Exhibit 10.7

 

TSR SHARE AWARD AGREEMENT

 

[DATE OF GRANT]

This TSR SHARE AWARD AGREEMENT (this “Agreement”) is entered into as of the date
first written above by and between PPG Industries, Inc. (the “Company”) and
Fullname (the “Participant”).

The Company maintains the PPG Industries, Inc. Omnibus Incentive Plan (as
amended from time to time, the “Plan”), which is incorporated into and forms a
part of this Agreement, and the Participant has been selected by the
Officers-Directors Compensation Committee (the “Committee”) to receive an Award
under the Plan. The Award is intended to qualify as “qualified performance-based
compensation” as described in Section 162(m)(4)(C) of the Code. Capitalized
terms used in this Agreement shall, unless defined elsewhere in this Agreement,
have the respective meanings given to such terms in the Plan.

The Award of TSR Shares shall be confirmed by a separate Grant Notice to which
this Agreement is attached (the “Grant Notice”), specifying the Date of Grant of
the Award, the number of TSR Shares granted and the Award Goals (as defined in
the Grant Notice) applicable to such TSR Shares. Each TSR Share is a bookkeeping
entry representing the equivalent in value of a share of Common Stock. Such
Award shall be subject to the terms and conditions of this Agreement and such
Grant Notice shall be deemed incorporated by reference into this Agreement.

NOW, THEREFORE, the Company and the Participant, intending to be legally bound,
agree as follows:

 

1. Terms and Conditions of the Award.

 

  A. This Agreement sets forth the terms and conditions applicable to the Award
of TSR Shares confirmed in the Grant Notice. The Award of TSR Shares is made
under Article VIII of the Plan. Unless and until the TSR Shares are vested and
certified in the manner set forth in paragraph 1.G. and 2.A. hereof, the
Participant shall have no right to settlement of any such TSR Shares.

 

  B. The Committee may terminate the Award at any time during the Award Period
if, in its sole discretion, the Committee determines that the Participant is no
longer in a position to have a substantial opportunity to influence the
long-term growth of the Company.

 

  C. The Participant shall be entitled to a Dividend Equivalent with respect to
the number of TSR Shares that are actually earned or to which the Participant is
determined to be entitled to in accordance with this paragraph 1, in an
aggregate amount equal to the product of the number of TSR Shares that are
earned and/or become payable, multiplied by each dividend paid on the Common
Stock during the period commencing on the first day of the Award Period and
ending on the date the TSR Shares are paid to the Participant. Unless prohibited
under applicable law or otherwise determined by the Committee in its discretion,
the value of such Dividend Equivalents shall be automatically deferred, on
behalf of the Participant, into the Participant’s account under the Deferred
Compensation Plan in accordance with the Participant’s investment elections
under such plan. To the extent the Dividend Equivalents have not been deferred,
the Dividend Equivalents shall be paid to the Participant at the same time and
in the same form the underlying TSR Shares are paid as contemplated in paragraph
2.A. hereof. For purposes of the time and form of payment requirements of
Section 409A of the Code, such Dividend Equivalents shall be treated separately
from the TSR Shares.

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  D. Prior to settlement of any vested TSR Shares, such TSR Shares will
represent an unsecured obligation of the Company, payable (if at all) only from
the general assets of the Company. The Company’s obligations under this
Agreement shall be unfunded and unsecured, and no special or separate fund shall
be established and no other segregation of assets shall be made and the
Participant shall have no greater rights than an unsecured general creditor of
the Company. Except as otherwise specifically provided in the Grant Notice or
this Agreement, the Participant shall have no rights as a stockholder of the
Company by virtue of this Award unless and until such Award is determined to be
vested and resulting shares of Common Stock are issued to the Participant.

