UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-36733

AXALTA COATING SYSTEMS LTD.

(Exact name of registrant as specified in its charter)

Bermuda	2851	98-1073028
(State or other jurisdiction of<br>incorporation or organization)	(Primary Standard Industrial<br>Classification Code Number)	(I.R.S. Employer<br>Identification No.)

50 Applied Bank Blvd

Suite 300

Glen Mills, Pennsylvania 19342

(855) 547-1461

(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices)

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

Common Shares, $1.00 par value	AXTA	New York Stock Exchange
(Title of class)	(Trading symbol)	(Exchange on which registered)

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  ☒ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Non-accelerated filer ☐ Accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

As of April 19, 2022, there were 221,467,603 shares of the registrant’s common shares outstanding.

Table of Contents

PART I		Financial Information
	ITEM 1.	Financial Statements (Unaudited)	3
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Statements of Comprehensive Income (Loss)	4
		Condensed Consolidated Balance Sheets	5
		Condensed Consolidated Statements of Changes in Shareholders' Equity	6
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	35
	ITEM 4.	Controls and Procedures	35
PART II		Other Information
	ITEM 1.	Legal Proceedings	36
	ITEM 1A.	Risk Factors	36
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
	ITEM 3.	Defaults Upon Senior Securities	36
	ITEM 4.	Mine Safety Disclosures	36
	ITEM 5.	Other Information	36
	ITEM 6.	Exhibits	37
		Signatures	38

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AXALTA COATING SYSTEMS LTD.

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share data)

	Three Months Ended March 31,
		2022		2021
Net sales		$	1,174.1	$	1,063.6
Cost of goods sold		837.4		684.5
Selling, general and administrative expenses		193.5		179.1
Other operating charges		7.7		102.8
Research and development expenses		16.4		15.6
Amortization of acquired intangibles		32.8		29.0
Income from operations		86.3		52.6
Interest expense, net		32.6		33.5
Other expense (income), net		1.8		(0.4)
Income before income taxes		51.9		19.5
Provision for income taxes		11.0		3.8
Net income		40.9		15.7
Less: Net (loss) income attributable to noncontrolling interests		(0.6)		0.5
Net income attributable to controlling interests		$	41.5	$	15.2
Basic net income per share		$	0.18	$	0.06
Diluted net income per share		$	0.18	$	0.06

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AXALTA COATING SYSTEMS LTD.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In millions)

	Three Months Ended March 31,
		2022		2021
Net income		$	40.9	$	15.7
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		(3.9)		(37.6)
Unrealized gain on derivatives		19.5		9.2
Unrealized gain on pension and other benefit plan obligations		0.9		1.2
Other comprehensive income (loss), before tax		16.5		(27.2)
Income tax provision related to items of other comprehensive income (loss)		3.0		1.8
Other comprehensive income (loss), net of tax		13.5		(29.0)
Comprehensive income (loss)		54.4		(13.3)
Less: Comprehensive (loss) income attributable to noncontrolling interests		(0.1)		0.3
Comprehensive income (loss) attributable to controlling interests		$	54.5	$	(13.6)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AXALTA COATING SYSTEMS LTD.

Condensed Consolidated Balance Sheets (Unaudited)

(In millions, except per share data)

	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	576.2	$	840.6
Restricted cash	10.6		10.6
Accounts and notes receivable, net	1,029.8		937.5
Inventories	764.0		669.7
Prepaid expenses and other current assets	135.7		117.2
Total current assets	2,516.3		2,575.6
Property, plant and equipment, net	1,184.4		1,186.2
Goodwill	1,574.4		1,592.7
Identifiable intangibles, net	1,237.5		1,278.2
Other assets	568.9		584.5
Total assets	$	7,081.5	$	7,217.2
Liabilities, Shareholders’ Equity
Current liabilities:
Accounts payable	$	748.0	$	657.4
Current portion of borrowings	76.1		79.7
Other accrued liabilities	520.9		597.8
Total current liabilities	1,345.0		1,334.9
Long-term borrowings	3,739.2		3,749.9
Accrued pensions	261.4		269.3
Deferred income taxes	165.5		174.7
Other liabilities	149.2		149.7
Total liabilities	5,660.3		5,678.5
Commitments and contingent liabilities (Note 6)
Shareholders’ equity:
Common shares, $1.00 par, 1,000.0 shares authorized, 252.2 and 251.8 shares issued at March 31, 2022 and December 31, 2021, respectively	252.2		251.8
Capital in excess of par	1,518.2		1,515.5
Retained earnings	868.7		827.2
Treasury shares, at cost, 30.8 and 24.4 shares at March 31, 2022 and December 31, 2021, respectively	(862.3)		(687.2)
Accumulated other comprehensive loss	(401.4)		(414.4)
Total Axalta shareholders’ equity	1,375.4		1,492.9
Noncontrolling interests	45.8		45.8
Total shareholders’ equity	1,421.2		1,538.7
Total liabilities and shareholders’ equity	$	7,081.5	$	7,217.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AXALTA COATING SYSTEMS LTD.

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

(In millions)

	Common Stock
	Number of Shares	Par/Stated Value		Capital In Excess Of Par		Retained Earnings		Treasury Shares, at cost		Accumulated Other Comprehensive Loss		Non controlling Interests		Total
Balance at December 31, 2021	227.4	$	251.8	$	1,515.5	$	827.2	$	(687.2)	$	(414.4)	$	45.8	$	1,538.7
Comprehensive income:
Net income	—	—		—		41.5		—		—		(0.6)		40.9
Net realized and unrealized gain on derivatives, net of tax of $2.6 million	—	—		—		—		—		16.9		—		16.9
Long-term employee benefit plans, net of tax of $0.4 million	—	—		—		—		—		0.5		—		0.5
Foreign currency translation, net of tax of $0.0 million	—	—		—		—		—		(4.4)		0.5		(3.9)
Total comprehensive income	—	—		—		41.5		—		13.0		(0.1)		54.4
Recognition of stock-based compensation	—	—		5.3		—		—		—		—		5.3
Shares issued under compensation plans	0.4	0.4		(2.3)		—		—		—		—		(1.9)
Changes in ownership of noncontrolling interests	—	—		(0.3)		—		—		—		0.2		(0.1)
Common stock purchases	(6.4)	—		—		—		(175.1)		—		—		(175.1)
Dividends declared to noncontrolling interests	—	—		—		—		—		—		(0.1)		(0.1)
Balance at March 31, 2022	221.4	252.2		$	1,518.2	$	868.7	$	(862.3)	$	(401.4)	$	45.8	$	1,421.2
	Common Stock
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Number of Shares	Par/Stated Value		Capital In Excess Of Par		Retained Earnings		Treasury Shares, at cost		Accumulated Other Comprehensive Loss		Non controlling Interests		Total
Balance at December 31, 2020	234.8	$	250.9	$	1,487.1	$	563.3	$	(443.5)	$	(424.8)	$	46.8	$	1,479.8
Comprehensive loss:
Net income	—	—		—		15.2		—		—		0.5		15.7
Net realized and unrealized gain on derivatives, net of tax of $1.3 million	—	—		—		—		—		7.9		—		7.9
Long-term employee benefit plans, net of tax of $0.5 million	—	—		—		—		—		0.7		—		0.7
Foreign currency translation, net of tax of $0.0 million	—	—		—		—		—		(37.4)		(0.2)		(37.6)
Total comprehensive loss	—	—		—		15.2		—		(28.8)		0.3		(13.3)
Recognition of stock-based compensation	—	—		3.6		—		—		—		—		3.6
Shares issued under compensation plans	0.3	0.3		(0.2)		—		—		—		—		0.1
Common stock purchases	(2.3)	—		—		—		(63.7)		—		—		(63.7)
Dividends declared to noncontrolling interests	—	—		—		—		—		—		(0.7)		(0.7)
Balance at March 31, 2021	232.8	251.2		$	1,490.5	$	578.5	$	(507.2)	$	(453.6)	$	46.4	$	1,405.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AXALTA COATING SYSTEMS LTD.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Three Months Ended March 31,
	2022		2021
Operating activities:
Net income	$	40.9	$	15.7
Adjustment to reconcile net income to cash (used for) provided by operating activities:
Depreciation and amortization	77.7		76.4
Amortization of deferred financing costs and original issue discount	2.4		2.2
Deferred income taxes	(2.7)		(18.3)
Realized and unrealized foreign exchange losses, net	2.4		8.6
Stock-based compensation	5.3		3.6
Interest income on swaps designated as net investment hedges	(6.2)		(3.5)
Other non-cash, net	(1.6)		1.4
Changes in operating assets and liabilities:
Trade accounts and notes receivable	(86.2)		(52.6)
Inventories	(91.5)		(36.2)
Prepaid expenses and other assets	(32.9)		(18.0)
Accounts payable	120.4		33.4
Other accrued liabilities	(66.7)		30.7
Other liabilities	(5.2)		(3.8)
Cash (used for) provided by operating activities	(43.9)		39.6
Investing activities:
Purchase of property, plant and equipment	(42.5)		(31.8)
Interest proceeds on swaps designated as net investment hedges	6.2		3.5
Settlement proceeds on swaps designated as net investment hedges	25.0		—
Other investing activities, net	1.0		0.5
Cash used for investing activities	(10.3)		(27.8)
Financing activities:
Payments on short-term borrowings	(24.1)		(20.0)
Payments on long-term borrowings	(6.8)		(6.7)
Financing-related costs	—		(1.5)
Purchases of common stock	(175.1)		(63.7)
Net cash flows associated with stock-based awards	(1.9)		0.1
Other financing activities, net	(0.2)		(0.7)
Cash used for financing activities	(208.1)		(92.5)
Decrease in cash	(262.3)		(80.7)
Effect of exchange rate changes on cash	(2.1)		(13.5)
Cash at beginning of period	851.2		1,364.0
Cash at end of period	$	586.8	$	1,269.8
Cash at end of period reconciliation:
Cash and cash equivalents	$	576.2	$	1,266.9
Restricted cash	10.6		2.9
Cash at end of period	$	586.8	$	1,269.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Index

Note	Page
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9
(2) REVENUE	9
(3) ACQUISITIONS	10
(4) GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS	10
(5) RESTRUCTURING	11
(6) COMMITMENTS AND CONTINGENCIES	12
(7) LONG-TERM EMPLOYEE BENEFITS	13
(8) STOCK-BASED COMPENSATION	13
(9) OTHER EXPENSE (INCOME), NET	14
(10) INCOME TAXES	14
(11) NET INCOME PER COMMON SHARE	15
(12) ACCOUNTS AND NOTES RECEIVABLE, NET	15
(13) INVENTORIES	15
(14) PROPERTY, PLANT AND EQUIPMENT, NET	16
(15) BORROWINGS	16
(16) FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS	17
(17) SEGMENTS	20
(18) ACCUMULATED OTHER COMPREHENSIVE LOSS	23

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(1)    BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the financial position and shareholders' equity of Axalta Coating Systems Ltd., a Bermuda exempted company limited by shares, and its consolidated subsidiaries ("Axalta," the "Company," "we," "our" and "us") at March 31, 2022, the results of operations, comprehensive income (loss), changes in shareholders' equity and cash flows for the three months ended March 31, 2022 and 2021. All intercompany balances and transactions have been eliminated.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The interim unaudited condensed consolidated financial statements include the accounts of Axalta and its subsidiaries, and entities in which a controlling interest is maintained. Certain of our entities are accounted for on a one-month lag basis, the effect of which is not material.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for a full year.

Risks and Uncertainties

After experiencing significant impacts to our results of operations, financial condition and cash flows in 2020 from the coronavirus ("COVID-19") pandemic, we have seen a return to more stable quarter-over-quarter demand for our products and services during 2021 and into 2022, though we continue to see impacts to our business given the continued significant presence, and actual or potential spread, of the virus globally, as well as preventative measures enacted in certain regions of the world. We are currently unable to fully determine the future impact of COVID-19 on our business, though we believe the pandemic will continue to have a negative effect on our business during 2022, and potentially longer. We are monitoring the progression of the pandemic and its ongoing and potential effect on our financial position, results of operations, and cash flows, which effects could be materially adverse in a particular quarterly reporting period as well as on an annual basis.

(2)    REVENUE

Consideration for products in which control has transferred to our customers that is conditional on something other than the passage of time is recorded as a contract asset within prepaid expenses and other current assets on the balance sheet. The contract asset balances at March 31, 2022 and December 31, 2021 were $37.7 million and $36.1 million, respectively.

We provide certain customers with incremental up-front consideration, subject to clawback provisions, including Business Incentive Plan assets ("BIPs"), which is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement as a reduction of net sales. At March 31, 2022 and December 31, 2021, the total carrying value of BIPs were $149.3 million and $151.2 million, respectively, and are presented within other assets in the condensed consolidated balance sheets. For the three months ended March 31, 2022 and 2021, $14.5 million and $15.3 million, respectively, was amortized and reflected as reductions of net sales in the condensed consolidated statements of operations. The total carrying value of BIPs exclude other up-front incentives with repayment features made in conjunction with long-term customer commitments of $69.7 million and $72.7 million at March 31, 2022 and December 31, 2021, respectively. These up-front incentives with repayment features are subject to the credit risk of our customers and depending on the financial condition of our customers, it is possible that some or all of the amounts may become uncollectible. We have no reserve for this risk at March 31, 2022 or December 31, 2021.

See Note 17 for disaggregated net sales by end-market.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(3)    ACQUISITIONS

Acquisition of U-POL Holdings Limited

On September 15, 2021, we completed the acquisition of U-POL Holdings Limited ("U-POL") for an aggregate purchase price of $619.8 million. The acquisition of U-POL, a leading supplier of paint, protective coatings and accessories primarily for the automotive aftermarket, strengthens Axalta's global refinish leadership position and supports its broader growth strategy. The results of the business are reported within our Performance Coatings segment. The U-POL acquisition was recorded as a business combination under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values as of the acquisition date.

At March 31, 2022, we have not finalized the purchase accounting related to the U-POL acquisition and these amounts represent preliminary values. The allocation of the purchase price may be modified up to one year from the closing date of the acquisition as more information is obtained about the fair value of assets acquired and liabilities assumed. The purchase price was allocated as follows:

	September 15, 2021 (As initially reported)		Measurement Period Adjustments		September 15, 2021 (Adjusted)
Cash	$	23.7	$	—	$	23.7
Accounts and notes receivable, net	22.5		—		22.5
Inventories	23.3		—		23.3
Prepaid expenses and other current assets, net	3.2		—		3.2
Property, plant and equipment, net	16.5		(1.5)		15.0
Identifiable intangible assets	273.0		1.0		274.0
Other assets	2.0		0.1		2.1
Accounts payable	(20.9)		—		(20.9)
Other accrued liabilities	(3.9)		(0.3)		(4.2)
Other liabilities	(0.9)		—		(0.9)
Deferred income taxes	(68.4)		(0.9)		(69.3)
Net assets before goodwill from acquisition	270.1		(1.6)		268.5
Goodwill from acquisition	349.7		1.6		351.3
Net assets acquired	$	619.8	$	—	$	619.8

(4)    GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

As of March 31, 2022, we have not yet finalized the purchase accounting related to acquisitions completed after March 31, 2021 and the amounts recorded represent preliminary values. During the three months ended March 31, 2022, we made purchase accounting adjustments impacting goodwill, deferred income taxes and property, plant and equipment. We expect to finalize our purchase accounting during the measurement period which will be no later than one year following the acquisition date.

