasing
revenue of excess headquarters space or leasing of facilities no longer used by
the Company in its operations. Gains and losses from the sale of property are
not a significant operating factor in determining the performance of this
Segment.

     Reportable segment financial information is presented in Note 17 of the
Notes to Consolidated Financial Statements on pages 35 through 37 of the 2000
Annual Report, which is incorporated herein by reference.

     For additional information regarding the Company's business and business
developments, see page 1 of the 2000 Annual Report and the "Letter to
Shareholders" on pages 3 through 5 of the 2000 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 Segments anticipates any
significant sourcing problems during 2001. There are sufficient suppliers of
each product purchased for resale that none of the Segments anticipates any
significant sourcing problems during 2001.

                                        2
<PAGE>   4

SEASONALITY

     The majority of the sales for the Paint Stores, Consumer and Automotive
Finishes Segments traditionally occur during the second and third quarters. The
International Coatings Segment's fourth quarter sales have traditionally been
greater than the sales for any of the first three quarters. There is no
significant seasonality in sales for the Administrative Segment.

TRADEMARKS AND TRADE NAMES

     Customer recognition of Company trademarks and trade names collectively
contribute significantly to the sales of the Company.

     The Paint Stores Segment is identified with names such as
Sherwin-Williams(R), Old Quaker(TM), Pro-Line(R), SeaGuard(R), JetGlo(R),
AcryGlo(R), Con-Lux(R), Mercury(TM), Brod-Dugan(TM), ArmorSeal(R), Kem(R)
Hi-Temp, Cook(R), Sher-Wood(R), Powdura(R), Polane(R) and Kem Aqua(R).

     The Consumer Segment employs a variety of trade names and trademarks in
marketing its products, such as Thompson's(R), Dutch Boy(R), Martin Senour(R),
Cuprinol(R), Pratt & Lambert(R), H&C(TM), Rubberset(R), Dupli-Color(R),
Minwax(R), White Lightning(R), Krylon(R), Formby's(R) and Red Devil(R).

     The Automotive Finishes Segment utilizes various trade names and trademarks
in pursuit of its business, including Sherwin-Williams(R), Martin Senour(R),
Western(R), Lazzuril(TM), Excelo(TM), Marson(TM) and ScottWarren(TM).

     The International Coatings Segment uses trade names and trademarks in the
conduct of its business including Sherwin-Williams(R), Dutch Boy(R), Krylon(R),
Kem-Tone(R), Pratt & Lambert(R), Minwax(R), Ronseal(TM), Colorgin(TM),
Globo(TM), Pulverlack(R), Sumare(TM), Andina(TM) and Marson(TM).

PATENTS

     Although patents and licenses are not of material importance to the
business of the Company as a whole or any Segment, the International Coatings
Segment and the international operations of the Automotive Finishes Segment
derive a portion of their income from the license of technology, trademarks and
trade names to foreign companies.

BACKLOG AND PRODUCTIVE CAPACITY

     Backlog orders are not significant in the business of any Segment since
there is normally a short period of time between the placing of an order and
shipment. Sufficient productive capacity currently exists to fulfill the
Company's needs for paint and coatings products through 2001.

COMPETITION

     The Company experiences competition from many local, regional, national and
international competitors of various sizes in the manufacture, distribution and
sale of its coatings and related products. The Company is a leading manufacturer
and retailer of coatings and related products to professional, industrial,
commercial and retail customers, however, the Company's competitive position
varies for its different products and markets.

     In the Paint Stores Segment, competitors include other paint and wallpaper
stores, mass merchandisers, home centers, independent hardware stores, hardware
chains and manufacturer-operated direct outlets. Product quality, service and
price determine the competitive advantage for this Segment. In the Consumer and
International Coatings Segments, domestic and foreign competitors include
manufacturers and distributors of branded and private labeled coatings products.
Technology, product quality, product innovation, breadth of product line,
technical expertise, distribution, service and price are the key competitive
factors for these Segments. The Automotive Finishes Segment 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, 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.

                                        3
<PAGE>   5

EMPLOYEES

     The Company employed 26,095 persons at December 31, 2000.

ENVIRONMENTAL COMPLIANCE

     For additional information regarding environmental-related matters, see
pages 14 through 16 of the 2000 Annual Report under the caption entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Notes 1, 4 and 9 of the Notes to Consolidated Financial
Statements on pages 28, 29 and 32, respectively, of the 2000 Annual Report,
which is incorporated herein by reference.

SEGMENT INFORMATION AND FOREIGN OPERATIONS

     For additional information regarding the Company's Reportable Segments and
foreign operations, see Note 17 on pages 35 through 37 of the 2000 Annual
Report, which is incorporated herein by reference. Additional information
regarding risks attendant to foreign operations is set forth on pages 15 and 17
of the 2000 Annual Report under the caption entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations," which is
incorporated herein by reference.

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 and future business plans. 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 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. These risks, uncertainties and other factors include such things as:
general business conditions, strengths of retail economies and the growth in the
coatings industry; competitive factors, including pricing pressures and product
innovation and quality; changes in raw material availability and pricing;
changes in the Company's relationships with customers and suppliers; the ability
of the Company to successfully integrate past and future acquisitions into its
existing operations, as well as the performance of the businesses acquired; the
ability of the Company to successfully complete planned divestitures; changes in
general domestic economic conditions such as inflation rates, interest rates and
tax rates; risks and uncertainties associated with the Company's expansion into
foreign markets, including inflation rates, recessions, foreign currency
exchange rates, foreign investment and repatriation restrictions and other
external economic and political factors; the achievement of growth in developing
markets, such as Mexico and South America; increasingly stringent domestic and
foreign governmental regulations including those affecting the environment;
inherent uncertainties involved in assessing the Company's potential liability
for environmental remediation-related activities; 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 affect of any legislation and
administrative regulations relating thereto; and unusual weather conditions.

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

ITEM 2.  DESCRIPTION OF PROPERTY

     The Company owns its corporate headquarters located in Cleveland, Ohio. The
Company's principal manufacturing and distribution facilities are located as set
forth below. The Company believes its manufacturing and distribution facilities
are well-maintained and are suitable and adequate, and have sufficient
productive capacity, to meet its current needs.

                                        4
<PAGE>   6

PAINT STORES SEGMENT

                            Manufacturing Facilities
                           -------------------------

Arlington, Texas                                                           Owned
Calgary, Alberta, Canada                                                  Leased
Cincinnati, Ohio                                                           Owned
Columbus, Ohio                                                             Owned
Edison, New Jersey                                                         Owned
Fort Wayne, Indiana                                                       Leased
Greensboro, North Carolina                                                 Owned
Grimsby, Ontario, Canada                                                   Owned
Harrisburg, Pennsylvania                                                  Leased
Memphis, Tennessee                                                         Owned
Mexico City, Mexico                                                        Owned
Ontario, California                                                       Leased
Portsmouth, Virginia                                                       Owned
Rockford, Illinois                                                        Leased
San Diego, California                                                     Leased
Spartanburg, South Carolina                                               Leased
Sylmar, California                                                        Leased
Wichita, Kansas                                                            Owned

                            Distribution Facilities
                             ----------------------

Mexico City, Mexico                                                        Owned
Vancouver, Alberta, Canada                                                Leased

CONSUMER SEGMENT

                            Manufacturing Facilities
                           -------------------------

Baltimore, Maryland                                                        Owned
Bedford Heights, Ohio                                                      Owned
Chicago, Illinois                                                          Owned
Coffeyville, Kansas                                                        Owned
Crisfield, Maryland                                                       Leased
Deshler, Ohio                                                              Owned
Elk Grove, Illinois                                                        Owned
Emeryville, California                                                     Owned
Ennis, Texas                                                              Leased
Flora, Illinois                                                            Owned
Fort Erie, Ontario, Canada                                                 Owned
Garland, Texas                                                             Owned
Greensboro, North Carolina                                                 Owned
Holland, Michigan                                                          Owned
Lawrenceville, Georgia                                                     Owned
Morrow, Georgia                                                            Owned
Olive Branch, Mississippi                                                  Owned
Orlando, Florida                                                           Owned
Victorville, California                                                    Owned

                            Distribution Facilities
                             ----------------------

Bedford Heights, Ohio                                                     Leased
Buford, Georgia                                                           Leased
Effingham, Illinois                                                       Leased
Fredericksburg, Pennsylvania                                               Owned
Reno, Nevada                                                               Owned
San Juan, Puerto Rico                                                     Leased
Vaughan, Ontario, Canada                                                  Leased
Waco, Texas                                                               Leased
Winter Haven, Florida                                                      Owned

AUTOMOTIVE FINISHES SEGMENT

                            Manufacturing Facilities
                            ------------------------

Aprilia, Italy                                                            Leased
Arica, Chile                                                               Owned
Kingston, Jamaica                                                          Owned
Richmond, Kentucky                                                         Owned
Santiago, Chile*                                                           Owned
Sao Paulo, Brazil                                                          Owned
Texcocco, Mexico                                                           Owned

                            Distribution Facilities
                             ----------------------

Aprilia, Italy                                                            Leased
Kingston, Jamaica                                                          Owned
Reno, Nevada                                                              Leased
Richmond, Kentucky                                                         Owned
Santiago, Chile*                                                           Owned
Sao Paulo, Brazil                                                          Owned
Zaragoza, Mexico                                                           Owned

                                        5
<PAGE>   7

INTERNATIONAL COATINGS SEGMENT

                            Manufacturing Facilities
                           -------------------------

Buenos Aires, Argentina                                                    Owned
Santiago, Chile*                                                           Owned
Santa Catarina, Brazil                                                     Owned
Sao Paulo, Brazil(4)                                                       Owned
Sheffield, England                                                         Owned

                            Distribution Facilities
                             ----------------------

Buenos Aires, Argentina                                                    Owned
Dublin, Ireland                                                            Owned
Santiago, Chile*                                                           Owned
Santiago, Chile                                                           Leased
Santa Catarina, Brazil                                                     Owned
Sao Paulo, Brazil(4)                                                       Owned
Lima, Peru                                                                Leased

* This facility is shared between the Automotive Finishes and International
Coatings Segments.

     The operations of the Paint Stores Segment included 2,488 company-operated
paint stores, of which 212 were owned, in the United States, Canada, Virgin
Islands, Puerto Rico and Mexico at December 31, 2000. The Paint Stores Segment
is divided into four separate operating divisions and certain operations in
Mexico, each of which is responsible for the paint stores located within its
geographical region. At the end of 2000, the Mid Western Division operated 666
paint stores primarily located in the midwestern and upper west coast states,
the Eastern Division operated 498 paint stores along the upper east coast and
New England states and Canada, the Southeastern Division operated 658 paint
stores principally covering the lower east and gulf coast states, Puerto Rico
and the U.S. Virgin Islands, and the South Western Division operated 588 paint
stores in the plains and the lower west coast states. The Paint Stores Segment
also included 78 paint stores in Mexico. The Paint Stores Segment opened 92 net
new paint stores in 2000 and relocated 36.

     The Automotive Finishes Segment included 127 company-operated automotive
branches, of which one was owned, in the United States and 48 leased
company-operated stores and branches in Canada, Chile and Jamaica at December
31, 2000. The International Coatings Segment included 45 company-operated
specialty paint stores, of which 6 were owned, in Chile and Brazil. All real
property within the Administrative Segment is owned by the Company except for
one warehouse lease. 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 8 of the Notes to Consolidated
Financial Statements on page 31 of the 2000 Annual Report, which is incorporated
herein by reference.

ITEM 3.  LEGAL PROCEEDINGS

     For information regarding environmental-related matters and other legal
proceedings, see pages 14 through 16 of the 2000 Annual Report under the caption
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Notes 1, 4 and 9 of the Notes to Consolidated
Financial Statements on pages 28, 29 and 32, respectively, of the 2000 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 the Company's security holders
during the fourth quarter of 2000.

                                        6
<PAGE>   8

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following is the name, age and present position of each of the
Executive Officers at March 13, 2001, as well as all prior positions held by
each during the last five years. 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 resignation or removal.

<TABLE>
<CAPTION>
             Name                  Age                   Present Position
             ----                  ---                   ----------------
<S>                                <C>    <C>
Christopher M. Connor              44     Chairman and Chief Executive Officer, Director
Joseph M. Scaminace                47     President and Chief Operating Officer, Director
Larry J. Pitorak                   54     Senior Vice President -- Finance, Treasurer and
                                          Chief Financial Officer
John L. Ault                       55     Vice President -- Corporate Controller
Michael A. Galasso                 53     President & General Manager, International
                                          Division
Thomas E. Hopkins                  43     Vice President -- Human Resources
Conway G. Ivy                      59     Vice President -- Corporate Planning and
                                          Development
John G. Morikis                    37     President, Paint Stores Group
Ronald P. Nandor                   41     President & General Manager, Automotive
                                          Division
Thomas W. Seitz                    52     President & General Manager, Consumer Division
Louis E. Stellato                  50     Vice President, General Counsel and Secretary
</TABLE>

     Mr. Connor has served as Chairman since April 2000 and Chief Executive
Officer since October 1999. Mr. Connor served as Vice Chairman from October 1999
to April 2000, President, Paint Stores Group from August 1997 to October 1999
and President & General Manager, Diversified Brands Division from April 1994 to
August 1997. Mr. Connor has served as a Director since October 1999.

     Mr. Scaminace has served as President and Chief Operating Officer since
October 1999. Mr. Scaminace served as President, Consumer Group from July 1998
to October 1999, President & General Manager, Coatings Division from June 1997
to July 1998, and President & General Manager, Automotive Division from April
1994 to June 1997. Mr. Scaminace has served as a Director since October 1999.

     Mr. Pitorak has served as Senior Vice President -- Finance, Treasurer and
Chief Financial Officer since April 1992.

     Mr. Ault has served as Vice President -- Corporate Controller since January
1987.

     Mr. Galasso has served as President & General Manager, International
Division since September 2000. Mr. Galasso served as President & General
Manager, Automotive Division from June 1997 to September 2000 and Vice President
& Director -- Operations, Automotive Division from May 1992 to June 1997.

     Mr. Hopkins has served as Vice President -- Human Resources since August
1997. Mr. Hopkins served as Vice President -- Human Resources, Paint Stores
Group from February 1996 to August 1997.

     Mr. Ivy has served as Vice President -- Corporate Planning and Development
since April 1992.

     Mr. Morikis has served as President, Paint Stores Group since October 1999.
Mr. Morikis served as President & General Manager, Eastern Division, Paint
Stores Group from July 1998 to October 1999, Senior Vice President &
Director -- Marketing, Paint Stores Group from September 1997 to July 1998 and
Division Vice President -- Sales, Eastern Division, Paint Stores Group from
April 1994 to September 1997.

     Mr. Nandor has served as President & General Manager, Automotive Division
since September 2000. Mr. Nandor served as Executive Vice
President -- Marketing, Paint Stores Group from August 1998 to September 2000
and Vice President and Director -- Marketing, Automotive Division from November
1996 to August 1998. Prior to joining Sherwin-Williams in November 1996, Mr.
Nandor was Director -- Sales of the Automotive Refinish Business Unit of PPG
Industries, Inc.

                                        7
<PAGE>   9

     Mr. Seitz has served as President & General Manager, Consumer Division
since January 2001. Mr. Seitz served as President, Consumer Group from October
1999 to January 2001, Vice President of Operations, Consumer Group from July
1998 to October 1999 and Vice President of Operations, Coatings Division from
December 1995 to July 1998.

     Mr. Stellato has served as Vice President, General Counsel and Secretary
since July 1991.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Sherwin-Williams common stock is listed on the New York Stock Exchange and
traded under the symbol SHW. The number of shareholders of record at March 1,
2001 was 10,708. Information regarding market prices and dividend information
with respect to Sherwin-Williams common stock is set forth on page 39 of the
2000 Annual Report under the caption entitled "Shareholder Information," which
is incorporated herein by reference.

ITEM 6.  SELECTED FINANCIAL DATA
(Millions of Dollars, except per share data)

<TABLE>
<CAPTION>
                               2000      1999    1998     1997    1996(a)
- -------------------------------------------------------------------------
<S>                           <C>       <C>     <C>      <C>      <C>
OPERATIONS
Net sales                     $5,212    $5,004  $4,934   $4,881   $4,133
Net income                        16(b)    304     273      261      229
FINANCIAL POSITION
Total assets                  $3,751(b) $4,033  $4,051   $4,036   $2,995
Long-term debt                   624       624     730      844      143
Ratio of earnings to fixed
  charges(c)                     2.4X(b)   5.8x    5.0x     4.6x     7.3x
PER COMMON SHARE DATA
Net income -- basic(d)        $  .10(b) $ 1.81  $ 1.58   $ 1.51   $ 1.34
Net income -- diluted(d)         .10(b)   1.80    1.57     1.50     1.33
Cash dividends                   .54       .48     .45      .40      .35
</TABLE>

(a) Pre-acquisition amounts for Thompson Minwax Holding Corp., acquired on
    January 7, 1997 using the purchase method of accounting, are not included.
    Therefore, amounts are not comparable to 1997 and beyond.

(b) Amount includes an impairment of long-lived assets charge of $294 million
    ($1.80 per share) after tax. See Note 2 of the Notes to Consolidated
    Financial Statements on page 28 of the 2000 Annual Report, which is
    incorporated herein by reference.

(c) For purposes of calculating the ratio of earnings to fixed charges, earnings
    represent income before income taxes 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.

(d) Amounts reflect adoption of Statement of Financial Accounting Standards No.
    128, "Earnings Per Share," effective December 31, 1997. Amounts shown for
    1996 have been restated. See Note 1 and Note 15 of the Notes to Consolidated
    Financial Statements on pages 28 and 35, respectively, of the 2000 Annual
    Report, which are incorporated herein by reference, for further per share
    information.

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 20
of the 2000 Annual Report under the caption entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations," which is
incorporated herein by reference.

                                        8
<PAGE>   10

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company is exposed to market risk through various financial
instruments, including fixed rate debt instruments. The Company does not believe
that any potential loss related to these financial instruments will have a
material adverse effect on the Company's financial condition, results of
operations or liquidity.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Information required by this item is set forth on pages 23 through 37 of
the 2000 Annual Report under the captions entitled "Statements of Consolidated
Income," "Consolidated Balance Sheets," "Statements of Consolidated Cash Flows,"
"Statements of Consolidated Shareholders' Equity," and "Notes to Consolidated
Financial Statements," which is incorporated herein by reference. Unaudited
quarterly data is set forth in Note 14 of the Notes to Consolidated Financial
Statements on pages 34 and 35 of the 2000 Annual Report, which is incorporated
herein by reference. The Report of Independent Auditors is set forth on page 11
of this report.

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

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information regarding Directors is set forth under the caption entitled
"Election of Directors" in the Proxy Statement, which is incorporated herein by
reference.

     The information regarding Executive Officers is set forth under the caption
entitled "Executive Officers of the Registrant" in Part I of this report, which
is incorporated herein by reference.

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

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this item is set forth on pages 7 through 15 of
the Proxy Statement and under the caption entitled "Compensation of Directors"
in the Proxy Statement, which is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     The information required by this item is set forth under the captions
entitled "Security Ownership of Management" and "Security Ownership of Certain
Beneficial Owners" in the Proxy Statement, which is incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is set forth under the captions
entitled "Certain Relationships and Related Transactions," "Compensation of
Directors" and "Compensation Committee Interlocks and Insider Participation" in
the Proxy Statement, which information is incorporated herein by reference.

                                        9
<PAGE>   11

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

<TABLE>
<S>    <C>    <C>     <C>
(a)    (1)    Financial Statements
              The following consolidated financial statements of the Company
              included in the 2000 Annual Report are incorporated by reference in
              Item 8. The Report of Independent Auditors is set forth on page 11
              of this report.
              (i)     Statements of Consolidated Income for the years ended
                      December 31, 2000, 1999 and 1998 (page 23 of the 2000 Annual
                      Report)
              (ii)    Consolidated Balance Sheets at December 31, 2000, 1999 and
                      1998 (page 24 of the 2000 Annual Report)
              (iii)   Statements of Consolidated Cash Flows for the years ended
                      December 31, 2000, 1999 and 1998 (page 25 of the 2000 Annual
                      Report)
              (iv)    Statements of Consolidated Shareholders' Equity for the
                      years ended December 31, 2000, 1999 and 1998 (page 26 of the
                      2000 Annual Report)
              (v)     Notes to Consolidated Financial Statements for the years
                      ended December 31, 2000, 1999 and 1998 (pages 27 through 37
                      of the 2000 Annual Report)
       (2)    Financial Statement Schedule
                      Schedule II -- Valuation and Qualifying Accounts and
                      Reserves for the years ended December 31, 2000, 1999 and
                      1998 is set forth on page 11 of this report. 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.
       (3)    Exhibits
                      See the Exhibit Index on pages 14 and 15 of this report.
</TABLE>

(b) Reports on Form 8-K -- The Company filed (a) a Current Report on Form 8-K,
    dated October 12, 2000, reporting under Item 5 the Company's expectations
    regarding earnings for the third quarter of 2000 and full year 2000 and (b)
    a Current Report on Form 8-K, dated December 4, 2000, reporting under Item 5
    the Company's expectations for sales and earnings for the full year 2000.

