<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission File Number 1-1687
PPG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0730780
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One PPG Place, Pittsburgh, Pennsylvania 15272
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 434-3131
As of November 3, 1995, 196,044,279 shares of the Registrant's common stock,
par value $1.66-2/3 per share, were outstanding.
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
=============================
Index
Part I. Financial Information Page(s)
Item 1. Financial Statements:
Condensed Statement of Income.................................... 2
Condensed Balance Sheet.......................................... 3
Condensed Statement of Cash Flows................................ 4
Notes to Condensed Financial Statements.......................... 5 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8 - 12
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.......................... 13
Signature............................................................ 14
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<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Statement of Income (Unaudited)
(Millions, except per share amounts)
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales........................ $1,724.1 $1,575.3 $5,335.3 $4,671.5
Cost of sales.................... 1,029.4 962.1 3,166.8 2,861.8
Gross profit................... 694.7 613.2 2,168.5 1,809.7
Other expenses:
Selling, general and
administrative............... 246.8 225.7 736.5 665.2
Depreciation................... 83.2 78.6 246.1 236.1
Research and development....... 59.8 55.7 176.0 159.1
Interest....................... 21.2 21.8 62.4 66.0
Business divestiture (Note 3).. -- -- -- 85.0
Other charges.................. 31.9 29.1 102.0 72.7
Total other expenses........... 442.9 410.9 1,323.0 1,284.1
Other earnings................... 28.3 34.4 150.4 81.9
Income before income taxes
and minority interest.......... 280.1 236.7 995.9 607.5
Income taxes..................... 106.4 86.2 378.4 230.9
Minority interest................ 3.3 5.0 11.1 13.0
Net income....................... $ 170.4 $ 145.5 $ 606.4 $ 363.6
Earnings per share............... $ 0.85 $ 0.68 $ 2.97 $ 1.71
Dividends per share.............. $ 0.30 $ 0.28 $ 0.88 $ 0.83
Average shares outstanding....... 200.9 212.5 204.0 212.7
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Balance Sheet (Unaudited)
<CAPTION>
Sept. 30 Dec. 31
1995 1994
(Millions)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents................... $ 118.3 $ 62.1
Receivables-net............................. 1,319.8 1,228.9
Inventories (Note 2)........................ 759.9 686.4
Other....................................... 176.6 190.8
Total current assets...................... 2,374.6 2,168.2
Property (less accumulated depreciation of
$3,629.0 million and $3,420.4 million)...... 2,763.6 2,742.3
Investments................................... 201.6 277.4
Other assets.................................. 848.6 706.0
Total..................................... $6,188.4 $5,893.9
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current
portion of long-term debt................. $ 444.6 $ 370.7
Accounts payable and accrued liabilities.... 1,096.3 1,034.4
Income taxes................................ 39.4 19.4
Total current liabilities................. 1,580.3 1,424.5
Long-term debt (Note 7)....................... 744.5 773.4
Deferred income taxes......................... 335.0 302.7
Accumulated provisions........................ 299.1 260.5
Other postretirement benefits................. 516.3 505.5
Minority interest............................. 72.2 70.3
Total liabilities......................... 3,547.4 3,336.9
Shareholders' equity:
Common stock (Note 8)....................... 484.3 484.3
Additional paid-in capital.................. 72.4 67.5
Retained earnings........................... 4,145.9 3,717.1
Treasury stock.............................. (1,874.8) (1,488.6)
Unearned compensation....................... (187.9) (183.0)
Minimum pension liability adjustment........ (3.0) (1.7)
Currency translation adjustment............. 4.1 (38.6)
Total shareholders' equity................ 2,641.0 2,557.0
Total..................................... $6,188.4 $5,893.9
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Statement of Cash Flows (Unaudited)
<CAPTION>
Nine Months Ended Sept. 30
1995 1994
(Millions)
<S> <C> <C>
Cash from operating activities............... $ 731.6 $ 503.0
Investing activities:
Capital spending.......................... (284.2) (224.0)
Reduction of investments.................. 129.1 28.5
Other..................................... 22.8 54.8
Cash used for investing activities... (132.3) (140.7)
Financing activities:
Net change in borrowings with
maturities of three months or less...... (30.6) (74.4)
Proceeds from other short-term debt....... 38.6 31.0
Repayment of other short-term debt........ (55.8) (23.9)
Proceeds from long-term debt.............. 118.3 10.3
Repayment of long-term debt............... (40.3) (28.7)
Loans to employee stock ownership plan.... (25.0) (11.0)
Repayment of loans by employee stock
ownership plan.......................... 20.1 14.8
Purchase of treasury stock, net........... (388.3) (53.0)
Dividends paid............................ (180.1) (176.4)
Cash used for financing activities... (543.1) (311.3)
Effect of currency exchange rate changes
on cash and cash equivalents............... -- 2.8
Net increase in cash and
cash equivalents........................... 56.2 53.8
Cash and cash equivalents,
beginning of period........................ 62.1 111.9
Cash and cash equivalents,
end of period.............................. $ 118.3 $ 165.7
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (Unaudited)
1. Financial Statements
The condensed 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
presentation of the financial position of PPG Industries, Inc. and
consolidated subsidiaries (the Company or PPG) at September 30, 1995,
and the results of their operations for the three- and nine-month
periods ended September 30, 1995 and 1994 and their cash flows for the
nine-month periods ended September 30, 1995 and 1994. These condensed
financial statements should be read in conjunction with the financial
statements and notes thereto incorporated by reference in PPG's Annual
Report on Form 10-K for the year ended December 31, 1994.