 

  E. If the Participant’s employment with the Company terminates during the
Award Period but after the first anniversary of the Date of Grant because of
retirement, disability or job elimination (each, as determined in the
Committee’s sole discretion), the Participant shall be entitled to a prorated
Award which shall be determined at the end of the Award Period by multiplying
the lesser of (i) the target number of TSR Shares subject to the Award and
(ii) the number of TSR Shares to which the Participant would otherwise have been
entitled had the Participant continued in employment through the duration of the
Award Period (based on actual performance as measured against the Award Goals in
accordance with Section 162(m) of the Code) by a fraction, the numerator of
which is the number of whole months the Participant was employed during the
Award Period and the denominator of which is the total number of calendar months
in the Award Period, and such Award shall be paid as soon as practicable
following the Certification Date (as defined below), subject to paragraph 2.C.
hereof; provided, however, that the Committee, in its sole discretion, may
determine pursuant to the provisions of the Plan to reduce or eliminate any
payout made or to be made to such Participant in respect of his or her Award. In
the event of the Participant’s death during the Award Period but after the first
anniversary of the Date of Grant, the Committee, in its sole discretion, shall
determine the number of TSR Shares to which the Participant should be entitled,
if any, not to exceed the maximum number of TSR Shares that are eligible to vest
under the Award. Such Award shall be paid to the Participant’s Beneficiary as
promptly as practicable following the Certification Date, subject to paragraph
2.C. hereof.

 

  F. If the Participant’s employment with the Company terminates during the
Award Period for any reason other than retirement, disability, job elimination
or death, or for any reason before the first anniversary of the Date of Grant,
the Participant’s Award shall be forfeited on the date of such termination;
provided, however, that the Committee, in its sole discretion, may determine
that the Participant will be entitled to a full or partial payout with respect
to the Award, but in no event shall the amount of such payout exceed the amount
that would be payable based on actual performance as measured against the Award
Goals in accordance with Section 162(m) of the Code, in the case of a
termination of the Participant’s employment due to retirement or job
elimination. Any payout of the Award pursuant to this paragraph 1.F. shall be
paid as soon as practicable following the Certification Date, subject to
paragraph 2.C. hereof.

 

  G.

The Committee shall determine and certify in accordance with the requirements of
Section 162(m) of the Code the extent, if any, to which the applicable Award
Goals have been attained and the extent, if any, to which the Award has been
earned by the Participant, as of the end of the Award Period or such other date
as the Committee may

 

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select in its sole discretion (the “Certification Date”). The Committee shall
have the negative discretion to reduce or eliminate any payout for the Award.
The Committee may not increase the amount payable as a result of the performance
as measured against the Award Goals.

 

  H. In the event that, during the Change in Control Period (as hereinafter
defined), the Participant is subject to an Involuntary Termination (as
hereinafter defined), then a number of TSR Shares determined by the Committee,
in its sole discretion, but in no event fewer than the number of TSR Shares
payable at the “target” level, shall become fully vested, and the payout of the
Award shall be made as soon as practicable following the date of the Involuntary
Termination, subject to paragraph 2.C. hereof (for avoidance of doubt, the TSR
Shares that vest pursuant to this paragraph 1.H. shall not be subject to the
performance and certification procedures contemplated by paragraph 1.G. hereof).
The Company and the Participant shall take all steps necessary (including with
regard to post-termination services by the Participant) to ensure that an
Involuntary Termination constitutes a “separation from service” within the
meaning of Section 409A of the Code, and notwithstanding anything contained
herein to the contrary, the date on which a separation from service takes place
for reasons resulting in an Involuntary Termination shall be the date of the
Involuntary Termination.

If the Participant is a party to a Change in Control Employment Agreement with
the Company (a “Change in Control Agreement”), “Change in Control Period” for
purposes of this Agreement shall have the meaning ascribed to the term
“Employment Period,” as defined in the Change in Control Agreement, and if the
Participant is not a party to a Change in Control Agreement, the term shall mean
the period commencing on the date of a Change in Control (as defined in the
Plan) and ending on the earlier of the Participant’s date of Retirement and the
last day of the Award Period. “Retirement” for purposes of this paragraph 1.H.
shall mean termination of employment on or after (i) the Participant’s “normal
retirement date,” as defined in the PPG Industries, Inc. Retirement Income Plan,
provided such termination is voluntary, or (ii) if the Company may subject the
Participant to compulsory retirement under the Age Discrimination in Employment
Act (29 U.S.C. Section 621 et. seq.) (ADEA) as a “bona fide executive or a high
policy maker,” the Participant’s “normal retirement date.”

