National Council of Self Insurers

The Sherwin-Williams Company Workers’ Compensation Program

May 24, 2010

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Key Facts History Agenda Today’s

Founded in 1866

Headquarters

Cleveland, OH

E l Employees

29 220 29,220

Revenue 12/31/09

$7,094,249

Divisions •

Stores - Company owned retail & commercial locations

•

Paint & Coatings – Manufacturing & Distribution

•

Global Finishes – Automotive Finishes, Chemical Coatings

Domestic Store Count

3,354

Domestic Manufacturing & Distribution sites 32

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Recognized Brand Names Stores Today’s T d ’ Agenda A d - $4.21 billion Duration

ProMar

Super Paint

Cashmere

Duron

Harmony

MAB

Woodscapes

Columbia

Paint and Coatings - $1.23 $1 23 billion Dutch Boy

Cuprinol

Krylon

Pratt & Lambert

Minwax

Purdy

Thompson’s Water Seal

White Lightning

Global Finishes - $1.65 billion Sherwin-Williams Automotive Finishes Products Chemical Coatings Industrial Products

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Organization Organization Senior VP – Human Resources Global Director Safety & WC Manager – Workers’ Compensation Financial/Systems Analyst

Administrator Retail Operations

Administrator Manufacturing & Distribution

Specialist

WC Organizational History Risk Management Employee Benefits Safety

Finance Human Resources Human Resources

4 years 15 years 6 years 4

Core Responsibilities

The Corporate Safety & Workers' Workers Compensation Department provides leadership at SherwinWilliams in the field of safety excellence and workers' compensation. compensation The department benchmarks organizations and industry best practices and integrates national standards into it EHS managementt systems. its t It monitors it compliance to these policies and standards through safety & health site assessments, and th through h th the establishment t bli h t off standard t d d policies li i and practices.

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Core Responsibilities

The department p also coordinates incident record keeping, manages US workers' compensation, and coordinates completion of Chemical Facility Anti-Terrorism Standards assessments. Safety and Health professionals are available to advise and assist sites on almost all areas off safety f t and d health, h lth including i l di management systems and safety controls, fire prevention and protection, life safety, process safety, f t safety f t engineering, i i emergency planning, and incident management.

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Stores and Branches

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Stores Safety & Environmental Web Site

• WorkSafe Manual  Environmental  Transportation & Permits  State Specific Requirements  Safety Forms - Click Here to go to the Forms Repository  Safety y Information for Contractors  Safety Equipment  OSHA Logs  Quarterly Training  Wellness

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Stores – Monthly Safety Training PAINT STORES GROUP SOURCE Shorts Thi page contains This t i safety f t training t i i materials t i l tto b be used d ffor monthly thl ttraining i i ttopics. i This training can be used to complement the Monthly Safety Meeting. The Monthly Safety Meeting Sheet can be found in the Forms Repository. Each month a safety topic and information sheets will be posted. April 2010 Housekeeping Hall of Shame #35 Industrial Accident Example #47 March Safety Contest Winners Reap the Rewards of Exercise Tire Safety

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Industrial Accident #47 Warning and danger signs are posted to help prevent bodily injury or harm to the environment. A construction site is usually identified by signs that state: “Danger”, “Warning”, “Construction Site”, “Hard Hat Area”, “No Entry”, “Check in at Gate” or other notices. A danger sign means immediate danger stay away and a caution sign means ea s possible poss b e hazard a a d stay a away. ay These ese ssigns g s warn a aga against st pote potential t a hazards a a ds or to caution against unsafe practices. A construction site may also be barricaded by fences, caution tape, do not enter tape, cones, gates, scaffolding, plywood or other means of warning. This also pertains to outdoor work such as but not limited to bridges, road construction, dams, tanks or other areas designated as construction sites. This policy also pertains to deliveries at a location or facility that are not designated as a construction site where hazards may exist such as but not limited to: trip hazard, fall hazard, exposure to flying debris, objects falling from elevated heights, forklift traffic, cranes, hoists, truck traffic, chemical exposure, engulfment, exposure to asbestos or other airborne contaminants contaminants. Do not enter into an area where construction, building demolition, remodeling, or other renovation is taking place without first checking in and being briefed by the site safety officer. You must remain with an escort for the entire delivery. Do not enter a site that you believe to be unsafe.

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Quarterly Training

The quarterly safety training system has been in place for 10 years. Please complete the safety self–inspection self inspection each quarter and keep a copy in your records. Failure to complete safety inspection is an audit infraction. Please check out the SOURCE shorts monthly training.

Safe Deliveries and Transportation Security (START Module 162). Driver Safety – Construction Sites Delivery Driver Equipment Hidden Dangerous Goods Dollies & Hand Trucks Load Securement

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START Program 1.

The Sherwin-Williams Company “Store Training and Reference Tool” (S.T.A.R.T.) program.

2.

Employees complete all training for their job and become certified for their current position.

3.

Based on an employee’s operational and business exposure

4.