Goodwill

The following table shows changes in the carrying amount of goodwill from December 31, 2021 to March 31, 2022 by reportable segment:

	Performance<br>Coatings		Mobility<br>Coatings		Total
Balance at December 31, 2021	$	1,513.4	$	79.3	$	1,592.7
Purchase accounting adjustments	1.8		—		1.8
Foreign currency translation	(19.4)		(0.7)		(20.1)
Balance at March 31, 2022	$	1,495.8	$	78.6	$	1,574.4

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Identifiable Intangible Assets

The following tables summarize the gross carrying amounts and accumulated amortization of identifiable intangible assets by major class:

March 31, 2022	Gross Carrying<br>Amount		Accumulated<br>Amortization		Net Book<br>Value		Weighted average<br>amortization periods (years)
Technology	$	570.7	$	(431.9)	$	138.8	10.2
Trademarks—indefinite-lived	264.1		—		264.1		Indefinite
Trademarks—definite-lived	132.8		(46.0)		86.8		14.4
Customer relationships	1,129.2		(381.9)		747.3		19.2
Other	14.1		(13.6)		0.5		5.0
Total	$	2,110.9	$	(873.4)	$	1,237.5			December 31, 2021	Gross Carrying<br>Amount		Accumulated<br>Amortization		Net Book<br>Value		Weighted average<br>amortization periods (years)
---	---	---	---	---	---	---	---
Technology	$	575.3	$	(420.9)	$	154.4	10.2
Trademarks—indefinite-lived	266.7		—		266.7		Indefinite
Trademarks—definite-lived	134.5		(43.8)		90.7		14.4
Customer relationships	1,131.8		(366.6)		765.2		19.2
Other	14.5		(13.3)		1.2		5.0
Total	$	2,122.8	$	(844.6)	$	1,278.2

The estimated amortization expense related to the fair value of acquired intangible assets for the remainder of 2022 and each of the succeeding five years is:

Remainder of 2022	$	96.2
2023	89.6
2024	84.8
2025	84.2
2026	83.7
2027	82.6

(5)    RESTRUCTURING

In accordance with the applicable guidance for ASC 712, Nonretirement Postemployment Benefits, we accounted for termination benefits and recognized liabilities when the loss was considered probable that employees were entitled to benefits and the amounts could be reasonably estimated.

During the three months ended March 31, 2022 and 2021, we incurred costs for termination benefits of $2.4 million and $4.5 million, respectively. The majority of our termination benefits are recorded within other operating charges in the condensed consolidated statements of operations. The remaining payments associated with these actions are expected to be substantially completed within 24 months.

The following table summarizes the activity related to termination benefit reserves and expenses from December 31, 2021 to March 31, 2022:

	2022 Activity
Balance at December 31, 2021	$	57.5
Expenses, net of changes to estimates	2.4
Payments made	(15.0)
Foreign currency translation	(0.5)
Balance at March 31, 2022	$	44.4

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(6)    COMMITMENTS AND CONTINGENCIES

Guarantees

We guarantee certain of our customers’ obligations to third parties, whereby any default by our customers on their obligations could force us to make payments to the applicable creditors. At March 31, 2022 and December 31, 2021, we had outstanding bank guarantees of $5.1 million and $5.7 million, respectively. A portion of our bank guarantees expire between 2022 and 2036, while others do not have specified expiration dates. We monitor the customer obligations and bank guarantees to evaluate whether we have a liability at the balance sheet date. We did not have any liabilities related to our outstanding bank guarantees recorded at March 31, 2022 and December 31, 2021.

Operational Matter

In January 2021, we became aware of an operational matter affecting certain North America Mobility Coatings customer manufacturing sites. The matter involves the use and application of certain of our products in combination with and incorporated within third-party products. The matter occurred over a discrete period during the fourth quarter of 2020. We have concluded that losses from this matter are probable and that a majority of losses would be covered under our insurance policies, subject to deductible and policy limits as defined in our policies.

For the three months ended March 31, 2022 and March 31, 2021, we recorded expenses of $0.1 million and $94.4 million, respectively, within other operating charges in the condensed consolidated statements of operations. At March 31, 2022 and December 31, 2021, we had $38.2 million and $52.7 million, respectively, recorded for estimated insurance receivables within accounts and notes receivable, net in the condensed consolidated balance sheets. Liabilities of $48.6 million and $49.7 million are recorded as other accrued liabilities in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. The recorded probable losses remain an estimate and actual costs arising from this matter could be materially lower or higher depending on the actual costs incurred to repair the impacted products as well as the availability of additional insurance coverage.

Other

We are subject to various pending lawsuits, legal proceedings and other claims in the ordinary course of business, including civil, regulatory and environmental matters. These matters may involve third-party indemnification obligations and/or insurance covering all or part of any potential damage incurred by us. All of these matters are subject to many uncertainties and, accordingly, we cannot determine the ultimate outcome of the proceedings and other claims at this time. The potential effects, if any, on our condensed consolidated financial statements will be recorded in the period in which these matters are probable and estimable. Except as set forth in the "Operational Matter" section above, we believe that any sum we may be required to pay in connection with proceedings or claims in excess of the amounts recorded would likely not have a material adverse effect upon our results of operations, financial conditions or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.

We are involved in environmental remediation and ongoing compliance activities at several sites. The timing and duration of remediation and ongoing compliance activities are determined on a site by site basis depending on local regulations. The liabilities recorded represent our estimable future remediation costs and other anticipated environmental liabilities. We have not recorded liabilities at sites where a liability is probable, but that a range of loss is not reasonably estimable. We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis but could have a material adverse impact in a particular quarterly reporting period.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(7)    LONG-TERM EMPLOYEE BENEFITS

Components of Net Periodic Benefit Cost

The following table sets forth the components of net periodic benefit costs for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
		2022		2021
Components of net periodic benefit cost:
Net periodic benefit cost:
Service cost		$	1.7	$	1.8
Interest cost		2.4		2.0
Expected return on plan assets		(3.2)		(3.4)
Amortization of actuarial losses, net		0.9		1.2
Net periodic benefit cost		$	1.8	$	1.6

All non-service components of net periodic benefit cost are recorded in other expense (income), net within the accompanying condensed consolidated statements of operations.

(8)    STOCK-BASED COMPENSATION

During the three months ended March 31, 2022 and 2021, we recognized expenses of $5.3 million and $3.6 million, respectively, in stock-based compensation, which was allocated between costs of goods sold and selling, general and administrative expenses on the condensed consolidated statements of operations. We recognized tax benefits on stock-based compensation of $0.6 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.

2022 Activity

A summary of award activity by type for the three months ended March 31, 2022 is presented below.

Stock Options	Awards<br>(in millions)	Weighted-<br>Average<br>Exercise<br>Price		Aggregate<br>Intrinsic<br>Value<br> (in millions)		Weighted<br>Average<br>Remaining<br>Contractual<br>Life (years)
Outstanding at January 1, 2022	1.4	$	26.30
Granted	—	$	—
Exercised	—	$	—
Forfeited / Expired	—	$	—
Outstanding at March 31, 2022	1.4	$	26.30
Vested and expected to vest at March 31, 2022	1.4	$	26.30	$	2.5	4.36
Exercisable at March 31, 2022	1.4	$	26.30	$	2.5	4.30

At March 31, 2022, there was an immaterial amount of unrecognized expense relating to unvested stock options that is expected to be amortized over the weighted average period of 0.2 years.

Restricted Stock Units	Units<br>(millions)	Weighted-Average<br>Fair Value
Outstanding at January 1, 2022	1.1	$	28.85
Granted	0.6	$	28.87
Vested	(0.4)	$	28.43
Forfeited (1)	—	$	28.78
Outstanding at March 31, 2022	1.3	$	29.00

(1)    Activity during the three months ended March 31, 2022 rounds to zero.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Tax shortfall expenses on the vesting of restricted stock awards and restricted stock units during the three months ended March 31, 2022 was $0.1 million.

At March 31, 2022, there was $25.7 million of unamortized expense relating to unvested restricted stock units that is expected to be amortized over a weighted average period of 1.7 years.

Performance Share Units	Units<br>(millions)	Weighted-Average<br>Fair Value
Outstanding at January 1, 2022	0.8	$	30.10
Granted	0.4	$	30.61
Vested	(0.1)	$	29.12
Forfeited	(0.2)	$	29.61
Outstanding at March 31, 2022	0.9	$	30.46

Our performance share units allow for participants to vest in more or less than the targeted number of shares granted. Some of our performance share units are performing at the applicable target while others are currently performing below the applicable targets. We currently expect a total of 0.5 million shares with a weighted average fair value per share of $30.30 to vest at the respective vesting dates for such awards. At March 31, 2022, there is $14.4 million of unamortized expense relating to unvested performance share units that is expected to be amortized over a weighted average period of 2.7 years. The forfeitures include performance share units that vested below threshold payout.

(9)    OTHER EXPENSE (INCOME), NET

	Three Months Ended March 31,
		2022		2021
Foreign exchange losses, net		$	2.6	$	1.8
Other miscellaneous income, net		(0.8)		(2.2)
Total		$	1.8	$	(0.4)

(10)    INCOME TAXES

Our effective income tax rates for the three months ended March 31, 2022 and 2021 are as follows:

	Three Months Ended March 31,
	2022		2021
Effective Tax Rate	21.2	%	19.5	%

The higher effective tax rate for the three months ended March 31, 2022 was primarily due to the unfavorable impact of net currency exchange losses in 2022. These adjustments are partially offset by the favorable impact of changes in valuation allowance and unrecognized tax benefits.

The effective tax rate for the three months ended March 31, 2022 differs from the U.S. Federal statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded the unfavorable impact of net currency exchange losses, increase in valuation allowance and foreign taxes. These adjustments were offset by the favorable adjustments for earnings in jurisdictions where the statutory rate is lower than the U.S. Federal statutory rate and decrease in unrecognized tax benefits.

The Company anticipates that it is reasonably possible it will settle up to $11.2 million, exclusive of interest and penalties, of its current unrecognized tax benefits within the next 12 months due to the expected conclusion of ongoing tax audits.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(11)    NET INCOME PER COMMON SHARE

Basic net income per common share excludes the dilutive impact of potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per common share includes the effect of potential dilution from the hypothetical exercise of outstanding stock options and vesting of restricted stock units and performance share units. A reconciliation of our basic and diluted net income per common share is as follows:

	Three Months Ended March 31,
(In millions, except per share data)		2022		2021
Net income to common shareholders		$	41.5	$	15.2
Basic weighted average shares outstanding		224.7		233.9
Diluted weighted average shares outstanding		225.2		234.7
Net income per common share:
Basic net income per share		$	0.18	$	0.06
Diluted net income per share		$	0.18	$	0.06

The number of anti-dilutive shares that have been excluded in the computation of diluted net income per share for the three months ended March 31, 2022 and 2021 were 1.0 million and 1.5 million, respectively.

(12)    ACCOUNTS AND NOTES RECEIVABLE, NET

Trade accounts receivable are stated at the amount we expect to collect. We maintain allowances for doubtful accounts for estimated losses by applying historical loss percentages, combined with reasonable and supportable forecasts of future losses, to respective aging categories. Management considers the following factors in developing its current estimate of expected credit losses: customer credit-worthiness, past transaction history with the customer, current economic industry trends, changes in market or regulatory matters, changes in geopolitical matters, and changes in customer payment terms, including the ongoing impacts from COVID-19.

	March 31, 2022		December 31, 2021
Accounts receivable - trade, net (1)	$	854.0	$	760.4
Notes receivable	25.3		24.7
Other (2)	150.5		152.4
Total	$	1,029.8	$	937.5

(1)    Allowance for doubtful accounts was $25.5 million and $22.0 million at March 31, 2022 and December 31, 2021, respectively.

(2)    Includes $38.2 million and $52.7 million at March 31, 2022 and December 31, 2021, respectively, of insurance recoveries related to the operational matter as discussed further in Note 6.

Bad debt expense of $(0.5) million and $0.7 million was included within selling, general and administrative expenses for the three months ended March 31, 2022 and 2021, respectively, and an additional $4.1 million related to sanctions imposed on Russia in response to the conflict with Ukraine was included in other operating charges for the three months ended March 31, 2022.

(13)    INVENTORIES

	March 31, 2022		December 31, 2021
Finished products	$	416.9	$	355.9
Semi-finished products	100.9		109.7
Raw materials	220.1		180.8
Stores and supplies	26.1		23.3
Total	$	764.0	$	669.7

Inventory reserves were $17.1 million and $15.6 million at March 31, 2022 and December 31, 2021, respectively.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(14)    PROPERTY, PLANT AND EQUIPMENT, NET

	March 31, 2022		December 31, 2021
Property, plant and equipment	$	2,333.1	$	2,299.4
Accumulated depreciation	(1,148.7)		(1,113.2)
Property, plant, and equipment, net	$	1,184.4	$	1,186.2

Depreciation expense amounted to $30.1 million and $31.9 million for the three months ended March 31, 2022 and 2021, respectively.

(15)    BORROWINGS

Borrowings are summarized as follows:

	March 31, 2022		December 31, 2021
2024 Dollar Term Loans	$	2,032.8	$	2,038.9
2025 Euro Senior Notes	501.8		508.8
2027 Dollar Senior Notes	500.0		500.0
2029 Dollar Senior Notes	700.0		700.0
Short-term and other borrowings	110.6		113.8
Unamortized original issue discount	(4.1)		(4.6)
Unamortized deferred financing costs	(25.8)		(27.3)
Total borrowings, net	3,815.3		3,829.6
Less:
Short-term borrowings	51.8		55.4
Current portion of long-term borrowings	24.3		24.3
Long-term debt	$	3,739.2	$	3,749.9

Revolving Credit Facility

At March 31, 2022 and December 31, 2021, letters of credit issued under the Revolving Credit Facility totaled $22.1 million, which reduced the availability under the Revolving Credit Facility. Availability under the Revolving Credit Facility was $527.9 million at March 31, 2022 and December 31, 2021.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Supplier financing arrangements

We have a financing program in China which is utilized to finance the purchases of goods and services from our suppliers through local banking institutions. The payment terms under the financing program vary, but the program has a weighted average maturity date that approximates 90 days. These financing arrangements are included in current portion of borrowings within the consolidated balance sheets and at the time of issuance each transaction is treated as a non-cash financing activity within the consolidated statements of cash flows. Upon settlement of the financing, the cash outflow is classified as a financing activity within the consolidated statements of cash flows. Amounts outstanding under this program were $21.2 million and $18.4 million at March 31, 2022 and March 31, 2021, respectively, including $4.2 million and $2.6 million, respectively, related to purchases of property, plant and equipment. Cash outflows under this program were $24.1 million and $13.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

Future repayments

Below is a schedule of required future repayments of all borrowings outstanding at March 31, 2022.

Remainder of 2022	$	68.1
2023	27.5
2024	1,993.5
2025	505.1
2026	3.6
Thereafter	1,247.4
Total borrowings	3,845.2
Unamortized original issue discount	(4.1)
Unamortized deferred financing costs	(25.8)
Total borrowings, net	$	3,815.3

(16)    FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

Fair value of financial instruments

Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other expense (income), net. The fair values of equity securities are based upon quoted market prices, which are considered Level 1 inputs.

Long-term borrowings - The estimated fair values of these borrowings are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.

Derivative instruments - The Company’s interest rate caps, interest rate swaps, cross-currency swaps, and foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are included in the Level 2 hierarchy.

Fair value of contingent consideration

The fair value of contingent consideration associated with an acquisition completed in the year is valued at each balance sheet date, until amounts become payable, with adjustments recorded within other expense (income) in the condensed consolidated statements of operations. During April 2021, in conjunction with an acquisition in China, we recorded fair value of contingent consideration of $7.3 million. As of March 31, 2022, the contingent consideration had increased to $7.8 million as a result of accretion for the passage of time and currency translation. The contingent consideration was valued using a probability-weighted expected payment method. The analysis considered the timing of expected future cash flows and the probability of whether key elements of the contingent event are completed. Due to the significant unobservable inputs used in the valuations, these liabilities are categorized within Level 3 of the fair value hierarchy.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at March 31, 2022 and December 31, 2021.

	March 31, 2022								December 31, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Prepaid expenses and other current assets:
Interest rate swaps (1)	$	—	$	0.7	$	—	$	0.7	$	—	$	—	$	—	$	—
Cross-currency swaps (2)	—		18.6		—		18.6		—		17.7		—		17.7
Foreign currency forward contracts (1)(3)	—		—		—		—		—		—		—		—
Other assets:
Cross-currency swaps (2)	—		—		—		—		—		8.3		—		8.3
Investments in equity securities	0.7		—		—		0.7		0.7		—		—		0.7
Liabilities:
Other accrued liabilities:
Interest rate swaps (1)	—		7.5		—		7.5		—		24.3		—		24.3
Contingent consideration	—		—		7.8		7.8		—		—		7.8		7.8
Other liabilities:
Interest rate swaps (1)	—		—		—		—		—		1.9		—		1.9
Cross-currency swaps (2)	—		16.4		—		16.4		—		—		—		—
Long-term borrowings:
2024 Dollar Term Loans	—		1,998.9		—		1,998.9		—		2,038.5		—		2,038.5
2025 Euro Senior Notes	—		494.6		—		494.6		—		513.7		—		513.7
2027 Dollar Senior Notes	—		480.9		—		480.9		—		522.9		—		522.9
2029 Dollar Senior Notes	—		615.6		—		615.6		—		679.5		—		679.5

(1)    Cash flow hedge

(2)    Net investment hedge

(3)    Balances at March 31, 2022 round to zero

The table below presents a roll forward of activity for the Level 3 liabilities during the three months ended March 31, 2022.