                                        10
<PAGE>   12

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
The Sherwin-Williams Company
Cleveland, Ohio

     We have audited the accompanying consolidated balance sheets of The
Sherwin-Williams Company and subsidiaries as of December 31, 2000, 1999 and
1998, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
2000. Our audits also included the financial statement schedule listed in the
Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The Sherwin-Williams Company and subsidiaries at December 31, 2000, 1999 and
1998, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

/s/ Ernst & Young LLP
Cleveland, Ohio
January 26, 2001

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(SCHEDULE II)

Changes in the allowance for doubtful accounts are as follows:

<TABLE>
<CAPTION>
                                                              2000        1999        1998
- --------------------------------------------------------------------------------------------
<S>                                                         <C>         <C>         <C>
Beginning balance                                           $ 23,592    $ 25,393    $ 26,891
Bad debt expense                                              29,387      32,819      15,176
Net uncollectible accounts written off                       (31,161)    (34,620)    (16,674)
- --------------------------------------------------------------------------------------------
Ending balance                                              $ 21,818    $ 23,592    $ 25,393
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>

     Bad debt expense increase for 2000 and 1999 as compared to 1998 is
primarily due to increased activity in accounts doubtful of collection and
charges to expense to reconcile open prior years' accounts receivable balances
of certain customers.

Activity related to other asset reserves is as follows:

<TABLE>
<CAPTION>
                                                              2000        1999        1998
- --------------------------------------------------------------------------------------------
<S>                                                         <C>         <C>         <C>
Beginning balance                                           $247,810    $203,606    $153,580
Charges to expense                                            58,169      53,063      52,103
Impairment charges                                           (58,518)
Other additions (deductions)                                  (1,075)     (8,859)     (2,077)
- --------------------------------------------------------------------------------------------
Ending balance                                              $246,386    $247,810    $203,606
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>

     Charges to expense consist primarily of amortization of goodwill and
intangibles. Other additions (deductions) consist primarily of actual costs
incurred and balance sheet reclassifications and removal of fully-amortized
items. See Note 2 of the Notes to Consolidated Financial Statements on page 28
of the 2000 Annual Report, which is incorporated herein by reference.

                                        11
<PAGE>   13

                                   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 the 13th day of
March, 2001.

                                             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 in the capacities
indicated on March 13, 2001.

<TABLE>
<S>                                                          <C>

* C. M. CONNOR                                               Chairman and Chief Executive Officer,
- -----------------------------------------------------------  Director (Principal Executive Officer)
  C. M. Connor

* J. M. SCAMINACE                                            President and Chief Operating Officer,
- -----------------------------------------------------------  Director
  J. M. Scaminace

* L. J. PITORAK                                              Senior Vice President -- Finance,
- -----------------------------------------------------------  Treasurer and Chief Financial Officer
  L. J. Pitorak                                              (Principal Financial Officer)

* J. L. AULT                                                 Vice President -- Corporate Controller
- -----------------------------------------------------------  (Principal Accounting Officer)
  J. L. Ault

* J. C. BOLAND                                               Director
- -----------------------------------------------------------
  J. C. Boland

* J. G. BREEN                                                Director
- -----------------------------------------------------------
  J. G. Breen

* D. E. COLLINS                                              Director
- -----------------------------------------------------------
  D. E. Collins

* D. E. EVANS                                                Director
- -----------------------------------------------------------
  D. E. Evans

* R. W. MAHONEY                                              Director
- -----------------------------------------------------------
  R. W. Mahoney

* W. G. MITCHELL                                             Director
- -----------------------------------------------------------
  W. G. Mitchell

* A. M. MIXON, III                                           Director
- -----------------------------------------------------------
  A. M. Mixon, III

* C. E. MOLL                                                 Director
- -----------------------------------------------------------
  C. E. Moll
</TABLE>

                                        12
<PAGE>   14
<TABLE>
<S>                                                          <C>
* H. O. PETRAUSKAS                                           Director
- -----------------------------------------------------------
  H. O. Petrauskas

* R. K. SMUCKER                                              Director
- -----------------------------------------------------------
  R. K. Smucker
</TABLE>

* 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.

<TABLE>
<S>                                                          <C>
By: /s/ L. E. STELLATO                                       March 13, 2001
- -----------------------------------------------------------
        L. E. Stellato, Attorney-in-fact
</TABLE>

                                        13
<PAGE>   15

                                 EXHIBIT INDEX

<TABLE>
<C>  <C>   <S>
 3.   (a)  Amended Articles of Incorporation, as amended April 25,
           1997, filed as Exhibit 3(i) to the Company's Quarterly
           Report on Form 10-Q for the quarterly period ended March 31,
           1997, and incorporated herein by reference.
      (b)  Regulations of the Company, as amended, dated April 27,
           1988, filed as Exhibit 4(b) to Post-Effective Amendment No.
           1, dated April 29, 1988, to Form S-8 Registration Statement
           Number 2-91401, and incorporated herein by reference.
 4.   (a)  Indenture between the Company and Chemical Bank, as Trustee,
           dated as of February 1, 1996, filed as Exhibit 4(a) to Form
           S-3 Registration Statement 333-01093, dated February 20,
           1996, and incorporated herein by reference.
      (b)  Amended and Restated 364-Day Revolving Credit Agreement,
           dated December 31, 1999, among the Company, The Chase
           Manhattan Bank, as Administrative Agent and Competitive
           Advance Facility Agent, and the financial institutions which
           are signatories thereto, filed as Exhibit 4(b) to the
           Company's Annual Report on Form 10-K for the fiscal year
           ended December 31, 1999, and incorporated herein by
           reference.
      (c)  Amendment No. 1 to Amended and Restated 364-Day Revolving
           Credit Agreement, dated December 1, 2000, among the Company,
           The Chase Manhattan Bank, as Administrative Agent and
           Competitive Advance Facility Agent, and the financial
           institutions which are signatories thereto (filed herewith).
      (d)  Amended and Restated Five Year Revolving Credit Agreement,
           dated January 3, 2000, among the Company, The Chase
           Manhattan Bank, as Administrative Agent and Competitive
           Advance Facility Agent, and the financial institutions which
           are signatories thereto, filed as Exhibit 4(c) to the
           Company's Annual Report on Form 10-K for the fiscal year
           ended December 31, 1999, and incorporated herein by
           reference.
      (e)  Amendment No. 1 to Amended and Restated Five Year Revolving
           Credit Agreement, dated December 1, 2000, among the Company,
           The Chase Manhattan Bank, as Administrative Agent and
           Competitive Advance Facility Agent, and the financial
           institutions which are signatories thereto (filed herewith).
      (f)  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.
      (g)  Rights Agreement between the Company and The Bank of New
           York, as successor Rights Agent to KeyBank National
           Association, dated April 23, 1997, filed as Exhibit 1 to
           Form 8-A, dated April 24, 1997, and incorporated herein by
           reference.
10.  *(a)  Form of Director 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)  Employment Agreement with C.G. Ivy filed as Exhibit 28(b) to
           Form S-3 Registration Statement Number 33-22705, dated June
           24, 1988, and incorporated herein by reference.
     *(c)  Amendment to Employment Agreement with C.G. Ivy filed as
           Exhibit 10(c) to the Company's Annual Report on Form 10-K
           for the fiscal year ended December 31, 1995, and
           incorporated herein by reference.
     *(d)  Forms of Severance Pay Agreements, filed as Exhibit 10(b) to
           the Company's Quarterly Report on Form 10-Q for the
           quarterly period ended June 30, 1997, and incorporated
           herein by reference.
     *(e)  Schedule of Certain Executive Officers who are Parties to
           the Severance Pay Agreements in the forms referred to in
           Exhibit 10(d) filed as Exhibit 10(a) to the Company's
           Quarterly Report on Form 10-Q for the quarterly period ended
           September 30, 2000, and incorporated herein by reference.
</TABLE>

                                        14
<PAGE>   16
<TABLE>
<C>  <C>   <S>
     *(f)  The Sherwin-Williams Company Deferred Compensation Savings
           Plan (1997/1999 Amendment and Restatement) filed as Exhibit
           10(f) to the Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1999, and incorporated herein
           by reference.
     *(g)  The Sherwin-Williams Company Key Management Deferred
           Compensation Plan (1997/1999 Amendment and Restatement)
           filed as Exhibit 10(g) to the Company's Annual Report on
           Form 10-K for the fiscal year ended December 31, 1999, and
           incorporated herein by reference.
     *(h)  Form of 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.
     *(i)  Form of Executive Life Insurance Plan filed as Exhibit 10(h)
           to the Company's Annual Report on Form 10-K for the fiscal
           year ended December 31, 1991, and incorporated herein by
           reference.
     *(j)  Form of The Sherwin-Williams Company Management Compensation
           Program filed as Exhibit 10(j) to the Company's Annual
           Report on Form 10-K for the fiscal year ended December 31,
           1999, and incorporated herein by reference.
     *(k)  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 June 30, 2000, and
           incorporated herein by reference.
     *(l)  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.
     *(m)  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.
     *(n)  Consulting Agreement, dated May 1, 2000, between John G.
           Breen and the Company filed as Exhibit 10(b) to the
           Company's Quarterly Report on Form 10-Q for the quarterly
           period ended June 30, 2000, and incorporated herein by
           reference.
     *(o)  Amended and Restated Split-Dollar Life Insurance Agreement,
           dated August 18, 2000, among the Company, National City Bank
           and John G. Breen filed as Exhibit 10(c) to the Company's
           Quarterly Report on Form 10-Q for the quarterly period ended
           September 30, 2000, and incorporated herein by reference.
     *(p)  Salary Continuation and Death Benefit Plan Agreement, dated
           August 18, 2000, filed as Exhibit 10(d) to the Company's
           Quarterly Report on Form 10-Q for the quarterly period ended
           September 30, 2000, and incorporated herein by reference.
13.        Portions of the 2000 Annual Report incorporated herein by
           reference (filed herewith). With the exception of those
           portions of the 2000 Annual Report which are specifically
           incorporated by reference in this report, the 2000 Annual
           Report shall not be deemed "filed" as part of this report.
21.        Subsidiaries (filed herewith).
23.        Consent of Ernst & Young LLP, Independent Auditors (filed
           herewith).
24.   (a)  Powers of Attorney (filed herewith).
      (b)  Certified Resolution Authorizing Signature by Power of
           Attorney (filed herewith).

*Management contract or compensatory plan or arrangement required to be
 filed as an exhibit pursuant to Item 14(c) of Form 10-K.
</TABLE>

                                        15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.C
<SEQUENCE>2
<FILENAME>l85264bex4-c.txt
<DESCRIPTION>EXHIBIT 4(C)
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 4(c)

                                    AMENDMENT NO. 1 dated as of December 1, 2000
                           (this "AMENDMENT"), to the AMENDED AND RESTATED
                           364-DAY CREDIT AGREEMENT dated as of December 31,
                           1999 (the "CREDIT AGREEMENT"), among THE
                           SHERWIN-WILLIAMS COMPANY (the "COMPANY"), the Lenders
                           referred to therein and THE CHASE MANHATTAN BANK, as
                           Administrative Agent and Competitive Advance Facility
                           Agent.

                  The Company has requested that certain terms of the Credit
Agreement be amended, and the Lenders are willing, on the terms and subject to
the conditions set forth herein, to agree to amend the Credit Agreement.

                  Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as set forth below.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Credit Agreement.

                  SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. (a) The Credit
Agreement is hereby amended to add Citicorp USA, Inc. (the "NEW LENDER") as a
"Lender" under the Credit Agreement, with an initial Commitment of $10,000,000.
After giving effect to this Amendment, the Commitments of all Lenders (other
than the New Lender) will remain the same as before giving effect to this
Amendment, and each Lender's Commitment and percentage of the aggregate
Commitments will be as set forth on Schedule 1 hereto.

                  (b) Article X of the Credit Agreement is hereby amended by
inserting the following new section at the end thereof:

                  "SECTION 10.16. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Revolving Credit Loans owing
to it (other than pursuant to Article III) in excess of its ratable share of
payments on account of the Revolving Credit Loans obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in the Revolving Credit Loans owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including any right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the Company
in the amount of such participation."


<PAGE>   2

                  SECTION 2. REPRESENTATIONS AND WARRANTIES. To induce the other
parties hereto to enter into this Amendment, the Company represents and warrants
to each of the Lenders and the Administrative Agent that:

                  (a) This Amendment has been duly authorized, executed and
         delivered by the Company, and each of this Amendment and the Credit
         Agreement, after giving effect to this Amendment, constitutes the
         legal, valid and binding obligation of the Company enforceable in
         accordance with its terms (subject to applicable bankruptcy,
         reorganization, insolvency, moratorium and similar laws affecting the
         enforcement of creditors' rights generally and subject to general
         principles of equity, regardless of whether considered in a proceeding
         in equity or at law).

                  (b) The representations and warranties contained in Article IV
         of the Credit Agreement, after giving effect to this Amendment, are
         true and correct on and as of the date hereof, except to the extent
         that such representations and warranties expressly relate to an earlier
         date.

                  (c) No Possible Default or Event of Default has occurred and
         is continuing or would result from the execution and delivery of this
         Amendment.

                  SECTION 3. EFFECTIVENESS. This Amendment shall become
effective as of the date set forth above (the "AMENDMENT EFFECTIVE DATE") on the
date that the Administrative Agent or its counsel shall have received
counterparts of this Amendment that, when taken together, bear the signatures of
the Company, the New Lender and the Lenders.

                  SECTION 4. LIMITED EFFECT OF AMENDMENT. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders or the Administrative Agent under the Credit Agreement, and shall
not alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement, which is
ratified and affirmed in all respects and shall continue in full force and
effect. Nothing herein shall be deemed to entitle the Company to a consent to,
or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement in similar or different circumstances. This Amendment shall apply and
be effective only with respect to the provisions of the Credit Agreement
specifically referred to herein. After the date hereof, any reference to the
Credit Agreement shall mean the Credit Agreement, as modified hereby.

                  SECTION 5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same contract.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.

                  SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.



<PAGE>   3

                  SECTION 7. HEADINGS. The headings of this Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.


<PAGE>   4

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first above written.

                                    THE SHERWIN-WILLIAMS COMPANY,

                                         by               /s/
                                             --------------------------
                                             Name:
                                             Title:

                                         by               /s/
                                             --------------------------
                                             Name:
                                             Title:


                                    THE CHASE MANHATTAN BANK, individually,
                                    and as Administrative Agent and Competitive
                                    Advance Facility Agent,

                                         by               /s/
                                             --------------------------
                                             Name:
                                             Title:


<PAGE>   5


Citicorp USA, Inc. hereby agrees to each of the terms and conditions of the
Credit Agreement, a copy of which has been delivered by the Company to Citicorp
USA, Inc.



AMOUNT OF COMMITMENT:                   CITICORP USA, INC.,
- --------------------
$10,000,000.00

                                           by               /s/
                                              ------------------------------
                                              Name:
                                              Title:


<PAGE>   6


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999






NAME OF INSTITUTION:  BANK ONE, NA


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   7




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999












NAME OF INSTITUTION:  THE BANK OF NEW YORK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:


<PAGE>   8


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  WACHOVIA BANK OF GEORGIA, N.A.


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   9




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  MELLON BANK, N.A.


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   10


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  FIFTH THIRD BANK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   11


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  SUNTRUST BANK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   12


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999










NAME OF INSTITUTION:  ABN AMRO BANK N.V.


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:

                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   13


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  THE BANK OF NOVA SCOTIA


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   14




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999










NAME OF INSTITUTION:  BANCA COMMERCIALE ITALIANA
                      CHICAGO BRANCH


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:

                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:




<PAGE>   15


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  FLEET NATIONAL BANK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:




<PAGE>   16




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  NATIONAL CITY BANK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:



<PAGE>   17


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999










NAME OF INSTITUTION:  BANK OF AMERICA, N.A.


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:




<PAGE>   18


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999











NAME OF INSTITUTION:  FIRST UNION NATIONAL BANK


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:




<PAGE>   19


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999






NAME OF INSTITUTION:  KEYBANK NATIONAL ASSOCIATION


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:





<PAGE>   20


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED 364-DAY CREDIT
                                    AGREEMENT DATED AS OF DECEMBER 31, 1999








NAME OF INSTITUTION:  WELLS FARGO BANK, NATIONAL ASSOCIATION


                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:

                                    by               /s/
                                        ------------------------------
                                        Name:
                                        Title:








<PAGE>   21




                                                        364-Day Credit Agreement
                                                                      Schedule 1
<TABLE>
<CAPTION>

LENDER                                               PERCENTAGE OF COMMITMENTS      COMMITMENT
- ------                                               -------------------------      ----------
<S>                                                        <C>                   <C>
The Chase Manhattan Bank                                      7.72%                 $10,000,000
ABN AMRO Bank N.V.                                            7.72%                 $10,000,000
National City Bank                                            7.72%                 $10,000,000
Wells Fargo Bank, N.A.                                        7.72%                 $10,000,000
Wachovia Bank of Georgia, N.A.                                5.86%                  $7,600,000
SunTrust Bank, Atlanta                                        7.72%                 $10,000,000
Banca Commerciale Italiana Chicago Branch                     3.70%                  $4,800,000
The Bank of New York                                          7.72%                 $10,000,000
Bank One, N.A.                                                7.72%                 $10,000,000
The Bank of Nova Scotia                                       3.70%                  $4,800,000
Bank of America                                               7.72%                 $10,000,000
First Union National Bank                                     7.72%                 $10,000,000
Mellon Bank, N.A.                                             5.86%                  $7,600,000
Fifth Third Bank                                              3.70%                  $4,800,000
Citicorp USA, Inc.                                            7.72%                 $10,000,000
                                                            -------                 -----------

Total                                                       100.00%                $129,600,000
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.E
<SEQUENCE>3
<FILENAME>l85264bex4-e.txt
<DESCRIPTION>EXHIBIT 4(E)
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 4(e)

                           AMENDMENT NO. 1 dated as of December 1, 2000 (this
                  "AMENDMENT"), to the AMENDED AND RESTATED FIVE YEAR CREDIT
                  AGREEMENT dated as of January 3, 2000 (the "CREDIT
                  AGREEMENT"), among THE SHERWIN-WILLIAMS COMPANY (the
                  "COMPANY"), the Lenders referred to therein and THE CHASE
                  MANHATTAN BANK, as Administrative Agent and Competitive
                  Advance Facility Agent.

                  The Company has requested that certain terms of the Credit
Agreement be amended, and the Lenders are willing, on the terms and subject to
the conditions set forth herein, to agree to amend the Credit Agreement.

                  Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as set forth below.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Credit Agreement.

                  SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. (a) The Credit
Agreement is hereby amended to add Citicorp USA, Inc. (the "NEW LENDER") as a
"Lender" under the Credit Agreement, with an initial Commitment of $40,000,000.
After giving effect to this Amendment, the Commitments of all Lenders (other
than the New Lender) will remain the same as before giving effect to this
Amendment, and each Lender's Commitment and percentage of the aggregate
Commitments will be as set forth on Schedule 1 hereto.

                  (b) Article X of the Credit Agreement is hereby amended by
inserting the following new section at the end thereof:

                  "SECTION 10.16. SHARING OF PAYMENTS, ETC. If any Lender shall
         obtain any payment (whether voluntary, involuntary, through the
         exercise of any right of set-off, or otherwise) on account of the
         Revolving Credit Loans or Term Loans owing to it (other than pursuant
         to Article III) in excess of its ratable share of payments on account
         of the Revolving Credit Loans or Term Loans (as the case may be)
         obtained by all the Lenders, such Lender shall forthwith purchase from
         the other Lenders such participations in the Revolving Credit Loans or
         Term Loans owing to them as shall be necessary to cause such purchasing
         Lender to share the excess payment ratably with each of them; provided,
         however, that if all or any portion of such excess payment is
         thereafter recovered from such purchasing Lender, such purchase from
         each Lender shall be rescinded and such Lender shall repay to the
         purchasing Lender the purchase price to the extent of such recovery
         together with an amount equal to such Lender's ratable share (according
         to the proportion of (i) the amount of such Lender's required repayment
         to (ii) the total amount so recovered from the purchasing Lender) of
         any interest or other amount paid or payable by the purchasing Lender
         in respect of the total amount so recovered. The Company agrees that
         any Lender so purchasing a participation from another Lender pursuant
         to this Section may, to the fullest extent permitted by law, exercise
         all its rights of payment (including any right of set-off) with respect
         to such


<PAGE>   2

         participation as fully as if such Lender were the direct creditor of
         the Company in the amount of such participation."

                  SECTION 2. REPRESENTATIONS AND WARRANTIES. To induce the other
parties hereto to enter into this Amendment, the Company represents and warrants
to each of the Lenders and the Administrative Agent that:

                  (a) This Amendment has been duly authorized, executed and
         delivered by the Company, and each of this Amendment and the Credit
         Agreement, after giving effect to this Amendment, constitutes the
         legal, valid and binding obligation of the Company enforceable in
         accordance with its terms (subject to applicable bankruptcy,
         reorganization, insolvency, moratorium and similar laws affecting the
         enforcement of creditors' rights generally and subject to general
         principles of equity, regardless of whether considered in a proceeding
         in equity or at law).

                  (b) The representations and warranties contained in Article IV
         of the Credit Agreement, after giving effect to this Amendment, are
         true and correct on and as of the date hereof, except to the extent
         that such representations and warranties expressly relate to an earlier
         date.

                  (c) No Possible Default or Event of Default has occurred and
         is continuing or would result from the execution and delivery of this
         Amendment.

                  SECTION 3. EFFECTIVENESS. This Amendment shall become
effective as of the date set forth above (the "AMENDMENT EFFECTIVE DATE") on the
date that the Administrative Agent or its counsel shall have received
counterparts of this Amendment that, when taken together, bear the signatures of
the Company, the New Lender and the Lenders.

                  SECTION 4. LIMITED EFFECT OF AMENDMENT. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders or the Administrative Agent under the Credit Agreement, and shall
not alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement, which is
ratified and affirmed in all respects and shall continue in full force and
effect. Nothing herein shall be deemed to entitle the Company to a consent to,
or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement in similar or different circumstances. This Amendment shall apply and
be effective only with respect to the provisions of the Credit Agreement
specifically referred to herein. After the date hereof, any reference to the
Credit Agreement shall mean the Credit Agreement, as modified hereby.