“Involuntary Termination” for purposes of this Agreement shall mean, if the
Participant is a party to a Change in Control Agreement, a termination of the
Participant’s employment that gives rise to payments and benefits under
Section 6 of the Change in Control Agreement, and if the Participant is not a
party to a Change in Control Agreement, shall mean a termination by the Company
for any reason other than Cause, death or Disability (as the terms are
hereinafter defined). “Cause” for purposes of a Participant who is not a party
to a Change in Control Agreement shall mean (i) the failure of the Participant
to perform substantially the Participant’s duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), or (ii) the engaging by the Participant in illegal
conduct or gross misconduct. “Disability” for purposes of this Agreement shall
mean disability which, after the expiration of more than 52 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers.

 

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2. Payout on Account of Awards.

 

  A. Upon certification by the Committee of the level of attainment of the Award
Goals in accordance with paragraph 1.G. hereof and satisfaction of all other
applicable conditions as to the issuance of the TSR Shares, and otherwise
subject to this Agreement and the terms of the Plan, the Participant shall be
entitled to the number of shares of Common Stock constituting the Award as
determined by the Committee. The Participant shall be entitled to receive payout
of the vested Award in the form of cash, shares of Common Stock or a combination
of cash and shares, less any Tax-Related Items as defined in paragraph 7, as
determined by the Committee in its sole discretion. The amount of any cash to be
paid in lieu of Common Stock shall be determined on the basis of the Fair Market
Value of the Common Stock as of the Payout Date (as hereinafter defined).

 

  B. Any shares of Common Stock issued to the Participant with respect to his or
her Award shall be subject to such restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, the New York Stock Exchange and any applicable state or
foreign securities laws, and the Committee may cause a legend or legends to be
endorsed on any stock certificates for such shares making appropriate references
to such legal restrictions.

 

  C. Except as otherwise provided in this Agreement, and except in the event the
Participant is permitted and has made an election to defer payout of the TSR
Shares pursuant to the terms and conditions established by the Company, the
issuance of the shares of Common Stock in accordance with the provisions of
paragraph 1 and this paragraph 2 will be delivered within 90 days following the
earliest to occur of the last day of the Award Period or, to the extent
applicable under the provisions of paragraph 1.H. hereof, the date of an
Involuntary Termination following a Change in Control (the earliest of these
dates, the “Payout Date”). Payout of TSR Shares that have been deferred shall be
governed by the terms and conditions of the deferral election form.

 

3. Continuing Conditions. Notwithstanding any other provisions herein, the
Participant, by execution of this Agreement, agrees and acknowledges that in
return for the Award granted by the Company in this Agreement, the following
continuing conditions shall apply:

 

  A. If at any time prior to the expiration of the Award Period or within one
(1) year after the Award Period the Participant engages in any activity in
competition with any activity of the Company or any of its Subsidiaries, or
contrary or harmful to the interests of the Company or any of its Subsidiaries,
including, but not limited to: (1) conduct related to the Participant’s
employment for which either criminal or civil penalties against the Participant
may be sought; (2) violation of Company (or Subsidiary) Business Conduct
Policies; (3) accepting employment with or serving as a consultant, advisor or
in any other capacity to an employer that is in competition with or acting
against the interests of the Company or any of its Subsidiaries, including
employing or recruiting any present, former or future employee of the Company or
any of its Subsidiaries; (4) disclosing or misusing any confidential information
or material concerning the Company or any of its Subsidiaries; or
(5) participating in a hostile takeover attempt, then this Award shall terminate
effective as of the date on which the Participant enters into such activity,
unless terminated sooner by operation of another term or condition of this
Agreement, and any “Award Gain” realized by the Participant shall be paid by the
Participant to the Company. “Award Gain” shall mean the cash and the Fair Market
Value of the Common Stock delivered to the Participant pursuant to paragraph 2
on the date of such delivery times the number of shares so delivered. Any shares
of Common Stock deferred by the Participant shall be considered to have been
delivered for the purpose of this paragraph 3.