	Fair Value Using Significant Unobservable Inputs <br>(Level 3)
Beginning balance December 31, 2021	$	7.8
Change in fair value	—
Ending balance at March 31, 2022	$	7.8

Derivative Financial Instruments

We selectively use derivative instruments to reduce market risk associated with changes in foreign currency exchange rates and interest rates. The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes.

Certain derivative instruments in use are contingent upon changes in LIBOR, which is the subject of recent reform and will cease being published in June 2023. The derivative instruments under LIBOR terms that we are currently party to will either mature before June 2023 or the agreements contain transitional language to a different reference rate.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Derivative Instruments Qualifying and Designated as Cash Flow and Net Investment Hedges

Cross-Currency Swaps Designated as Net Investment Hedges

During the three months ended March 31, 2022, we settled two fixed-for-fixed cross-currency swaps with an aggregate notional amount totaling €335.0 million previously executed in 2020 resulting in cash proceeds of $25.0 million. Concurrently, we entered into two fixed-for-fixed cross-currency swaps with an aggregate notional amount totaling €335.0 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Euro. Under the terms of the new cross-currency swap agreements, the Company notionally exchanged $365.5 million at a weighted average interest rate of 3.375% for €335.0 million at a weighted average interest rate of 2.04%. The cross-currency swaps are designated as net investment hedges and expire on February 15, 2029. These cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within accumulated other comprehensive loss ("AOCI").

Foreign Currency Forward Contracts Designated as Cash Flow Hedges

During the three months ended March 31, 2022, we designated foreign currency forward contracts with a notional value of $3.0 million as cash flow hedges of the Company’s exposure to variability in exchange rates on forecasted purchases of inventory denominated in foreign currencies. These forward currency contracts are marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to cost of goods sold in the same period or periods during which the hedged transactions affect earnings.

The following table presents the fair values of derivative instruments that qualify and have been designated as cash flow and net investment hedges included in AOCI:

	March 31, 2022		December 31, 2021
AOCI:
Interest rate swaps (cash flow hedges)	$	6.8	$	26.3
Foreign currency forward contracts (cash flow hedges) (1)	—		—
Cross-currency swaps (net investment hedges)	(26.8)		(26.0)
Total AOCI	$	(20.0)	$	0.3

(1)    Activity during the three months ended March 31, 2022 rounds to zero

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.

The following tables set forth the locations and amounts recognized during the three months ended March 31, 2022 and 2021 for these cash flow and net investment hedges.

		For the Three Months Ended March 31,
		2022				2021
Derivatives in Cash Flow and Net Investment Hedges	Location of Loss (Gain) Recognized in Income on Derivatives	Net Amount of (Gain) Recognized in OCI on Derivatives		Amount of Loss (Gain) Recognized in Income		Net Amount of (Gain) Recognized in OCI on Derivatives		Amount of Loss (Gain) Recognized in Income
Interest rate caps	Interest expense, net	$	—	$	—	$	—	$	0.6
Interest rate swaps	Interest expense, net	(12.4)		7.1		(1.5)		7.0
Foreign currency forward contracts (1)	Cost of goods sold	—		—		(0.1)		—
Cross-currency swaps	Interest expense, net	(5.6)		(4.8)		(29.6)		(4.8)

(1)    Activity during the three months ended March 31, 2022 rounds to zero

Over the next 12 months, we expect losses of $6.7 million pertaining to cash flow hedges to be reclassified from AOCI into earnings, related to our interest rate swaps and foreign currency forward contracts.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Derivative Instruments Not Designated as Cash Flow Hedges

We periodically enter into foreign currency forward and option contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other expense (income), net in the condensed consolidated statements of operations.

Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment are recorded in earnings as follows:

Derivatives Not Designated as Hedging <br>Instruments under ASC 815	Location of Loss Recognized in <br>Income on Derivatives	Three Months Ended March 31,
			2022			2021
Foreign currency forward contracts	Other expense (income), net			$	0.3		$	(6.8)

(17)    SEGMENTS

The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker ("CODM") to make decisions about resources to be allocated to the segment and assess its performance; and (iii) that has available discrete financial information.

We have two operating segments, which are also our reportable segments: Performance Coatings and Mobility Coatings. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Our CODM is identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Our segments are based on the type and concentration of customers served, service requirements, methods of distribution and major product lines.

Through our Performance Coatings segment, we provide high-quality liquid and powder coatings solutions to a fragmented and local customer base. We are one of only a few suppliers with the technology to provide precise color matching and highly durable coatings systems. The end-markets within this segment are refinish and industrial.

Through our Mobility Coatings segment, we provide coatings technologies while focusing on supporting the accelerating demand for e-mobility and the evolving coatings needs of established and emerging light and commercial vehicle OEMs, fleet owners and shared mobility providers. These global customers are faced with evolving megatrends in sustainability, personalization and autonomous driving that require a high level of technical support coupled with productive, environmentally responsible coatings systems that can be applied with a high degree of precision, consistency and speed. The end-markets within this segment are light vehicle and commercial vehicle.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

Adjusted EBIT is the primary measure to evaluate financial performance of the operating segments and allocate resources. Asset information is not reviewed or included with our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. The following table presents relevant information of our reportable segments.

	Three Months Ended March 31,
		2022		2021
Net sales (1):
Refinish		$	461.4	$	399.0
Industrial		353.0		308.3
Total Net sales Performance Coatings		814.4		707.3
Light Vehicle		275.6		278.9
Commercial Vehicle		84.1		77.4
Total Net sales Mobility Coatings		359.7		356.3
Total Net sales		$	1,174.1	$	1,063.6
Depreciation and amortization expense (2):
Performance Coatings		$	58.0	$	54.0
Mobility Coatings		19.7		22.4
Total Depreciation and amortization expense		$	77.7	$	76.4

(1)The Company has no intercompany sales between segments.

(2)Depreciation and amortization expenses relating to assets used within the operations of a specifically identifiable segment are recorded to the appropriate segment, while depreciation and amortization expenses relating to assets shared in our integrated supply chain are allocated to the appropriate segments on a consistent basis reflecting their use.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

The following table reconciles our segment operating performance to income before income taxes for the periods presented:

	Three Months Ended March 31,
		2022		2021
Segment Adjusted EBIT (1):
Performance Coatings		$	94.6	$	117.2
Mobility Coatings		0.5		39.2
Total (2)		95.1		156.4
Interest expense, net		32.6		33.5
Termination benefits and other employee related costs (a)		2.4		2.8
Strategic review and retention costs (b)		—		5.4
Acquisition and divestiture-related costs (c)		0.4		0.2
Impairment charges (d)		0.3		—
Accelerated depreciation and site closure costs (e)		1.3		0.6
Indemnity loss (f)		0.3		—
Operational matter (g)		0.1		94.4
Russia sanction-related impacts (h)		5.8		—
Income before income taxes		$	51.9	$	19.5		(1)	The primary measure of segment operating performance is Adjusted EBIT, which is defined as net income before interest, taxes and select other items impacting operating results. These other items impacting operating results are items that management has concluded are (1) non-cash items included within net income, (2) items the Company does not believe are indicative of ongoing operating performance or (3) non-recurring, unusual or infrequent items that have not occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Adjusted EBIT is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year financial results, providing a measure that management believes reflects the Company's core operating performance, which represents Adjusted EBIT adjusted for the select items referred to above.
---	---
(2)	Does not represent Adjusted EBIT referenced elsewhere by the Company as there are additional adjustments that are not allocated to the segments.
(a)	Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating performance.
(b)	Represents costs for legal, tax and other advisory fees pertaining to our review of strategic alternatives that was concluded in March 2020, as well as retention awards for certain employees, which were earned over a period of 18-24 months, which ended in September 2021. These amounts are not considered indicative of our ongoing performance.
(c)	Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance.
(d)	Represents impairment charges, which are not considered indicative of our ongoing performance.
(e)	Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance.
(f)	Represents indemnity loss associated with acquisitions, which we do not consider indicative of our ongoing operating performance.
(g)	Represents expenses, changes in estimates and insurance recoveries for probable liabilities related to an operational matter in the Mobility Coatings segment discussed further in Note 6, which we do not consider indicative of our ongoing operating performance.
(h)	Represents expenses related to sanctions imposed on Russia in response to the conflict with Ukraine as a result of incremental reserves for accounts receivable and incremental inventory obsolescence, which we do not consider indicative of our ongoing operating performance.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

(In millions, unless otherwise noted)

(18)    ACCUMULATED OTHER COMPREHENSIVE LOSS

	Unrealized<br>Currency<br>Translation<br>Adjustments		Pension<br>Adjustments		Unrealized<br>(Loss) Gain on<br>Derivatives		Accumulated<br>Other<br>Comprehensive<br> (Loss) Income
Balance, December 31, 2021	$	(331.3)	$	(60.4)	$	(22.7)	$	(414.4)
Current year deferrals to AOCI	0.4		—		10.8		11.2
Reclassifications from AOCI to Net income	(4.8)		0.5		6.1		1.8
Net Change	(4.4)		0.5		16.9		13.0
Balance, March 31, 2022	$	(335.7)	$	(59.9)	$	(5.8)	$	(401.4)

The cumulative income tax benefit related to the adjustments for pension benefit at March 31, 2022 was $24.4 million. The cumulative income tax benefit related to the adjustments for unrealized loss on derivatives at March 31, 2022 was $1.0 million. See Note 16 for classification within the consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.

	Unrealized<br>Currency<br>Translation<br>Adjustments		Pension<br>Adjustments		Unrealized<br>(Loss) Gain on<br>Derivatives		Accumulated<br>Other<br>Comprehensive<br>(Loss) Income
Balance, December 31, 2020	$	(282.0)	$	(88.7)	$	(54.1)	$	(424.8)
Current year deferrals to AOCI	(32.6)		—		1.3		(31.3)
Reclassifications from AOCI to Net income	(4.8)		0.7		6.6		2.5
Net Change	(37.4)		0.7		7.9		(28.8)
Balance, March 31, 2021	$	(319.4)	$	(88.0)	$	(46.2)	$	(453.6)

The cumulative income tax benefit related to the adjustments for pension benefits at March 31, 2021 was $33.0 million. The cumulative income tax benefit related to the adjustments for unrealized loss on derivatives at March 31, 2021 was $7.5 million. See Note 16 for classification within the consolidated statements of operations of the gains and losses on derivatives reclassified from AOCI.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the interim unaudited condensed consolidated financial statements and the condensed notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

FORWARD-LOOKING STATEMENTS

Many statements made in the following discussion and analysis of our financial condition and results of operations and elsewhere in this Quarterly Report on Form 10-Q that are not statements of historical fact, including statements about our beliefs and expectations, are "forward-looking statements" within the meaning of federal securities laws and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan, strategies and capital structure. These statements often include words such as "anticipate," "expect," "believe," "intend," "estimates," "targets," "projections," "can," "could," "would," "may," "will," "forecasts" and the negative of these words or other comparable or similar terminology. We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions, including, but not limited to, the risks and uncertainties described in "Forward-Looking Statements," as well as "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors, including, but not limited to, those described in "Risk Factors", could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections.

These cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

We are a leading global manufacturer, marketer and distributor of high performance coatings systems and products. We have over a 150-year heritage in the coatings industry and are known for manufacturing high-quality products with well-recognized brands supported by market-leading technology and customer service. Our diverse global footprint of 47 manufacturing facilities, four technology centers, 48 customer training centers and approximately 12,000 employees allows us to meet the needs of customers in over 140 countries. We serve our customer base through an extensive sales force and technical support organization, as well as through approximately 4,000 independent, locally based distributors.

We operate our business in two operating segments, Performance Coatings and Mobility Coatings. Our segments are based on the type and concentration of customers served, service requirements, methods of distribution and major product lines.

Through our Performance Coatings segment, we provide high-quality liquid and powder coatings solutions to a fragmented and local customer base. We are one of only a few suppliers with the technology to provide precise color matching and highly durable coatings systems. The end-markets within this segment are refinish and industrial.

Through our Mobility Coatings segment, we provide coatings technologies while focusing on supporting the accelerating demand for e-mobility and the evolving coatings needs of established and emerging light and commercial vehicle OEMs, fleet owners and shared mobility providers. These global customers are faced with evolving megatrends in sustainability, personalization and autonomous driving that require a high level of technical support coupled with productive, environmentally responsible coatings systems that can be applied with a high degree of precision, consistency and speed. The end-markets within this segment are light vehicle and commercial vehicle.

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BUSINESS HIGHLIGHTS

General Business Highlights

Our net sales increased 10.4%, including a 3.0% headwind from foreign currency translation, for the three months ended March 31, 2022 compared with the three months ended March 31, 2021. The increased sales were primarily driven by higher average selling price and product mix of 8.8%, contributions from acquisitions of 3.6% and higher volumes of 1.0%. The following trends have impacted our segment and end-market net sales performance:

•Performance Coatings: Net sales increased 15.1% for the three months ended March 31, 2022 compared with the three months ended March 31, 2021. The increased sales were primarily driven by higher average selling price and product mix of 10.7%, contributions from acquisitions of 5.4% and higher sales volume of 2.5%, partially offset by a 3.5% headwind from unfavorable foreign currency translation driven primarily by fluctuations of the Euro and Turkish Lira compared to the U.S. Dollar.

•Mobility Coatings: Net sales increased 1.0% for the three months ended March 31, 2022 compared with the three months ended March 31, 2021. The increased sales were driven by higher average selling price and product mix of 4.9%, partially offset by lower sales volume of 1.9% as a result of continued semiconductor chip and other supply chain shortages that dampened customer demand and unfavorable currency impact of 2.0%. The unfavorable foreign currency translation was driven primarily by fluctuations of the Euro and Turkish Lira compared to the U.S. Dollar.

Our business serves four end-markets globally with net sales for the three months ended March 31, 2022 and 2021, as follows:

(In millions)	Three Months Ended March 31,			2022 vs 2021
		2022		2021		% change
Performance Coatings
Refinish		$	461.4	$	399.0	15.6	%
Industrial		353.0		308.3		14.5	%
Total Net sales Performance Coatings		814.4		707.3		15.1	%
Mobility Coatings
Light Vehicle		275.6		278.9		(1.2)	%
Commercial Vehicle		84.1		77.4		8.7	%
Total Net sales Mobility Coatings		359.7		356.3		1.0	%
Total Net sales		$	1,174.1	$	1,063.6	10.4	%

Semiconductor chip shortages, supply chain shortages and raw material inflation

During the three months ended March 31, 2022, we were negatively impacted globally by semiconductor chip shortages, primarily affecting production levels of our automotive original equipment manufacturer customers in our Light Vehicle end-market, as well as other supply chain shortages, inflation of raw material and other costs and logistics constraints. We anticipate the semiconductor chip and other supply chain constraints, including the tightness of raw materials and freight and logistic challenges, and raw material inflation will continue to impact our results throughout the year. We will continue to monitor these conditions and take appropriate actions that we believe will help mitigate costs and other operational impacts.

Russia conflict with Ukraine

Russia's conflict with Ukraine and the sanctions and other measures being imposed by various governments in response to this conflict have increased the level of economic and political uncertainty globally. While our operations in Russia and Ukraine do not constitute a material portion of our business, a significant escalation or expansion of economic disruption or countries subject to sanctions or the conflict's current scope could have a material adverse effect on our results of operations, financial condition and cash flows. We are actively monitoring the broader economic impact on commodities and currency exchange rates from the current crisis, especially on the price and supply of raw materials. During the three months ended March 31, 2022, we recorded $5.8 million of incremental reserves for accounts receivable and inventory as a result of sanctions imposed on Russia.