                  SECTION 5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same contract.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.


<PAGE>   3

                  SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.

                  SECTION 7. HEADINGS. The headings of this Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.


                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first above written.

THE SHERWIN-WILLIAMS COMPANY,

by                         /S/
         ----------------------------------
         Name:
         Title:

by                         /S/
         ----------------------------------
         Name:
         Title:


THE CHASE MANHATTAN BANK, individually, and as Administrative Agent and
Competitive Advance Facility Agent,

by                         /S/
         ----------------------------------
         Name:
         Title:


<PAGE>   4


Citicorp USA, Inc. hereby agrees to each of the terms and conditions of the
Credit Agreement, a copy of which has been delivered by the Company to Citicorp
USA, Inc.



AMOUNT OF COMMITMENT:               CITICORP USA, INC.,
- --------------------
$40,000,000.00

                                                 by             /S/
                                                     ---------------------------
                                                     Name:
                                                     Title:




<PAGE>   5




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000





NAME OF INSTITUTION:  BANK ONE, NA


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:





<PAGE>   6




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000








NAME OF INSTITUTION:  THE BANK OF NEW YORK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:


<PAGE>   7




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000









NAME OF INSTITUTION:  WACHOVIA BANK OF GEORGIA, N.A.


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   8




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000










NAME OF INSTITUTION:  MELLON BANK, N.A.


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   9




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  FIFTH THIRD BANK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   10




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000










NAME OF INSTITUTION:  SUNTRUST BANK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   11




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  ABN AMRO BANK N.V.


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:

                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   12




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000










NAME OF INSTITUTION:  THE BANK OF NOVA SCOTIA


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:





<PAGE>   13


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  BANCA COMMERCIALE ITALIANA
                      CHICAGO BRANCH


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:

                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:




<PAGE>   14




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000












NAME OF INSTITUTION:  FLEET NATIONAL BANK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:




<PAGE>   15




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000










NAME OF INSTITUTION:  NATIONAL CITY BANK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   16


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  BANK OF AMERICA, N.A.


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   17




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000












NAME OF INSTITUTION:  FIRST UNION NATIONAL BANK


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   18




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  KEY BANK NATIONAL ASSOCIATION


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   19




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  WELLS FARGO BANK, NATIONAL ASSOCIATION


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:

                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   20


                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000









NAME OF INSTITUTION:  PNC BANK NATIONAL ASSOCIATION


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:




<PAGE>   21




                                    SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS
                                    OF DECEMBER 1, 2000, TO THE SHERWIN-WILLIAMS
                                    COMPANY AMENDED AND RESTATED FIVE YEAR
                                    CREDIT AGREEMENT DATED AS OF JANUARY 3, 2000











NAME OF INSTITUTION:  ROYAL BANK OF CANADA


                                    by               /S/
                                        ---------------------------------
                                        Name:
                                        Title:



<PAGE>   22


                                                      Five Year Credit Agreement
                                                                      Schedule 1
<TABLE>
<CAPTION>

LENDER                                               % OF COMMITMENTS      COMMITMENT        TERMINATION
- ------                                               ----------------      ----------        -----------
<S>                                                     <C>              <C>                       <C>
The Chase Manhattan Bank                                  6.27%            $40,000,000       January 3, 2006
ABN AMRO Bank N.V.                                        6.27%            $40,000,000       January 3, 2006
Fleet National Bank                                       3.01%            $19,200,000       January 3, 2005
National City Bank                                        6.27%            $40,000,000       January 3, 2006
Wells Fargo Bank, N.A.                                    6.27%            $40,000,000       January 3, 2005
PNC Bank, National Association                            4.76%            $30,400,000       January 3, 2003
Wachovia Bank of Georgia, N.A.                            4.76%            $30,400,000       January 3, 2005
SunTrust Bank, Atlanta                                    6.27%            $40,000,000       January 3, 2006
Banca Commerciale Italiana Chicago Branch                 3.01%            $19,200,000       January 3, 2006
The Bank of New York                                      6.27%            $40,000,000       January 3, 2006
Bank One, N.A.                                            6.27%            $40,000,000       January 3, 2006
The Bank of Nova Scotia                                   3.01%            $19,200,000       January 3, 2006
Bank of America                                           6.27%            $40,000,000       January 3, 2006
Keybank National Association                              6.27%            $40,000,000       January 3, 2005
First Union National Bank                                 6.27%            $40,000,000       January 3, 2006
Mellon Bank, N.A.                                         4.76%            $30,400,000       January 3, 2005
Royal Bank of Canada                                      4.76%            $30,400,000       January 3, 2005
Fifth Third Bank                                          3.01%            $19,200,000       January 3, 2006
Citicorp USA, Inc.                                        6.27%            $40,000,000       January 3, 2006
                                                        -------           ------------
Total                                                   100.00%           $638,400,000
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>4
<FILENAME>l85264bex13.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>

<PAGE>   1
                                                                      EXHIBIT 13

               PORTIONS OF THE 2000 ANNUAL REPORT TO SHAREHOLDERS

INTRODUCTION
- ------------

ask.

How are we structured to maximize market opportunity?

Sherwin-Williams is a manufacturer, distributor and retailer of coatings and
other related products, with annual sales in excess of $5.2 billion. More than
half of our worldwide revenue is generated by our network of North American
company-operated paint stores and automotive branches. We also market branded,
private label and licensed brand products through a variety of other channels.
These include mass merchandisers, home centers, hardware stores, independent
paint dealers, industrial and marine distributors, automotive distributors and
body shops, joint ventures, and licensees of technology, trademarks and trade
names.

Our Company is organized into four operating segments. These segments allow us
to closely tailor our technology, distribution and service to the needs of a
particular marketplace.

TABLE OF CONTENTS
- -----------------

<TABLE>
<S>                                                                                              <C>
Highlights ..................................................................................    2
Letter to Shareholders.......................................................................    3-5
Company Overview.............................................................................    6-11
Financial Summary............................................................................    12
Management's Discussion and Analysis of Financial
  Condition and Results of Operations........................................................    13-20
Report of Management and Cautionary Statement Regarding
   Forward-Looking Information...............................................................    21
Report of Independent Auditors...............................................................    22
Consolidated Financial Statements and Notes..................................................    23-37
Directors, Officers, Managers................................................................    38
Shareholder Information......................................................................    39
Subsidiaries.................................................................................    40
</TABLE>

The Sherwin-Williams company recruits, selects and hires the best qualified
people available - without discrimination based on race, religion, color, creed,
sex, national origin, age, disability, status as a special disabled veteran,
veteran of the Vietnam era or any other unlawful consideration.

Inside front cover | The Sherwin-Williams Company  2000 Annual Report


<PAGE>   2


OUR FOUR OPERATING SEGMENTS

[Photo of paint store]
PAINT STORES SEGMENT
- --------------------

PRODUCTS SOLD: Paints, stains, caulks, applicators, wallcoverings,
floorcoverings, spray equipment and related products

MARKETS SERVED: Do-It-Yourselfers, professional painting contractors, home
builders, property managers, architects, interior designers, industrial, marine,
aviation, flooring and OEM product finishes

MAJOR BRANDS SOLD: Sherwin-Williams(R), Con-Lux(R), Old Quaker(TM), Mercury(TM),
Broad Dugan(TM), Pro-Line(R), SeaGuard(R), ArmorSeal(R), Kem(R)Hi-Temp,
Cook(TM), Sher-Wood(R), Powdura(R), Polane(R), Kem Aqua(R)

OUTLETS: 2,488 Sherwin-Williams stores in North America

[Photo of cans of paint]
CONSUMER SEGMENT
- ----------------

PRODUCTS SOLD: Branded, private label and licensed brand paints, stains,
varnishes, industrial products, wood finishing products, applicators, corrosion
inhibitors, aerosols and related products

MARKETS SERVED: Do-It-Yourselfers, professional painting contractors and
industrial maintenance

MAJOR BRANDS SOLD: Dutch Boy(R), Krylon(R), Minwax(R), Cuprinol(R),
Thompson's(R), Formby's(R), Red Devil(R), Pratt & Lambert(R), Martin Senour(R),
H&C(TM), White Lightning(R), Dupli-Color(R)and Rubberset(R)

OUTLETS: Leading mass merchandisers, home centers, independent paint dealers,
hardware stores and industrial distributors


[Photo of car]
AUTOMOTIVE FINISHES SEGMENT
- ---------------------------

PRODUCTS SOLD: High performance interior and exterior coatings for the
automotive and fleet industries, and automotive and heavy truck original
equipment manufacturer (OEM) markets; as well as thousands of associated
products.

MARKETS SERVED: Automotive jobbers, wholesale distributors, collision repair
facilities, dealerships, fleet owners and refinishers, production shops, body
builders and original equipment manufacturers (OEM).

MAJOR BRANDS SOLD: Sherwin-Williams(R), Martin Senour(R), Western(R),
Lazzuril(R), Excelo(TM), Marson(TM)and ScottWarren(TM)

OUTLETS: 175 company-operated branches worldwide, including operations in the
United States, Canada, Mexico, Brazil, Jamaica, Chile and Italy.


[Photo of paint store]
INTERNATIONAL COATINGS SEGMENT
- ------------------------------

PRODUCTS SOLD: Architectural paints, stains, varnishes, industrial maintenance
products, aerosols, product finishes, wood finishing products and related
products.

MARKETS SERVED: Do-It-Yourselfers, professional painting contractors,
independent dealers, industrial maintenance and OEM product finishes

MAJOR BRANDS SOLD: Sherwin-Williams(R), Dutch Boy(R), Krylon(R), Kem-Tone(R),
Pratt & Lambert(R), Minwax(R), Sumare(TM), Ronseal(TM), Globo(TM),
Pulverlack(R), Colorgin(TM), Andina(TM)and Marson(TM)

OUTLETS: Distribution in more than 20 foreign countries through wholly-owned
subsidiaries, joint ventures and licensees of technology, trademarks and
tradenames, including 45 company-operated architectural and industrial stores in
Chile and Brazil


                             The Sherwin-Williams Company 2000 Annual Report | 1


<PAGE>   3


                            LETTER TO SHAREHOLDERS
                            ----------------------
to our shareholders

In 2000, The Sherwin-Williams Company posted record sales of $5.2 billion
representing a 4.2 percent improvement over last year, our strongest sales
performance in the past several years. Our net income, excluding a one-time
charge for the impairment of long-lived assets, also set a new high at $309.7
million, a 1.9 percent increase over 1999's performance. Earnings per share from
operations, prior to the asset impairment charge, improved 5.6 percent from
$1.80 in 1999 to $1.90 in 2000. This represents our 23rd consecutive year of
improvement in earnings from operations. This past year we also increased the
dividend for our 22nd consecutive year. As a sign of the Company's confidence in
our future and in the value of our stock, we purchased 6.8 million shares of our
stock on the open market for treasury. The price of our stock at year-end
compared to last year was up over 25 percent.

Despite these positive results, we were disappointed with our performance in
2000. We expected to do better and fell short in a number of areas. This past
year we experienced significant raw material cost increases driven by a sharp
run up in the price of oil. Management reacted quickly by implementing selective
mid-year price increases in some of our operating segments and making tough cuts
in spending in all of our segments. However, we were not able, in the short
term, to overcome the severity of these increases and margins suffered. We also
experienced a slow down in the demand for our products over the second half of
the year. Even though we believe that we continued to gain market share in most
product categories, our sales results lagged behind our expectations. There were
a number of positive results in our operating segments that give us confidence
as we begin 2001.


                              PAINT STORES SEGMENT
- -------------------------------------------------------------------------------

2000 marked the twentieth consecutive year of improved sales results from our
Paint Stores Segment. Net sales increased 6.1 percent to $3.2 billion while
comparable store net sales improved by 3.7 percent. Operating profit rose 9.2
percent to $411.5 million. Gallon gains were posted in the architectural,
industrial and marine and chemical coatings categories.

While servicing do-it-yourself customers remains an important part of our
architectural coatings mission, we are increasingly focused on the professional
painting contractor market. There has been a significant increase in the
purchase of architectural gallons by painting contractors. This shift is driven
by the demographic changes in our country as our population ages and
has less-free time to tackle major projects around the home. We are further
encouraged by the fact that painting contractors continue to purchase almost all
of their product requirements from the paint store channel. Our 2,488 company
paint stores throughout North America give us a significant advantage over all
other paint store competitors serving professional painting contractors.

As a critical component of this contractor focused strategy, we remain committed
to expanding our network of company paint stores. This past year, we opened 92
net new stores, providing more convenient access to every customer in these
neighborhoods. Included in this number are nine stores acquired from the Norfolk
Paint Company in Norfolk, Virginia that now proudly offer Sherwin-Williams(R)
products. In addition to new stores, this Segment added 70 new sales
representatives and launched 35 new products, strengthening our commitment to be
the service and technology leader in our industry.

This past year, our industrial and marine business continued to be an important
growing part of our Company. The acquisition of the business of General Polymers
Corporation added a full line of industrial floor coatings to our existing broad
line of industrial products. Our chemical coatings business also posted improved
results as we accelerated our original equipment manufacturer specification
approval process, launched new products and successfully grew our powder
coatings business.

We believe the internet will play an increasing role in helping paint customers
choose a supplier. Last year,


                           The Sherwin - Williams Company 2000 Annual Report | 3

<PAGE>   4


we made substantial progress in evolving our award-winning web site from a
comprehensive information source to an e-business platform for professional
customers. A select group of diverse professional customers took part in a pilot
program to help us design a site that serves a broad range of their business
needs. In the years ahead, we will continue to enhance this site and expand the
service to a significant number of our professional customers.


                                CONSUMER SEGMENT
- -------------------------------------------------------------------------------

Net sales for our Consumer Segment ended the year at $1.2 billion, essentially
flat with last year's performance. More disappointing, operating profit declined
8.0 percent to $142.5 million, excluding the asset impairment charge. Our poor
performance in this Segment reflects our lackluster sales and inability to pass
on raw material cost increases to our customers in a timely fashion.

In addition, certain parts of our Consumer Segment, specifically Pratt &
Lambert, Thompson's and Cleaning Solutions, lacked the past financial
performance or management's expectations of future cash flow to support the
carrying value of certain long-lived assets, particularly goodwill, resulting in
a $293.6 million after-tax write-off for impaired long-lived assets ($1.80 per
diluted share on an annual basis). This one-time charge had no cash effect on
our Company in 2000.

After a year like this, it is important that management reacts, makes changes
and moves in a different direction. We have done that. We have made organization
and management changes to reduce the complexity of our operation, gain greater
focus on individual product lines and further reduce costs. As a result, we have
created three operating units within this Segment.

The Wood Care Business Unit will be responsible for the sales, marketing,
manufacturing and technical development of our Thompson's(R), Minwax(R) and
Formby's(R) product lines. Harvey Sass, Senior Vice President - Wood Care, will
head this organization.

Our Diversified Brands Business Unit will be responsible for the sales,
marketing, manufacturing and technical development of our Krylon(R) and Red
Devil(R) brands of aerosol and small package paint, our industrial, automotive
and custom-filled aerosol products, our White Lightning(R) brand of caulks and
sealants and our applicator business. This business will be managed by Tim
Knight, Senior Vice President- Diversified Brands.

The Consumer Division will be responsible for the sales and marketing of our
branded and private label architectural coatings other than the
Sherwin-Williams(R) brand. These names include Dutch Boy(R), Pratt& Lambert(R)
and Martin Senour(R), as well as nationally recognized private label and
licensed brands. This Division will continue to be responsible for the
manufacturing and technical development for all architectural and industrial and
marine coatings for our Company domestically. Tom Seitz, President & General
Manager, Consumer Division, will lead this team.

In addition to these organizational changes, two non-core business units in the
Consumer Segment are currently being marketed for potential divestiture. We
believe the Cleaning Solutions and Graphic Arts businesses will perform better
within an organization where their focus relates more closely to the core
function of a potential acquirer.

The Consumer Segment has a portfolio of outstanding brand names and relation-
ships with the top retailers in our country. We expect these changes will
improve our ability to react quickly to changing market conditions and bring a
heightened sense of urgency to required improvements.


                          AUTOMOTIVE FINISHES SEGMENT
- -------------------------------------------------------------------------------

The Automotive Finishes Segment ended the year with $493.4 million in net sales
for a 4.8 percent improvement. Operating profit declined to $61.3 million from
$66.5 million in 1999. Operating profit was negatively impacted in 2000 by a
$6.8 million provision for the disposition of the Chicago and Troy technical
facilities as the Segment moved to its new state-of-the-art automotive
technology center in Warrensville Heights, Ohio. This new facility will improve
the efficiency and productivity of our automotive finishes product development
effort.

In 2000, the Automotive Finishes Segment expanded its distribution network
through both company branches and independent distributors. Three net new
Sherwin-Williams branches were opened or acquired bringing our total to 175
facilities. The acquisition of Scott Warren S.p.A. in Italy, a manufacturer of
automotive coatings for the collision repair market, provides a solid base upon
which to grow our presence in Europe and enhances our color match capability for
all European automobile makes.

The Automotive Finishes Segment begins 2001 under new leadership. Ron Nandor has
been promoted back into this Segment to the position of President & General
Manager, Automotive Division, after a successful assignment as Executive Vice
President - Marketing of our Paint Stores Group.


                         INTERNATIONAL COATINGS SEGMENT
- --------------------------------------------------------------------------------

2000 proved to be another difficult year for our International Coatings Segment.
Net sales improved 2.6 percent to $307.0 million, but operating profit declined
by 47.9 percent to finish at $17.7 million. A harsh economic climate in South
America negatively impacted our performance in the entire region, most notably
in Argentina. In the United Kingdom, an extended truck strike, poor weather and
rising oil prices took their toll on our Ronseal operations.

Despite our results in this Segment, we remain optimistic about our growth
prospects in these markets over time. Last year, Sherwin-Williams and our
subsidiaries introduced 60 products to meet specific coatings needs in these
countries, with much of the technology transferred from our domestic operations.
In Brazil, the acquisition of Pulverlack Tintas Ltda.,


4 | The Sherwin - Williams Company 2000 Annual Report


<PAGE>   5

a powder coatings manufacturer, strengthens our industrial position in
this region. A key management change was made in our International
Coatings Segment as well. Mike Galasso was named President, International
Division after his successful assignment as President & General Manager of our
Automotive Division.


                                OUTLOOK FOR 2001

While the economic climate does not look promising at the
beginning of this new year, we look forward with optimism and confidence. This
optimism and confidence comes from sound strategic plans in support of each of
our Segments, a track record of past success and 26,000 employees committed to
making this year better. We are focused on the significant opportunities we have
to gain market share in every business segment regardless of the economic
environment.


                               MANAGEMENT CHANGES

This past year, we said goodbye to two long-time leaders of our Company. Don
Fields retired after 46 years of service, most recently as President of our
International Division. Don's steady hand touched many different divisions at
Sherwin-Williams over his impressive career and he has made numerous significant
contributions. We wish Don and his wife Joyce many years of continued good
health and happiness.

Our long-time Chairman, Jack Breen, completed the last phase of the Company's
orderly management succession plan as he stepped down from his position as
Chairman of our Board of Directors. The legacy Jack leaves behind is impressive,
beginning with the consecutive years of earnings growth and strong stock
performance throughout his tenure. But more lasting for those of us who had the
pleasure of knowing and working for him, will be the manner in which Jack
conducted his personal and business affairs. Words like integrity, honesty and
morality are ingrained in this Company as a result of Jack's leadership. While
he is missed on a daily basis, Jack continues to play an important role as an
active member of our Board of Directors. We wish Jack and Mary Jane an active
life, full of adventure, good health and happiness.

Every day our hard working team arrives at Sherwin-Williams commited to
improving your Company. We are blessed with the most dedicated and talented
employees in our industry. We are thankful for the loyalty of our customers and
the support of our suppliers. We are excited about our future, proud of our past
and most appreciative of your continuing trust.


Christopher M. Connor
Chairman and Chief Executive Officer


Joseph M. Scaminace
President and Chief Operating Officer




                           The Sherwin - Williams Company 2000 Annual Report | 5
<PAGE>   6
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------

                           FINANCIAL CONDITION - 2000

Net operating cash flow generated by the Company during 2000 was $461.1 million,
while net proceeds from short-term borrowings were $106.9 million. This cash
flow provided the funds to invest in property, plant and equipment, reduce
long-term debt, acquire treasury stock, increase the annual dividend, complete
several acquisitions and make other long-term investments. The Company's current
ratio increased to 1.39 at December 31, 2000 from 1.38 at the end of 1999. The
Company's Consolidated Balance Sheets and Statements of Consolidated Cash Flows,
on pages 24 and 25 of this report, provide more detailed information on the
Company's financial position and cash flows.

Borrowings outstanding under the Company's commercial paper program are included
in Short-term borrowings on the balance sheet. Such borrowings had a
weighted-average interest rate of 6.6 percent. Borrowings under the commercial
paper program are fully backed by and limited to the borrowing availability
under the Company's revolving credit agreements which aggregated $768.0 million
effective January 3, 2001. The current portion of long-term debt decreased
$102.9 million due primarily to the payment of 6.5% notes totaling $100.0
million during the first quarter of 2000. The $19.4 million balance in Current
portion of long-term debt at December 31, 2000 related to various promissory
notes and other obligations. Increases and decreases in components of net
working capital were primarily due to timing during 2000.