An on-the-job learning, self-instruction and self-paced courses, classroom or supervisor instructional assistance, i t e demonstration de t ti andd skill kill assessment e e t process e andd a competency ete te t test.

5.

Each employee is certified as meeting the regulatory training requirements for their position.

6.

p y must complete p a complete p the review of trainingg material,, complete p a test of understanding, g, Employees complete hands-on practices, and then satisfactorily pass a knowledge test.

7.

Employees then must successfully complete a final test using the S.T.A.R.T. Testing Telephone Line.

8.

Tests employees on random questions selected from the training material.

9.

Training records are maintained on the S.T.A.R.T. system and are available upon request.

10 Employees that do not complete the appropriate safety training are not eligible for promotion or 10. to post for jobs. A list of employees is distributed to District Management twice a week. 13

Source – WorkSafe Manual Administrator’s Guide The Paint Stores Group’s p written Environmental,, Health & Safetyy Program, g , entitled “The WorkSafe Administrator’s Guide” (WorkSafe), provides the policy, procedures, and company standards required to assist Store Management in meeting known existing federal, state and local law. In the event that more stringent regulations become applicable to individual locations, locations Store management must inform the Safety & Environmental Compliance Department (S&EC) and immediately implement such standards. WorkSafe presents policy and standards that the Store Manager must be familiar with and implement in his/her store. The majority of the standards and procedures are required by law; however, there are some required Company standard operating procedures that are based on accident and injury experience. experience These are minimum standards. Where state or local regulations are more restrictive than those stated in the manual, the State or local regulations will prevail.

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Paint & Coatings Division Locations

*VPP Site

Eastern Region Manufacturing Baltimore, MD Beltsville MD Beltsville, Manchester, GA Memphis, TN

Manufacturing Morrow, GA Orlando FL Orlando, Portsmoth, VA

Distribution * Atlanta, GA Fredricksburg PA Fredricksburg, Winter Haven, FL

Western Region Manufacturing Andover, KS Chicago, IL Cincinnati, OH C ff Coffeyville, KS S ((merit))

Manufacturing Fernley, NV Flora, IL Garland, TX Victorville, CA C

Distribution * Effingham, IL Sierra, NV Waco, TX *Includes Trucking operations

Specialty Region Specialty p y Bedford Hts., OH Ennis, TX Fort Erie, ON Greensboro, NC

Specialty p y Holland, MI Lawrencville, GA Terre Haute, IN

Applicators pp Crisfield, MD Portland, OR Accurate Dispersions South Holland, Holland IL Homewood, IL 15

OSHA – VPP Criteria Occupational Safety and Health Administration VPP •Recognizes worksites that have achieved and are maintaining excellence in worker safety •The VPP is composed of three different programs: 1. STAR - distinguished with the highest level of safety and health excellence; 2. MERIT - good 2 d safety f and dh health l h programs, b but must take k additional ddi i l steps to reach Star quality; and 3. STAR DEMONSTRATION - have Star quality safety and health programs, demonstration and/or testing of experimental approaches that differ from current Star requirements.

• A site that applies for participation in the VPP must submit a written application that addresses the major elements of the program: management leadership and employee involvement; worksite analysis; hazard prevention and control; and safety and health training. An onsite review by OSHA officials to evaluate the workplace safety and health program and to interview employees at the facility is the final stage of the application process. 16

SMART Safety Means Awareness Responsibility and Teamwork

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SMART – 10 ELEMENTS SMART is one of the most important Sherwin-Williams safety tools, which is designed to drive continuous improvement and employee involvement. SMART consists of 10 elements, which requires participations of all levels of workforce. The two themes common to all 10 elements are employee involvement and communication.

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Changing Times in Safety Past / Traditional Program

Objective

Compliance Driven

Value Driven

Management Driven

Employee Driven

Reactive

Proactive

Conditions ((Hardware))

Behaviors ((Software))

Safety-Stand Alone

Integrated/Synergy

Flat Incidence Rates

Improving Rates

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Conditions

Behaviors

•Equipment Guarding

•

•Power Industrial Trucks

•SMART Safety Observations

•Tanks / Piping / Valves

•Risk Assessments

pp •Fire Suppression Systems

•Safety “Culture”

•Electrical Distribution S t System •Robotics

Process

•Management of Change •“Brother’s/Sister’s Keeper” •Total Employee Engagement •Training > At-Risk Behaviors

•Tractors T t / Trailers T il

•Housekeeping Excellence (HKE)

•Dock Locks / Levelers

•Audits / Inspections / Assessments

•Racking

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Claim Intake

SWIM entry

•Manufacturing & distribution facilities access SWIM through Company intranet •Stores Locations call 800 number into W k ’C Workers’ Comp D Dept. t for adding injuries into SWIM

Electronic transfer to CS Stars

•Daily flat file feeds to CS Stars. •Create generic electronic system file •Produce P d paper FROI for records confirm individual claim established

CS Stars electronic transfer to TPAs

•Daily transmissions to TPA

TPA forwards FROIs to states

• TPAs receive and set up claims in their claim systems for processing •As necessary, electronic FROI transmitted to states

TPAs return financial data monthly

•Monthly TPA data transmitted to CS Stars for capturing financial transactions, payments, reserve changes g

•Restricted user access, tied to HR System – employee look-up

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SWIM Welcome to Sherwin-Williams Incident Management •

SWIM is a safety incident management system. Used to record and report near misses, injuries, illnesses, fires, spills, driver accidents, corrective actions, and collects monthly work-hours.