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Coronavirus (COVID-19) Pandemic

During the three months ended March 31, 2022, our business continued to recover from the significant adverse impact on the demand for our products and, thus, our income from operations, caused by the COVID-19 pandemic, which began in early 2020. While we have seen a return to more stable quarter-over-quarter demand for our products and services, we remain cognizant of future COVID-19 developments, such as impacts from new variants, employee absenteeism, shutdowns or other restrictions, that could impact our future results of operations, financial condition and cash flows. Our manufacturing sites and operations in China have been temporarily impacted by the lockdowns imposed by the local authorities in response to COVID-19 and we are actively managing through these disruptions. The risks and uncertainties related to the COVID-19 pandemic are discussed in further detail within Note 1 to the interim unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Capital and Liquidity Highlights

During the three months ended March 31, 2022, we repurchased 6.4 million shares of our common stock for total consideration of $175.1 million as we continue to execute against our previously-approved share repurchase program.

Environmental, Social and Governance ("ESG") Framework

In January 2022, we announced a new ESG framework that details longer-term ESG goals and strategies. For additional information, see Part I, Item 1, "Business—Environmental, Social and Governance" of our Annual Report on Form 10-K for the year ended December 31, 2021.

FACTORS AFFECTING OUR OPERATING RESULTS

There have been no changes in the factors affecting our operating results previously reported in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in the accompanying financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Our historical results of operations summarized and analyzed below may not necessarily reflect what will occur in the future.

Net sales

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Net sales		$	1,174.1	$	1,063.6		10.4	%
Price/Mix effect							8.8	%
Impact of acquisitions							3.6	%
Volume effect							1.0	%
Exchange rate effect							(3.0)	%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Net sales increased due to the following:
n Higher average selling price driven in both segments and all regions as a result of pricing actions taken to offset input price inflation
n Increased sales from companies acquired in 2021
n Higher sales volumes driven by Performance Coatings, partially muted by customer production limitations resulting from significant impacts of semiconductor chip and other supply chain constraints within Mobility Coatings
Partially offset by:
n Unfavorable impacts of currency translation, due primarily to the fluctuations of the Euro and Turkish Lira compared to the U.S. dollar

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Cost of sales

	Three Months Ended March 31,	2022 vs 2021
		2022			2021			Change	% Change
Cost of sales		$	837.4		$	684.5			22.3	%
% of net sales		71.3		%	64.4		%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Cost of sales increased due to the following:
n Higher variable input costs due to raw material, logistics and energy inflation
n Increased costs from companies acquired in 2021
n Higher operating costs as temporary COVID-19 related cost savings initiatives have lapsed
n Increase of $1.7 million associated with incremental inventory obsolescence related to sanctions imposed on Russia
Partially offset by:
n Favorable impacts of currency translation, due primarily to the fluctuations of the Euro and Turkish Lira compared to the U.S. dollar
Cost of sales as a percentage of net sales increased due to the following:
n Higher variable input costs due to raw material, logistics and energy inflation
Partially offset by:
n Higher average selling price driven by both segments and all regions as a result of pricing actions taken to offset variable input cost inflation

Selling, general and administrative expenses

	Three Months Ended March 31,	2022 vs 2021
		2022			2021			Change	% Change
SG&A		$	193.5		$	179.1			8.0	%
% of net sales		16.5		%	16.8		%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Selling, general and administrative expenses increased due to the following:
n Higher operating costs as temporary COVID-19 related cost savings initiatives have lapsed
n Increased costs from companies acquired in 2021
n Increase in commissions and sales incentive compensation driven by increased sales volume
Partially offset by:
n Favorable impacts of currency translation, due primarily to the fluctuations of the Euro compared to the U.S. dollar

Other operating charges

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Other operating charges		$	7.7	$	102.8		(92.5)	%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Other operating charges changed due to the following:
n Decrease of $94.3 million related to a charge recorded in 2021 related to probable liabilities for an operational matter in our Mobility Coatings segment discussed further in Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q
n Decrease of $5.4 million associated with retention awards earned in 2021
n Impacts of currency translation were immaterial when compared to 2021
Partially offset by:
n Increase of $4.1 million as a result of incremental reserves for accounts receivable related to sanctions imposed on Russia

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Research and development expenses

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Research and development expenses		$	16.4	$	15.6		5.1	%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Research and development expenses increased due to the following:
n Increased operating expenses driven by increased research and development activity
n Increased costs from companies acquired in 2021
n Impacts of currency translation were immaterial when compared to 2021

Amortization of acquired intangibles

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Amortization of acquired intangibles		$	32.8	$	29.0		13.1	%

All values are in US Dollars. Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Amortization of acquired intangibles increased due to the following:
n Amortization related to 2021 acquisitions
n Impacts of currency translation were immaterial when compared to 2021

Interest expense, net

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Interest expense, net		$	32.6	$	33.5		(2.7)	%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Interest expense, net decreased primarily due to the following:
n Favorable impacts of our derivative instruments used to hedge the variable interest rate exposure on certain debt arrangements
n Impacts of currency translation were immaterial when compared to 2021

Other expense (income), net

	Three Months Ended March 31,	2022 vs 2021
		2022		2021		Change	% Change
Other expense (income), net		$	1.8	$	(0.4)		(550.0)	%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Other expense (income), net changed due to the following:
n Unfavorable impact of foreign exchange losses of $0.8 million when compared with the prior year period
n Increased expenses of $0.3 million during 2022 as a result of non-service pension costs
n Indemnity loss of $0.3 million during 2022 as a result of offsetting tax reserves released during the period

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Provision for income taxes

	Three Months Ended March 31,
		2022			2021
Income before income taxes		$	51.9		$	19.5
Provision for income taxes		11.0			3.8
Statutory U.S. Federal income tax rate		21.0		%	21.0		%
Effective tax rate		21.2		%	19.5		%
Effective tax rate vs. statutory U.S. Federal income tax rate		0.2		%	(1.5)		%				(Favorable) Unfavorable Impact
---	---	---	---	---	---
	Three Months Ended March 31,
Items impacting the effective tax rate vs. statutory U.S. federal income tax rate		2022		2021
Earnings generated in jurisdictions where the statutory rate is different from the U.S. Federal rate (1)		$	(6.0)	$	(4.9)
Changes in valuation allowance		1.1		7.0
Foreign exchange gain (loss), net		2.3		(1.4)
Non-deductible expenses and interest		0.5		0.7
Changes in unrecognized tax benefits		0.2		2.2

(1) Primarily related to earnings in Bermuda, Germany, Luxembourg, and Switzerland.

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SEGMENT RESULTS

The Company's products and operations are managed and reported in two operating segments: Performance Coatings and Mobility Coatings. See Note 17 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Performance Coatings Segment

	Three Months Ended March 31,	2022 vs 2021
		2022			2021			Change	% Change
Net sales		$	814.4		$	707.3			15.1	%
Price/Mix effect									10.7	%
Impact of acquisitions									5.4	%
Volume effect									2.5	%
Exchange rate effect									(3.5)	%
Adjusted EBIT		$	94.6		$	117.2			(19.3)	%
Adjusted EBIT Margin		11.6		%	16.6		%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Net sales increased due to the following:
n Higher average selling prices and product mix across both end-markets and all regions, primarily as a result of pricing actions taken to offset input price inflation within both end-markets
n Increased sales from companies acquired in 2021
n Higher sales volumes across most regions driven primarily by Refinish
Partially offset by:
n Unfavorable impacts of currency translation, due primarily to the fluctuations of the Euro and Turkish Lira compared to the U.S. dollar
Adjusted EBIT and Adjusted EBIT margins decreased due to the following:
---
n Higher variable input costs across both end-markets and all regions due to raw material, logistics and energy inflation
n Higher operating expenses across both end-markets and all regions due to inflation and increased activity as temporary COVID-19 related cost savings initiatives have lapsed
n Unfavorable impacts of currency translation, due primarily to the fluctuations of the Euro compared to the U.S. dollar
Partially offset by:
n Higher average selling prices and product mix across both end-markets and all regions

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Mobility Coatings Segment

	Three Months Ended March 31,	2022 vs 2021
		2022			2021			Change	% Change
Net sales		$	359.7		$	356.3			1.0	%
Price/Mix effect									4.9	%
Exchange rate effect									(2.0)	%
Volume effect									(1.9)	%
Adjusted EBIT		$	0.5		$	39.2			(98.7)	%
Adjusted EBIT Margin		0.1		%	11.0		%

All values are in US Dollars.

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

Net sales increased due to the following:
n Higher average selling prices and product mix across both end-markets and most regions, primarily as a result of pricing actions taken to offset input price inflation
Partially offset by:
n Unfavorable impacts of currency translation, due primarily to the fluctuations of the Euro and Turkish Lira compared to the U.S. dollar
n Lower sales volumes across most regions driven by Light Vehicle as a result of customer production restraints, partially offset by increased volumes in Commercial Vehicle		Adjusted EBIT and Adjusted EBIT margins decreased due to the following:
---
n Higher variable input costs across both end-markets and all regions due to raw material, logistics and energy inflation
n Lower sales volumes across most regions driven by Light Vehicle as a result of customer production restraints, partially offset by increased volumes in Commercial Vehicle
Partially offset by:
n Higher average selling prices and product mix across both end-markets and most regions, primarily as a result of pricing actions taken to offset input price inflation

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash on hand, cash flow from operations and available borrowing capacity under our Senior Secured Credit Facilities.

At March 31, 2022, availability under the Revolving Credit Facility was $527.9 million, net of $22.1 million of letters of credit outstanding. All such availability may be utilized without violating any covenants under the credit agreement governing such facility or the indentures governing the Senior Notes. At March 31, 2022, we had $21.2 million of outstanding borrowings under other lines of credit. Our remaining available borrowing capacity under other lines of credit in certain non-U.S. jurisdictions totaled $25.2 million.

We, or our affiliates, at any time and from time to time, may purchase shares of our common stock or the Senior Notes, and may prepay our Term Loans or other indebtedness. Any such purchases of our common stock or Senior Notes may be made through the open market or privately negotiated transactions with third parties or pursuant to one or more redemption, tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we, or any of our affiliates, may determine.

We have various supplier finance programs in place around the world. We partner with large banking institutions and utilize these programs to enhance our liquidity profile. Depending on the program, the liabilities under the program are classified either as accounts payable or current portion of borrowings on our consolidated balance sheets. Our facility in China is more fully described in Note 15 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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Cash Flows

	Three Months Ended March 31,
(In millions)	2022		2021
Net cash provided by (used for):
Operating activities:
Net income	$	40.9	$	15.7
Depreciation and amortization	77.7		76.4
Amortization of deferred financing costs and original issue discount	2.4		2.2
Deferred income taxes	(2.7)		(18.3)
Realized and unrealized foreign exchange losses, net	2.4		8.6
Stock-based compensation	5.3		3.6
Interest income on swaps designated as net investment hedges	(6.2)		(3.5)
Other non-cash, net	(1.6)		1.4
Net income adjusted for non-cash items	118.2		86.1
Changes in operating assets and liabilities	(162.1)		(46.5)
Operating activities	(43.9)		39.6
Investing activities	(10.3)		(27.8)
Financing activities	(208.1)		(92.5)
Effect of exchange rate changes on cash	(2.1)		(13.5)
Net decrease in cash	$	(264.4)	$	(94.2)

Three months ended March 31, 2022

Net Cash Used for Operating Activities

Net cash used for operating activities for the three months ended March 31, 2022 was $43.9 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $118.2 million. This was offset by net uses of working capital of $162.1 million, for which the most significant drivers were increases in inventories, accounts and notes receivable, other accruals and prepaid expenses and other assets of $91.5 million, $86.2 million, $66.7 million and $32.9 million, respectively. These outflows were primarily driven by inflation of raw material, logistics and energy costs, timing of collections and largely seasonal cash payments for employee related benefits. The outflows were partially offset by increases in accounts payable of $120.4 million primarily due to raw material cost inflation, as well as elevated logistics and energy costs.

Net Cash Used for Investing Activities

Net cash used for investing activities for the three months ended March 31, 2022 was $10.3 million. The primary use was for purchases of property, plant and equipment of $42.5 million, partially offset by $25.0 million of proceeds from settlements of swaps designated as net investment hedges, which are discussed further in Note 16 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Net Cash Used for Financing Activities

Net cash used for financing activities for the three months ended March 31, 2022 was $208.1 million. The primary uses were for the purchase of our common stock totaling $175.1 million and payments of $30.9 million on borrowings.

Other Impacts on Cash

Currency exchange impact on cash for the three months ended March 31, 2022 were unfavorable by $2.1 million, which was driven primarily by fluctuations in the Euro, Russian Ruble and British Pound compared to the U.S. Dollar, partially offset by fluctuations in the Brazilian Real and Mexican Peso compared to the U.S. Dollar.

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Three months ended March 31, 2021

Net Cash Provided by Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2021 was $39.6 million. Net income before deducting depreciation, amortization and other non-cash items generated cash of $86.1 million. This was offset by net uses of working capital of $46.5 million, for which the most significant drivers were increases in accounts and notes receivable, inventory and prepaid expenses and other assets of $52.6 million, $36.2 million and $18.0 million, respectively. These outflows were primarily driven by timing of collections and building inventory to pre-COVID levels to align with returning demand and inflation of raw material costs. The outflows were partially offset by increases in accounts payable of $33.4 million due to increased production and inflation of raw material costs and other accruals of $30.7 million due to accruals related to the operational matter within the Mobility Coatings segment, which is discussed further in Note 6 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, partially offset by the timing of cash payments for employee related benefits, customer incentive payments and payments related to normal seasonal operating activities.

Net Cash Used for Investing Activities

Net cash used for investing activities for the three months ended March 31, 2021 was $27.8 million. The primary use was for purchases of property, plant and equipment of $31.8 million, partially offset by interest proceeds on swaps designated as net investment hedges of $3.5 million.

Net Cash Used for Financing Activities

Net cash used for financing activities for the three months ended March 31, 2021 was $92.5 million. The primary uses were for the purchase of our common stock totaling $63.7 million and payments of $26.7 million on borrowings.

Other Impacts on Cash

Currency exchange impact on cash for the three months ended March 31, 2021 were unfavorable by $13.5 million, which was driven primarily by weakening of the Euro compared to the U.S. Dollar.

Financial Condition

We had cash and cash equivalents at March 31, 2022 and December 31, 2021 of $576.2 million and $840.6 million, respectively. Of these balances, $385.0 million and $471.9 million were maintained in non-U.S. jurisdictions as of March 31, 2022 and December 31, 2021, respectively. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.

Our business may not generate sufficient cash flow from operations and future borrowings may not be available under our Senior Secured Credit Facilities in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs, including planned capital expenditures. In such circumstances, we may need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, selling additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. Our primary sources of liquidity are cash on hand, cash flow from operations and available borrowing capacity under our Senior Secured Credit Facilities. Based on our forecasts, we believe that cash flow from operations, available cash on hand and available borrowing capacity under our Senior Secured Credit Facilities and existing lines of credit will be adequate to service debt, fund our cost saving initiatives, meet liquidity needs and fund necessary capital expenditures for the next twelve months.

Our ability to make scheduled payments of principal or interest on, or to refinance, our indebtedness or to fund working capital requirements, capital expenditures and other current obligations will depend on our ability to generate cash from operations. Such cash generation is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control, including the effects of COVID-19 and Russia's conflict with Ukraine.

If required, our ability to raise additional financing and our borrowing costs may be impacted by short and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. Our highly leveraged nature may limit our ability to procure additional financing in the future.

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The following table details our borrowings outstanding at the periods indicated:

(In millions)	March 31, 2022		December 31, 2021
2024 Dollar Term Loans	$	2,032.8	$	2,038.9
2025 Euro Senior Notes	501.8		508.8
2027 Dollar Senior Notes	500.0		500.0
2029 Dollar Senior Notes	700.0		700.0
Short-term and other borrowings	110.6		113.8
Unamortized original issue discount	(4.1)		(4.6)
Unamortized deferred financing costs	(25.8)		(27.3)
Total borrowings, net	3,815.3		3,829.6
Less:
Short-term borrowings	51.8		55.4
Current portion of long-term borrowings	24.3		24.3
Long-term debt	$	3,739.2	$	3,749.9

Our indebtedness, including the Senior Secured Credit Facilities and Senior Notes, is more fully described in Note 18 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

We believe that we continue to maintain sufficient liquidity to meet our requirements, including our leverage and associated interest as well as our working capital needs. Availability under the Revolving Credit Facility was $527.9 million at March 31, 2022 and December 31, 2021, all of which may be borrowed by us without violating any covenants under the Credit Agreement governing such facility or the indentures governing the Senior Notes.