The results of operations for the nine months ended September 30, 1995
are not necessarily indicative of the results to be expected for the
full year.
2. Inventories
Inventories at September 30, 1995, and December 31, 1994, are detailed
below.
<TABLE>
<CAPTION>
Sept. 30 Dec. 31
1995 1994
(Millions)
<S> <C> <C>
Finished products and work in process............ $507.8 $462.7
Raw materials.................................... 138.9 111.9
Supplies......................................... 113.2 111.8
Total.......................................... $759.9 $686.4
</TABLE>
Most domestic and certain foreign inventories are valued using the last-
in, first-out method. If the first-in, first-out method had been used,
inventories would have been $211.3 million and $199.2 million higher at
September 30, 1995 and December 31, 1994, respectively.
3. Business Divestiture
PPG's operating results reflect the impact of the Company's programs to
divest businesses and activities not meeting strategic or performance
objectives. The 1994 charge pertains to the divestiture of the
Biomedical Systems Division. Refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations for further
details regarding this charge.
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<PAGE>
4. Cash Flow Information
Cash payments for interest for the nine months ended September 30, 1995
and 1994 were $61.0 million and $63.7 million, respectively. Cash
payments for income taxes for the nine months ended September 30, 1995
and 1994 were $279.4 million and $217.4 million, respectively.
5. Business Segment Information
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
(Millions)
<S> <C> <C> <C> <C>
Net Sales:
Coatings and Resins.. $ 669 $ 640 $2,110 $1,956
Glass................ 655 594 2,014 1,779
Chemicals............ 400 342 1,211 937
Total.............. $1,724 $1,576 $5,335 $4,672
Operating Income (Loss):
Coatings and Resins.. $ 91 $ 109 $ 363 $ 376
Glass................ 114 74 404 243
Chemicals............ 90 68 286 139
Other (1)............ -- -- -- (85)
Total operating
income............ 295 251 1,053 673
Interest expense - net.... (18) (19) (54) (59)
Other unallocated
corporate income
(expense) - net........ 3 5 (3) (6)
Income before income
taxes and minority
interest................. $ 280 $ 237 $ 996 $ 608
</TABLE>
(1) Loss in 1994 represents the charge to divest the Biomedical
Systems Division (see Note 3).
6. Environmental Matters
Management of the Company anticipates that the resolution of the
environmental contingencies discussed below, which will occur over an
extended period of time, will not result in future annual charges to
income that are significantly greater than those recorded in recent
years. It is possible, however, that technological, regulatory and
enforcement developments, the results of environmental studies and other
factors could alter this expectation. In management's opinion, the
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<PAGE>
Company operates in an environmentally sound manner and the outcome of
these environmental matters will not have a material effect on PPG's
financial position or liquidity. To date, compliance with federal,
state and local requirements has not had a material impact on PPG's
financial position, results of operations or liquidity.
It is PPG's policy to accrue expenses for environmental contingencies
when it is probable that a liability exists and the amount of loss can
be reasonably estimated. As of September 30, 1995 and December 31,
1994, PPG had environmental reserves totaling $97 million and
$90 million, respectively. Charges against income for environmental
remediation costs for the nine-month periods ended September 30, 1995
and 1994 were $35 million and $25 million, respectively.