Deferred pension assets of $364.4 million at December 31, 2000 represent the
excess of the fair market value of the assets in the Company's defined benefit
pension plans over the actuarially-determined projected benefit obligations.
The 2000 increase in deferred pension assets of $30.3 million represents
primarily the recognition of the current year net pension credit, described in
Note 6 on pages 29 to 31 of this report. The assumed discount rate used to
compute the actuarial present value of projected benefit obligations was
decreased from 7.25 percent to 7.00 percent at December 31, 2000 due to
decreased rates of high-quality, long-term investments. The decrease in the
actual return on plan assets during 2000 was primarily the result of returns on
equity investments that were below the assumed return of 8.5 percent.

Goodwill, which represents the excess of cost over the fair value of net assets
acquired in purchase business combinations, decreased $334.0 million in 2000.
Intangible assets, which represent items such as trademarks and patents,
decreased $15.8 million in 2000. These decreases were due primarily to a total
charge for the impairment of long-lived assets of $352.0 million, of which
$342.5 million related to goodwill, as described in Note 2 on page 28 of this
report. In addition, amortization expense of $47.3 million and foreign currency
translation adjustments decreased goodwill and intangible assets, offset by
increases resulting from acquisitions completed in 2000. An increase in Other
assets of $53.3 million was primarily due to the capitalization of costs
incurred, net of amortization, related to designing, developing, obtaining and
implementing internal use software in accordance with Statement of Position
98-1, "Accounting for the Cost of Computer Software Developed or Obtained for
Internal Use." Other long-term investments, related to certain marketing
programs of the Company, also increased Other assets.

Net property, plant and equipment increased $10.7 million to $722.4 million at
December 31, 2000. The increase results primarily from capital expenditures of
$132.8 million, partially offset by depreciation expense of $108.9 million and a
portion of the total charge for the impairment of long-lived assets. Provisions
for disposition or retirement of certain assets and foreign currency translation
adjustments further offset capital expenditures. Capital expenditures in 2000
represented primarily the costs of purchasing and remodeling the automotive
technology center in Warrensville Heights, Ohio, upgrading information systems
equipment, the capacity expansion or upgrade of manufacturing and distribution
centers and costs related to opening new paint stores. Capital expenditures
during 2000 in the Paint Stores Segment were primarily attributable to opening
new paint stores and store relocations along with normal replacement and
upgrading store equipment. Capital expenditures in the Consumer and

                          The Sherwin - Williams Company 2000 Annual Report | 13


<PAGE>   7

International Coatings Segments during 2000 were primarily related to capacity
expansions, efficiency improvements in production facilities and information
systems hardware. Capital expenditures during 2000 in the Automotive
Finishes Segment primarily related to the purchase and remodeling of the
automotive technology center, capacity expansions and equipment upgrades. In
2001, the Company expects that its most significant capital expenditures will
relate to various capacity and productivity improvement projects at
manufacturing facilities, continued new store openings, and new or upgraded
information systems equipment. The Company does not anticipate the need for any
specific long-term external financing to support these capital programs.

Long-term debt decreased during the year to $623.6 million at December 31, 2000,
resulting primarily from current debt maturities of $19.4 million that were
partially offset by increased debt associated with acquired companies. The
Company expects to remain in a borrowing position throughout 2001.

The increase in the Company's long-term postretirement benefit liability
occurred due to the excess of the net postretirement benefit expense over the
costs for benefit claims incurred. The current portion of the accrued
postretirement liability, amounting to $13.2 million at December 31, 2000, is
included in Other accruals. The assumed discount rate used to calculate the
actuarial present value of the postretirement benefit obligations was decreased
from 7.25 percent to 7.00 percent at December 31, 2000 due to the reduced rates
of high-quality, long-term investments. The assumed health care cost trend
rates, first established in 1992 during the adoption of SFAS No. 106, were
revised during 2000 for years 2001 through 2009. The revised rates reflect
escalating health care costs that continue to exceed the assumed cost trend
rates. The trend rate for 2001 was revised from the previous 5.5 percent annual
increase to a more representative 9.5 percent annual increase. The trend rate
will decrease gradually to 5.5 percent in 2010 - the same trend rate as
previously estimated for 2010. The net effect of these changes is expected to
increase the net postretirement benefit expense approximately 15 percent for
2001 as the cumulative unrecognized net loss is above the threshold for required
amortization. See Note 6, on pages 29 to 31 of this report, for further
information on the Company's postretirement benefit obligations.

Other long-term liabilities include accruals for environmental-related
liabilities and other non-current items. The decrease of $31.1 million in other
long-term liabilities during 2000 primarily related to a reduction in certain
tax liabilities resulting from timing items and to a decrease in the accrual for
environmental-related liabilities. See Note 9, on page 32 of this report, for
additional information concerning the Company's other long-term liabilities.

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 purported class actions, separate
actions brought by the State of Rhode Island, and actions brought by other
governmental 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
practices and consumer protection laws, enterprise liability, market share
liability, 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 believes that the litigation is without merit and is
vigorously defending such litigation. Considering the Company's past operations
relating to lead pigments and lead-based paints, it is possible that additional
lead pigment and lead-based paint litigation may be filed against the Company
based upon similar or different legal theories and seeking similar or different
types of damages and relief.

Litigation is inherently subject to many uncertainties. Adverse court rulings or
determinations of liability 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. In

14 | The Sherwin - Williams Company 2000 Annual Report


<PAGE>   8

addition, from time to time, various legislation and administrative regulations
have been enacted 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 and to overturn 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 such
litigation or the number or nature of possible future claims and proceedings, or
the affect of any such legislation and administrative regulations. In addition,
management cannot reasonably determine the scope or amount of the potential
costs and liabilities related to such litigation, or 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. However, based upon, among other
things, the outcome of such litigation to date, management does not currently
believe that the costs or potential liability ultimately determined to be
attributable to the Company arising out of such litigation will have a material
adverse effect on the Company's results of operations, liquidity or financial
condition.

The operations of the Company, like those of other companies in our industry,
are subject to various federal, state and local environmental laws and
regulations. These laws and regulations not only govern our current operations
and products, but also impose potential liability on the Company for past
operations which were conducted utilizing practices and procedures that were
considered acceptable under the laws and regulations existing at that time. The
Company expects environmental laws and regulations to impose increasingly
stringent requirements upon the Company and our industry in the future. The
Company believes that it 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 are 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, results of operations or
liquidity during 2000, and the Company does not expect that such capital
expenditures and other expenses will be material to the Company's financial
condition, results of operations or liquidity in 2001.

The Company is involved with environmental compliance, investigation and
remediation activities at some of its current and former sites (including former
sites which were previously owned and/or operated by businesses acquired by the
Company). The Company, together with other parties, has also 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.
The Company may be similarly designated with respect to additional third-party
sites in the future.

The Company accrues for environmental-related activities relating to its past
operations and third-party sites, including Superfund sites, for which
commitments or clean-up plans have been developed and for which costs can be
reasonably estimated. These estimated costs are determined based on currently
available facts regarding each site. 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 which require changing the estimated costs or
the procedure utilized in estimating such costs. Actual costs incurred may vary
from these 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. The Company's environmental-related contingencies are

                         The Sherwin - Williams Company 2000 Annual Report | 15


<PAGE>   9

expected to be resolved over an extended period of time.

Pursuant to a Consent Decree entered into with the United States of America in
1997, on behalf of the Environmental Protection Agency, filed in the United
States District Court for the Northern District of Illinois, the Company has
agreed, in part, to (i) conduct an investigation at its southeast Chicago,
Illinois facility to determine the nature, extent and potential impact, if any,
of environmental contamination at the facility and (ii) implement remedial
action measures, if required, to address any environmental contamination
identified pursuant to the investigation. While the Company continues to
investigate this site, certain initial remedial actions have occurred at this
site.

In 1999, the Company entered into a settlement agreement with PMC, Inc. settling
a lawsuit brought by PMC regarding the Company's former manufacturing facility
in Chicago, Illinois which was sold to PMC in 1985. Pursuant to the terms of the
settlement agreement, the Company agreed, in part, to investigate and remediate,
as necessary, certain soil and/or ground water contamination caused by
historical disposals, discharges, releases and/or events occurring at this
facility. In 2000, the Company entered into a Consent Decree with the People of
the State of Illinois settling an action brought by the State of Illinois
against the Company regarding the PMC facility. Under the Consent Decree, the
Company agreed, in part, to investigate and remediate, as necessary, certain
soil and/or groundwater contamination caused by historical disposals,
discharges, releases and/or events occurring at this facility. The Company is
currently conducting its investigation of this facility.

With respect to the Company's southeast Chicago, Illinois facility and the
PMC facility, the Company has evaluated its potential liability and, based upon
its investigations to date, has accrued appropriate amounts. However, due to the
uncertainties surrounding these facilities, the Company's ultimate liability may
result in costs that are significantly higher than currently accrued. In such
event, the recording of the liability may result in a material impact on net
income for the annual or interim period during which the additional costs are
accrued. The Company expects the contingent liabilities related to these
facilities to be resolved over an extended period of time.

The Company 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, cash flow or,
except as set forth in the preceding paragraph, net income. See Note 9, on page
32 of this report, for discussion of the environmental-related accruals
included in the Company's Consolidated Balance Sheets.

Shareholders' equity decreased $226.7 million during 2000 to $1,471.9 million
due primarily to the purchase of 6,800,000 shares of Company stock for treasury
at a cost of $146.9 million. The Company acquires its own stock for general
corporate purposes and, depending on its future cash position and market
conditions, it may acquire additional shares in the future. The Company had
remaining authorization at December 31, 2000 to purchase 13,200,000 shares of
its common stock. Also contributing to the decrease in shareholders' equity were
cash dividends paid of $88.1 million and other comprehensive losses related to
foreign currency translations of $18.0 million. These decreases were partially
offset by current year net income of $16.0 million.

Comprehensive loss is comprised of net income and the components of other
comprehensive income or loss including foreign currency translation adjustments.
The 2000 increase of $18.0 million in Cumulative other comprehensive loss was
attributed to weakness in several foreign operation's functional currencies,
while the 1999 increase of $100.7 million occurred primarily due to the
devaluation of the Brazilian real. In January 1999, the Brazilian Central
Bank eliminated its governmental policy of supporting and tightly managing the
trading band of the real and allowed it to trade freely in the open market
against other currencies. Shortly after this announcement, the Brazilian real
weakened significantly in trading with the U.S. dollar and other foreign
currencies and has only partially recovered since that time. As a result of the
floating exchange rate of certain foreign currencies, the Company believes it
may experience continuing losses from foreign currency translation. The Company
does

16 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   10
not expect any devaluation or other currency translation losses to have a
material adverse effect on the Company's financial condition, results of
operations or cash flows. See Note 16, on page 35 of this report.

The Company is exposed to market risk through various financial instruments,
including fixed rate debt instruments. The Company does not believe that any
potential loss related to these financial instruments will have a material
adverse effect on the Company's financial condition, results of operations or
cash flows.

The 2000 annual dividend of $.54 per share approximated our payout ratio target
of 30.0 percent of the prior year's earnings. This annual dividend represented
the twenty-first consecutive year that the dividend has increased and a
compounded annual rate of increase of 24.5 percent since the dividend was
reinstated in the fourth quarter of 1979. At a meeting held on February 7, 2001,
the Board of Directors increased the quarterly dividend to $.145 per share.

                      RESULTS OF OPERATIONS - 2000 vs 1999
- -------------------------------------------------------------------------------

Consolidated net sales increased 4.2 percent to $5.2 billion in 2000, primarily
due to increased sales in the Paint Stores, Automotive Finishes and
International Coatings Segments that were partially offset by decreased sales in
the Consumer Segment.

Net external sales in the Paint Stores Segment during 2000 increased 6.1
percent to $3.2 billion as higher volume sales of paint products outpaced
increases in the stores' other product lines (wallcoverings, floorcoverings,
spray equipment and associated products) with sales to professional painters and
industrial users showing the greatest gains. Comparable-store sales increased
3.7 percent in 2000. This Segment ended 2000 with 2,488 stores in operation
compared to 2,396 stores in operation at the end of the prior year. It is the
objective of the Paint Stores Segment to expand its store base an average of
three percent each year. In 2000, the Segment added 92 net new stores and
expects to add 65 to 70 net new stores in 2001.

External sales in the Consumer Segment decreased 0.4 percent during 2000 to $1.2
billion primarily due to a sluggish domestic do-it-yourself market. New product
launches, sales to new customers and increased sales to certain existing
customers could not offset the effects of the sluggish retail market. The
Company expects that additional Consumer Segment sales in 2001 from new product
introductions, expansion of its presence at certain retailers and new customer
accounts will not be sufficient to offset the effects of lost business and
customer accounts in 2000. In addition, a sluggish domestic do-it-yourself
market is expected to continue through at least the first half of 2001 and
adversely impact year-over-year sales comparisons with 2000.

External sales in the Automotive Finishes Segment increased 4.8 percent during
2000 to $493.4 million due primarily to the sales of vehicle refinish products.
The soft fourth quarter domestic economy negatively impacted this Segment's OEM
sales. The Company expects that sales from new product and color introductions,
a stronger vehicle refinish market and an increase in the number of automotive
branches will result in a sales increase for this Segment in 2001.

External sales in the International Coatings Segment increased 2.6 percent to
$307.0 million due primarily to increased gallons sold. Sales in local
currencies were up 6.5 percent, while U.S. dollar comparisons were affected by
currency conversions. Net sales for the year continued to be impacted by a shift
in sales to lower priced products and competitive pricing due to poor market
conditions in South America, particularly in Argentina. The Company expects to
realize sales improvements in the International Coatings Segment in 2001 as
economic conditions are expected to improve in most South American countries in
which we operate.

Consolidated gross profit as a percent of sales decreased to 44.3 percent from
44.9 percent in 1999. The Company's gross profit margin was impacted by raw
material cost increases, inflated energy costs and higher distribution costs.
The Paint Stores Segment's 2000 gross profit margin was slightly higher than
last year primarily due to increased paint volume sales, a favorable product
sales mix and selective selling price increases. Gross profit margin in the
Consumer Segment was lower than last year as competitive pricing pressures
prohibited selling price increases sufficient to offset increased raw material
costs and higher distribution costs. In addition, costs associated with

                         The Sherwin - Williams Company 2000 Annual Report | 17

<PAGE>   11

new product launches and new customer start-ups could not be offset by volume
related manufacturing efficiencies and certain cost reductions. Gross profit
margin decreased in the Automotive Finishes Segment and was also unfavorably
impacted by increased raw material costs. Gross profit margin in the
International Coatings Segment decreased primarily due to price competition,
increased raw material costs and an unfavorable product sales mix to lower
margin products.

Consolidated selling, general and administrative (SG&A) expenses remained flat
as a percent of sales at 33.4 percent. Increased expenses in 2000 related to new
store openings, new products, new customers and the consolidation of two
research facilities and division administrative functions into the automotive
technology center. Offsetting these increased expenses was the reduction in
costs in 2000 due to the completion in 1999 of the Company's Year 2000
compliance project. The Paint Stores Segment's SG&A ratio was slightly
unfavorable compared to last year primarily due to increased expenses related to
92 net new store openings. The Paint Stores Segment continued its investment in
expanding its business in spite of the soft domestic economy during the latter
part of the year. A slightly favorable SG&A ratio in the Consumer Segment for
2000 as compared to last year was primarily a result of certain administrative
cost reductions partially offset by decreased sales and increased costs of new
product launches and new customer start-ups. The Automotive Finishes
Segment's SG&A ratio was also slightly favorable compared to last year primarily
due to higher sales volume partially offset by severance and moving costs
associated with the consolidation of the Segment's research and administrative
functions into the newly purchased automotive technology center. The
International Coatings Segment's SG&A ratio was unfavorable primarily due to
higher commissions in Brazil relating to increased sales, partially offset by
overall sales increases.

During the fourth quarter of 2000, the Company recognized an asset impairment
charge of $352.0 million ($293.6 million after-tax or $1.80 per diluted share)
in the Consumer Segment to reduce the carrying values of certain long-lived
assets, primarily goodwill, to their estimated fair values. Cash flow in 2000
was not affected by this accounting charge which is more fully described in Note
2 on page 28 of this report. Accordingly, consolidated segment operating profit
for the year was reduced to 2.8 percent of sales compared to 9.8 percent of
sales in 1999. Excluding the asset impairment charge, consolidated segment
operating profit increased 1.1 percent but declined as a percent of sales to 9.5
percent from 9.8 percent last year. Segment operating profit of the Paint Stores
Segment increased 9.2 percent to 12.9 percent of sales, as increased paint
volume sales, a favorable product mix and selective selling price increases more
than offset increased expenses related to new store openings. The Consumer
Segment's operating profit, excluding the effects of the asset impairment
charge, declined 8.0 percent primarily due to competitive pricing pressures that
did not allow recovery of all increased raw material costs and higher
distribution costs. Segment operating profit of the Automotive Finishes Segment
decreased $5.3 million or 7.9 percent primarily due to increased raw material
costs and a $6.8 million provision for the disposition of two research centers
idled by the consolidation into the new automotive technology center. See Note
5, on page 29 of this report, for additional disposition and termination of
operations information. Segment operating profit of the International Coatings
Segment decreased to $17.7 million from $33.9 million last year primarily due to
increased price competition, increased raw material costs and an unfavorable
product sales mix to lower margin products. There are certain risks in
transacting business internationally, such as changes in applicable laws and
regulatory requirements, political instability, general economic and labor
conditions, fluctuations in currency exchange rates and expatriation
restrictions, which could adversely affect the financial condition or results of
operation of the Company's consolidated foreign subsidiaries. Corporate expenses
decreased in 2000 primarily due to the reduction in certain information systems
expenses, including the completion of the Company's Year 2000 compliance project
in 1999, partially offset by increased interest expense and certain unallocated
employee benefit expenses. Refer to Note 17, on pages 35 through 37 of this
report, for additional reportable segment information.

Interest expense increased slightly in 2000 primarily due to higher average
short-term debt outstanding and

18 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   12

rates, partially offset by lower average long-term debt outstanding. As a
result, interest coverage, excluding the effects of the asset impairment charge,
remained unchanged from 1999 at 9.0 times. Interest coverage in 2000, after
recording the effects of the asset impairment charge, decreased to 3.3 times.
Fixed charge coverage, excluding the effects of the asset impairment charge,
which is calculated using interest and rent expense, decreased to 4.5 times from
5.8 times in 1999. Fixed charge coverage in 2000, after recording the effects of
the asset impairment charge, was 1.2 times.

Interest and net investment income decreased in 2000 primarily due to lower
average cash and short-term investment balances, partially offset by higher
average yields. See Note 4, on page 29 of this report, for further detail on
Other expense - net. As shown in Note 13, on page 34 of this report, the
effective income tax rate was 88.9 percent in 2000 due to the effect of a
portion of the asset impairment charge that was not deductible for tax purposes.
Excluding the effects of the asset impairment charge, the effective tax rate
declined to 37.5 percent from 38.0 percent in 1999.

Net income decreased in 2000 to $16.0 million from $303.9 million in 1999 due
primarily to the effects of the asset impairment charge. Net income per
share-diluted was reduced to $.10 per share from $1.80 last year. See Note 15,
on page 35 of this report, for detailed computations. Excluding the effects of
the asset impairment charge, net income for 2000 increased 1.9 percent to $309.7
million, and net income per share increased 5.6 percent to $1.90 per diluted
share.

                      RESULTS OF OPERATIONS - 1999 vs 1998
- -------------------------------------------------------------------------------

Consolidated net sales increased 1.4 percent to $5.0 billion in 1999, primarily
due to increased sales in the Paint Stores Segment which were partially offset
by decreased sales in each of the other reportable segments.

Net external sales in the Paint Stores Segment during 1999 increased 6.3 percent
primarily due to higher volume sales of paint products, combined with sales
gains in each of the remaining major product lines (wallcoverings, floor
coverings, spray equipment and associated products). Comparable-store sales
increased 4.0 percent in 1999. The Company launched its web site,
"www.sherwin-williams.com" in 1999. A portion of the web site provides Paint
Stores Segment customers, painting contractors, and others with product
information and store locations along with do-it-yourself instruction.

External sales in the Consumer Segment decreased 4.5 percent during 1999
primarily due to the bankruptcy and subsequent liquidation of a large retail
customer, the anticipated sales losses due to the closing of a Cleaning
Solutions plant in the fourth quarter of 1998, and slow do-it-yourself coatings
sales at certain customers.

External sales in the Automotive Finishes Segment declined 0.6 percent. The
sales decrease in this Segment was primarily due to the effects of foreign
currency translation losses and, to a lesser extent, a soft domestic automotive
refinish market.

External sales in the International Coatings Segment declined 14.0 percent.
Sales declines in the International Coatings Segment resulted primarily from the
first quarter 1999 devaluation of the Brazilian real and continuing poor market
conditions in South America. Gallons sold and sales in local currencies were up
in most market areas.

Consolidated gross profit as a percent of sales increased to 44.9 percent from
43.2 percent in 1998. The Paint Stores Segment's 1999 gross profit margin was
slightly higher than 1998 primarily due to a favorable product sales mix. Gross
profit margin in the Consumer Segment was higher than 1998 as increased factory
efficiencies and cost reductions associated with closing four manufacturing
plants early in 1999 took effect. Gross profit margin in the Automotive Finishes
Segment increased slightly due to product sales mix. Gross profit margin in the
International Coatings Segment increased primarily due to increased factory
efficiencies and cost reduction efforts.

