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Exhibit
10.24
CHANGE IN CONTROL
EMPLOYMENT
AGREEMENT
AGREEMENT by and between PPG
Industries, Inc., a Pennsylvania corporation (the
“Company”), and
(the “Executive”), dated as of
.
The Board of Directors of the
Company (the “Board”), has determined that it is in the
best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined below) of the Company. The Board believes it
is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change in Control and to encourage the
Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change in
Control, and to provide the Executive with compensation and
benefits arrangements upon a Change in Control which ensure that
the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1. Certain Definitions
. (a) The “Effective Date” shall mean the first
date during the Change in Control Period (as defined in Section
l(b)) while the Executive is an employee of the Company on which a
Change in Control (as defined in Section 2) occurs. Anything
in this Agreement to the contrary notwithstanding, if a Change in
Control occurs and if the Executive’s employment with the
Company is terminated prior to the
date on which the Change in Control
occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with
or anticipation of a Change in Control, then for all purposes of
this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of
employment.
(b) The “Change in
Control Period” shall mean the period commencing on the date
hereof and ending on the earlier of (i) the Executive’s
date of Retirement, or (ii) the third anniversary of the date
hereof; provided, however, that commencing on the date one year
after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof shall be hereinafter
referred to as the “Renewal Date”), unless previously
terminated, the Change in Control Period shall be automatically
extended so as to terminate the earlier of (i) the
Executive’s date of Retirement, or (ii) three years from
such Renewal Date, unless at least 60 days prior to the Renewal
Date the Company shall give notice to the Executive that the Change
in Control Period shall not be so extended.
(c) “Retirement”
shall mean termination of employment on or after (i) an
Executive’s “normal retirement date” as defined
in the PPG Industries, Inc. Retirement Income Plan, provided such
termination is voluntary, or (ii) with respect to any
Executive that the Company may subject to compulsory retirement
under the Age Discrimination in Employment Act (29 U.S.C. §
621 et. seq.) (ADEA) as a “bona fide executive or a high
policy maker”, such Executive’s “normal
retirement date”.
(d) “Code” shall
mean the Internal Revenue Code of 1986, as amended.
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(e) The “Compensation
Multiplier” shall mean: (i) if the Executive is subject
to compulsory retirement, then the number of years and fractions of
years remaining (such fractions to be expressed as the number of
whole months and any partial month, divided by 12) from the
Executive’s Date of Termination (as defined in
Section 5(e)) to his normal retirement date, not to exceed
three, or, (ii) if the Executive is not subject to compulsory
retirement, then the multiplier shall be three.
(f) “Specified
Employee” shall mean a key employee (as defined in
Section 416(i) of the Code without regard to
Section 416(i)(5) of the Code) of the Company, determined in
accordance with Section 409A of the Code and any regulations
or other guidance thereunder.
2. Change in Control .
For the purpose of this Agreement, a “Change in
Control” shall mean:
(a) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”)
or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this
Section 2; or
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(b) Individuals who, as of
the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company
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Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination;
(d) Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company; or
(e) A majority of the Board
otherwise determines that a Change in Control shall have
occurred.
3. Employment Period .
The Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the
earlier of (i) the Executive’s date of Retirement and
(ii) the third anniversary of the Effective Date, (the
“Employment Period”).
4. Terms of Employment
. (a) Position and Duties . (i) During the
Employment Period, (A) the Executive’s position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of
those held, exercised
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and assigned at any time during the
120-day period immediately preceding the Effective Date and
(B) the Executive’s services shall be performed at the
location where the Executive was employed immediately preceding the
Effective Date or any office or location less than 35 miles from
such location.
(ii) During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b) Compensation .
(i) Base Salary . During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at a monthly rate, at least
equal to twelve times the highest monthly base salary paid or
payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During
the
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Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective
Date and thereafter at least annually. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be
reduced after any such increase and the term Annual Base Salary as
utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term “affiliated
companies” shall include any company controlled by,
controlling or under common control with the Company.
(ii) Annual Bonus . In
addition to Annual Base Salary during the Employment Period, the
Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the “Annual Bonus”)
in cash at least equal to the Executive’s target bonus under
the Company’s Incentive Compensation and Deferred Income Plan
for Key Employees, or any comparable bonus under any predecessor or
successor plan, for the fiscal year in which the Effective Date
occurs. Each such Annual Bonus shall be paid no later than the
fifteenth day of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual
Bonus.
(iii) Incentive, Savings
and Retirement Plans . During the Employment Period, the
Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its affiliated companies for the Executive under
such
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plans, practices, policies and programs
as in effect at any time during the 120-day period immediately
preceding the Effective Date or if more favorable to the Executive,
those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit
Plans . During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated
companies.
(v) Expenses . During
the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
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(vi) Fringe Benefits .
During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of
an automobile and payment of related expenses, in accordance with
the most favorable plans, practices, programs and policies of the
Company and its affiliated companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(vii) Office and Support
Staff . During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated
companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(viii) Vacation .
During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated
companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
5. Termination of
Employment . (a) Death or Disability . The
Executive’s employment shall terminate automatically upon the
Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of
the
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Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall
terminate effective on the 90th day after receipt of such notice by
the Executive (the “Disability Effective Date”),
provided that, within the 90 days after such receipt, the Executive
shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement,
“Disability” 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 and acceptable to the Executive or the
Executive’s legal representative (such agreement to
acceptability not to be withheld unreasonably).
(b) Cause . The
Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement,
“Cause” shall mean:
(i) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness), including a failure to follow any
applicable Company policies or directives, after a written demand
for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially
performed the Executive’s duties, or
(ii) the engaging by the
Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.
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For purposes of (i) of this
Section 5(b), no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon
the advice of counsel for the Company shall be con
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