In addition to the amounts accrued, the Company may be subject to
contingencies related to environmental matters estimated at the high end
to be as much as $200 million to $400 million. Such aggregate losses
are reasonably possible but not currently considered to be probable of
occurrence. The Company's current environmental contingencies are
expected to be resolved over a period of 20 years or more. These loss
contingencies include significant unresolved issues such as the nature
and extent of contamination, if any, at sites and the methods that may
have to be employed should remediation be required. Although insurance
may cover a portion of these costs, to the extent they are incurred, any
potential recovery is not included in this unrecorded exposure to future
loss. With respect to certain waste sites, the financial condition of
any other potentially responsible parties also contributes to the
uncertainty of estimating PPG's final costs. Although contributors of
waste to sites involving other potentially responsible parties may face
governmental agency assertions of joint and several liability, in
general, final allocations of costs are made based on the relative
contributions of wastes to such sites. PPG is generally not a major
contributor to such sites. Although the unrecorded exposure to future
loss relates to all sites, a significant portion of such unrecorded
exposure involves three operating plant sites and one closed plant site.
Two of the sites are in the early stages of study, while the remaining
two are further into the study phase. All four sites require additional
study to assess the magnitude of contamination, if any, and the
remediation alternatives.
7. Long-term Debt
On August 3, 1995, the Company issued $100 million of non-callable
6 7/8% notes which are due August 1, 2005.
8. Common Stock
On April 20, 1995, the Company's Restated Articles of Incorporation were
amended to increase the number of authorized shares of common stock from
300 million to 600 million.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Performance in the Third Quarter of 1995 Compared with the Third Quarter of
1994
Performance Overview
Sales for the third quarter of 1995 and 1994 were $1.72 billion and $1.58
billion, respectively. The sales increase was primarily attributable to
higher prices in virtually all product lines, particularly for our chlor-
alkali and derivative, fiber glass, and flat glass products. Also
contributing to the sales increase were higher volumes, particularly in our
European operations, and the favorable effects of foreign currency
translation.
The gross profit percentage increased to 40.3% from 38.9% in the prior year's
quarter primarily due to higher sales prices in all business segments. The
negative effects of inflation partially offset these gains.
Net income and earnings per share for the 1995 quarter were $170.4 million and
$0.85, respectively. In the third quarter of 1994, net income and earnings
per share were $145.5 million and $0.68, respectively. Current period net
income was favorably impacted by the factors that contributed to the gross
profit percentage improvement and higher sales volumes. Partially offsetting
these gains were increased overhead costs, higher income tax expense, and
lower other earnings.
Performance of Business Segments
Coatings and resins sales increased to $669 million from $640 million in the
third quarter of 1994. Operating income for the corresponding periods were
$91 million and $109 million, respectively. The increase in sales was
primarily attributable to stronger pricing in all product lines, higher
volumes for our European automotive original products, and the favorable
effects of translating European currencies. The effects of lower volumes for
most of our North American product lines partially offset these improvements.
Despite higher sales, operating income declined as the favorable effects of
price improvements were more than offset by the negative impact of inflation,
particularly on raw material costs.
Glass sales increased to $655 million in the third quarter of 1995 from $594
million in the prior year's quarter. Operating income increased to $114
million from $74 million in the corresponding 1994 period. Contributing to
the sales increase were higher sales prices, principally for worldwide fiber
glass and flat glass products and North American automotive replacement glass,
higher volumes, particularly for our North American automotive original glass
products, and the favorable effects of translating European currencies. The
effect of lower North American automotive replacement glass volume partially
offset these improvements. Increased operating income was primarily the
result of the factors that contributed to the sales increase, partially offset
by the negative effects of inflation and higher overhead costs.
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<PAGE>
Chemicals sales increased to $400 million from $342 million in the third
quarter of 1994. Operating income for the corresponding periods was $90
million and $68 million, respectively. The increase in sales was primarily
attributable to substantial price increases for chlor-alkali and derivative
products and higher volumes for Transitions (registered trademark) optical
lenses. These improvements were partially offset by the effect of lower
volumes for our chlor-alkali and derivative products. The increase in
operating income was attributable to the factors that contributed to the sales
increase, partially offset by increases in other charges, net of other
earnings, and overhead costs. The increase in other charges, net of other
earnings, was the result of a non-recurring freight charge, the absence of the
1994 third quarter gain from the disposition of the segment's polymer
additives business, and higher environmental expense.
The "other" segment's 1994 operating loss represents the charge to divest the
Biomedical Systems Division.