SG&A expenses as a percent of sales increased to 33.4 percent in 1999 from 32.4
percent in 1998 resulting primarily from increased expenses related to new store
openings, bad debts, certain employee benefits and information systems,
partially offset by decreased SG&A expenses in the Consumer Segment primarily
resulting from the consolidation of administrative functions of

                          The Sherwin - Williams Company 2000 Annual Report | 19

<PAGE>   13

four separate operating divisions into one. The Paint Stores Segment's SG&A
ratio was slightly unfavorable compared to 1998 primarily due to increased
expenses related to new store openings. A slightly unfavorable SG&A ratio in the
Consumer Segment for 1999 as compared to 1998 was primarily a result of
decreased sales and increased bad debt expense, partially offset by the
consolidation of administrative functions. Automotive Finishes Segment's SG&A
ratio was slightly unfavorable compared to 1998 primarily due to increases in
bad debt expense and reduced sales volume. International Coatings Segment's SG&A
ratio was unfavorable primarily due to reduced sales.

Consolidated operating profits increased 11.4 percent in 1999. Operating profits
of the Paint Stores Segment increased 8.6 percent, primarily due to increased
sales volume and gross profit margins. The Consumer Segment's operating profits
were 23.7 percent higher than 1998 primarily due to decreased SG&A expenses and
increased gross profit margins, partially offset by lower sales volume.
Operating profits of the Automotive Finishes Segment increased 2.0 percent
primarily due to increased gross profit margins, partially offset by slightly
lower sales and increased SG&A expenses. Operating profits of the International
Coatings Segment increased 40.3 percent primarily due to decreased foreign
currency transaction losses associated with U.S. dollar denominated debt that
was reduced and improved gross profit margins, partially offset by decreased
sales and increased SG&A expenses. Corporate expenses increased in 1999
primarily due to the increase in certain unallocated employee benefit and
information systems expenses, partially offset by decreased interest expense.
Additionally, the 1998 Corporate expenses included a net gain related to the
sale of the Company's joint venture interest in American Standox, Inc.

Interest expense decreased in 1999 primarily due to lower average outstanding
debt balances. As a result, interest coverage increased to 9.0 times from 7.1
times in 1998. Fixed charge coverage, which is calculated using interest and
rent expense, increased to 3.7 times from 3.3 times in 1998.

Interest and net investment income decreased in 1999 primarily due lower average
yields, partially offset by slightly higher average cash and short-term
investment balances. See Note 4, on page 29 of this report, for further detail
on Other expense - net. As shown in Note 13, on page 34 of this report, the
effective income tax rate in 1999 remained unchanged from 1998 at 38 percent.

Net income increased 11.4 percent in 1999 to $303.9 million from $272.9 million
in 1998. Net income per share-diluted increased 14.6 percent to $1.80 from
$1.57. See Note 15, on page 35 of this report for detailed computations.

20 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   14
                              REPORT OF MANAGEMENT
- -------------------------------------------------------------------------------

Shareholders
The Sherwin-Williams Company

We have prepared the accompanying consolidated financial statements and related
information included herein for the years ended December 31, 2000, 1999 and
1998. The primary responsibility for the integrity of the financial information
rests with management. This information is prepared in accordance with
accounting principles generally accepted in the United States, based upon our
best estimates and judgments and giving due consideration to materiality.

The Company maintains accounting and control systems which are designed to
provide reasonable assurance that assets are safeguarded from loss or
unauthorized use and which produce records adequate for preparation of financial
information. There are limits inherent in all systems of internal control based
on the recognition that the cost of such systems should not exceed the benefits
to be derived. We believe our systems provide this appropriate balance.

The Board of Directors pursues its responsibility for these financial statements
through the Audit Committee, composed exclusively of independent directors. The
Committee meets periodically with management, internal auditors and our
independent auditors to discuss the adequacy of financial controls, the quality
of financial reporting and the nature, extent and results of the audit effort.
Both the internal auditors and independent auditors have private and
confidential access to the Audit Committee at all times.

/s/ C. M. Connnor

C. M. Connor
Chairman and Chief
Executive Officer


/s/ L. J. Pitorak

L. J. Pitorak
Senior Vice President - Finance,
Treasurer and Chief Financial
Officer


/s/ J. L. Ault

J. L. Ault
Vice President -
Corporate Controller

           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 and future
business plans. 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 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. These risks, uncertainties
and other factors include such things as: general business conditions, strengths
of retail economies and the growth in the coatings industry; competitive
factors, including pricing pressures and product innovation and quality; changes
in raw material availability and pricing; changes in the Company's relationships
with customers and suppliers; the ability of the Company to successfully
integrate past and future acquisitions into its existing operations, as well as
the performance of the businesses acquired; the ability of the Company to
successfully complete planned divestitures; changes in general domestic economic
conditions such as inflation rates, interest rates and tax rates; risk and
uncertainties associated with the Company's expansion into foreign markets,
including inflation rates, recessions, foreign currency exchange rates, foreign
investment and repatriation restrictions and other external economic and
political factors; the achievement of growth in developing markets, such as
Mexico and South America; increasingly stringent domestic and foreign
governmental regulations including those affecting the environment; inherent
uncertainties involved in assessing the Company's potential liability for
environmental remediation-related activities; 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 affect of any legislation and
administrative regulations relating thereto; and unusual weather conditions.

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

                          The Sherwin - Williams Company 2000 Annual Report | 21

<PAGE>   15

                         REPORT OF INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------

Shareholders and Board of Directors
The Sherwin-Williams Company
Cleveland, Ohio

We have audited the accompanying consolidated balance sheets of The
Sherwin-Williams Company and subsidiaries as of December 31, 2000, 1999 and
1998, and the related statements of consolidated income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
2000. 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 auditing standards generally accepted
in the 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Sherwin-Williams Company and subsidiaries at December 31, 2000, 1999 and 1998,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Cleveland, Ohio
January 26, 2001

22 | The Sherwin - Williams Company 2000 Annual Report
<PAGE>   16

                        STATEMENTS OF CONSOLIDATED INCOME
- -------------------------------------------------------------------------------
(Thousands of Dollars Except Per Share Data)


<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                  -----------------------------------------------------
                                                      2000                1999                1998
                                                      ----                ----                ----
<S>                                               <C>                 <C>                 <C>
Net sales .................................       $ 5,211,624         $ 5,003,837         $ 4,934,430

Cost of goods sold ........................         2,904,013           2,755,323           2,804,459

Gross profit ..............................         2,307,611           2,248,514           2,129,971
  Percent to net sales ....................              44.3%               44.9%               43.2%

Selling, general and administrative
  expenses ................................         1,740,367           1,673,449           1,598,333
  Percent to net sales ....................              33.4%               33.4%               32.4%

Impairment of long-lived assets ...........           352,040

Operating income ..........................           215,204             575,065             531,638
  Percent to net sales ....................               4.1%               11.5%               10.8%

Interest expense ..........................            62,026              61,168              71,971
Interest and net investment income ........            (4,981)             (5,761)             (6,482)
Other expense - net .......................            14,753              29,540              26,046
                                                  -----------         -----------         -----------

Income before income taxes ................           143,406             490,118             440,103

Income taxes ..............................           127,380             186,258             167,239
                                                  -----------         -----------         -----------

Net income ........ .......................       $    16,026         $   303,860         $   272,864
                                                  ===========         ===========         ===========

Net income per share:
  Basic ...................................       $       .10         $      1.81         $      1.58
                                                  ===========         ===========         ===========

  Diluted .................................       $       .10         $      1.80         $      1.57
                                                  ===========         ===========         ===========
</TABLE>

See notes to consolidated financial statements.


                          The Sherwin - Williams Company 2000 Annual Report | 23

<PAGE>   17

                           CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
(Thousands of Dollars)



<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                   ----------------------------------------------------
                                                                        2000               1999               1998
                                                                        ----               ----               ----
<S>                                                                <C>                <C>                <C>
Assets
Current assets:
  Cash and cash equivalents ................................       $     2,896        $    18,623        $    19,133
  Accounts receivable, less allowance ......................           594,162            606,046            604,516
  Inventories:
    Finished goods .........................................           597,472            591,912            568,328
    Work in process and raw materials ......................           106,255            111,476            114,195
                                                                   -----------        -----------        -----------
                                                                       703,727            703,388            682,523
  Deferred income taxes ....................................           104,662            108,899            102,818
  Other current assets .....................................           146,092            141,143            123,398
                                                                   -----------        -----------        -----------
    Total current assets ...................................         1,551,539          1,578,099          1,532,388

Goodwill ...................................................           705,547          1,039,555          1,123,128
Intangible assets ..........................................           259,085            274,924            291,715
Deferred pension assets ....................................           364,351            334,094            304,006
Other assets ...............................................           147,769             94,464             80,466
Property, plant and equipment:
  Land .....................................................            65,546             62,517             67,567
  Buildings ................................................           431,524            431,802            422,902
  Machinery and equipment ..................................           980,560            913,346            906,501
  Construction in progress .................................            52,779             40,262             43,274
                                                                   -----------        -----------        -----------
                                                                     1,530,409          1,447,927          1,440,244
  Less allowances for depreciation .........................           808,030            736,251            721,387
                                                                   -----------        -----------        -----------
                                                                       722,379            711,676            718,857
                                                                   -----------        -----------        -----------

Total Assets ...............................................       $ 3,750,670        $ 4,032,812        $ 4,050,560
                                                                   ===========        ===========        ===========

Liabilities and Shareholders' Equity
Current liabilities:
  Short-term borrowings ....................................       $   106,854
  Accounts payable .........................................           448,799        $   458,919        $   408,144
  Compensation and taxes withheld ..........................           137,211            140,934            125,698
  Current portion of long-term debt ........................            19,376            122,277            118,184
  Other accruals ...........................................           328,435            333,363            345,191
  Accrued taxes ............................................            74,568             85,396             76,804
                                                                   -----------        -----------        -----------
    Total current liabilities ..............................         1,115,243          1,140,889          1,074,021

Long-term debt .............................................           623,587            624,365            730,283
Postretirement benefits other than pensions ................           208,673            206,591            204,763
Other long-term liabilities ................................           331,303            362,435            325,553
Shareholders' equity:
  Common stock- $1.00 par value: 159,558,335, 165,663,601
    and 171,033,231 shares outstanding at December 31, 2000,
    1999 and 1998, respectively ............................           206,848            206,309            205,701
  Other capital ............................................           158,650            150,887            143,686
  Retained earnings ........................................         1,948,753          2,020,851          1,797,945
  Treasury stock, at cost ..................................          (678,778)          (533,891)          (386,465)
  Cumulative other comprehensive loss ......................          (163,609)          (145,624)           (44,927)
                                                                   -----------        -----------        -----------
    Total shareholders' equity .............................         1,471,864          1,698,532          1,715,940
                                                                   -----------        -----------        -----------

Total Liabilities and Shareholders' Equity .................       $ 3,750,670        $ 4,032,812        $ 4,050,560
                                                                   ===========        ===========        ===========
</TABLE>


See notes to consolidated financial statements.


24 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   18

                      STATEMENTS OF CONSOLIDATED CASH FLOWS
- --------------------------------------------------------------------------------
(Thousands of Dollars)


<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                                 --------------------------------------------
                                                                    2000             1999             1998
                                                                    ----             ----             ----
<S>                                                              <C>              <C>              <C>
Operating Activities
Net income ...............................................       $  16,026        $ 303,860        $ 272,864
Adjustments to reconcile net income to net operating cash:
  Impairment of long-lived assets ........................         352,040
  Depreciation ...........................................         108,906          105,350           97,821
  Deferred income taxes ..................................         (26,886)          21,170           30,557
  Provisions for disposition of operations ...............           8,023            7,640           23,557
  Provisions for environmental-related matters ...........                           16,334            4,295
  Amortization of intangible assets ......................          51,124           50,394           50,067
  Defined benefit pension plans net credit ...............         (29,629)         (28,083)         (30,851)
  Net increase in post retirement liability ..............           3,682            3,428            5,424
  Foreign currency transaction losses ....................           2,115            3,333           11,773
  Other ..................................................           7,744           13,594              554
Change in working capital accounts:
  Decrease (increase) in accounts receivable .............          21,264          (28,212)         (65,679)
  Decrease (increase) in inventories .....................           6,188          (24,420)          35,130
  (Decrease) increase in accounts payable ................         (21,790)          60,487          (12,272)
  (Decrease) increase in accrued taxes ...................         (11,744)           6,019           32,449
  Other ..................................................         (22,645)           3,650           35,175
Increase in long-term accrued taxes ......................          10,005           15,715            8,211
Costs incurred for environmental-related matters .........          (9,105)         (15,808)         (14,275)
Costs incurred for disposition of operations .............          (6,173)         (15,529)          (5,322)
Other ....................................................           1,963          (13,808)         (10,721)
                                                                 ---------        ---------        ---------
  Net operating cash .....................................         461,108          485,114          468,757
                                                                 ---------        ---------        ---------

Investing Activities
Capital expenditures .....................................        (132,778)        (134,171)        (146,129)
Acquisitions of businesses ...............................         (60,108)         (15,427)
Increase in other investments ............................         (51,163)         (23,435)         (19,281)
Other ....................................................          (8,989)           9,111            6,478
                                                                 ---------        ---------        ---------
  Net investing cash .....................................        (253,038)        (163,922)        (158,932)
                                                                 ---------        ---------        ---------

Financing Activities
Net increase (decrease) in short-term borrowings .........         106,854                          (106,913)
Increase in long-term debt ...............................          16,931                             4,559
Payments of long-term debt ...............................        (120,316)        (102,046)         (54,673)
Payments of cash dividends ...............................         (88,124)         (80,954)         (77,801)
Proceeds from stock options exercised ....................           6,419            7,107           16,818
Treasury stock purchased .................................        (146,857)        (145,806)         (83,791)
Other ....................................................           1,662            2,791            7,579
                                                                 ---------        ---------        ---------
  Net financing cash .....................................        (223,431)        (318,908)        (294,222)
                                                                 ---------        ---------        ---------

Effect of exchange rate changes on cash ..................            (366)          (2,794)
                                                                 ---------        ---------

Net (decrease) increase in cash and cash equivalents .....         (15,727)            (510)          15,603
Cash and cash equivalents at beginning of year ...........          18,623           19,133            3,530
                                                                 ---------        ---------        ---------
Cash and cash equivalents at end of year .................       $   2,896        $  18,623        $  19,133
                                                                 =========        =========        =========

Taxes paid on income .....................................       $ 156,514        $ 153,890        $  85,746
Interest paid on debt ....................................          64,400           61,868           71,970
</TABLE>

See notes to consolidated financial statements.



                          The Sherwin - Williams Company 2000 Annual Report | 25



<PAGE>   19

                 STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------
(Thousands of Dollars Except Per Share Data)

<TABLE>
<CAPTION>
                                                                                                        Cumulative
                                                                                                           Other
                                              Common         Other        Retained      Treasury       Comprehensive
                                               Stock        Capital       Earnings       Stock              Loss           Total
                                             ---------     ---------     -----------    ---------        ---------      ----------
<S>                                          <C>           <C>           <C>            <C>              <C>            <C>
Balance at January 1, 1998 ...............   $ 204,538     $ 119,695     $ 1,602,882    $(301,418)       $ (33,517)     $1,592,180
Comprehensive income:
  Net income .............................                                   272,864                                       272,864
  Other comprehensive loss ...............                                                                 (11,410)        (11,410)
                                                                                                                        ----------
    Comprehensive income .................                                                                                 261,454
Treasury stock purchased .................                                                (83,791)                         (83,791)
Stock issued (tendered)
  for exercise of options ................       1,201        23,103                       (1,256)                          23,048
Restricted stock grants (net activity)....         (38)        2,128                                                         2,090
Stock acquired for trust .................                    (1,240)                                                       (1,240)
Cash dividends-- $.45 per share ..........                                   (77,801)                                      (77,801)
                                             ---------     ---------     -----------    ---------        ---------      ----------

Balance at December 31, 1998 .............     205,701       143,686       1,797,945     (386,465)         (44,927)      1,715,940
Comprehensive income:
  Net income .............................                                   303,860                                       303,860
  Other comprehensive loss ...............                                                                (100,697)       (100,697)
                                                                                                                        ----------
    Comprehensive income .................                                                                                 203,163
Treasury stock purchased .................                                               (145,806)                        (145,806)
Stock issued (tendered)
  for exercise of options ................         463         8,597                         (252)                           8,808
Stock tendered in connection
  with restricted stock grants ...........                                                 (1,368)                          (1,368)
Restricted stock grants (net activity) ...         145           (69)                                                           76
Stock acquired for trust .................                    (1,327)                                                       (1,327)
Cash dividends-- $.48 per share ..........                                   (80,954)                                      (80,954)
                                             ---------     ---------     -----------    ---------        ---------      ----------

Balance at December 31, 1999 .............     206,309       150,887       2,020,851     (533,891)        (145,624)      1,698,532
Comprehensive income:
  Net income .............................                                    16,026                                        16,026
  Other comprehensive loss ...............                                                                 (17,985)        (17,985)
                                                                                                                        ----------
    Comprehensive loss ...................                                                                                  (1,959)
Treasury stock purchased .................                                               (146,857)                        (146,857)
Stock issued (tendered)
  for exercise of options ................         534         8,121                         (192)                           8,463
Stock tendered in connection
  with restricted stock grants ...........                                                   (173)                            (173)
Restricted stock grants (net activity) ...           5         3,176                                                         3,181
Stock acquired for trust .................                    (1,199)                                                       (1,199)
Treasury stock transferred to trust ......                    (2,335)                       2,335
Cash dividends-- $.54 per share ..........                                   (88,124)                                      (88,124)
                                             ---------     ---------     -----------    ---------        ---------      ----------

Balance at December 31, 2000 .............   $ 206,848     $ 158,650     $ 1,948,753    $(678,778)       $(163,609)     $1,471,864
                                             =========     =========     ===========    =========        =========      ==========
</TABLE>

See notes to consolidated financial statements.

26 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   20

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(Thousands of Dollars Unless Otherwise Indicated)

    NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------

CONSOLIDATION. The consolidated financial statements include all controlled
subsidiaries. Inter-company accounts and transactions have been eliminated.

USE OF ESTIMATES. The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates.

NATURE OF OPERATIONS. The Company is engaged in the manufacture, distribution
and sale of coatings and related products to professional, industrial,
commercial and retail customers primarily in North and South America.

REPORTABLE SEGMENTS. See Note 17.

CASH FLOWS. The Company 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 in the consolidated
   balance sheets for cash and cash equivalents approximate fair value.

   SHORT-TERM INVESTMENTS: The carrying amounts reported in the consolidated
   balance sheets for marketable debt and equity securities are based on quoted
   market prices and approximate fair value.

   INVESTMENTS IN SECURITIES: The Company maintains certain long-term
   investments, classified as available for sale securities, in a fund to
   provide for payment of health care benefits of certain qualified employees.
   The estimated fair values of these securities, included in Other assets, of
   $15,913, $21,093, and $25,523 at December 31, 2000, 1999, and 1998,
   respectively, are based on quoted market prices.

   LONG-TERM DEBT(INCLUDING CURRENT PORTION): The fair values of the Company's
   publicly traded debentures, 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.

                                         December 31,
                    -----------------------------------------------------------
                           2000                1999                  1998
                    ----------------    -----------------     -----------------
                    Carrying   Fair     Carrying    Fair      Carrying    Fair
                     Amount    Value     Amount     Value      Amount     Value
                    --------   -----    --------    -----     --------    -----
Publicly traded
  debt .......     $613,709 $592,113   $726,017   $698,031   $764,806  $825,989

Non-traded
  debt .......       29,179   26,203     20,536     18,969     83,559    80,929

   INTEREST RATE SWAPS: The Company occasionally enters into interest rate swaps
   primarily to hedge against interest rate risks. These agreements generally
   involve the exchange of fixed and floating rate interest payment obligations
   without the exchange of the underlying principal amounts. Counterparties to
   these agreements are major financial institutions. Management believes the
   risk of incurring losses related to credit risk is remote. There were no
   interest rate swaps outstanding at December 31, 2000 and 1999.

   NON-TRADED INVESTMENTS: It was not practicable to estimate the fair value of
   the Company's investment in certain non-traded investments because of the
   lack of quoted market prices and the inability to estimate fair values
   without incurring excessive costs. The carrying amounts, included in Other
   assets, of $25,143, $15,860, and $20,034 at December 31, 2000, 1999, and
   1998, respectively, represent the Company's best estimate of current economic
   values of these investments.

   INVESTMENT IN LIFE INSURANCE. The Company invests in broad-based corporate
   owned life insurance. The cash surrender values of the policies, net of
   policy loans, are included in Other assets. The net expense associated with
   such investment is included in Other expense - net. Such expense is
   immaterial to Income before income taxes.

   IMPAIRMENT OF LONG-LIVED ASSETS. The Company evaluates the recoverability of
   long-lived assets and the related estimated remaining lives at each balance
   sheet date. The Company records an impairment or change in useful life
   whenever events or changes in circumstances indicate that the carrying amount
   may not be recoverable or the useful life has changed in accordance with
   Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for
   the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
   of." See Note 2.

   GOODWILL. Goodwill represents the cost in excess of fair value of net assets
   acquired in business combinations accounted for by the purchase method and is
   amortized on a straight-line basis over the expected period of benefit
   ranging from 10 to 40 years. Accumulated amortization of goodwill was
   $84,827, $107,365 and $78,983 at December 31, 2000, 1999, and 1998,
   respectively. See Note 2.

   INTANGIBLES. Intangible assets include non-compete covenants, operating
   rights, patents, and trademarks. These assets are amortized on a
   straight-line basis over the expected period of benefit ranging from 2 to 40
   years. Accumulated amortization of intangible assets was $129,320, $119,125,
   and $102,359 at December 31, 2000, 1999, and 1998, respectively.

   PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated on the
   basis of cost. Depreciation is provided principally by the straight-line
   method. The major classes of assets and ranges of depreciation rates are as
   follows:

                          The Sherwin - Williams Company 2000 Annual Report | 27


<PAGE>   21

  Buildings ...................     2% - 6-2/3%
  Machinery and equipment .....     4% - 20%
  Furniture and fixtures ......     5% - 33-1/3%
  Automobiles and trucks ......    10% - 33-1/3%

LETTERS OF CREDIT. The Company occasionally enters into standby letter of credit
agreements to guarantee various operating activities. These agreements, which
expire in 2001, provide credit availability to the various beneficiaries if
certain contractual events occur. Amounts outstanding under these agreements
totaled $12,230, $14,177, and $15,042 at December 31, 2000, 1999, and 1998,
respectively.

FOREIGN CURRENCY TRANSLATION. All consolidated non-highly inflationary foreign
operations use the local currency of the country of operation as the functional
currency and translate the local currency asset and liability accounts at
year-end exchange rates while income and expense accounts are translated at
average exchange rates. The resulting translation adjustments are included in
Cumulative other comprehensive loss, a component of Shareholders' equity.

REVENUE RECOGNITION. Substantially all revenues are recognized when products are
shipped and title has passed to unaffiliated customers.

TECHNICAL EXPENDITURES. Total technical expenditures include research and
development costs, quality control, product formulation expenditures and other
similar items. Research and development costs included in technical expenditures
were $33,927, $27,200, and $23,955 for 2000, 1999, and 1998, respectively.

ADVERTISING EXPENSES. The cost of advertising is expensed as incurred. The
Company incurred $276,078, $265,411, and $282,817 in advertising costs during
2000, 1999, and 1998, respectively.

ENVIRONMENTAL MATTERS. Capital expenditures for ongoing environmental compliance
measures are recorded in the consolidated balance sheets, and related expenses
are included in the normal operating expenses of conducting business. The
Company is involved with environmental compliance, investigation and remediation
activities at some of its current and former sites and at a number of
third-party sites. The Company accrues for certain environmental
remediation-related activities for which commitments or clean-up plans have been
developed and for which costs can be reasonably estimated. All accrued amounts
are recorded on an undiscounted basis. Accrued environmental remediation-related
expenses include direct costs of remediation and indirect costs related to the
remediation effort, such as compensation and benefits for employees directly
involved in the remediation activities and fees paid to outside engineering,
consulting and law firms. See Notes 4 and 9.

STOCK-BASED COMPENSATION. The Company uses the intrinsic value method of
accounting for stock-based compensation in accordance with Accounting Principles
Board Opinion (APBO) No. 25. See Note 12 for pro forma disclosure of net income
and earnings per share under the fair value method of accounting for stock-based
compensation as prescribed by SFAS No. 123, "Accounting for Stock-Based
Compensation."

EARNINGS PER SHARE. Basic net income per share is computed based on the
weighted-average number of shares outstanding during the year. Diluted net
income per share is computed based on the weighted-average number of shares
outstanding plus all dilutive securities potentially outstanding during the
year. See Note 15. All references to earnings or losses per share throughout
this report are stated on a diluted per share basis unless otherwise indicated.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS. Financial Accounting Standards
Board (FASB) SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, is effective for all fiscal years beginning after June
15, 2000. SFAS No. 133 requires all derivative instruments to be recorded as
either assets or liabilities at fair value. Gains or losses resulting from
changes in the values of those derivative instruments may be recognized
immediately or deferred depending on the use of the derivative or whether it
qualifies as a hedge. The Company will comply with the requirements of SFAS No.
133 beginning January 1, 2001, as required. The impact of complying with this
statement is not expected to have a material effect on the Company's financial
condition, results of operations or cash flows.

RECLASSIFICATION. Certain amounts in the 1999 and 1998 consolidated financial
statements have been reclassified to conform with the 2000 presentation.

                     NOTE 2-IMPAIRMENT OF LONG-LIVED ASSETS
- --------------------------------------------------------------------------------

During the fourth quarter of 2000, the Company recognized an impairment charge
of $352,040 ($293,628 after tax or $1.80 per share) to reduce the carrying
values of certain long-lived assets to their estimated fair values. Charges of
$342,522 reduced goodwill while the remaining portion of the charge primarily
reduced fixed assets. The impaired assets are part of the Consumer Segment
related to the previous acquisitions of Thompson Minwax Holding Corp. and Pratt
& Lambert United, Inc., and the assets of Sunshine Quality Products, Inc. and
the Household and Professional Products Division of Grow Group, Inc. Current
year losses, cash flow deficiencies and cash flow shortfalls from expectations
indicated an impairment review was necessary. Undiscounted future cash flows
estimated by management established that impairment existed at December 31,
2000. The amount of impairment was estimated using a discounted cash flow
valuation technique incorporating a discount rate commensurate with the risks
involved for each group of assets.

                               NOTE 3-INVENTORIES
- --------------------------------------------------------------------------------

Inventories are stated at the lower of cost or market. Cost is determined
principally on the last-in, first-out (LIFO) method which provides a better
matching of current costs and revenues in periods of inflation. The following
presents the effect on inventories, net income and net income per share had the
Company used the first-in, first-out (FIFO) inventory valuation adjusted for
income taxes at the statutory rate and assuming no other adjustments. This
information is presented to enable the reader to make comparisons with companies
using the FIFO method of inventory valuation.



28 | The Sherwin - Williams Company 2000 Annual Report



<PAGE>   22

<TABLE>
<CAPTION>
                                                             2000         1999        1998
                                                             ----         ----        ----
<S>                                                       <C>          <C>         <C>
Percentage of total inventories on LIFO .................        89%         90%         91%
Excess of FIFO over LIFO ................................  $110,124     $97,953     $96,235
Increase (decrease) in net income due to LIFO ...........    (7,916)       (894)      4,685
Increase (decrease) in net income per share due to LIFO..      (.05)       (.01)        .03
</TABLE>

                          NOTE 4 - OTHER EXPENSE - NET
- --------------------------------------------------------------------------------
A summary of significant items included in Other expense - net is as follows:

<TABLE>
<CAPTION>
                                                   2000        1999      1998
                                                   ----        ----      ----
<S>                                             <C>        <C>       <C>
Dividend and royalty income...................   $(4,144)   $(4,692)  $(3,069)
Net expense of financing and
  investing activities .......................    10,926      7,084     2,542
Provisions for environmental
  matters- net(see Note 9) ...................               15,402       695
Provisions for disposition and
  termination of operations (see Note 5) .....     6,968      3,830    12,290
Foreign currency exchange losses .............     2,115      3,333    11,773
Other (income) expense .......................    (1,112)     4,583     1,815
                                                 -------    -------   -------
                                                 $14,753    $29,540   $26,046
                                                 =======    =======   =======
</TABLE>

The net expense of financing and investing activities represents the net
realized gains or losses from disposing of fixed assets, the net gain or loss
associated with the investment in certain long-term asset funds, the net
pre-tax expense associated with the Company's investment in broad-based
corporate owned life insurance, other related fees and, in 1998, the net gain
related to the sale of the Company's joint venture interest in American Standox,
Inc.

The provisions for environmental matters represent the net charge necessary to
record the most current estimates of potential costs of environmental
remediation at current, former and third-party sites. See Note 9. The provision
for 1998 was partially offset by settlements with certain insurance carriers
totaling $3,600.

The provisions for disposition and termination of operations reduce property,
plant and equipment at closed facilities to estimated net realizable value and
adjust previous provisions to current estimates as closure or disposition
occurs. See Note 5.

                       NOTE 5-DISPOSITION AND TERMINATION
                                  OF OPERATIONS
- --------------------------------------------------------------------------------

The Company is continually re-evaluating its operating facilities against its
long-term strategic goals. Upon cessation of operations, a provision is made to
reduce property, plant and equipment to its estimated net realizable value. The
expense is included in Other expense - net. Similarly, provisions are made, and
included in Cost of goods sold, to provide for all qualified exit costs such as
lease cancellation penalties, post-closure rent expenses, incremental
post-closure expenses and the estimated costs of employee terminations.

During 2000, provisions were made to reduce certain assets to their net
realizable value for two research centers idled by the Automotive Finishes
Segment, resulting from the consolidation of its research operations into a
newly purchased facility, and for a closed distribution center. Provisions were
made for qualified exit costs associated with the shut down of these facilities,
primarily incremental post-closure costs. In 1999, provisions were made to
reduce certain assets to their net realizable value and to accrue qualified exit
costs for two idle manufacturing facilities and a leased warehouse and for four
redundant manufacturing facilities in 1998. Adjustments are made to prior
accruals as information becomes available upon which more accurate costs can be
reasonably estimated.

Approximately 45 percent of the ending accrual at December 31, 2000 consisted of
reductions in property, plant and equipment to estimated net realizable values.
Approximately one-half of the reduction to net realizable value relates to
facilities closed in 2000 while the other half relates primarily to facilities
that ceased operations prior to 1998. The remaining portion of the ending
accrual at December 31, 2000 relates primarily to post-closure demolition
expenses, continued lease payments or cancellation penalties, and ongoing
contractual expenses relating to facilities whose operations ceased prior to
1998. The Company is involved in ongoing environmental-related activities at
certain owned facilities that have been closed and cannot reasonably estimate
when such matters will be concluded to allow for disposition. As sale of the
facilities occurs, following the completion of the environmental-related
activities or at time of demolition, the realized loss from carrying value to
net realizable value will be charged to the accrual. Most remaining demolition
expenses are expected to be incurred during 2001.

A summary of the financial data related to the closing or sale of the facilities
is as follows:


                                               2000        1999       1998
                                               ----        ----       ----
Beginning accruals- January 1 ..............  $34,883    $ 56,097    $47,111
Provisions included in Cost of goods sold...    1,055       3,810     11,267
Provisions included in
  Other expense - net ......................    6,990         278     14,094
Prior accrual adjustments included
  in Other expense - net ...................      (22)      3,552     (1,804)
                                              -------    --------    -------
    Total charges included in
       Other expense - net .................    6,968       3,830     12,290
Actual expenditures charged to accrual .....   (6,173)    (15,529)    (5,322)
Realized losses charged to accrual .........   (4,459)    (13,325)    (9,249)
                                              -------    --------    -------
Ending accruals- December 31 ...............  $32,274    $ 34,883    $56,097
                                              =======    ========    =======
Net after-tax charges to
  current operations .....................    $ 5,215    $  4,966    $15,312
Net after-tax charges per share ............  $   .03    $    .03    $   .09

                       NOTE 6 - PENSION AND OTHER BENEFITS
- --------------------------------------------------------------------------------

The Company provides pension benefits to substantially all employees through
noncontributory defined benefit or defined contribution plans. The Company's
annual contribution for its defined contribution pension plans, which is based
on a level percentage of compensation for covered employees, was $33,043,
$31,512, and $27,004 in 2000, 1999, and 1998, respectively.

The Company provides certain health care benefits for active employees. The
plans are contributory and contain cost-sharing features such as deductibles and
coinsurance. There were 16,811, 16,081, and 15,894, active employees entitled to
receive benefits


                          The Sherwin - Williams Company 2000 Annual Report | 29


<PAGE>   23

under these plans as of December 31, 2000, 1999, and 1998, respectively. The
cost of these benefits for active employees is recognized as claims are incurred
and amounted to $58,782, $52,640, and $47,563 for 2000, 1999, and 1998,
respectively. The Company has a fund, to which it no longer intends to
contribute, that provides for payment of health care benefits of certain
qualified employees. Distributions from the fund amounted to $7,410, $6,421, and
$4,928 in 2000, 1999, and 1998, respectively.

Employees of the Company who were hired prior to January 1, 1993 and who are not
members of a collective bargaining unit, and certain groups of employees added
through acquisitions, are eligible for certain health care and life insurance
benefits upon retirement from active service, subject to the terms, conditions
and limitations of the applicable plans. There were 4,855, 4,831, and 4,800
retired employees entitled to receive benefits as of December 31, 2000, 1999,
and 1998, respectively. The plans are unfunded.

<TABLE>
<CAPTION>
                                                      DEFINED BENEFIT PENSION PLANS          OTHER POSTRETIREMENT BENEFITS
                                                  ----------------------------------     -------------------------------------
                                                    2000         1999         1998          2000         1999           1998
                                                    ----         ----         ----          ----         ----           ----
<S>                                              <C>          <C>          <C>          <C>           <C>           <C>
BENEFIT OBLIGATION:
  Balance at beginning of year ................   $170,632     $169,099     $175,204     $ 225,686     $ 217,627     $ 206,007
  Service cost ................................      2,990        3,237        2,564         3,821         4,215         3,877
  Interest cost ...............................     12,504       11,516       11,942        15,649        14,467        13,909
  Actuarial loss (gain) .......................      8,957       (1,106)       1,702        15,930           966         3,184
  Plan amendments .............................        738                     2,003
  Plan mergers ................................      9,446
  Other - net .................................        208          181
  Benefits paid ...............................    (10,596)     (12,295)     (24,316)      (13,150)      (11,589)       (9,350)
                                                  --------     --------     --------     ---------     ---------     ---------
  Balance at end of year ......................    194,879      170,632      169,099       247,936       225,686       217,627

PLAN ASSETS:
  Balance at beginning of year ................    523,453      492,384      446,271
  Actual return on plan assets ................     25,534       44,859       71,188
  Plan mergers ................................     17,017
  Other - net .................................       (954)      (1,495)        (759)
  Benefits paid ...............................    (10,596)     (12,295)     (24,316)
                                                  --------     --------     --------
  Balance at end of year ......................    554,454      523,453      492,384

EXCESS(DEFICIENT) PLAN ASSETS:
  Balance at end of year ......................    359,575      352,821      323,285      (247,936)     (225,686)     (217,627)
  Unrecognized net asset ......................                  (1,279)      (2,792)
  Unrecognized actuarial loss (gain) ..........      2,080      (20,262)     (20,348)       37,752        21,993        20,171
  Unrecognized prior service cost (credit) ....      2,320        2,404        2,330       (11,689)      (14,498)      (17,307)
                                                  --------     --------     --------     ---------     ---------     ---------
NET ASSET (LIABILITY) RECOGNIZED IN THE
  CONSOLIDATED BALANCE SHEETS .................   $363,975     $333,684     $302,475     $(221,873)    $(218,191)    $(214,763)
                                                  ========     ========     ========     =========     =========     =========

NET ASSET (LIABILITY) RECOGNIZED IN THE
  CONSOLIDATED BALANCE SHEETS CONSISTS OF:
    Prepaid benefit cost ......................   $364,351     $334,094     $304,006
    Accrued benefit liability .................                                          $(208,673)    $(206,591)    $(204,763)
    Amount included in current liabilities ....       (376)        (410)      (1,531)      (13,200)      (11,600)      (10,000)
                                                  --------     --------     --------     ---------     ---------     ---------
                                                  $363,975     $333,684     $302,475     $(221,873)    $(218,191)    $(214,763)
                                                  ========     ========     ========     =========     =========     =========

WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:
  Discount rate ...............................       7.00%        7.25%        6.75%         7.00%         7.25%         6.75%
  Expected long-term rate of return on assets .       8.50%        8.50%        8.50%
  Rate of compensation increase ...............       5.00%        5.00%        5.00%
  Health care cost trend rate .................                                               6.00%         6.40%         6.70%

NET PERIODIC BENEFIT (CREDIT) COST:
  Service and interest cost ...................   $ 15,494     $ 14,753     $ 14,506     $  19,470     $  18,682     $  17,786
  Net amortization and deferral ...............       (490)        (699)      (2,524)       (2,814)       (2,768)       (2,809)
  Expected return on assets ...................    (44,633)     (42,137)     (37,531)
  Settlement gain .............................                               (5,302)
                                                  --------     --------     --------     ---------     ---------     ---------
  Net periodic benefit (credit) cost ..........   $(29,629)    $(28,083)    $(30,851)    $  16,656     $  15,914     $  14,977
                                                  ========     ========     ========     =========     =========     =========
</TABLE>



30 | The Sherwin - Williams Company 2000 Annual Report


<PAGE>   24

Plan assets included 2,338,800 shares of the Company's common stock at December
31, 2000 with a market value of $61,541. Dividends received during the year from
Company stock was $1,155.

The assumed health care cost trend rate was revised during the year ended
December 31, 2000, to 9.5 percent for 2001 decreasing gradually to 5.5 percent
for 2010 and thereafter. Assumed health care cost trend rates have a significant
effect on the amounts reported for the health care plan. A one-percentage-point
change in assumed health care cost trend rates would have the following effects
as of December 31, 2000:

                                              One-Percentage-Point
                                             -----------------------
                                             Increase     (Decrease)
                                             --------     ----------
Effect on total of service and interest
  cost components ....................        $  580        $  (565)
Effect on the post retirement benefit
  obligation .........................        $8,137        $(7,900)

                              NOTE 7-LONG-TERM DEBT
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                           Amount Outstanding
                                             ------------------------------------------------------------
                                               Due Date            2000            1999           1998
                                               --------            ----            ----           ----
<S>                                         <C>                 <C>             <C>            <C>
6.85% Notes .........................             2007           $199,807        $199,775       $199,742
7.375% Debentures ...................             2027            149,910         149,907        149,903
7.45% Debentures ....................             2097            149,408         149,402        149,396
6.5% Notes ..........................             2002             99,989          99,978         99,966
6.25% Notes .........................             2000                                            99,974
9.875% Debentures ...................        2007 to 2016          11,500          15,900         15,900
5% to 9% Promissory Notes............        Through 2005           8,882           5,752         10,623
8% to 12% Promissory Notes
  partially secured by certain
  land and buildings .................       Through 2005           2,259           3,569          3,884
4.75% Promissory Note ...............             2000                                               800
Other Obligations ...................                               1,832              82             95
                                                                 --------        --------       --------
                                                                 $623,587        $624,365       $730,283
                                                                 ========        ========       ========
</TABLE>

Maturities of long-term debt are as follows for the next five years: $19,368 in
2001; $106,616 in 2002; $5,632 in 2003; $405 in 2004, and $204 in 2005.

Interest expense on long-term debt was $46,569, $55,415, and $59,137 for 2000,
1999, and 1998, respectively.

The Company has renewable 364-day and five-year amended revolving credit
agreements. The current agreements with effective dates of December 29, 2000 and
January 3, 2001 reflect the following: 1) a 364-day annually renewable agreement
aggregating $129,600 expiring on December 28, 2001; and 2) a five-year rolling
agreement aggregating $638,400, with $30,400, $190,400, and $417,600 expiring on
January 3, 2003, 2005, and 2006, respectively. There were no borrowings
outstanding under any revolving credit agreement during all years presented.

The Company uses the revolving credit agreements to satisfy its commercial paper
program's dollar for dollar liquidity requirement. At December 31, 2000,
borrowings outstanding under the commercial paper program totaled $106,854 and
are included in Short-term borrowings on the balance sheet. The weighted-average
interest rate related to these borrowings was 6.6% at December 31, 2000. There
were no borrowings outstanding under this program at December 31, 1999 and 1998,
respectively. Effective January 3, 2001, this program is limited to $768,000,
which equals the new aggregate maximum borrowing capacity under the revolving
credit agreements.

On October 6, 1997, the Company issued $50,000 of debt securities remaining
under a previously existing shelf registration with the Securities and Exchange
Commission consisting of 5.5% notes, due October 15, 2027, with provisions that
the holders, individually or in the aggregate, may exercise a put option on
October 15, 1999 and annually thereafter that would require the Company to repay
the securities. On October 15, 2000 and 1999, individual debt security holders
exercised put options requiring the Company to repay $7,960 and $38,945 of these
debt securities. The remaining balance of $3,095 at December 31, 2000 and
$11,055 at December 31, 1999 of these debt securities are included in Current
portion of long-term debt on the balance sheets.

On December 24, 1997, the Company filed a shelf registration with the Securities
and Exchange Commission covering $150,000 of unsecured debt securities with
maturities greater than nine months from the date of issue. The Company may
issue these securities from time to time in one or more series and will offer
the securities on terms determined at the time of sale. There were no borrowings
outstanding under this registration at December 31, 2000, 1999, and 1998.

On August 18, 1998, the Company filed a universal shelf registration statement
with the Securities and Exchange Commission to issue debt securities, common
stock and warrants up to $1,500,000. The registration was effective September 8,
1998. There were no borrowings outstanding under this registration at December
31, 2000, 1999, and 1998.

                                  NOTE 8-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 was $130,552, $123,084, and $117,762 for
2000, 1999, and 1998, 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 $12,423, $11,530, and $10,329 in 2000,
1999, and 1998, respectively. Rental income, as lessor, from real estate leasing
activities and sublease rental income for all years presented was not
significant.

Following is a schedule, by year and in the aggregate, of future minimum lease
payments under noncancellable operating leases having initial or remaining terms
in excess of one year at December 31, 2000:

                    2001 ............................. $ 98,001
                    2002 .............................   81,919
                    2003 .............................   62,376
                    2004 .............................   46,533
                    2005 .............................   30,805
                    Later years ......................   81,959
                                                       --------
                    Total minimum lease payments ..... $401,593
                                                       ========

                          The Sherwin - Williams Company 2000 Annual Report | 31

<PAGE>   25

                       NOTE 9--OTHER LONG-TERM LIABILITIES
- --------------------------------------------------------------------------------

Included in Other long-term liabilities at December 31, 2000, 1999, and 1998
were accruals for extended environmental-related activities of $116,594,
$124,096 and $127,613, respectively. The accrual for extended
environmental-related activities represents the Company's provisions for
estimated costs associated with some of its current and former sites. Also, the
Company, together with other parties, has been designated a potentially
responsible party under federal and state environmental protection laws for the
remediation of hazardous waste at a number of third-party sites, primarily
Superfund sites. In general, these laws provide that potentially responsible
parties may be held jointly and severally liable for investigation and
remediation costs regardless of fault. The Company provides for, and includes in
long-term liabilities, its estimated potential long-term liability for
investigation and remediation costs with respect to such third-party sites.