Contractual Obligations

Information related to our material contractual obligations and cash requirements can be found in Note 7 and Note 18 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in the Company's contractual obligations and cash requirements as reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Off-Balance Sheet Arrangements

See Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for disclosure of our guarantees of certain customers’ obligations to third parties.

Recent Accounting Guidance

None.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are those accounting policies that can have a significant impact on the presentation of our financial condition and results of operations, and that require the use of complex and subjective estimates based upon past experience and management’s judgment. Because of the uncertainty inherent in such estimates, actual results may differ materially from these estimates. The policies applied in preparing our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are those that management believes are the most dependent on estimates and assumptions. There have been no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. For a description of our critical accounting policies and estimates as well as a listing of our significant accounting policies, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” and “Note 1 - Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks previously disclosed in our financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As required by Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2022.

Changes in internal control over financial reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are from time to time party to legal proceedings that arise in the ordinary course of business. We are not involved in any litigation other than that which has arisen in the ordinary course of business. We do not expect that any currently pending lawsuits will have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis except as is set forth in Note 6 to the interim unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed a specified threshold. Consistent with SEC rules, the Company will continue to use a threshold of $1 million for such proceedings. At this time, the Company is not aware of any matters that exceed this threshold and that meet the other conditions for disclosure except for the matter summarized below.

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, in January 2022, the Company entered into a settlement agreement with the California South Coast Air Quality Management District (the "District") in order to settle claims by the District alleging that certain of the Company's products failed to comply with applicable volatile organic compound limits imposed under California law. Pursuant to the terms of the settlement agreement, the Company agreed to pay the District $1,377,328 (the “Settlement Amount”) in full settlement of the claims and without admitting any liability or wrongdoing. In February 2022, the Company paid the Settlement Amount to the District.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from the risks previously reported in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table summarizes the Company's share repurchase activity through its share repurchase program for the three months ended March 31, 2022:

(in millions, except per share data)
Month	Total Number of Shares Purchased(1)	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Programs(1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Share Repurchase Program(1)
January 2022	0.3	$	28.70	0.3	$	607.4
February 2022	3.1	28.99		3.1	517.4
March 2022	3.0	25.24		3.0	442.3
Total	6.4	$	27.24	6.4	$	442.3

(1) All shares were repurchased through the share repurchase program announced in March 2017 (the "Program"). In April 2021, our Board of Directors authorized an increase in the Program by $625.0 million, bringing the total size of the Program to $1.3 billion, of which we have already purchased $857.7 million. Under the Program, we repurchased $175.1 million of our common shares during the three months ended March 31, 2022. At March 31, 2022, the Company had remaining authorization to repurchase $442.3 million of shares. There is no expiration date on the Program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

EXHIBIT NO.	DESCRIPTION OF EXHIBITS
10.1	Form of Performance Share Unit Award Agreement for U.S. Employees
10.2	Form of Restricted Stock Unit Award Agreement for U.S. Employees
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1†	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2†	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	INS - Inline XBRL Instance Document. The document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101	SCH - Inline XBRL Taxonomy Extension Schema Document
101	CAL - Inline XBRL Taxonomy Extension Calculation Linkbase Document
101	DEF - Inline XBRL Taxonomy Extension Definition Linkbase Document
101	LAB - Inline XBRL Taxonomy Extension Label Linkbase Document
101	PRE - Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
*	Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
†	This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

		AXALTA COATING SYSTEMS LTD.
Date:	April 26, 2022	By: /s/ Robert W. Bryant
		Robert W. Bryant
		Chief Executive Officer and President
		(Principal Executive Officer)
Date:	April 26, 2022	By: /s/ Sean M. Lannon
		Sean M. Lannon
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date:	April 26, 2022	By: /s/ Anthony Massey
		Anthony Massey
		Vice President and Global Controller
		(Principal Accounting Officer)

38

Document

Exhibit 10.1

AXALTA COATING SYSTEMS LTD. AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN

PERFORMANCE SHARE UNIT GRANT NOTICE

Axalta Coating Systems Ltd., a Bermuda exempted limited liability company (the “Company”), pursuant to its Amended and Restated 2014 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of performance share units (the “PSUs”) set forth below. The PSUs are subject to the performance criteria and other terms and conditions set forth in this Performance Share Unit Grant Notice (the “Grant Notice”) and the Performance Share Unit Agreement attached hereto as Exhibit A, including Appendix 1 (Vesting) and Appendix 2 (Confidentiality and Business Protection Agreement) thereto (the “Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

Participant:
Grant Date:
Target Number of PSUs (the “Target PSUs”):	Notwithstanding the number of Target PSUs, the number of PSUs that are eligible to vest pursuant to this Agreement range from [___] to [___]% of the Target PSUs.
Type of Shares Issuable:	Common Stock
Vesting Schedule:	The PSUs will vest in accordance with the terms of this Agreement and the vesting schedule set forth in Appendix 1.

By Participant’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and the Grant Notice. Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice or the Agreement.

AXALTA COATING SYSTEMS LTD.    Holder:	PARTICIPANT
By:	By:
Print Name:	Print Name:
Title:

Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

EXHIBIT A

TO PERFORMANCE SHARE UNIT GRANT NOTICE

PERFORMANCE SHARE UNIT AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the Target PSUs set forth in the Grant Notice. The actual number of PSUs that are eligible to vest pursuant to this Agreement range from [___] to [___]% of the Target PSUs based upon performance metrics set forth on Appendix 1 during the Performance Period and subject to forfeiture, in each case, as set forth in Article II below and the terms of the Plan.

ARTICLE I. GENERAL

1.1    Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.2    Incorporation of Terms of Plan. The PSUs and the shares of Common Stock issued to Participant hereunder (“Shares”) are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control, except with respect to the definition of Change in Control as defined in this Agreement.

ARTICLE II. AWARD OF PERFORMANCE SHARE UNITS AND DIVIDEND EQUIVALENTS

2.1    Award of PSUs and Dividend Equivalents.

(a)    In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the Target PSUs upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 13.2 of the Plan. Each PSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in Section 2.3(b), in either case, at the times and subject to the conditions set forth herein. However, unless and until the PSUs have vested, Participant will have no right to the payment of any Shares subject thereto. Prior to the actual delivery of any Shares, the PSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

(b)    The Company hereby grants to Participant an Award of Dividend Equivalents with respect to each PSU granted pursuant to the Grant Notice for all ordinary cash dividends which are paid to all or substantially all holders of the outstanding Shares between the Grant Date and the date when the applicable PSU is distributed or paid to Participant or is forfeited or expires. The Dividend Equivalents for each PSU shall be equal to the amount of cash which is paid as a dividend on one share of Common Stock. All such Dividend Equivalents shall be credited to Participant and paid in cash at the same time as the distribution or payment is made of the PSU to which such Dividend Equivalent relates in accordance with Section 2.3 below. Any Dividend Equivalents that relate to PSUs that are forfeited shall likewise be forfeited without consideration.

2.2    Vesting of PSUs and Dividend Equivalents.

(a)    Vesting Schedule. Subject to Sections 2.2(b) and (c) below and subject to the terms of this Agreement, the PSUs shall vest, if at all, in amounts up to [___]% of the Target PSUs (the

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

“Maximum PSUs”) on the Determination Date, in accordance with the vesting schedule set forth in Appendix 1.

(b)    Effect of Termination of Service. Notwithstanding any contrary provision of this Agreement, except as otherwise provided in Section 2.2(c)(i)(A), upon Participant’s Termination of Service prior to the date the PSUs are determined to vest pursuant to this Agreement, any and all PSUs and Dividend Equivalents shall immediately be forfeited and Participant’s rights with respect thereto shall lapse and expire; provided that in the event of Participant’s Termination of Service prior to the date the PSUs are determined to vest (i) by the Company by reason of Participant’s Disability or (ii) by reason of death, the Target PSUs (or if such Termination of Service occurs after a Change in Control, then the number of PSUs determined pursuant to Section 2.3(c)(i)) and related Dividend Equivalents shall immediately vest in full and be settled in accordance with Section 2.3(a).

(c)    Change in Control.

(i)    Notwithstanding any contrary provision of this Agreement, if a Change in Control occurs prior to the day immediately prior to the third anniversary of the Grant Date, the number of PSUs determined to vest pursuant to the Change in Control section of Appendix 1 shall vest on [___], subject to the Participant not incurring a Termination of Service prior to such date; provided, that, subject to clause (c)(ii) below, such unvested PSUs shall immediately vest and be settled in accordance with Section 2.3(a) (A) in the event of Participant’s Termination of Service by the Company without Cause or by Participant for Good Reason, in each case, within two (2) years after the Change in Control, (B) immediately prior to (and subject to the consummation of) the Change in Control in the event the successor corporation (or any of its parent entities) does not assume or substitute the unvested PSUs for equivalent rights in connection with such Change in Control, or (C) in the event of Participant’s Termination of Service by the Company by reason of Participant’s Disability or by reason of death as provided in Section 2.2(b).

(ii)    As a condition to any accelerated vesting of the PSUs as set forth in Section 2.2(c)(i)(A) above, Participant shall, within the thirty (30) day period following the date of Participant’s Termination of Service, execute and not revoke a general release of all claims, including all known and unknown and current and potential claims, in favor of the Company and its affiliates in either (A) a form provided to Participant by the Company or (B) if Participant is party to a severance or employment agreement with the Company or any of its affiliates or is a participant in a severance policy of the Company or any of its affiliates, the form of release of claims applicable to Participant under such agreement or policy.

(d)    Lapse of PSUs.

(i)    In the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all PSUs and Dividend Equivalents granted under this Agreement which have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such PSUs and Dividend Equivalents which are not so vested shall lapse and expire.

(ii)    Subject to Sections 2.2(b) and (c), in the event the PSUs do not vest at the maximum level in accordance with the provisions of Section 2.2(a), such PSUs that do not vest in accordance with the provisions of Section 2.2(a) shall be forfeited and Participant’s rights in any such PSUs and related Dividend Equivalents shall lapse and expire.

2.3     Distribution or Payment of PSUs.

(a)    Participant’s PSUs shall be distributed in Shares (either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in Section 2.3(b), in either case, as soon as administratively practicable following the vesting of the applicable PSU pursuant to Section 2.2, and, in any event, within sixty (60) days following such vesting. Notwithstanding the foregoing, the Company may delay a distribution or payment in settlement of PSUs if it reasonably

2

Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

determines that such payment or distribution will violate federal securities laws or any other Applicable Law, provided that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.3(a) if such delay will result in a violation of Section 409A of the Code.

(b)    In the event that the Company elects to make payment of Participant’s PSUs in cash, the amount of cash payable with respect to each PSU shall be equal to the Fair Market Value of a Share on the day immediately preceding the applicable distribution or payment date set forth in Section 2.3(a). All distributions made in Shares shall be made by the Company in the form of whole Shares.

2.4    Conditions to Issuance of Certificates. The Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions: (A) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable, and (D) the receipt of full payment of any applicable withholding tax in accordance with Section 2.5 by the Company or its Subsidiary with respect to which the applicable withholding obligation arises.

2.5    Tax Withholding. Notwithstanding any other provision of this Agreement:

(a)    Participant shall be required to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement. With respect to any withholding taxes arising in connection with the distribution of Shares upon settlement of the PSUs, unless the Participant makes an advance election pursuant to this Section 2.5(a), the Company shall withhold a net number of Shares otherwise issuable pursuant to the PSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries for federal, state, local and foreign income and payroll taxes, up to the maximum statutory withholding rate. Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company to complete the withholding described in the previous sentence. Alternatively, Participant may elect to satisfy such tax withholding obligations in one or more of the forms specified below, provided such election is made in accordance with any advance notice requirements that the Company may establish for this purpose:

(i)    by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;

(ii)    with respect to any withholding taxes arising in connection with the distribution of Shares upon settlement of the PSUs, unless otherwise determined by the Administrator, by requesting that the Company and its Subsidiaries instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those Shares then issuable to Participant pursuant to the PSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceedsof such sale to the Company or the Subsidiary with respect to which the withholding obligation arises;

(iii)    with respect to any withholding taxes arising in connection with the distribution of Shares upon settlement of the PSUs, unless otherwise determined by the Administrator, by tendering to the Company vested Shares having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries for federal, state, local and foreign income and payroll taxes, up to the maximum statutory withholding rate; or

(iv)    in any combination of the foregoing.

3

Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

(b)    With respect to any withholding taxes arising in connection with the PSUs, in the event Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a), the Company shall have the right and option, but not the obligation, to (i) deduct such amounts from other compensation payable to Participant and/or (ii) treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.5(a) above. The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the PSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting or settlement of the PSUs or any other taxable event related to the PSUs. The Company may refuse to issue any Shares in settlement of the PSUs to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5(b) if such delay will result in a violation of Section 409A of the Code.

(c)    Participant is ultimately liable and responsible for all taxes owed in connection with the PSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the PSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the PSUs or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the PSUs to reduce or eliminate Participant’s tax liability.

2.6    Rights as Shareholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a shareholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a shareholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

ARTICLE III.

OTHER PROVISIONS

3.1    Administration. The Administrator shall have the exclusive power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

3.2    PSUs Not Transferable. The PSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the PSUs have been issued, and all restrictions applicable to such Shares have lapsed. No PSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

3.3    Adjustments. The Administrator may accelerate the vesting of all or a portion of the PSUs in such circumstances as it, in its sole discretion, may determine. Participant acknowledges that the

4

Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

PSUs and the Shares subject to the PSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 13.2 of the Plan.

3.4    Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Chief Human Resources Officer of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if to Participant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

3.5    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

3.6    Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

3.7    Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the PSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

3.8    Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the PSUs in any material way without the prior written consent of Participant.

3.9    Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in Section 3.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

3.10    Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the PSUs, the Dividend Equivalents, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.11    Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

3.12    Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit or appendix hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof;

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

provided, however, that (i) if Participant is party to a severance or employment agreement with the Company or any of its affiliates or is a participant in a severance policy of the Company or any of its affiliates, in either case, that provides greater vesting protection to Participant, then the PSUs shall be treated in accordance with the applicable terms of such agreement or policy; and (ii) if Participant is party to the Company’s Executive Restrictive Covenant and Severance Agreement or other severance, non-compete, employment or similar agreement with the Company or any of its affiliates that includes the same or similar restrictive covenants as those in Appendix 2, then Appendix 2 shall not apply to Participant. For the avoidance of doubt, the Company’s Restrictive Covenant and Severance Policy does not constitute an agreement with the same or similar covenants as Appendix 2.

3.13    Section 409A. This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

3.14    Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

3.15    Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PSUs and Dividend Equivalents.

3.16    Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

3.17    Broker-Assisted Sales. In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in Section 2.5(a): (A) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

3.18    Recoupment. Notwithstanding any other provision of the Agreement to the contrary, Participant acknowledges and agrees that all Shares acquired pursuant to the Plan, under this Agreement or otherwise, shall be and remain subject to any incentive compensation recoupment policy of the

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Company currently in effect or as may be adopted by the Company and, in each case, as may be amended from time to time. No such policy adoption or amendment shall require Participant’s prior consent. For purposes of the foregoing, Participant expressly and explicitly authorizes the Company to issue instructions, on Participant’s behalf, to any brokerage firm and/or third party administrator engaged by the Company to hold Participant’s Shares, and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.

3.19    Definitions. For purposes of this Agreement, the following definitions shall apply:

(a)    “Cause” means any of the following: (i) if Participant is a party to a written employment or severance agreement with the Company or any of its Subsidiaries in which the term “cause” is defined (a “Relevant Agreement”), “Cause” as defined in the Relevant Agreement and (ii) if no Relevant Agreement exists, (A) Participant’s failure to (x) substantially perform his or her duties with the Company (other than any such failure resulting from Participant’s Disability) or (y) comply with, in any material respect, any of the Company’s policies; (B) the Company’s determination that Participant failed in any material respect to carry out or comply with any lawful and reasonable directive of the Board; (C) Participant’s breach of a material provision of this Agreement or any Relevant Agreement; (D) Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude; (E) Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s (or any of its affiliate’s) premises or while performing Participant’s duties and responsibilities for the Company; or (F) Participant’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company or any of its affiliates. Notwithstanding the foregoing, in the case of clauses (A), (B) and (C) above, no Cause will have occurred unless and until the Company has: (a) provided Participant written notice describing the applicable facts and circumstances underlying such finding of Cause; and (b) provided Participant with an opportunity to cure the same within 30 days after the receipt of such notice; provided, however, that Participant shall be provided only one cure opportunity per category of Cause event in any rolling six (6) month period. If Participant fails to cure the same within such 30 days, then “Cause” shall be deemed to have occurred as of the expiration of the 30-day cure period.