Performance in the First Nine Months of 1995 Compared with the First Nine
Months of 1994
Performance Overview
Sales for the first nine months of 1995 and 1994 were $5.34 billion and $4.67
billion, respectively. The sales increase was attributable to higher prices
in most product lines, particularly for our chlor-alkali and derivative, fiber
glass, and flat glass products, higher volumes in each of the business
segments, and the favorable effects of foreign currency translation.
The gross profit percentage increased to 40.6% from 38.7% in the prior year
period primarily due to higher sales prices in all business segments. The
negative effects of inflation partially offset these gains.
Net income and earnings per share for the current year period were $606.4
million and $2.97, respectively, which included a $24.2 million after-tax gain
($0.12 per share) from a legal settlement of a glass technology dispute with
Pilkington plc of England. In the prior year period, net income and earnings
per share were $363.6 million and $1.71, respectively, including a $51.9
million ($0.24 per share) second quarter after-tax charge to divest the
Biomedical Systems Division. Current period earnings were favorably impacted
by the factors that contributed to the gross profit percentage improvement,
the absence of the business divestiture charge, higher sales volumes, and
increased other earnings which were attributable to several gains from legal
settlements and higher earnings from our equity affiliates. Partially
offsetting these items were higher income tax expense and increased other
charges. The majority of the increase in other charges was the result of a
charge for a legal dispute and higher environmental expense.
Performance of Business Segments
Coatings and resins sales increased to $2.11 billion in the first nine months
of 1995 from $1.96 billion in the prior year period. Operating income for the
corresponding periods was $363 million and $376 million, respectively.
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<PAGE>
Contributing to the sales increase were higher volumes in most European
product lines, particularly automotive original products, the favorable
effects of translating European currencies, and stronger prices, primarily in
our automotive refinish products. The effect of lower North American
automotive refinish volume partially offset these improvements. Operating
income declined as the negative effects of inflation, particularly on raw
material costs, were only partially offset by increased volumes, higher
prices, and gains from legal settlements.
Glass sales increased to $2.01 billion in the nine-month period ended
September 30, 1995, from $1.78 billion in the prior year period. Operating
income increased to $404 million from $243 million in the corresponding 1994
period. Contributing to the sales increase were higher sales prices,
principally for worldwide fiber glass and flat glass products and North
American automotive replacement glass, higher volumes in most of the segment's
major businesses, principally worldwide fiber glass and automotive original
glass products, and the favorable effects of translating European currencies.
The effect of lower volume in North American automotive replacement glass
partially offset these improvements. Increased operating income was primarily
the result of the factors that contributed to the sales increase and the gain
from the first quarter legal settlement with Pilkington. The negative effects
of inflation and higher overhead costs partially offset these improvements.
Chemicals sales increased to $1.21 billion for the nine-month period ended
September 30, 1995 from $937 million in the corresponding prior period.
Operating income increased to $286 million from $139 million for the first
nine months of 1994. The increase in sales was primarily attributable to
substantial price gains for chlor-alkali and derivative products and volume
improvements for specialty products, particularly Transitions (registered
trademark) optical lenses. The increase in operating income was attributable
to the factors that contributed to the sales increase. Partially offsetting
these improvements were the negative effects of inflation, particularly on
ethylene costs, increased other charges, the majority of which related to a
charge for a legal dispute, increased environmental expenses, and a non-
recurring freight charge, as well as higher overhead costs.
The "other" segment's 1994 operating loss represents the charge to divest the
Biomedical Systems Division.
Other Factors
Higher inventories were mainly due to a build-up in our coatings and resins
segment, primarily in Europe, to support stronger sales volumes. Also
contributing to the increase was the strengthening of certain European
currencies against the U.S. dollar.
The decline in investments was principally due to a loan taken against the
cash surrender value of an investment in company-owned life insurance.
Pension plan contributions were the main factors contributing to the increase
in other assets.
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<PAGE>
The increase in short-term debt and current portion of long-term debt was due
to a reclassification of the portion of long-term notes maturing in the first
nine months of 1996 to current liabilities, partially offset by the repayment
of certain short-term borrowings with cash generated from operations. The
corresponding decline in long-term debt was partially offset by the issuance
of $100 million of non-callable 6 7/8% notes in August 1995.
The ten million share repurchase program approved by PPG's Board of Directors
in April 1995 has been completed. PPG's Board of Directors approved an
additional repurchase of ten million shares of PPG common stock in October
1995. The shares may be repurchased in open market or private transactions
and a timetable for this additional repurchase program has not been
established.