The Company initially provides for the estimated cost of environmental-related
activities relating to its current, former and third-party sites when costs can
be reasonably estimated. These estimates are determined 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
accrued. Actual costs incurred may vary from these estimates due to the inherent
uncertainties involved. The Company believes that any additional liability in
excess of amounts provided which may result from the resolution of such matters
will not have a material adverse effect on the financial condition, liquidity or
cash flow of the Company.

Current environmental-related liabilities are included in Other accruals on the
consolidated balance sheets.

                           NOTE 10-STOCK PURCHASE PLAN
- --------------------------------------------------------------------------------

As of December 31, 2000, 14,611 employees participated in the Company's Employee
Stock Purchase and Savings Plan. The Company's contribution charged to
operations was $28,070, $36,535, and $32,679 for 2000, 1999, and 1998,
respectively. Additionally, the Company made contributions on behalf of
participating employees, representing amounts authorized by employees to be
withheld from their earnings, of $26,636, $22,581, and $20,250 in 2000, 1999,
and 1998, respectively.

At December 31, 2000, there were 25,345,026 shares of the Company's stock being
held by this plan, representing 15.9 percent of the total number of voting
shares outstanding. Shares of company stock credited to each member's account
under the plan are voted by the trustee under instructions from each individual
plan member. Shares for which no instructions are received, along with any
unallocated shares held in the plan, are voted by the trustee in the same
proportion as those for which instructions are received.

                              NOTE 11-CAPITAL STOCK
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            Shares              Shares
                                                         in Treasury          Outstanding
                                                         -----------          -----------
<S>                                                 <C>                   <C>
Balance at January 1, 1998 ......................         31,630,255          172,907,418
   Shares tendered as payment for
     options exercised ..........................             37,663              (37,663)
   Shares issued for exercise of stock options ..                               1,201,476
   Shares cancelled under previous
     restricted stock grants ....................                                 (38,000)
   Treasury stock purchased .....................          3,000,000           (3,000,000)
                                                         -----------         ------------
Balance at December 31, 1998 ....................         34,667,918          171,033,231
   Shares tendered as payment for
     options exercised ..........................              8,392               (8,392)
   Shares issued for exercise of stock options...                                 462,598
   Shares tendered in connection with
     restricted stock grants ....................             44,236              (44,236)
   Net shares issued under
     restricted stock grants .....................                                145,400
   Treasury stock purchased .....................          5,925,000           (5,925,000)
                                                         -----------         ------------
Balance at December 31, 1999 ....................         40,645,546          165,663,601
   Shares tendered as payment for
     options exercised ..........................              8,757               (8,757)
   Shares issued for exercise of
     stock options ..............................                                 533,991
   Shares transferred to revocable trust ........           (165,000)             165,000
   Net shares issued under
     restricted stock grants ....................                                   4,500
   Treasury stock purchased .....................          6,800,000           (6,800,000)
                                                         -----------         ------------
Balance at December 31, 2000 ....................         47,289,303          159,558,335
                                                         ===========         ============
</TABLE>

An aggregate of 19,184,038 shares, 19,722,529 shares, and 20,389,127 shares of
stock at December 31, 2000, 1999 and 1998, respectively, were reserved for
future grants of restricted stock and the exercise and future grants of stock
options. Shares outstanding include 432,518 shares, 215,150 shares, and 159,800
shares of stock held in a revocable trust at December 31, 2000, 1999, and 1998,
respectively. At December 31, 2000, there were 300,000,000 shares of common
stock and 30,000,000 shares of serial preferred stock authorized for issuance
(3,000,000 shares of the authorized serial preferred stock have been designated
as cumulative redeemable serial preferred stock which may be issued pursuant to
the Company's shareholders' rights plan if the Company becomes the target of
coercive and unfair takeover tactics).

                               NOTE 12-STOCK PLAN
- --------------------------------------------------------------------------------

The Company's 1994 Stock Plan permits the granting of restricted stock, stock
appreciation rights and stock options to eligible employees. The 1994 Stock Plan
succeeded the 1984 Stock Plan which expired on February 15, 1994. Although no
further grants may be made under the 1984 Stock Plan, all rights granted under
such plan remain. The Company's 1997 Stock Plan for Nonemployee Directors
provides for the granting of restricted stock and stock options to members of
the Board of Directors who are not employees of the Company. There were 400,000
shares authorized as available for grant under the 1997 Stock Plan. Grants made
pursuant to the 1997 Stock Plan are authorized by the Board of Directors.

32 | The Sherwin - Williams Company 2000 Annual Report
<PAGE>   26



Restricted stock grants, which generally require four years of continuous
employment from the date of grant before vesting and receiving the shares
without restriction, have been awarded to certain officers and key employees
under the 1994 Stock Plan. The number of shares to be received without
restriction is based on the Company's performance relative to a peer group of
companies. Shares of restricted stock that vested and were delivered to officers
and employees amounted to 120,400 during 1999. No shares of restricted stock
vested during 2000 or 1998. At December 31, 2000, there were 352,500 shares of
restricted stock outstanding. Unamortized deferred compensation expense with
respect to the restricted stock grants amounted to $3,036, $4,249, and $2,781 at
December 31, 2000, 1999, and 1998, respectively, and is being amortized over the
four-year vesting period. Deferred compensation expense aggregated $3,180, $77,
and $2,090 in 2000, 1999, and 1998, respectively. No stock appreciation rights
have been granted.

A summary of restricted stock granted during 2000, 1999, and 1998 is as follows:

                                                   2000       1999        1998
                                                   ----       ----        ----
Shares granted .............................      4,500     204,000      4,000
Weighted-average fair value of
   restricted shares granted during year....     $19.63    $  23.77     $33.06

Non-qualified and incentive stock options have been granted to certain officers
and key employees under the plans at prices not less than fair market value of
the shares, as defined by the plans, at the date of grant. The options 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. The number of options and any period of service required before
the options may be exercised is determined by the Board of Directors at the time
of grant. No options may be exercised more than ten years from the date of the
grant.

The Company has elected to follow APBO No. 25, "Accounting for Stock Issued to
Employees," and related interpretations, in accounting for its employee stock
options because, as discussed below, the alternative fair value accounting
provided for under SFAS No. 123, "Accounting for Stock-Based Compensation,"
requires use of highly subjective assumptions in option valuation models. Under
APBO No. 25, because the exercise price of the Company's employee stock options
is not less than fair market price of the shares at the date of grant, no
compensation expense is recognized in the financial statements. Pro forma
information regarding net income and earnings per share, determined as if the
Company had accounted for its employee stock options under the fair value method
of SFAS No. 123, is required by that statement. The fair value for these options
was estimated at the date of grant using a Black-Scholes option pricing model
with the following weighted-average assumptions for all options granted:

                                             2000          1999          1998
                                             ----          ----          ----
Risk-free interest rate ...........           6.29%         5.34%         5.14%
Expected life of option ...........        3 years       3 years       3 years
Expected dividend yield of stock ..           2.00%         2.00%         2.00%
Expected volatility of stock ......          0.305         0.265         0.194

The Black-Scholes option pricing model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, it
is management's opinion that the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.

The amounts below represent the pro forma information calculated through use of
the Black-Scholes model. For purposes of pro forma disclosures, the estimated
fair value of the options is amortized to expense over the options' vesting
period.

                                        2000        1999          1998
                                        ----        ----          ----
Pro forma net income ..........        $9,617     $297,107     $269,838
PRO FORMA NET INCOME PER SHARE:
   Basic ......................        $  .06     $   1.77     $   1.57
   Diluted ....................        $  .06     $   1.76     $   1.56

A summary of the Company's stock option activity and related information for the
years ended December 31, 2000, 1999 and 1998 is shown in the following table:

<TABLE>
<CAPTION>
                                                                        2000                  1999                    1998
                                                               ---------------------  --------------------   ----------------------
                                                                           Weighted-             Weighted-                Weighted-
                                                                            Average              Average                  Average
                                                               Optioned     Exercise  Optioned   Exercise    Optioned     Exercise
                                                                 Shares       Price    Shares      Price       Shares       Price
                                                               --------     --------  --------   --------    --------     --------
<S>                                                           <C>           <C>      <C>         <C>        <C>           <C>
Outstanding beginning of year ..............................   10,724,653    $22.78   6,259,702   $22.89     5,810,471     $18.47
Granted ....................................................    2,820,900     19.75   5,292,350    22.33     1,867,500      29.10
Exercised ..................................................     (533,991)    12.02    (462,598)   15.36    (1,201,476)     14.00
Canceled ...................................................     (423,252)    24.62    (364,801)   27.69      (216,793)     26.68
                                                               ----------    ------  ----------   ------     ---------     ------
Outstanding end of year ....................................   12,588,310    $22.47  10,724,653   $22.78     6,259,702     $22.89
                                                               ==========    ======  ==========   ======     =========     ======

Exercisable at end of year .................................    5,923,537    $23.31   3,971,139   $21.09     3,019,873     $17.77
Weighted-average fair value of options granted during year..        $4.72                 $4.67                  $5.12
Reserved for future grants .................................    6,595,728             8,997,876             14,129,425
</TABLE>


                          The Sherwin - Williams Company 2000 Annual Report | 33


<PAGE>   27

Exercise prices for optioned shares outstanding as of December 31, 2000 ranged
from $9.56 to $35.34. A summary of these options by range of exercise prices is
as follows:

<TABLE>
<CAPTION>
                                      Outstanding                      Exercisable
                        ------------------------------------     ------------------------
                                                   Weighted-
                                     Weighted-      Average                     Weighted-
                                      Average      Remaining                    Average
    Range of            Optioned      Exercise    Contractual    Optioned      Exercise
 Exercise Prices          Shares        Price    Life (years)     Shares         Price
 ---------------        ---------    ---------   ------------    ---------    -----------
<S>                    <C>          <C>          <C>             <C>         <C>
less than $16.00 ....     390,829      $12.86        1.80          390,829       $12.86
 $16.00 - $19.99 ....   3,241,788       19.03        9.38          557,988        16.51
 $20.00 - $26.00 ....   6,128,196       22.00        8.01        2,701,625        21.74
greater than $26.00..   2,827,497       28.77        6.96        2,273,095        28.65
                       ----------      ------        ----        ---------       ------
                       12,588,310      $22.47        7.67        5,923,537       $23.31
                       ==========      ======        ====        =========       ======
</TABLE>

                              NOTE 13-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, 2000, 1999 and
1998 are as follows:

                                             2000       1999       1998
                                             ----       ----       ----
DEFERRED TAX ASSETS:
   Dispositions, environmental and
     other similar items ............      $ 55,220    $ 56,123    $ 61,857
   Other items (each less than 5% of
     total assets) ..................        98,107      94,196      88,432
                                           --------    --------    --------
        Total deferred tax assets ...      $153,327    $150,319    $150,289
                                           ========    ========    ========

DEFERRED TAX LIABILITIES:
   Depreciation and amortization ....      $ 35,691    $ 66,374    $ 51,997
   Deferred employee benefit items ..        50,333      42,785      35,163
                                           --------    --------    --------
     Total deferred tax liabilities .      $ 86,024    $109,159    $ 87,160
                                           ========    ========    ========

Significant components of the provisions for income taxes are as follows:

                                      2000             1999            1998
                                      ----             ----            ----
CURRENT:
   Federal ................         $125,393         $128,185        $106,538
   Foreign ................            6,211           11,787           6,982
   State and Local ........           22,662           25,116          23,162
                                    --------         --------        --------
     Total Current ........          154,266          165,088         136,682

DEFERRED:
   Federal ................          (27,386)          14,388          20,946
   Foreign ................            6,213            3,851           5,587
   State and Local ........           (5,713)           2,931           4,024
                                    --------         --------        --------
     Total Deferred .......          (26,886)          21,170          30,557
                                    --------         --------        --------
Total income tax expense...         $127,380         $186,258        $167,239
                                    ========         ========        ========

Significant components of income before income taxes as used for income
tax purposes, are as follows:

                               2000                1999               1998
                               ----                ----               ----
Domestic..............      $ 90,412            $411,626            $382,469
Foreign...............        52,994              78,492              57,634
                            --------            --------            --------
                            $143,406            $490,118            $440,103
                            ========            ========            ========

A reconciliation of the statutory federal income tax rate and the effective
tax rate follows:

                                           2000        1999        1998
                                           ----        ----        ----
Statutory tax rate ...................     35.0%       35.0%       35.0%
EFFECT OF:
   State and local taxes .............      7.7         3.7         4.0
   Investment vehicles ...............     (7.3)       (1.5)       (2.7)
   Impairment of long-lived assets....     51.0
   Other - net .......................      2.5         0.8         1.7
                                           ----        ----        ----
Effective tax rate ...................     88.9%       38.0%       38.0%
                                           ====        ====        ====

A portion of the impairment of long-lived assets charge in 2000 related to
goodwill was not deductible for tax purposes. The effect on the statutory
federal income tax rate is shown separately in the previous table. The state and
local tax effect is not shown separately. The remaining portion of the
impairment charge created federal, state and local deferred tax benefits due to
the significant temporary differences between the reduced financial carrying
amounts and amounts used for tax purposes.

The provisions for income taxes includes estimated taxes payable on that portion
of retained earnings of foreign subsidiaries expected to be received by the
Company. A provision was not made with respect to $5,647 of retained earnings at
December 31, 2000 that have been invested by foreign subsidiaries. It is not
practicable to estimate the amount of unrecognized deferred tax liability for
undistributed foreign earnings.

Netted against the Company's other deferred tax assets are valuation reserves of
$9,082, $16,211 and $16,703 at December 31, 2000, 1999, and 1998, respectively,
resulting from the uncertainty as to the realization of the tax benefits from
certain foreign net operating losses and certain other foreign assets.

                      NOTE 14-SUMMARY OF QUARTERLY RESULTS
                            OF OPERATIONS (Unaudited)
- --------------------------------------------------------------------------------

                                 2000
- --------------------------------------------------------------------------------
                                                  Net Income      Net Income
                                     Net Income   (Loss) per      (Loss) per
Quarter   Net Sales   Gross Profit     (Loss)    Share - Basic  Share - Diluted
- -------   ---------   ------------  -----------  -------------  ---------------
1st      $1,221,916      $516,244   $  40,923       $  .25          $  .25
2nd       1,429,267       641,474     115,843          .71             .71
3rd       1,411,903       626,095     106,719          .66             .66
4th       1,148,538       523,798    (247,459)       (1.55)          (1.55)

The fourth quarter net loss resulted from an after-tax charge for the impairment
of long-lived assets of $293,628 or $1.84 per share ($1.80 per share for the
year due to the effect of dilution and higher average shares outstanding). Net
income in the fourth quarter of $46,169, excluding the impairment charge, was
decreased by $484, no per share impact, due to certain year-end adjustments.
Gross profit increased by $8,666 ($5,633 after-tax, $.04 per share) primarily as
a result of physical inventory adjustments of $9,889 ($6,428 after-tax, $.04 per
share) partially offset by fourth quarter provisions for closing costs
associated with certain operations of $1,055 ($686 after-tax, no per share

34 | The Sherwin - Williams Company 2000 Annual Report



<PAGE>   28

impact). Administrative expenses increased $1,288 ($838 after-tax, $.01 per
share) due to other year-end adjustments. Other expense-net increased $8,122
($5,279 after-tax, $.03 per share) due primarily to fourth quarter provisions
for the reduction to net realizable value of certain fixed assets related to
site closings of $6,968 ($4,529 after-tax, $.03 per share).

                                  1999
- --------------------------------------------------------------------------------
                                                   Net Income     Net Income
                                                      per            per
Quarter   Net Sales   Gross Profit   Net Income  Share - Basic  Share - Diluted
- -------   ---------   ------------   ----------  -------------  ---------------
1st      $1,127,867      $477,086      $ 28,797       $.17          $.17
2nd       1,384,070       610,390       107,594        .64           .63
3rd       1,345,483       609,834       111,482        .67           .66
4th       1,146,416       551,204        55,987        .34           .34

Net income during the fourth quarter decreased by $1,751 ($.01 per share) due to
certain year-end adjustments. Gross profit increased by $23,006 ($14,953
after-tax, $.09 per share) as a result of physical inventory adjustments of
$32,659 ($21,228 after-tax, $.12 per share). These adjustments were partially
offset by other year-end adjustments of $5,843 ($3,798 after-tax, $.02 per
share) and by provisions for the closing costs associated with certain
operations of $3,810 ($2,477 after-tax, $.01 per share). Administrative expenses
decreased $703 ($457 after-tax, no per share effect) due to other year-end
adjustments. Other expense - net increased $26,403 ($17,162 after-tax, $.10 per
share) due to the net provisions for environmental-related matters at current,
former and third-party sites of $16,860 ($10,959 after-tax, $.07 per share), the
provision of $3,830 ($2,490 after-tax, $.01 per share) for the adjustment to net
realizable value of certain net fixed assets related to site closings, and due
to other year-end adjustments of $5,713 ($3,713 after-tax, $.02 per share).

                          NOTE 15-NET INCOME PER SHARE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                 2000              1999              1998
                                                 ----              ----              ----
<S>                                         <C>               <C>               <C>
BASIC
   Average shares outstanding .........       161,911,789       167,924,660       172,162,472
                                             ============      ============      ============
   Net income .........................      $     16,026      $    303,860      $    272,864
                                             ============      ============      ============
   Net income per share ...............      $        .10      $       1.81      $       1.58
                                             ============      ============      ============

DILUTED
   Average shares outstanding .........       161,911,789       167,924,660       172,162,472
   Non-vested restricted stock grants .           279,300           263,567           235,317
   Stock options-
     treasury stock method ............           503,982           838,069         1,137,890
                                             ------------      ------------      ------------
   Average shares assuming dilution ...       162,695,071       169,026,296       173,535,679
                                             ============      ============      ============
   Net income .........................      $     16,026      $    303,860      $    272,864
                                             ============      ============      ============
   Net income per share ...............      $        .10      $       1.80      $       1.57
                                             ============      ============      ============
</TABLE>

                          NOTE 16-COMPREHENSIVE INCOME
- --------------------------------------------------------------------------------

Cumulative other comprehensive loss consists of the following components:

                                   Foreign         Minimum         Cumulative
                                  Currency         Pension           Other
                                 Translation      Liability      Comprehensive
                                 Adjustments     Adjustments          Loss
                                 -----------     -----------     -------------
Balance at January 1, 1998 ...    $ (33,089)        $(428)          $(33,517)
Other comprehensive loss .....      (11,838)          428            (11,410)
                                  ---------         -----           --------
Balance at December 31, 1998..      (44,927)        $   0            (44,927)
                                                    =====
Other comprehensive loss .....     (100,697)                        (100,697)
                                  ---------                        ---------
Balance at December 31, 1999..     (145,624)                        (145,624)
Other comprehensive loss .....      (17,985)                         (17,985)
                                  ---------                        ---------
Balance at December 31, 2000..    $(163,609)                       $(163,609)
                                  =========                        =========

                    NOTE 17 - REPORTABLE SEGMENT INFORMATION
- --------------------------------------------------------------------------------

The Company reports its segment information in five reportable segments - the
Paint Stores, Consumer, Automotive Finishes, International Coatings
(collectively, the "Operating Segments") and Administrative Segments - in
accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information." SFAS No. 131 requires an enterprise to report segment
information in the same way that management internally organizes its business
for assessing performance and making decisions regarding allocation of
resources. See the inside front cover and page 1 of this report for more
information about reportable segments.

The Company's chief operating decision maker has been identified as the Chief
Executive Officer because he has final authority over performance assessment and
resource allocation decisions. Because of the global, diverse operations of the
Company, the chief operating decision maker regularly receives discrete
financial information about each reportable segment as well as a significant
amount of additional financial information about certain aggregated divisions,
operating units and subsidiaries of the Company. The chief operating decision
maker uses all such financial information for performance assessment and
resource allocation decisions. Factors considered in determining the five
reportable segments of the Company include the nature of the business
activities, existence of managers responsible for the operating and
administrative activities and information presented to the Board of Directors.
The Company evaluates the performance of operating segments and allocates
resources based on profit or loss and cash generated from operations before
income taxes, excluding corporate expenses and financing gains and losses. The
accounting policies of the reportable segments are the same as those described
in Note 1.

The Paint Stores Segment consists of 2,488 company-operated specialty paint
stores in the United States, Canada, Virgin Islands, Puerto Rico and Mexico.
Each of the stores has the same business activity of selling identical national
and similar regional products to similar types of customers. During 2000, this
Segment opened or acquired 92 net new stores, remodeled 52 and relocated 36. The
net new stores consisted of 79 stores in the United States, 3 in Canada, 1 in
the Virgin Islands, 4 in Puerto Rico and 5 in Mexico. In 1999, there were 73 net
new stores opened (66 in the

                          The Sherwin - Williams Company 2000 Annual Report | 35

<PAGE>   29

United States). In 1998, 64 net new stores were opened (55 in the United
States). This Segment also manufactures original equipment manufacturer (OEM)
product finishes sold through the paint stores and by direct outside sales
representatives. In addition to stores, operations in Mexico include a
manufacturing facility, distribution activities and outside selling functions to
dealers and other distributors.

The Paint Stores Segment is the exclusive North American marketer and seller of
Sherwin-Williams(R) branded architectural coatings, industrial and marine
products, OEM product finishes and related items produced by its Mexican
operations, its product finishes manufacturing and by the Consumer Segment. The
loss of any single customer would not have a material adverse effect on the
business of this Segment. A map on the inside back cover of this report shows
the number of paint stores and their geographical locations.