(b)    “Change in Control” means and includes, notwithstanding anything to the contrary in the Plan, each of the following: (A) a transaction or series of transactions occurring after the Grant Date whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing 30% or more of the total combined voting power of the Company’s securities outstanding immediately after such transaction; (B) during any 12 month period, individuals who, at the beginning of such period, constitute the Board together with any new members of the Board whose election by the Board or nomination for election by the Company’s members was approved by a vote of at least two-thirds of the members of the Board then still in office who either were members of the Board at the beginning of the one-year period or whose election or nomination for election was previously so approved (other than (x) an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, and (y) any member of the Board whose initial assumption of office during such 12 month period in connection with a transaction described in clause (C)(x) below that occurs with a non-affiliate third party), cease for any reason to constitute a majority thereof; or (C) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) after the Grant Date of (x) a merger, consolidation, reorganization, or business combination or (y) a sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets or (z) the acquisition of assets or stock of another entity, other than a transaction:

(i)    in the case of clauses (A) and (C), which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining

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outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, more than seventy percent (70%) of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii)    in the case of clause (C), after which no person or group beneficially owns voting securities representing 30% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 30% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

(c)    “Change in Control Determination Date” means any date within thirty days prior to the date of a Change in Control, as determined by the Administrator.

(d)    “Determination Date” means the date the Administrator determines the number of PSUs that shall vest pursuant to Section 2.2(a), which date shall be no later than [___].

(e)    “Disability” shall mean the following: (a) if Participant is a party to an employment, severance or similar agreement with the Company or any of its affiliates in which “disability ” or term of like import is defined, “Disability” or term of like import as defined in such agreement and (b) if no such agreement exists, at any time the Company or any of its affiliates sponsors a long-term disability plan for the Company’s employees, “disability” as defined in such long-term disability plan for the purpose of determining a participant’s eligibility for benefits, provided, however, if the long-term disability plan contains multiple definitions of disability, “Disability” shall refer to that definition of disability which, if Participant qualified for such disability benefits, would provide coverage for the longest period of time. The determination of whether Participant has a Disability shall be made by the person or persons required to make disability determinations under the long-term disability plan. At any time the Company does not sponsor a long-term disability plan for its employees, Disability shall mean Participant’s inability to perform, with or without reasonable accommodation, the essential functions of the Participant’s position for a total of three months during any six-month period as a result of incapacity due to mental or physical illness as determined by a physician selected by the Company or its insurers and acceptable to Participant or Participant’s legal representative, with such agreement as to acceptability not to be unreasonably withheld or delayed.

(f)    “Good Reason” means (i) if Participant is a party to a Relevant Agreement in which the term “good reason” is defined, “Good Reason” as defined in the Relevant Agreement and (ii) if no Relevant Agreement exists or “good reason” is not defined therein, the occurrence of any of the following events or conditions without Participant’s written consent: (A) a decrease in Participant’s annual base salary at the rate in effect on day prior to the date of Participant’s Termination of Service (without regard to any decrease that may occur after the date of a Change in Control), other than a reduction of less than 10% that is implemented in connection with a contemporaneous reduction in annual base salaries affecting other similarly situated employees of the Company, (B) a material decrease in Participant’s authority or areas of responsibility as are commensurate with such Participant’s title or position, or (C) the relocation of Participant’s primary office to a location more than 35 miles from Participant’s then-current primary office location. Participant must provide written notice to the Company of the occurrence of any of the foregoing events or conditions within ninety (90) days of the occurrence of such event or the date upon which Participant reasonably became aware that such an event or condition had occurred. The Company or any successor or affiliate shall have a period of thirty (30) days to cure such event or condition after receipt of written notice of such event from Participant. Any voluntary termination for “Good Reason” following such thirty (30) day cure period must occur no later than the date that is one (1) year following the date notice was provided by Participant. Participant’s voluntary “separation from service” within the meaning of Section 409A by reason of resignation from employment with the Company for Good Reason shall be treated as involuntary.

(g)    “Performance Period” means the period beginning on [___] and ending on [___].

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* * * * *

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APPENDIX 1

TO PERFORMANCE SHARE UNIT GRANT NOTICE

VESTING

ADJUSTED EPS PSU BANKING

1.    If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between [____]% and [____]% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

2.    If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between [____]% and [____]% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

3.    If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to [____]% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

4.    If the Company achieves an Adjusted EPS between the “Threshold” and “Target” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between [____]% and [____]% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

5.    If the Company achieves an Adjusted EPS between the “Target” and “Maximum” amounts in the table below for the cumulative Performance Period, a number of PSUs equal to between [____]% and [____]% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

6.    If the Company achieves an Adjusted EPS greater than the “Maximum” amount in the table below for the cumulative Performance Period, a number of PSUs equal to [____]% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

ADJUSTED EPS	Fiscal Year<br><br>[___]	Fiscal Year<br><br>[___]	Fiscal Year<br><br>[___]	Performance Period<br><br>([___]% [__]-year)
Metric Target	$[___]	$[___]	$[___]	$[___]
Threshold<br><br>(% of metric target)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)
Target<br><br>(% or metric target)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br>([____]%)
Maximum<br><br>(% of metric target)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)	$[___]<br><br>([____]%)

ROIC PSU BANKING

1.    If the Company achieves an ROIC between the “Threshold” and “Target” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between

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[____]% and [____]% of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

2.    If the Company achieves an ROIC between the “Target” and “Maximum” amounts in the table below for any fiscal year during the Performance Period, a number of PSUs equal to between [____]% and [____] of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

3.    If the Company achieves an ROIC greater than the “Maximum” amount in the table below for any fiscal year during the Performance Period, a number of PSUs equal to [____]% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

4.    If the Company achieves an [___] ROIC between the “Threshold” and “Target” amounts in the table below over the Performance Period, a number of PSUs equal to between [____]% and [____] of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

5.    If the Company achieves an [___] ROIC between the “Target” and “Maximum” amounts in the table below over the Performance Period, a number of PSUs equal to between [____]% and [____] of the Target PSUs, using straight-line interpolation (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

6.    If the Company achieves an [___] ROIC greater than the “Maximum” amount in the table below over the Performance Period, a number of PSUs equal to [____]% of the Target PSUs (rounded up to the nearest whole PSU), shall be designated “Banked PSUs.”

ROIC	Fiscal Year<br><br>[___]	Fiscal Year<br><br>[___]	Fiscal Year<br><br>[___]	Performance Period<br><br>([___] [__]-year)
Metric Target	[___]%	[___]%	[___]%	[___]%
Threshold<br><br>(% of metric target)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)
Target<br><br>(% or metric target)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br>([___]%)
Maximum<br><br>(% of metric target)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)	[___]%<br><br>([___]%)

TSR MODIFER

1.    If the Company achieves a TSR over the [_____] Period that is at or below the [___] percentile of the TSRs of the component members of the Company’s Peer Group over the [____] Period, a number of PSUs equal to [___]% of the Banked PSUs shall vest.

2.    If the Company achieves a TSR over the [____] Period that is between the [___] percentile and [___] percentile of the TSRs of the component members of the Company’s Peer Group over the [____] Period, a number of PSUs equal to [___]% of the Banked PSUs shall vest.

3.    If the Company achieves a TSR over the [____] Period that is at or above the [___] percentile of the TSRs of the component members of the Company’s Peer Group over the [____] Period, a number of PSUs equal to the lesser of (i) [___]% of the Banked PSUs or (ii) the Maximum PSUs, shall vest.

CHANGE IN CONTROL

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

If a Change in Control occurs prior to the last day of the Performance Period, the number of PSUs determined to vest shall be equal to (A) the number of Banked PSUs, if any, plus (B) [___]%, [___]% or [___]% of the Target PSUs if the Change in Control occurs during fiscal year [___], [___] or [___], respectively, in each case as modified by the TSR Modifier Section of this Appendix 1. [If a Change in Control occurs on or after the last day of the Performance Period but before the day immediately prior to the third anniversary of the Grant Date, the number of PSUs determined to vest shall be equal to the number of Banked PSUs (for clarity, determined as described in this Appendix 1 based on actual performance through the end of the Performance Period), as modified by the TSR Modifier Section of this Appendix 1 (for clarity, calculated based on TSR performance through the Change in Control Determination Date).]

DEFINITIONS

For purposes of this Appendix 1, the following definitions shall apply to capitalized terms not defined in the Performance Share Unit Grant Notice or the Performance Share Unit Agreement:

(a)    “Adjusted EPS” means the diluted earnings per share of the Company, adjusted for (i) certain non-cash items included within net income, (ii) certain items not indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items that have not occurred within the last two years or are not reasonably likely to recur within the next [__] years, each as determined by the Committee and subject to certain other adjustments made in the Committee’s discretion.

(b)    “Average Market Value” of the Company or a member of the Peer Group, as applicable, means, as of any day, the average closing price per share of Common Stock (or per share of common stock of a member of the Peer Group, as applicable) over the [____] trading days ending with and including that day (or, if there is no closing price on that day, the last trading day before that day).

(c)    “Beginning Average Market Value” means the Average Market Value as of [___].

(d)     “Ending Average Market Value” means the Average Market Value as of [___]; provided, that, for clarity, in the event a Change in Control occurs during the [____] Period, “Ending Average Market Value” means the Average Market Value as of the Change in Control Determination Date.

(e)    “Peer Group” shall consist of the companies included in the [___] Index as of [___]; provided, however, that if a member of the Peer Group ceases to be a Publicly Traded Company for any reason during the [____] Period or is acquired by another Publicly Traded Company (other than a transaction the principal purpose of which is to change the name, corporate form or jurisdiction of incorporation or formation of the Peer Group member), the member shall be automatically removed from and treated as never having been included in the Peer Group.

(f)    “Performance Period” means the period beginning on [___] and ending on [___]%.

(g)     “Publicly Traded Company” means a company whose shares are regularly quoted or traded on an active securities exchange, over-the-counter market or inter-dealer quotation system.

(h)     “ROIC” means the return on invested capital of the Company, calculated as a fraction using (i) a numerator of adjusted earnings before interest and taxes (Adjusted EBIT) and (ii) a denominator of debt plus equity less cash (Invested Capital), each as determined by the Committee and subject to certain adjustments made in the Committee’s discretion.

(i)    “TSR” means the percentage appreciation (positive or negative) in the Common Stock price (or common stock price of a member of the Peer Group, as applicable) over the [___] Period, determined by dividing (i) the difference obtained by subtracting (A) the Beginning Average Market Value, from (B) the Ending Average Market Value plus all cash dividends for the [____] Period, assuming same-day reinvestment into Common Stock (or common stock of the applicable member of the Peer Group) on the applicable ex-dividend date, by (ii) the Beginning Average Market Value. TSR shall

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

be equitably adjusted to reflect stock dividends, stock-splits, spin-offs, and other corporate changes having similar effect. The Committee may adjust the Company’s TSR to take into account unusual or nonrecurring events, including unusual and extraordinary corporate transactions, events or developments, events outside the scope of the Company’s core business activities or any other items set forth in the performance criteria adjustment provisions of the Plan.

(j)    “TSR Period” means the period beginning on [____] and ending on [____].

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

APPENDIX 2

TO PERFORMANCE SHARE UNIT AGREEMENT

CONFIDENTIALITY AND BUSINESS PROTECTION AGREEMENT

Capitalized terms used but not defined in this Appendix 2 shall have the respective meanings ascribed to such terms in the Agreement, the Grant Notice or the Plan, as applicable.

WHEREAS, the Company operates in a highly competitive business environment and has a legitimate interest in protecting its valuable assets, including its confidential information, trade secrets, and intellectual property; its goodwill and reputation; the business relationships it has developed with its clients and vendors; and the training and development of its employees;

WHEREAS, Participant’s employment and responsibilities with the Company have permitted and will in the future permit Participant to have access to competitively sensitive and highly confidential business information and trade secrets of the Company and to derive and enjoy the benefit of the Company’s relationships with its customers and business partners, which have been developed by the Company’s employees and/or or as a result of the innovative products and technologies that the Company has brought or will bring to its customers (“Goodwill”);

WHEREAS, the Company’s customers are located across the United States and around the world; the market for the Company’s products, processes, and services is national and international in scope; the Company sells and markets the same or similar products, processes, and services across state and national boundaries; and the Company’s market expands or contracts over time based on the growth of the Company’s business and the demand for the Company’s products, processes, and services;

WHEREAS, the Company desires to ensure that its confidential information, trade secrets, intellectual property, goodwill, reputation, business relationships, and investment in training and developing employees are adequately protected and are not used or disclosed without proper authorization by the Company; and

WHEREAS, Participant’s eligibility to receive the PSUs is conditioned upon Participant’s timely acceptance of the obligations and other terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of Participant’s eligibility for the PSUs, and as a condition of Participant’s continued access to the Company’s confidential information and trade secrets and the benefit of the Company’s Goodwill and customer relationships, the Company and Participant agree as follows:

1.    Access to Confidential Information. In the course of Participant’s employment, the Company will provide Participant with access to certain Confidential Information, which is not in the public domain, is highly valuable and competitively sensitive and which, if acquired by the Company’s competitors, would cause irreparable harm to the Company. As used in this Agreement, “Confidential Information” means all information that Participant acquires from the Company which is not publicly known outside of the Company, and which concerns any of the following: the methods, processes, or know-how used or developed by the Company to design, manufacture, distribute, market, or sell its products, processes, or services; the research, development, or design of the Company’s products or processes; the Company’s plans or strategies for sales, marketing, or distribution; the Company’s supply and distribution processes or arrangements; research initiatives or projects; results of tests or experiments; information on financial performance, pricing, margins, or profits or production, labor, or other costs; market or sales data; existing or planned merger, acquisition, or divestiture activities; proposals or terms of contracts with customers, suppliers, distributors, or others; the identity and skills of other the Company employees; and information provided to the Company by its customers, suppliers, or third parties pursuant to a confidentiality obligation or an expectation of confidentiality.

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2.    Covenants to Protect Confidential Information. Participant covenants, promises, and agrees that she/he will not, directly or indirectly, use Confidential Information (or cause or permit it to be used) for any purpose other than the good-faith performance of her/his duties as a Company employee. In addition, subject to the Permitted Disclosures referenced below, Participant covenants, promises, and agrees that she/he will not, directly or indirectly, disclose Confidential Information (or cause or permit it to be disclosed) to any individual or person other than employees, consultants, contractors, suppliers, vendors, or teammates authorized by the Company to receive such information and having a need to know such information in connection with the good-faith support of the Company’s business activities. Participant further covenants, promises, and agrees (a) not to remove from the Company’s premises (including the Company’s computer systems, servers, and networks) any Confidential Information in any form, except as required in the performance of his or her duties as an the Company employee, and (b) to return to the Company any and all records containing Confidential Information immediately upon termination of the employment relationship between Participant and the Company. Furthermore, Participant covenants, promises, and agrees not to accept employment with any employer that manufactures, markets, or sells products, processes, or services that are similar to or competitive with products, processes, or services manufactured, marketed, or sold by the Company, where such employment would involve duties the performance of which would inevitably cause Participant to use or disclose Confidential Information of the Company for the benefit of a third party in violation of this Agreement. The covenants and promises set forth in this section shall continue both during and after Participant’s employment with the Company and, notwithstanding any other provision of this Agreement, in all cases shall be subject to the Permitted Disclosures referenced below.