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Benchmarking S-W Injury & Illness Recordable Case Rates 2009 vs 2008

8.00

2008 2009

North American Industrial Classification System

7.90

7.00

6.80 6.00

5.00

4.90

4 00 R t 4.00 Rate

3.80

3.82

3.73

3.00

3.20 3.10 2.75 2.65

2 00 2.00

1.77 1.41 1.00

0 00 0.00

S-W TOTAL

NAICS - 49311

PAINT & COATINGS

NAICS - MFG

STORES GROUP

NAICS - STORES

’09 SW data compared to ’08 NAICS rates & ’08 SW data compared to ’07 NAICS rates, since 2009 rates not yet available

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Benchmarking W o r k e r s C o m p e n s a t io n - # C la im s p e r 1 0 0 Em p lo y e e

# C la im s p e r 1 0 0 E m p V a lu e d a t 1 2 / 3 1 / 2 0 0 9 4 .0 0

3 .9 3

3 .5 0

3 .4 5

3 .4 4 3 .0 4

3 .0 0

2 .5 7

2 .5 0

2 .0 0

1.5 0

1.0 0

0 .5 0

2005

2006

2007

2008

2009

Safety Performance RCR

2009 DART

2009 Change

3 Year RCR Change

3 Year DART

Global Finishes

1.94

1.33

-12.1%

-10.0%

Paint & Coatings

1.41

0.73

-20.1%

-28.6%

Stores Group

3.73

2.70

-6.8%

0.6%

RCR = OSHA Recordable Case rate DART = Away From Work Cases + Restricted Duty Cases

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Workers’ Compensation History Self-Insured States (TPA) California Self-Administered states

1984 Florida Ohio

1984 Revenue - $2.0B

Maryland Kentucky Employees – 19,437

Virginia Stores – 1,535

Transition

1986 – 1996 Self-administered SI med only claims in approximately 20 states. At one point self-administered 50% claims

Transition

1996 Relinquished self-administering SI med only claims & Kentucky claims, retain Ohio self-administration 1996 Revenue R - $4.1B $4 1B

Transition

Employees E l – 20,768 20 768

S Stores – 2,156 2 156

2003 Relinquished q self-administering f g Ohio Claims 2003 Revenue - $5.4B 2004 Revenue - $6.1B

Employees – 25,777 Employees – 28,690

Stores – 2,943 Stores – 3,254

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Current Self-Insured Program Alabama Arkansas California Florida Georgia Illinois Indiana Kansas Kentucky

Louisiana Maryland Massachusetts Michigan Minnesota Missouri Nevada New Jersey New York

North Carolina Ohio Oklahoma Pennsylvania South Carolina Tennessee Texas Virginia

S lf I Self-Insured d program payrollll – 86%

26 states t t

Insured program by payroll – 14%

21 states

(State Funds - ND, WA, WY) TPAs Gallagher Bassett Services – 1990 (all states except IL, NV, OH, TX) Sedgwick Claims Management Services – 2003 (IL, NV, OH, TX)

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Workers’ Compensation Staff Financial/Systems Analyst

SW service: 4 years

•Manage & maintain SWIM incident management system •Provide Provide departmental financial & accounting support •Manage & process administrative expenses •Complete annual, quarterly or monthly SI filings •Complete monthly safety statistical report & distribute to management and key personnel

Administrator - Stores

SW service: 7 years

•Manage lost time claims and coordinate action plan with TPA •Coordinate & communicate with Store Managers & Field HR Representatives •Facilitate Facilitate RTW opportunities

Specialist

SW service: 8 years, WC Dept. service: 2 years

•Complete phone intake for retail/commercial & field operations •Add claim content to SWIM •Assess incident, communicate concerns to TPA •Evaluate the need & assign telephonic medical management •Manage medical only claims up to 90 days

Administrator - Manufacturing & Distribution

SW service: 4 years

•Manage lost time claims and coordinate action plan with TPA •Coordinate & communicate with Human Resources and Safety Managers •Facilitate RTW opportunities

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Discussion Topics

•Interaction with other Sherwin-Williams Departments Legal Occupational Health

Employee Benefits Medical Director

•Centralized Internal Claim Management •How we manage our TPAs p TPAs •Use of multiple •RTW / Modified Duty Issues Medical Management •Medical •SI Security Issues (Bonds, LOCs, Guaranty Funds)

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Thank You Thank You

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