On November 8, 1995 the Company intends to file a Registration Statement on
Form S-3 to cover offerings in the future of up to $500 million aggregate
principal amount of debt securities. Such debt securities would be offered on
terms to be determined at the time of the offering. The proceeds from the
sale of such debt securities would be added to the Company's general funds and
be used for general corporate purposes or for such purposes as may be
disclosed at the time any debt is issued.
Environmental Matters
Management of the Company anticipates that the resolution of the environmental
contingencies discussed below, which will occur over an extended period of
time, will not result in future annual charges to income that are
significantly greater than those recorded in recent years. It is possible,
however, that technological, regulatory and enforcement developments, the
results of environmental studies and other factors could alter this
expectation. In management's opinion, the Company operates in an
environmentally sound manner and the outcome of these environmental matters
will not have a material effect on PPG's financial position or liquidity. To
date, compliance with federal, state and local requirements has not had a
material impact on PPG's financial position, results of operations or
liquidity.
It is PPG's policy to accrue expenses for environmental contingencies when it
is probable that a liability exists and the amount of loss can be reasonably
estimated. As of September 30, 1995 and December 31, 1994, PPG had
environmental reserves totaling $97 million and $90 million, respectively.
Charges against income for environmental remediation costs for the nine-month
periods ended September 30, 1995 and 1994 were $35 million and $25 million,
respectively.
In addition to the amounts accrued, the Company may be subject to
contingencies related to environmental matters estimated at the high end to be
as much as $200 million to $400 million. Such aggregate losses are reasonably
possible but not currently considered to be probable of occurrence. The
Company's current environmental contingencies are expected to be resolved over
a period of 20 years or more. These loss contingencies include significant
unresolved issues such as the nature and extent of contamination, if any, at
sites and the methods that may have to be employed should remediation be
required. Although insurance may cover a portion of these costs, to the
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<PAGE>
extent they are incurred, any potential recovery is not included in this
unrecorded exposure to future loss. With respect to certain waste sites, the
financial condition of any other potentially responsible parties also
contributes to the uncertainty of estimating PPG's final costs. Although
contributors of waste to sites involving other potentially responsible parties
may face governmental agency assertions of joint and several liability, in
general, final allocations of costs are made based on the relative
contributions of wastes to such sites. PPG is generally not a major
contributor to such sites. Although the unrecorded exposure to future loss
relates to all sites, a significant portion of such unrecorded exposure
involves three operating plant sites and one closed plant site. Two of the
sites are in the early stages of study, while the remaining two are further
into the study phase. All four sites require additional study to assess the
magnitude of contamination, if any, and the remediation alternatives.
Business Divestiture
PPG's operating results reflect the impact of the Company's programs to divest
businesses and activities not meeting strategic or performance objectives.
The 1994 charge pertains to the divestiture of the Biomedicals System
Division. The majority of the charge was comprised of the reversal of a $60
million gain originally anticipated from divestiture of the division's sensors
business at the time the decision was made to dispose of the division and
reflects the general decline in health-care and related markets. Also, a $13
million charge was taken for additional operating losses anticipated because
of extension of the expected disposal date as well as actual operating losses
exceeding those originally estimated. With the sale of the sensors business
in January 1995, the divestiture of the Biomedical Systems Division is
complete.
Foreign Currency and Interest Rate Risk
As a multinational company, PPG manages its transaction exposure to foreign
currency risk to minimize the volatility of cash flows caused by currency
fluctuations. The Company manages its foreign currency transaction exposures
principally through the purchase of forward and option contracts. It does not
manage its exposure to translation gains and losses; however, by borrowing in
local currencies it reduces such exposure. The market value of the forward
and option contracts purchased and outstanding as of September 30, 1995, was
not material.
The Company manages its interest rate risk in order to balance its exposure
between fixed and variable rates while attempting to minimize its interest
costs. PPG principally manages its interest rate risk by retiring and issuing
debt from time to time. To a limited extent, PPG manages its interest rate
risk through the purchase of interest rate swaps. As of September 30, 1995
and December 31, 1994, the notional principal amounts and fair values of
interest rate swaps held were not material.
PPG's policies do not permit active trading of currency or interest rate
derivatives.