 

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  B. By accepting this Agreement, the Participant consents to a deduction from
any amounts the Company or any of its Subsidiaries owes the Participant from
time to time (including amounts owed the Participant as wages or other
compensation, fringe benefits or vacation pay, as well as any other amounts owed
to the Participant by the Company or any of its Subsidiaries), to the extent of
the amounts payable to the Company by the Participant under paragraph 3.A.
above. Whether or not the Company elects to make any set-off in whole or in
part, if the Company does not recover by means of set-off the full amount
payable by the Participant, calculated as set forth above, the Participant
agrees to pay immediately the unpaid balance to the Company.

 

  C. The Participant may be released from the Participant’s obligations under
paragraphs 3.A and 3.B above only if the Committee determines, in its sole
discretion, that such action is in the best interest of the Company.

 

4. Award Subject to Plan Provisions. Unless otherwise expressly provided in the
Grant Notice or this Agreement, the TSR Share Award shall be subject to the
provisions of the Plan, including, without limitation, Article XI. In the event
of any conflict between this Agreement and either the Grant Notice or the Plan,
the Grant Notice or Plan, as applicable, shall control over this Agreement.

 

5. Applicable Law; Entire Agreement; Venue. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania
without reference to any choice of law principles. The Grant Notice, this
Agreement and the Plan contain all terms and conditions with respect to the
subject matter hereof.

For purposes of litigating any dispute that arises under the Award or this
Agreement, the parties hereby submit to and consent to the jurisdiction of the
Commonwealth of Pennsylvania, and agree that such litigation shall be conducted
in the courts of Allegheny County, Pennsylvania, or other federal courts for the
United States for the Western District of Pennsylvania, and no other courts,
where this Award of TSR Shares is made and/or to be performed. The parties agree
that, if suit is filed in Allegheny County courts, application will be made by
one or both parties, without objection, to have the case heard in the Center for
Commercial and Complex Litigation of the Court of Common Pleas of Allegheny
County.

 

6. Further Assurances. The Participant agrees, upon demand of the Company or the
Committee, to do all acts and execute, deliver and perform all additional
documents, instruments and agreements (including, without limitation, stock
powers with respect to shares of Common Stock issued or otherwise distributed in
relation to this Award) which may be reasonably required by the Company or the
Committee, as the case may be, to implement the provisions and purposes of the
Grant Notice, this Agreement and the Plan.

 

7.

Taxes. Regardless of any action the Company and/or the Subsidiary employing the
Participant (the “Employer”) take with respect to any or all income tax
(including U.S. federal, state, and local tax and/or non-U.S. tax), social
insurance, payroll tax, payment on account or other tax-related items related to
the Participant’s participation in the Plan and legally applicable to the
Participant or deemed by the Company or the Employer to be an appropriate charge
to the Participant (“Tax-Related Items”), the Participant acknowledges that the
ultimate liability for all Tax-Related Items is and remains the Participant’s
responsibility and may exceed the amount

 