3.    Covenant to Protect Goodwill and Customer Relationships. Participant acknowledges that the Goodwill of the Company shall belong to the Company and not be used for the benefit of Participant, a future employer, or any other third party. In recognition of the value and importance of the Goodwill to the Company, Participant covenants, promises, and agrees that, during the Restricted Period (as defined below), Participant will refrain from directly or indirectly soliciting or attempting to solicit business from a Customer1 or a Prospective Customer,2 where a purpose of such solicitation is to induce the Customer or Prospective Customer to reduce or alter its business relationship with the Company or to purchase or acquire from a third party any product, process, or service that is competitive with any product, process, or service that the Company offers to its customers. As used in this Agreement, the Restricted Period shall consist of the continuous period of twelve (12) consecutive months immediately following the Participant’s separation from service with the Company, provided, however, that this twelve (12)-month period may be extended by any period of Participant’s noncompliance with the covenants and promises set forth in this Agreement.

4.    Covenant Not to Solicit Employees. In recognition of the Company’s investment in recruiting, training, and developing its employees, Participant covenants, promises, and agrees that, during employment by the Company and during the Restricted Period, she/he shall not solicit or encourage any employee of the Company to resign from or cease employment with the Company, or to accept a position as an employee or consultant for any other entity or person that manufactures, sells, or markets products, processes, or services that are similar to or competitive with products, processes, or services manufactured, sold, or marketed by the Company. This Section 4 does not apply to the solicitation of any Company employee who is not employed by the Company until after the date on which Participant’s Termination of Service occurs.

5.     Covenants Not to Compete.

1 “Customer” refers to any person or entity (a) to which Axalta sells any of its products, processes, or services during Employee’s employment with Axalta, and (b) with which Employee has one or more business contacts or as to which Employee receives or acquires any Confidential Information at any time in the course of the final 24 months of Employee’s employment with Axalta.

2 “Prospective Customer” refers to any person or entity with respect to which, at any time in the course of the final 24 months of Employee’s employment with Axalta, Employee is involved in seeking to market, sell, or develop opportunities for the sale of any of Axalta’s products, processes, or services.

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a.    Establishment or Leadership of a Competitive Business. During Participant’s employment with the Company, and during the Restricted Period, Participant covenants, promises, and agrees that she/he shall not, within the Geographic Territory, either (i) directly or indirectly own, establish, or control (other than through ownership of less than two percent (2%) of the shares of publicly traded stock) or (ii) serve as an officer, director, principal, or partner of a business that manufactures, develops, markets, or sells products, processes, or services that are similar to or competitive with the products, processes, or services that are manufactured, marketed, sold, or being developed by the Company during the final twenty-four (24) months of Participant’s employment with the Company. As used herein, the “Geographic Territory” is defined to include all states of the United States in which the Company manufactures, distributes, sells, or markets its products, processes, or services during the twenty-four (24) months immediately preceding the start of the Restricted Period, and all countries in which the Company manufactures, distributes, sells, or markets its products, processes, or services during the twenty-four (24) months immediately preceding the start of the Restricted Period. The Geographic Territory does not include any state or country in which the Company does not maintain operations or commence sales or marketing until after the start of the Restricted Period.

b.    Prohibited Positions with Competitors. During Participant’s employment with the Company and during the Restricted Period, Participant covenants, promises, and agrees that she/he shall not directly or indirectly engage in, have any equity interest in, interview for a potential employment or consulting relationship with or manage, provide services to or operate any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any portion of the Business (as defined below) of the Company. The term “Business” refers to the business of the Company and shall include the manufacturing and sale of automotive and industrial paints, coatings and related products, as such business may be expanded or altered by the Company during the term of the Participant’s employment with the Company. This Agreement shall not be construed to bar any attorney from engaging in the practice of law as an attorney for any third party; provided that he or she otherwise complies with his or her obligations under this Agreement and under the applicable rules of professional conduct.

6.    Nature and Timing of Separation. The obligations set forth in this Agreement shall apply regardless of the voluntary or involuntary nature of the termination of the employment relationship between the Company and Participant, the duration of that relationship, or any other circumstances under which the relationship terminates.

7.    Injunctive Relief. Participant specifically acknowledges and agrees that Participant’s violation of any obligation under the preceding sections of this Agreement will cause irreparable harm to the Company’s legitimate business interests, and that such harm cannot be measured by any specific amount of money or adequately remedied by the award of any sum of monetary damages. Therefore, Participant specifically agrees and understands that the Company will be entitled to specific performance and injunctive and other equitable relief in case of any breach or attempted breach of the preceding sections and agrees not to assert as a defense that the Company has an adequate remedy at law. Any injunctive relief shall be in addition to, and not in lieu of, any other remedies available to the Company.

8.    Conformance and Severability. It is the intent of the Parties that each of the covenants and promises set forth above is divisible and severable from the other covenants and promises in those sections. The Parties further intend that this Agreement be enforceable to the maximum extent possible and that, if a court of competent jurisdiction determines that any term or clause renders some or all of this Agreement invalid or unenforceable, then, such term or clause should be modified to the extent necessary to make the Agreement legal and enforceable while preserving as much as possible of the intent of such term or clause. Where a court of competent jurisdiction determines that any term or clause renders some or all of this Agreement invalid or unenforceable, and such modification is not feasible, it is the intent of the Parties that the offending term or clause should be substituted with another term or clause that is enforceable and most nearly achieves the same objectives. Where a court determines that neither modification nor substitution of such term or clause is feasible under the circumstances, only then shall the offending term or clause be severed and stricken from the Agreement, but only to the extent that the

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term or clause is invalid or unenforceable, and the remaining provisions of the Agreement shall be enforced in accordance with their terms and entitled to full force and effect.

9.    Permitted Disclosures. Notwithstanding any other provision of this Agreement, Participant will not be held civilly or criminally liable under any federal or state trade secret law for disclosing a trade secret of the Company in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney representing or advising Participant concerning such disclosure, if the disclosure (a) is made solely for the purpose of reporting or investigating a suspected violation of law or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, as long as such filing is made under seal.  In addition, if Participant files a lawsuit against the Company for retaliation for reporting a suspected violation of law, Participant may disclose trade secrets of the Company to the attorney representing him/her and may use the trade secret information in the court proceeding, only if any document containing the trade secret is filed under seal, and Participant does not disclose the trade secret except as specifically directed or authorized by a court order. In addition, nothing in this Agreement should be construed (i) to impede or interfere with Participant’s right to respond truthfully and completely to any request for information regarding the Company’s activities where disclosure is required by legal process, or (ii) to prevent Participant from communicating directly with, responding to any inquiry from, or providing truthful testimony or information to, any regulatory or law enforcement agency of the United States, the U.S. Congress, an Inspector General, or a state government agency in the course of a lawful investigation or proceeding. Participant is not required to contact the Company as a precondition to any of the foregoing, provided, however, that Participant cannot, without the written approval of the Company’s General Counsel, disclose the substance of communications between the Company personnel and the Company’s legal counsel which are protected by the Company’s attorney-client privilege.

10.    General.

a.    With the exception of modification or substitution of terms by a court of competent jurisdiction under the Conformance and Severability section above, no modification or waiver of any provision of this Agreement shall be valid unless in writing signed by both Parties and specifically referring to this Agreement by name.

b.    Participant acknowledges that the services to be rendered by Participant are personal and that Participant may not assign any of her/his duties or obligations under this Agreement. The Company may assign the Agreement to any successor or transferee. This Agreement shall be valid and binding upon all heirs, successors and assigns of the Parties.

c.    No delay or omission in enforcing any provision of this Agreement or in exercising any right or remedy set forth in this Agreement shall operate as a waiver of any right or remedy or preclude enforcement or specific performance of such provision or the exercise of any right or remedy.

d.    The Parties acknowledge that they have each read this Agreement in its entirety, understand it, agree to be bound by its terms and conditions, and intend that the Agreement be interpreted as if drafted equally by both Parties.

e.    Participant agrees that the Company may, in its sole discretion, share all or part of this Agreement with any future or prospective employer to the extent reasonably necessary to ensure Participant’s compliance. In addition, Participant agrees to provide the Company, upon its request, with the name, address, and contact information of any new employer or third party whose relationship with Participant may violate the provisions of this Agreement.

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Axalta – PSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

Document

Exhibit 10.2

AXALTA COATING SYSTEMS LTD. 2014 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

Axalta Coating Systems Ltd., a Bermuda exempted limited liability company (the “Company”), pursuant to its 2014 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of Restricted Stock Units (the “RSUs”) set forth below. The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A, including Appendix 1 (Confidentiality and Business Protection Agreement) thereto (the “Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

Participant:
Grant Date:
Number of RSUs:
Type of Shares Issuable:	Common Stock

By Participant’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and the Grant Notice. Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice or the Agreement.

AXALTA COATING SYSTEMS LTD.    Holder:	PARTICIPANT
By:	By:
Print Name:	Print Name:
Title:

Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

EXHIBIT A

TO RESTRICTED STOCK UNIT GRANT NOTICE

RESTRICTED STOCK UNIT AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number of RSUs set forth in the Grant Notice.

ARTICLE I. GENERAL

1.1    Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.2    Incorporation of Terms of Plan. The RSUs and the shares of Common Stock (“Shares”) issued to Participant hereunder (“Shares”) are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control, except with respect to the definition of Change in Control as defined in this Agreement.

ARTICLE II. AWARD OF RESTRICTED STOCK UNITS AND DIVIDEND EQUIVALENTS

2.1    Award of RSUs and Dividend Equivalents.

(a)    In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 13.2 of the Plan. Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in Section 2.3(b), in either case, at the times and subject to the conditions set forth herein. However, unless and until the RSUs have vested, Participant will have no right to the payment of any Shares subject thereto. Prior to the actual delivery of any Shares, the RSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

(b)    The Company hereby grants to Participant an Award of Dividend Equivalents with respect to each RSU granted pursuant to the Grant Notice for all ordinary cash dividends which are paid to all or substantially all holders of the outstanding Shares between the Grant Date and the date when the applicable RSU is distributed or paid to Participant or is forfeited or expires. The Dividend Equivalents for each RSU shall be equal to the amount of cash which is paid as a dividend on one share of Common Stock. All such Dividend Equivalents shall be credited to Participant and paid in cash at the same time as the distribution or payment is made of the RSU to which such Dividend Equivalent relates in accordance with Section 2.3 below. Any Dividend Equivalents that relate to RSUs that are forfeited shall likewise be forfeited without consideration.

2.2    Vesting of RSUs and Dividend Equivalents.

(a)    Subject to Participant’s continued employment with or service to the Company or a Subsidiary on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest as follows: three equal installments occurring on the first, second and third anniversaries of the Grant Date. Each additional RSU which results from deemed reinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof shall vest whenever the underlying RSU to which such additional RSU relates vests. In the event of Participant’s Termination of Service (i) by the Company without Cause within two

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(2) years after a Change in Control (subject to Section 2.2(c)), (ii) by the Company by reason of Participant’s Disability or (iii) by reason of death, any unvested RSUs shall immediately vest in full and be settled; provided, that if Participant is party to a severance or employment agreement with the Company or any of its affiliates or is a participant in a severance policy of the Company or any of its affiliates, in either case, that provides greater vesting protection to Participant, the RSUs shall be treated in accordance with the applicable terms of such agreement or policy.

(b)    In the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all RSUs and Dividend Equivalents granted under this Agreement which have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs and Dividend Equivalents which are not so vested shall lapse and expire.

(c)    As a condition to any accelerated vesting of the RSUs due to Participant’s Termination of Service by the Company without Cause within two (2) years after a Change in Control as set forth in Section 2.2(a), Participant shall, within the thirty (30) day period following the date of Participant’s Termination of Service, execute and not revoke a general release of all claims, including all known and unknown and current and potential claims, in favor of the Company and its affiliates in either (A) a form provided to Participant by the Company or (B) if Participant is party to a severance or employment agreement with the Company or any of its affiliates or is a participant in a severance policy of the Company or any of its affiliates, the form of release of claims applicable to Participant under such agreement or policy.

2.3    Distribution or Payment of RSUs.

(a)    Participant’s RSUs shall be distributed in Shares (either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in Section 2.3(b), in either case, as soon as administratively practicable following the vesting of the applicable RSU pursuant to Section 2.2, and, in any event, within sixty (60) days following such vesting. Notwithstanding the foregoing, the Company may delay a distribution or payment in settlement of RSUs if it reasonably determines that such payment or distribution will violate federal securities laws or any other Applicable Law, provided that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.3(a) if such delay will result in a violation of Section 409A of the Code.

(b)    In the event that the Company elects to make payment of Participant’s RSUs in cash, the amount of cash payable with respect to each RSU shall be equal to the Fair Market Value of a Share on the day immediately preceding the applicable distribution or payment date set forth in Section 2.3(a). All distributions made in Shares shall be made by the Company in the form of whole Shares, and any fractional share shall be distributed in cash in an amount equal to the value of such fractional share determined based on the Fair Market Value as of the date immediately preceding the date of such distribution.

2.4    Conditions to Issuance of Certificates. The Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions: (A) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable, and (D) the receipt of full payment of any applicable withholding tax in accordance with Section 2.5 by the Company or its Subsidiary with respect to which the applicable withholding obligation arises.

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2.5    Tax Withholding. Notwithstanding any other provision of this Agreement:

(a)    Participant shall be required to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement. With respect to any withholding taxes arising in connection with the Shares upon settlement of the RSUs, unless the Participant makes an advance election pursuant to this Section 2.5(a), the Company shall withhold a net number of Shares otherwise issuable pursuant to the RSUs being settled having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries for federal, state, local and foreign income and payroll taxes purposes, up to the maximum statutory withholding rate. Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company to complete the withholding described in the previous sentence. Alternatively, Participant may elect to satisfy such tax withholding obligations in one or more of the forms specified below, provided such election is made in accordance with any advance notice requirements that the Company may establish for this purpose:

(i)    by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;

(ii)    with respect to any withholding taxes arising in connection with the distribution of Shares upon settlement of the RSUs, unless otherwise determined by the Administrator, by requesting that the Company and its Subsidiaries instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those Shares then issuable to Participant pursuant to the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises;

(iii)    with respect to any withholding taxes arising in connection with the distribution of Shares upon settlement of the RSUs, unless otherwise determined by the Administrator, by tendering to the Company vested Shares having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries for federal, state, local and foreign income and payroll taxes, up to the maximum statutory withholding rate; or

(iv)    in any combination of the foregoing.

(b)    With respect to any withholding taxes arising in connection with the RSUs, in the event Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a), the Company shall have the right and option, but not the obligation, to (i) deduct such amounts from other compensation payable to Participant and/or (ii) treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.5(a) above. The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs. The Company may refuse to issue any Shares in settlement of the RSUs to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5 if such delay will result in a violation of Section 409A of the Code.

(c)    Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

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2.6    Rights as Shareholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a shareholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a shareholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

ARTICLE III.

OTHER PROVISIONS

3.1    Administration. The Administrator shall have the exclusive power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

3.2    RSUs Not Transferable. The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the RSUs have been issued, and all restrictions applicable to such Shares have lapsed. No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

3.3    Adjustments. The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole discretion, may determine. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 13.2 of the Plan.

3.4    Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Chief Human Resources Officer of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if to Participant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

3.5    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

3.6    Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

3.7    Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws

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and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

3.8    Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

3.9    Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in Section 3.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

3.10    Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RSUs (including RSUs which result from the deemed reinvestment of Dividend Equivalents), the Dividend Equivalents, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.11    Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

3.12    Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit or appendix hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof; provided, however, that (i) if Participant is party to a severance or employment agreement with the Company or any of its affiliates or is a participant in a severance policy of the Company or any of its affiliates, in either case, that provides greater vesting protection to Participant, then the RSUs shall be treated in accordance with the applicable terms of such agreement or policy; and (ii) if Participant is party to the Company’s Executive Restrictive Covenant and Severance Agreement or other severance, non-compete, employment or similar agreement with the Company or any of its affiliates that includes the same or similar restrictive covenants as those in Appendix 1, then Appendix 1 shall not apply to Participant. For the avoidance of doubt, the Company’s Restrictive Covenant and Severance Policy does not constitute an agreement with the same or similar covenants as Appendix 1.

3.13    Section 409A. This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are

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Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

3.14    Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

3.15    Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs and Dividend Equivalents.