The Consumer Segment develops, manufactures and distributes a variety of paint,
coatings and related products to third party customers and the Paint Stores
Segment. Approximately 41 percent of the total sales of the Consumer Segment in
2000, including inter-segment transfers, represented products sold through the
Paint Stores Segment. Sales and marketing of certain control-branded 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 Segment has 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 incurs most of the Company's
capital expenditures related to ongoing environmental compliance measures.

The Automotive Finishes Segment develops, manufactures and distributes a variety
of motor vehicle finish, refinish and touch-up products primarily throughout
North and South America, the Caribbean Islands, and Italy. This Segment also
licenses certain technology and trade names worldwide. Sherwin-Williams(R)
branded automotive finish and refinish products are distributed throughout North
America solely through this Segment's network of 127 company-operated automotive
branches in the United States and 17 in Canada. Additional automotive branches
in Jamaica (14) and Chile (17) complete this Segment's worldwide network. At
December 31, 2000, this Segment included 11 foreign wholly-owned subsidiaries in
8 foreign countries and 11 licensing agreements in 15 foreign countries. During
2000, the Automotive Finishes Segment opened or acquired three net new branches
worldwide. A map on the inside back cover of this report shows the number of
branches and their geographical locations.

The International Coatings Segment develops, licenses, manufactures and
distributes a variety of paint, coatings and related products worldwide. The
majority of the sales from licensees and subsidiaries occur in South America,
the Segment's most important international market. This Segment sells its
products through 29 company-operated specialty paint stores in Chile and 16 in
Brazil and by outside selling functions to dealers and other distributors. At
December 31, 2000, this Segment included 12 foreign wholly-owned subsidiaries in
8 foreign countries, 4 foreign joint ventures and 29 licensing agreements in 20
foreign countries.

The Administrative Segment includes the administrative expenses of the Company's
and certain consolidated subsidiaries' headquarters sites. This Segment includes
interest expense which is unrelated to retail real estate leasing activities,
investment income, certain foreign currency transaction losses related to
dollar-denominated debt, certain provisions for disposition and
environmental-related matters, and other expenses which are not directly
associated with any Operating Segment. Administrative expenses do not include
any significant foreign operations. Also included in the Administrative Segment
is a real estate management unit that is responsible for the ownership,
management, 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 the Administrative Segment represent external leasing
revenue of excess headquarters space or leasing of facilities no longer used by
the Company in its operations. Gains and losses from the sale of property are
not a significant operating factor in determining the performance of this
Segment.

Net external sales of all consolidated foreign subsidiaries were $540 million,
$497 million, and $521 million for 2000, 1999, and 1998, respectively. Operating
profits of all consolidated foreign subsidiaries were $32 million, $70 million,
and $47 million for 2000, 1999, and 1998, respectively. Domestic operations
account for the remaining net sales and operating profits. Long-lived assets
consist of net property, plant and equipment, goodwill, and intangibles.
Long-lived assets of consolidated foreign subsidiaries totaled $245 million,
$242 million, and $312 million at December 31, 2000, 1999, and 1998,
respectively. The consolidated total of long-lived assets for the Company was
$1,687 million, $2,026 million, and $2,134 million at December 31, 2000, 1999,
and 1998, respectively. No single geographic area outside the United States was
significant relative to consolidated net external 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, operating profit
is total revenue, including inter-segment transfers, less operating costs and
expenses. Identifiable assets are those directly identified with each reportable
segment. Administrative Segment assets consist primarily of cash, investments,
deferred pension assets, headquarters property, plant and equipment, and other
real estate. The operating margin for each Operating Segment is based upon total
external sales and inter-segment transfers. Domestic inter-segment transfers are
accounted for at the approximate fully absorbed manufactured cost plus
distribution costs. International inter-segment transfers are accounted for at
values comparable to normal unaffiliated customer sales.

36 | The Sherwin - Williams Company 2000 Annual Report


<PAGE>   30

                    Reportable Segment Financial Information
- --------------------------------------------------------------------------------
(Millions of Dollars)

<TABLE>
<CAPTION>
                                     2000        1999       1998       1997       1996
                                    ------      ------     ------     ------     ------
<S>                                <C>         <C>        <C>        <C>        <C>
NET EXTERNAL SALES
Paint Stores ....................   $3,185      $3,002     $2,822     $2,639     $2,414
Consumer ........................    1,219       1,224      1,282      1,409      1,162
Automotive Finishes .............      493         471        474        476        434
International Coatings ..........      307         299        348        350        114
Administrative ..................        8           8          8          7          9
                                    ------      ------     ------     ------     ------
Consolidated totals .............   $5,212      $5,004     $4,934     $4,881     $4,133

OPERATING PROFITS
Paint Stores ....................   $  411      $  377     $  347     $  315     $  277
Consumer ........................     (210)*       155        125        167        126
Automotive Finishes .............       61          67         65         64         52
International Coatings ..........       18          34         24         36         20
Administrative:
  Interest Expense ..............      (60)        (59)       (70)       (79)       (22)
  Corporate  expenses  and  other      (77)        (84)       (51)       (76)       (78)
                                    ------      ------     ------     ------     ------
Income before income taxes ......   $  143*     $  490     $  440     $  427     $  375

IDENTIFIABLE ASSETS
Paint Stores ....................   $1,018      $  930     $  881     $  832     $  757
Consumer ........................    1,360*      1,804      1,850      1,938      1,122
Automotive Finishes .............      349         279        275        274        274
International Coatings ..........      298         294        356        312        194
Administrative ..................      726         726        689        680        648
                                    ------      ------     ------     ------     ------
Consolidated totals .............   $3,751*     $4,033     $4,051     $4,036     $2,995

CAPITAL EXPENDITURES
Paint Stores ....................   $   48      $   49     $   57     $   56     $   49
Consumer ........................       40          40         37         57         44
Automotive Finishes .............       29          10          8         14         10
International Coatings ..........        6          11         15         13         12
Administrative ..................       10          24         29         24          8
                                    ------      ------     ------     ------     ------
Consolidated totals .............   $  133      $  134     $  146     $  164     $  123

DEPRECIATION
Paint Stores ....................   $   45      $   42     $   38     $   40     $   35
Consumer ........................       28          29         30         24         21
Automotive Finishes .............        9           8          8          7          7
International Coatings ..........        6           6          6          6          1
Administrative ..................       21          20         16         13         12
                                    ------      ------     ------     ------     ------
Consolidated totals .............   $  109      $  105     $   98     $   90     $   76

OPERATING SEGMENT MARGINS
Paint Stores ....................     12.9%       12.5%      12.3%      11.9%      11.5%
Consumer ........................    (10.1%)       7.6%       6.1%       8.0%       7.0%
Automotive Finishes .............     11.5%       13.3%      12.8%      12.5%      11.1%
International Coatings ..........      5.9%       11.4%       6.9%      10.2%      17.5%
                                    ------      ------     ------     ------     ------
Operating segment totals ........      4.6%*      10.8%       9.8%      10.4%       9.9%

INTERSEGMENT TRANSFERS
Paint Stores ....................   $   10      $    8     $    5
Consumer ........................      860         817        771     $  666     $  645
Automotive Finishes .............       36          31         34         37         33
International Coatings ..........                                          2
Administrative ..................       11          12         11          9          9
                                    ------      ------     ------     ------     ------
Segment totals ..................   $  917      $  868     $  821     $  714     $  687
</TABLE>

*  Includes charge and reduction in asset value of $352 in 2000 for impairment
   of long-lived assets. See note 2.

                          The Sherwin - Williams Company 2000 Annual Report | 37



<PAGE>   31

                         DIRECTORS, OFFICERS, MANAGERS
- --------------------------------------------------------------------------------

BOARD OF DIRECTORS

JAMES C. BOLAND, 61*
President and Chief Executive Officer
CAVS/Gund Arena Company

JOHN G. BREEN, 66
Retired, former Chairman, Chief Executive
Officer and President
The Sherwin-Williams Company

DUANE E. COLLINS, 64
Chairman and Chief Executive Officer
Parker-Hannifin Corporation

CHRISTOPHER M. CONNOR, 44
Chairman and Chief Executive Officer
The Sherwin-Williams Company

DANIEL E. EVANS, 64
Chairman
Bob Evans Farms, Inc.

ROBERT W. MAHONEY, 64
Retired, former Chairman, Chief Executive
Officer and President
Diebold, Incorporated

WILLIAM G. MITCHELL, 70*
Retired, former Vice Chairman
Centel Corporation

A. MALACHI MIXON, III, 60
Chairman and Chief Executive Officer
Invacare Corporation

CURTIS E. MOLL, 61*
Chairman and Chief Executive Officer
MTD Products, Inc.

HELEN O. PETRAUSKAS, 56*
Vice President-Environmental and
Safety Engineering
Ford Motor Company

JOSEPH M. SCAMINACE, 47
President and Chief Operating Officer
The Sherwin-Williams Company

RICHARD K. SMUCKER, 52*
President
The J. M. Smucker Company

CORPORATE OFFICERS

CHRISTOPHER M. CONNOR, 44**
Chairman and Chief Executive Officer

JOSEPH M. SCAMINACE, 47**
President and Chief Operating Officer

LARRY J. PITORAK, 54**
Senior Vice President - Finance,
Treasurer and Chief Financial Officer

JOHN L. AULT, 55**
Vice President - Corporate Controller

CYNTHIA D. BROGAN, 49
Vice President and
Assistant Treasurer

MARK J. DVOROZNAK, 42
Vice President -
Corporate Audit and Loss Prevention

THOMAS E. HOPKINS, 43**
Vice President -
Human Resources

CONWAY G. IVY, 59**
Vice President -
Corporate Planning and Development

JAMES J. SGAMBELLONE, 43
Vice President -
Taxes and Assistant Secretary

LOUIS E. STELLATO, 50**
Vice President, General
Counsel and Secretary

RICHARD M. WEAVER, 46
Vice President - Administration

OPERATING MANAGERS

THOMAS S. BRUMMETT, 55
President & General Manager
Eastern Division
Paint Stores Group

ROBERT J. DAVISSON, 40
President & General Manager
Southeastern Division
Paint Stores Group

MICHAEL A. GALASSO, 53**
President & General Manager
International Division

BLAIR P. LACOUR, 54
President & General Manager
Mid Western Division
Paint Stores Group

JOHN G. MORIKIS, 37**
President
Paint Stores Group

RONALD P. NANDOR, 41**
President & General Manager
Automotive Division

STEVEN J. OBERFELD, 48
President & General Manager
South Western Division
Paint Stores Group

THOMAS W. SEITZ, 52**
President & General Manager
Consumer Division

ROBERT A. TAYLOR, 47
President & General Manager
Chemical Coatings Business Unit
Paint Stores Group

*  Audit Committee Member

** Executive Officer as defined by the Securities Exchange Act of 1934

38 | The Sherwin - Williams Company 2000 Annual Report

<PAGE>   32

                            SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------

Annual Meeting

The annual meeting of shareholders will be held at 10:00 A.M., April 25, 2001 in
the Landmark Conference Center, Room 927, Midland Building, 101 Prospect Avenue,
N.W., Cleveland, Ohio.

Investor Relations

Conway G. Ivy
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115-1075
Internet: www.sherwin.com

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 the Investor
Relations Office.

Dividend Reinvestment Program

A dividend reinvestment program is available to shareholders of common stock.
For information, contact our transfer agent, The Bank of New York.

Headquarters

The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115-1075
(216) 566-2000

Independent Auditors

Ernst & Young LLP
Cleveland, Ohio

Stock Trading

Sherwin-Williams Common
Stock-Symbol, SHW-is traded on the New York Stock Exchange.

Transfer Agent& Registrar

The Bank of New York
Shareholder Relations Department-11E
P.O. Box 11258
Church Street Station
New York, NY 10286
1-800-432-0140
E-mail address:
Shareowner-svcs@Email.bony.com

COMMON STOCK TRADING STATISTICS
<TABLE>
<CAPTION>
                                    2000        1999        1998        1997        1996
                                    ----        ----        ----        ----        ----
<S>                              <C>         <C>         <C>         <C>         <C>
High .........................    $ 27.625    $ 32.875    $ 37.875    $33.375     $28.875
Low ..........................      17.125      18.750      19.438     24.125      19.500
Close December 31 ............      26.313      21.000      29.375     27.750      28.000
Shareholders of record .......      10,813      11,475      11,929     11,964      11,933
Shares traded (thousands).....     158,349     161,118     128,942     98,855      72,638
</TABLE>

QUARTERLY STOCK PRICES AND DIVIDENDS
<TABLE>
<CAPTION>
                       2000                                                   1999
- --------------------------------------------------       ---------------------------------------------
Quarter           High         Low        Dividend       Quarter         High        Low      Dividend
- -------           ----         ---        --------       -------         ----        ---      --------
<S>            <C>          <C>            <C>           <C>          <C>         <C>          <C>
  1st           $23.000      $17.125        $.135         1st          $30.688     $23.063      $.12
  2nd            27.625       21.172         .135         2nd           32.875      27.000       .12
  3rd            24.625       19.875         .135         3rd           30.000      19.438       .12
  4th            26.563       18.875         .135         4th           23.125      18.750       .12
</TABLE>





                           The Sherwin - Williams Company 2000 Annual Report |39

<PAGE>   33

[MAP]

Map shows the approximate geographical separation of each domestic division and
the number of paint stores and automotive branches in each state or province and
in the Virgin Islands, Puerto Rico, Mexico and South America. Map also shows the
United Kingdom and Italy.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>l85264bex21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>

<PAGE>   1

                                                                      EXHIBIT 21

<TABLE>
<CAPTION>
                                                              STATE OR JURISDICTION
                                                               OF INCORPORATION OR
                        SUBSIDIARIES                              ORGANIZATION
                        ------------                          ---------------------
<S>                                                           <C>
DOMESTIC SUBSIDIARIES
Contract Transportation Systems Co.                                 Delaware
DIMC, Inc.                                                          Delaware
Dupli-Color Products Company                                        Delaware
Sherwin-Williams Automotive Finishes Corp.                          Delaware
SWIMC, Inc.                                                         Delaware
The Sherwin-Williams Acceptance Corporation                          Nevada
Thompson Minwax International Corp.                                 Delaware

FOREIGN SUBSIDIARIES
Compania Sherwin-Williams, S.A. de C.V.                              Mexico
Distribuidores Pinturas del Mundo S.r.L.                             Peru
Eurofinish S.r.L.                                                    Italy
Kriesol, S.A.                                                        Uruguay
Marson Chilena, S.A.                                                  Chile
Productos Quimicos y Pinturas, S.A. de C.V.                          Mexico
Proquipsa, S.A. de C.V.                                              Mexico
Pulverlack Tintas Ltda.                                              Brazil
Quetzal Pinturas, S.A. de C.V.                                       Mexico
Ronseal (Ireland) Limited                                            Ireland
Ronseal Limited                                                  United Kingdom
ScottWarren S.p.A.                                                   Italy
Sherwin-Williams Argentina I.y C.S.A.                               Argentina
Sherwin-Williams do Brasil Industria e Comercio Ltda.                Brazil
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 Foreign Sales Corporation Limited          U.S. Virgin Islands
Sherwin-Williams Japan Co., Ltd.                                      Japan
Sherwin-Williams (West Indies) Limited                               Jamaica
SW Paints Ltda.                                                      Brazil
The Sherwin-Williams Company Resources Limited                       Jamaica
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>l85264bex23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>

<PAGE>   1

                                                                      EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in this Annual Report (Form
10-K) of The Sherwin-Williams Company of our report dated January 26, 2001,
included in the 2000 Annual Report to Shareholders of The Sherwin-Williams
Company.

     We also consent to the incorporation by reference in the following
Registration Statements and related Prospectuses of our report dated January 26,
2001, with respect to the consolidated financial statements and schedule
included in this Annual Report (Form 10-K) of The Sherwin-Williams Company:


<TABLE>
<CAPTION>
REGISTRATION
   NUMBER                               DESCRIPTION
- ------------                            -----------
<S>             <C>
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
333-61735       The Sherwin-Williams Company Form S-3 Registration Statement
333-41659       The Sherwin-Williams Company Form S-3 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 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
33-62229        The Sherwin-Williams Company Employee Stock Purchase and
                  Savings Plan Form S-8 Registration Statement
2-80510         Post-Effective Amendment Number 5 to Form S-8 Registration
                  Statement relating to The Sherwin-Williams Company
                  Employee Stock Purchase and Savings Plan
33-52227        The Sherwin-Williams Company 1994 Stock Plan Form S-8
                  Registration Statement
33-28585        The Sherwin-Williams Company 1984 Stock Plan Form S-8
                  Registration Statement
33-22705        The Sherwin-Williams Company Form S-3 Registration Statement
</TABLE>

Cleveland, Ohio
March 9, 2001

                                                   ERNST & YOUNG LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.A
<SEQUENCE>7
<FILENAME>l85264bex24-a.txt
<DESCRIPTION>EXHIBIT 24(A)
<TEXT>

<PAGE>   1
                                                                   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 under the provisions of the Securities Exchange Act of
1934, as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints J.M. Scaminace, L.J. Pitorak and L.E.
Stellato, or any of them, with full power of substitution and resubstitution, as
attorneys or attorney to sign for me and in my name, in the capacities indicated
below, 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 Securities and Exchange Commission or any national securities
exchange pertaining thereto, with full power and authority to do and perform any
and all acts and things whatsoever required and necessary to be done in the
premises, hereby ratifying and approving the acts of said attorneys and any of
them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 2, 2001                      /S/  C. M. CONNOR
       -------------------------           --------------------------
                                           C.M. Connor
                                           Chairman and Chief Executive Officer,
                                           Director


<PAGE>   2


                                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 under the provisions of the Securities Exchange Act of
1934, as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, L.J. Pitorak and L.E.
Stellato, or any of them, with full power of substitution and resubstitution, as
attorneys or attorney to sign for me and in my name, in the capacities indicated
below, 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 Securities and Exchange Commission or any national securities
exchange pertaining thereto, with full power and authority to do and perform any
and all acts and things whatsoever required and necessary to be done in the
premises, hereby ratifying and approving the acts of said attorneys and any of
them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 2, 2001                    /S/  J. M. SCAMINACE
       --------------------------        -----------------------------
                                         J.M. Scaminace
                                         President and Chief Operating Officer,
                                         Director



<PAGE>   3


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace and L.E.
Stellato, or any of them, with full power of substitution and resubstitution, as
attorneys or attorney to sign for me and in my name, in the capacities indicated
below, 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 Securities and Exchange Commission or any national securities
exchange pertaining thereto, with full power and authority to do and perform any
and all acts and things whatsoever required and necessary to be done in the
premises, hereby ratifying and approving the acts of said attorneys and any of
them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 2, 2001                  /S/  L. J. PITORAK
       --------------------------     ---------------------------
                                      L. J. Pitorak
                                      Senior Vice President - Finance, Treasurer
                                      and Chief Financial Officer


<PAGE>   4


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 2, 2001                   /S/  J. L. AULT
       --------------------------        ------------------------
                                         J. L. Ault
                                         Vice President - Corporate Controller


<PAGE>   5


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 6, 2001                     /S/  J. C. BOLAND
       ---------------------------        --------------------------
                                          J. C. Boland
                                          Director




<PAGE>   6


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 7, 2001                       /S/  J. G. BREEN
       -----------------------------        -------------------------
                                            J. G. Breen
                                            Director


<PAGE>   7


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000 hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 3, 2001                       /S/  D. E. COLLINS
       -----------------------------        ---------------------------
                                            D. E. Collins
                                            Director


<PAGE>   8


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 6, 2001                      /S/  D. E. EVANS
       ---------------------------        -------------------------
                                          D. E. Evans
                                          Director



<PAGE>   9


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 5, 2001                      /S/  R. W. MAHONEY
       ---------------------------        ---------------------------
                                          R. W. Mahoney
                                          Director


<PAGE>   10


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 7, 2001                    /S/  W. G. MITCHELL
       ---------------------------        ----------------------------
                                          W. G. Mitchell
                                          Director



<PAGE>   11


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 5, 2001                     /S/  A. M. MIXON, III
       ---------------------------        ------------------------------
                                          A. M. Mixon, III
                                          Director


<PAGE>   12


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 2, 2001                        /S/  C. E. MOLL
       -----------------------------        ------------------------
                                            C. E. Moll
                                            Director



<PAGE>   13


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 7, 2001                     /S/  H. O. PETRAUSKAS
       ---------------------------        ------------------------------
                                          H. O. Petrauskas
                                          Director



<PAGE>   14


                                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 under the provisions of the Securities Exchange Act of 1934,
as amended, and any rules and regulations of the Securities and Exchange
Commission, an Annual Report on Form 10-K for the fiscal year ended December 31,
2000, hereby constitutes and appoints C.M. Connor, J.M. Scaminace, L.J. Pitorak
and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, in the
capacities indicated below, 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 Securities and Exchange Commission or any
national securities exchange pertaining thereto, with full power and authority
to do and perform any and all acts and things whatsoever required and necessary
to be done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.

         Executed the date set opposite my name.

Date:    FEBRUARY 6, 2001                     /S/  R. K. SMUCKER
       ---------------------------        ---------------------------
                                          R. K. Smucker
                                          Director


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.B
<SEQUENCE>8
<FILENAME>l85264bex24-b.txt
<DESCRIPTION>EXHIBIT 24(B)
<TEXT>

<PAGE>   1
                                                                   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 7, 2001, 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 13th
day of March, 2001.

                                             /S/ L. E. STELLATO
                                             ---------------------------------
                                             L.E. Stellato, Secretary



<PAGE>   2


RESOLVED, that the appropriate officers of the Company are each hereby
authorized to execute and deliver a power of attorney appointing C.M. Connor,
J.M. Scaminace, L.J. Pitorak 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, 2000 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.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