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actually withheld by the Company or the Employer. The Participant further
acknowledges that the Company and/or the Employer (i) make no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with
any aspect of the Award, including the grant and vesting of the TSR Shares, the
certification of the Award Goals, the conversion of the TSR Shares into shares
or the receipt of an equivalent cash payment, the subsequent sale of any shares
acquired pursuant to the TSR Shares and the receipt of any dividends or Dividend
Equivalents; and (ii) do not commit to and are under no obligation to structure
the terms of the grant or any aspect of the Award to reduce or eliminate the
Participant’s liability for Tax-Related Items or achieve any particular tax
result. Further, if the Participant has become subject to tax in more than one
jurisdiction between the Date of Grant and the date of any relevant taxable
event, the Participant acknowledges that the Company and/or the Employer (or
former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, the
Participant shall pay or make adequate arrangements satisfactory to the Company
and/or the Employer to satisfy all Tax-Related Items. In this regard, the
Participant authorizes the Company and/or the Employer, or their respective
agents, to satisfy the Tax-Related Items obligation by withholding otherwise
deliverable shares of Common Stock. In addition, the Participant authorizes the
Company and/or the Employer, in their sole discretion and pursuant to such
procedures as the Company may specify from time to time, to withhold any
Tax-Related Items by one or more of the following means: (i) withholding from
the proceeds of the sale of shares of Common Stock acquired upon the
vesting/settlement of the Award either through a voluntary sale or through a
mandatory sale arranged by the Company (on the Participant’s behalf pursuant to
this authorization); and /or (ii) withholding from any wages or other cash
compensation paid to the Participant by the Company and/or the Employer or from
any equivalent cash payment received in connection with the Award. To avoid
negative accounting treatment, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates. If the obligation for Tax-Related
Items is satisfied by withholding a number of shares as described herein, the
Participant shall be deemed, for tax purposes only, to have been issued the full
number of shares of Common Stock subject to the vested portion of the Award,
notwithstanding that a number of shares are held back solely for the purpose of
paying the Tax-Related Items due as a result of any aspect of the Award. The
Participant shall pay to the Company and/or the Employer any amount of
Tax-Related Items that is required to be withheld or accounted for in connection
with the TSR Shares that cannot be satisfied by the means previously described.
The Company may refuse to deliver to the Participant any shares of Common Stock
pursuant to the Award if the Participant fails to comply with his or her
obligations in connection with the Tax-Related Items.

 

8. Transfer Restrictions. This Award and the TSR Shares are not transferable
other than by will or the laws of descent and distribution, and may not be
assigned, hypothecated or otherwise pledged and shall not be subject to
execution, attachment or similar process. Upon any attempt to effect any such
disposition, or upon the levy of any such process, the Award shall immediately
become null and void and the TSR Shares shall be forfeited.

 

9. Capitalization Adjustments. The number of TSR Shares awarded is subject to
adjustment as provided in Section 11.07(a) of the Plan. The Participant shall be
notified of such adjustment and such adjustment shall be binding upon the
Company and the Participant.

 

10.

Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, no shares of Common Stock shall be issued to the Participant upon
vesting of this Award unless the

 

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Common Stock is then registered under the U.S. Securities Act of 1933, as
amended (the “Securities Act”) or, if such Common Stock is not then so
registered, the Company has determined that such vesting and issuance would be
exempt from the registration requirements of the Securities Act. By accepting
this Award, the Participant agrees not to sell any of the shares of Common Stock
received under this Award at a time when the applicable laws or Company policies
prohibit a sale.

 

11. Award Confers No Rights to Continued Employment. Nothing contained in the
Plan or this Agreement shall give the Participant the right to be retained in
the employment of the Company or any Subsidiary or affect the right of any such
employer to terminate the Participant’s employment.

 

12. Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, that provision will be enforced to the
maximum extent permissible and the legality, validity and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

13. Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to current or future participation in the Plan by
electronic means or request the Participant’s consent to participate in the Plan
by electronic means. The Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through an on-line
or electronic system established and maintained by the Company or a third party
designated by the Company.

 

14. Code Section 409A. It is the intent that the vesting or the payout of the
TSR Shares set forth in this Agreement shall comply with the requirements of
Section 409A of the Code, and any ambiguities herein will be interpreted to so
comply. The Company reserves the right, to the extent the Company deems
necessary or advisable in its sole discretion, to unilaterally amend or modify
this Agreement as may be necessary to ensure that all vesting or payouts
provided under this Agreement are made in a manner that complies with
Section 409A of the Code; provided, however, that the Company makes no
representation that the vesting or payout of TSR Shares provided under this
Agreement will comply with Section 409A of the Code.

 

15. Imposition of Other Requirements. The Company reserves the right to impose
other requirements on the Participant’s participation in the Plan, on the TSR
Shares and on any shares of Common Stock acquired under the Plan, to the extent
the Company determines it is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan, and to require the
Participant to sign any additional agreements or undertakings that may be
necessary to accomplish the foregoing.

 

PPG Industries, Inc.

/s/ C. W. Wise

By: C. W. Wise, Vice President, Human Resources

 

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