3.16    Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

3.17    Broker-Assisted Sales. In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in Section 2.5(a): (A) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

3.18    Recoupment. Notwithstanding any other provision of the Agreement to the contrary, Participant acknowledges and agrees that all Shares acquired pursuant to the Plan, under this Agreement or otherwise, shall be and remain subject to any incentive compensation recoupment policy of the Company currently in effect or as may be adopted by the Company and, in each case, as may be amended from time to time. No such policy adoption or amendment shall require Participant’s prior consent. For purposes of the foregoing, Participant expressly and explicitly authorizes the Company to issue instructions, on Participant’s behalf, to any brokerage firm and/or third party administrator engaged by the Company to hold Participant’s Shares, and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.

3.19    Definitions. Notwithstanding anything to the contrary in the Plan, for purposes of this Agreement:

(a)    “Change in Control” shall mean and includes each of the following: (i) a transaction or series of transactions occurring after the Grant Date whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing 30% or more of the total combined voting power of the Company’s securities outstanding immediately after such transaction; (ii) during any 12 month period, individuals who, at the beginning of such period,

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constitute the Board together with any new members of the Board whose election by the Board or nomination for election by the Company’s members was approved by a vote of at least two-thirds of the members of the Board then still in office who either were members of the Board at the beginning of the one-year period or whose election or nomination for election was previously so approved (other than (x) an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, and (y) any member of the Board whose initial assumption of office during such 12 month period in connection with a transaction described in clause (iii)(x) below that occurs with a non-affiliate third party), cease for any reason to constitute a majority thereof; or (iii) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) after the Grant Date of (x) a merger, consolidation, reorganization, or business combination or (y) a sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets or (z) the acquisition of assets or stock of another entity, other than a transaction:

(i)    in the case of clauses (i) and (iii), which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, more than seventy percent (70%) of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii)    in the case of clause (iii), after which no person or group beneficially owns voting securities representing 30% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (b) as beneficially owning 30% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

(b)    “Disability” shall mean the following: (a) if Participant is a party to an employment, severance or similar agreement with the Company or any of its affiliates in which “disability ” or term of like import is defined, “Disability” or term of like import as defined in such agreement and (b) if no such agreement exists, at any time the Company or any of its affiliates sponsors a long-term disability plan for the Company’s employees, “disability” as defined in such long-term disability plan for the purpose of determining a participant’s eligibility for benefits, provided, however, if the long-term disability plan contains multiple definitions of disability, “Disability” shall refer to that definition of disability which, if Participant qualified for such disability benefits, would provide coverage for the longest period of time. The determination of whether Participant has a Disability shall be made by the person or persons required to make disability determinations under the long-term disability plan. At any time the Company does not sponsor a long-term disability plan for its employees, Disability shall mean Participant’s inability to perform, with or without reasonable accommodation, the essential functions of Participant’s position for a total of three months during any six-month period as a result of incapacity due to mental or physical illness as determined by a physician selected by the Company or its insurers and acceptable to Participant or Participant’s legal representative, with such agreement as to acceptability not to be unreasonably withheld or delayed.

* * * *

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Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

APPENDIX 1

TO RESTRICTED STOCK UNIT AGREEMENT

CONFIDENTIALITY AND BUSINESS PROTECTION AGREEMENT

Capitalized terms used but not defined in this Appendix 1 shall have the respective meanings ascribed to such terms in the Agreement, the Grant Notice or the Plan, as applicable.

WHEREAS, the Company operates in a highly competitive business environment and has a legitimate interest in protecting its valuable assets, including its confidential information, trade secrets, and intellectual property; its goodwill and reputation; the business relationships it has developed with its clients and vendors; and the training and development of its employees;

WHEREAS, Participant’s employment and responsibilities with the Company have permitted and will in the future permit Participant to have access to competitively sensitive and highly confidential business information and trade secrets of the Company and to derive and enjoy the benefit of the Company’s relationships with its customers and business partners, which have been developed by the Company’s employees and/or or as a result of the innovative products and technologies that the Company has brought or will bring to its customers (“Goodwill”);

WHEREAS, the Company’s customers are located across the United States and around the world; the market for the Company’s products, processes, and services is national and international in scope; the Company sells and markets the same or similar products, processes, and services across state and national boundaries; and the Company’s market expands or contracts over time based on the growth of the Company’s business and the demand for the Company’s products, processes, and services;

WHEREAS, the Company desires to ensure that its confidential information, trade secrets, intellectual property, goodwill, reputation, business relationships, and investment in training and developing employees are adequately protected and are not used or disclosed without proper authorization by the Company; and

WHEREAS, Participant’s eligibility to receive the RSUs are conditioned upon Participant’s timely acceptance of the obligations and other terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of Participant’s eligibility for the RSUs, and as a condition of Participant’s continued access to the Company’s confidential information and trade secrets and the benefit of the Company’s Goodwill and customer relationships, the Company and Participant agree as follows:

1.    Access to Confidential Information. In the course of Participant’s employment, the Company will provide Participant with access to certain Confidential Information, which is not in the public domain, is highly valuable and competitively sensitive and which, if acquired by the Company’s competitors, would cause irreparable harm to the Company. As used in this Agreement, “Confidential Information” means all information that Participant acquires from the Company which is not publicly known outside of the Company, and which concerns any of the following: the methods, processes, or know-how used or developed by the Company to design, manufacture, distribute, market, or sell its products, processes, or services; the research, development, or design of the Company’s products or processes; the Company’s plans or strategies for sales, marketing, or distribution; the Company’s supply and distribution processes or arrangements; research initiatives or projects; results of tests or experiments; information on financial performance, pricing, margins, or profits or production, labor, or other costs; market or sales data; existing or planned merger, acquisition, or divestiture activities; proposals or terms of contracts with customers, suppliers, distributors, or others; the identity and skills of other the Company employees; and information provided to the Company by its customers, suppliers, or third parties pursuant to a confidentiality obligation or an expectation of confidentiality.

2.    Covenants to Protect Confidential Information. Participant covenants, promises, and agrees that she/he will not, directly or indirectly, use Confidential Information (or cause or permit it to be used) for any purpose other than the good-faith performance of her/his duties as a Company employee. In addition, subject to the Permitted Disclosures referenced below, Participant covenants, promises, and

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agrees that she/he will not, directly or indirectly, disclose Confidential Information (or cause or permit it to be disclosed) to any individual or person other than employees, consultants, contractors, suppliers, vendors, or teammates authorized by the Company to receive such information and having a need to know such information in connection with the good-faith support of the Company’s business activities. Participant further covenants, promises, and agrees (a) not to remove from the Company’s premises (including the Company’s computer systems, servers, and networks) any Confidential Information in any form, except as required in the performance of his or her duties as an the Company employee, and (b) to return to the Company any and all records containing Confidential Information immediately upon termination of the employment relationship between Participant and the Company. Furthermore, Participant covenants, promises, and agrees not to accept employment with any employer that manufactures, markets, or sells products, processes, or services that are similar to or competitive with products, processes, or services manufactured, marketed, or sold by the Company, where such employment would involve duties the performance of which would inevitably cause Participant to use or disclose Confidential Information of the Company for the benefit of a third party in violation of this Agreement. The covenants and promises set forth in this section shall continue both during and after Participant’s employment with the Company and, notwithstanding any other provision of this Agreement, in all cases shall be subject to the Permitted Disclosures referenced below.

3.    Covenant to Protect Goodwill and Customer Relationships. Participant acknowledges that the Goodwill of the Company shall belong to the Company and not be used for the benefit of Participant, a future employer, or any other third party. In recognition of the value and importance of the Goodwill to the Company, Participant covenants, promises, and agrees that, during the Restricted Period (as defined below), Participant will refrain from directly or indirectly soliciting or attempting to solicit business from a Customer1 or a Prospective Customer,2 where a purpose of such solicitation is to induce the Customer or Prospective Customer to reduce or alter its business relationship with the Company or to purchase or acquire from a third party any product, process, or service that is competitive with any product, process, or service that the Company offers to its customers. As used in this Agreement, the Restricted Period shall consist of the continuous period of twelve (12) consecutive months immediately following the Participant’s separation from service with the Company, provided, however, that this twelve (12)-month period may be extended by any period of Participant’s noncompliance with the covenants and promises set forth in this Agreement.

4.    Covenant Not to Solicit Employees. In recognition of the Company’s investment in recruiting, training, and developing its employees, Participant covenants, promises, and agrees that, during employment by the Company and during the Restricted Period, she/he shall not solicit or encourage any employee of the Company to resign from or cease employment with the Company, or to accept a position as an employee or consultant for any other entity or person that manufactures, sells, or markets products, processes, or services that are similar to or competitive with products, processes, or services manufactured, sold, or marketed by the Company. This Section 4 does not apply to the solicitation of any Company employee who is not employed by the Company until after the date on which Participant’s Termination of Service occurs.

5.     Covenants Not to Compete.

a.    Establishment or Leadership of a Competitive Business. During Participant’s employment with the Company, and during the Restricted Period, Participant covenants, promises, and agrees that she/he shall not, within the Geographic Territory, either (i) directly or indirectly own, establish, or control (other than through ownership of less than two percent (2%) of the shares of publicly

1 “Customer” refers to any person or entity (a) to which Axalta sells any of its products, processes, or services during Employee’s employment with Axalta, and (b) with which Employee has one or more business contacts or as to which Employee receives or acquires any Confidential Information at any time in the course of the final 24 months of Employee’s employment with Axalta.

2 “Prospective Customer” refers to any person or entity with respect to which, at any time in the course of the final 24 months of Employee’s employment with Axalta, Employee is involved in seeking to market, sell, or develop opportunities for the sale of any of Axalta’s products, processes, or services.

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Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

traded stock) or (ii) serve as an officer, director, principal, or partner of a business that manufactures, develops, markets, or sells products, processes, or services that are similar to or competitive with the products, processes, or services that are manufactured, marketed, sold, or being developed by the Company during the final twenty-four (24) months of Participant’s employment with the Company. As used herein, the “Geographic Territory” is defined to include all states of the United States in which the Company manufactures, distributes, sells, or markets its products, processes, or services during the twenty-four (24) months immediately preceding the start of the Restricted Period, and all countries in which the Company manufactures, distributes, sells, or markets its products, processes, or services during the twenty-four (24) months immediately preceding the start of the Restricted Period. The Geographic Territory does not include any state or country in which the Company does not maintain operations or commence sales or marketing until after the start of the Restricted Period.

b.    Prohibited Positions with Competitors. During Participant’s employment with the Company and during the Restricted Period, Participant covenants, promises, and agrees that she/he shall not directly or indirectly engage in, have any equity interest in, interview for a potential employment or consulting relationship with or manage, provide services to or operate any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any portion of the Business (as defined below) of the Company. The term “Business” refers to the business of the Company and shall include the manufacturing and sale of automotive and industrial paints, coatings and related products, as such business may be expanded or altered by the Company during the term of the Participant’s employment with the Company. This Agreement shall not be construed to bar any attorney from engaging in the practice of law as an attorney for any third party; provided that he or she otherwise complies with his or her obligations under this Agreement and under the applicable rules of professional conduct.

6.    Nature and Timing of Separation. The obligations set forth in this Agreement shall apply regardless of the voluntary or involuntary nature of the termination of the employment relationship between the Company and Participant, the duration of that relationship, or any other circumstances under which the relationship terminates.

7.    Injunctive Relief. Participant specifically acknowledges and agrees that Participant’s violation of any obligation under the preceding sections of this Agreement will cause irreparable harm to the Company’s legitimate business interests, and that such harm cannot be measured by any specific amount of money or adequately remedied by the award of any sum of monetary damages. Therefore, Participant specifically agrees and understands that the Company will be entitled to specific performance and injunctive and other equitable relief in case of any breach or attempted breach of the preceding sections and agrees not to assert as a defense that the Company has an adequate remedy at law. Any injunctive relief shall be in addition to, and not in lieu of, any other remedies available to the Company.

8.    Conformance and Severability. It is the intent of the Parties that each of the covenants and promises set forth above is divisible and severable from the other covenants and promises in those sections. The Parties further intend that this Agreement be enforceable to the maximum extent possible and that, if a court of competent jurisdiction determines that any term or clause renders some or all of this Agreement invalid or unenforceable, then, such term or clause should be modified to the extent necessary to make the Agreement legal and enforceable while preserving as much as possible of the intent of such term or clause. Where a court of competent jurisdiction determines that any term or clause renders some or all of this Agreement invalid or unenforceable, and such modification is not feasible, it is the intent of the Parties that the offending term or clause should be substituted with another term or clause that is enforceable and most nearly achieves the same objectives. Where a court determines that neither modification nor substitution of such term or clause is feasible under the circumstances, only then shall the offending term or clause be severed and stricken from the Agreement, but only to the extent that the term or clause is invalid or unenforceable, and the remaining provisions of the Agreement shall be enforced in accordance with their terms and entitled to full force and effect.

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Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

9.    Permitted Disclosures. Notwithstanding any other provision of this Agreement, Participant will not be held civilly or criminally liable under any federal or state trade secret law for disclosing a trade secret of the Company in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney representing or advising Participant concerning such disclosure, if the disclosure (a) is made solely for the purpose of reporting or investigating a suspected violation of law or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, as long as such filing is made under seal.  In addition, if Participant files a lawsuit against the Company for retaliation for reporting a suspected violation of law, Participant may disclose trade secrets of the Company to the attorney representing him/her and may use the trade secret information in the court proceeding, only if any document containing the trade secret is filed under seal, and Participant does not disclose the trade secret except as specifically directed or authorized by a court order. In addition, nothing in this Agreement should be construed (i) to impede or interfere with Participant’s right to respond truthfully and completely to any request for information regarding the Company’s activities where disclosure is required by legal process, or (ii) to prevent Participant from communicating directly with, responding to any inquiry from, or providing truthful testimony or information to, any regulatory or law enforcement agency of the United States, the U.S. Congress, an Inspector General, or a state government agency in the course of a lawful investigation or proceeding. Participant is not required to contact the Company as a precondition to any of the foregoing, provided, however, that Participant cannot, without the written approval of the Company’s General Counsel, disclose the substance of communications between the Company personnel and the Company’s legal counsel which are protected by the Company’s attorney-client privilege.

10.    General.

a.    With the exception of modification or substitution of terms by a court of competent jurisdiction under the Conformance and Severability section above, no modification or waiver of any provision of this Agreement shall be valid unless in writing signed by both Parties and specifically referring to this Agreement by name.

b.    Participant acknowledges that the services to be rendered by Participant are personal and that Participant may not assign any of her/his duties or obligations under this Agreement. The Company may assign the Agreement to any successor or transferee. This Agreement shall be valid and binding upon all heirs, successors and assigns of the Parties.

c.    No delay or omission in enforcing any provision of this Agreement or in exercising any right or remedy set forth in this Agreement shall operate as a waiver of any right or remedy or preclude enforcement or specific performance of such provision or the exercise of any right or remedy.

d.    The Parties acknowledge that they have each read this Agreement in its entirety, understand it, agree to be bound by its terms and conditions, and intend that the Agreement be interpreted as if drafted equally by both Parties.

e.    Participant agrees that the Company may, in its sole discretion, share all or part of this Agreement with any future or prospective employer to the extent reasonably necessary to ensure Participant’s compliance. In addition, Participant agrees to provide the Company, upon its request, with the name, address, and contact information of any new employer or third party whose relationship with Participant may violate the provisions of this Agreement.

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Axalta – RSU Agreement – US (2014 Plan)(2022 Annual Grant – ExCo)

Document

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Robert W. Bryant, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2022

By:	/s/ Robert W. Bryant
Name:	Robert W. Bryant
Title:	Chief Executive Officer and President

Document

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Sean M. Lannon, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Axalta Coating Systems Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2022

By:	/s/ Sean M. Lannon
Name:	Sean M. Lannon
Title:	Senior Vice President and Chief Financial Officer

Document

Exhibit 32.1

Certification of CEO Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Robert W. Bryant, Chief Executive Officer and President of Axalta Coating Systems Ltd. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2022 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 26, 2022

By:	/s/ Robert W. Bryant
Name:	Robert W. Bryant
Title:	Chief Executive Officer and President

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Document

Exhibit 32.2

Certification of CFO Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Sean M. Lannon, Senior Vice President and Chief Financial Officer of Axalta Coating Systems Ltd. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2022 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 26, 2022

By:	/s/ Sean M. Lannon
Name:	Sean M. Lannon
Title:	Senior Vice President and Chief Financial Officer

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.