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<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.1) Nonqualified Retirement Plan as amended through September
20, 1995
(10.2) Supplemental Executive Retirement Plan II as amended
through September 20, 1995
(10.3) Directors' Retirement Plan as amended through September 20,
1995
(10.4) Deferred Compensation Plan for Directors as amended through
September 20, 1995
(10.5) Change in Control Employment Agreement
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Form 8-K on August 11, 1995, dated July 31,
1995, filing exhibits to become, by way of incorporation by
reference, exhibits to Registration Statement No. 33-04983 on Form
S-3. No financial statements were filed.
The Company filed a Form 8-K on October 20, 1995, dated October 19,
1995. The report indicated that on October 19, 1995 the Board of
Directors approved the repurchase of ten million shares of the
Company's outstanding common stock, par value $1.66 2/3 per share.
The shares may be repurchased in open market or private
transactions and a timetable was not established for the
repurchase.
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<PAGE>
SIGNATURE
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 thereunto duly authorized.
PPG INDUSTRIES, INC.
(Registrant)
Date: November 8, 1995 /s/ W. H. Hernandez
W. H. Hernandez
Senior Vice President, Finance
(Principal Financial and
Accounting Officer and
Duly Authorized Officer)
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
No. Description
10.1 Nonqualified Retirement Plan as amended through September 20, 1995
10.2 Supplemental Executive Retirement Plan II as amended through
September 20, 1995
10.3 Directors' Retirement Plan as amended through September 20, 1995
10.4 Deferred Compensation Plan for Directors as amended through
September 20, 1995
10.5 Change in Control Employment Agreement
11 Computation of Earnings Per Share
27 Financial Data Schedule
PPG INDUSTRIES, INC.
NONQUALIFIED RETIREMENT PLAN
Effective: January 1, 1989
As amended through September 20, 1995
<PAGE>
Adoption of Plan
WHEREAS, effective January 1, 1982, the Supplemental Executive
Retirement Plan II ("SERP II") was adopted to provide a distinct and
additional element of compensation to motivate key employees of the Company;
and
WHEREAS, in 1988 the Company redesigned its compensation policy for
executives;
NOW THEREFORE, the Company wishes to have the Plan redesigned such that
it will continue to accomplish its initial purpose and provide benefits more
closely aligned with the new compensation policy; and, accordingly, it is:
RESOLVED, that, effective December 31, 1988 the accrued benefit of all
participants in SERP II shall be frozen and no further benefits shall accrue
under such plan.
RESOLVED FURTHER, that, effective January 1, 1989, the PPG Industries,
Inc. Nonqualified Retirement Plan shall become effective as provided herein.
In accordance with Resolutions adopted by the
Officers-Directors Compensation Committee at
its meeting December 15, 1988.
<PAGE>
ARTICLE I
Effective Date
1.1 This Plan shall be effective for retirements and terminations which
occur on and after January 1, 1989.
<PAGE>
ARTICLE II
Definitions
2.1 Wherever used herein, the following words and phrases shall have the
meanings set forth below unless a different meaning is plainly required
by context:
(a) "Act" shall mean the Employee Retirement Income Security Act of
1974 and amendments thereto.
(b) (1) "Administrative Committee" shall mean the Compensation
and Executive Development Committee appointed by the Board of
Directors of the Company.
(2) "Administrative Subcommittee" shall mean a committee
adopted by the Administrative Committee which shall have the
authority set forth in Section 7.2.
(c) "Administrator" shall mean the Director, Compensation and
Benefits.
(d) "Awards" shall mean a grant of incentive compensation under the
Incentive Compensation or the Management Award Plan which is paid
or deferred on or after January 1, 1989.
(e) "Company" shall mean PPG Industries, Inc. and its Subsidiaries.
(f) "Early Retirement Reduction Factor" shall mean the factor
applied to the benefit payable under the Qualified Plan reducing the
benefit for early retirement.
(g) "Eligible Spouse" shall mean:
(1) For purposes of the payment of an REP/SSB, a spouse who
was legally married to a Participant, Former Participant or
Terminated Vested Participant on his Benefit Commencement
Date; and
(2) For purposes of the payment of an AEP/SSB, a spouse who
was legally married to a Participant during the one year period
immediately prior to the Participant's death.
(h) "Employee" shall mean any full-time employee (including any
officer) of the Company or any of its Subsidiaries.
(i) "Excess FAMI" shall mean the amount by which a Participant's
FAMI exceeds Covered Compensation.
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(j) "Final Average Monthly Incentive" or "FAMI" shall mean the sum
of a Participant's five highest Awards paid or deferred within the
ten years immediately preceding such Participant's termination of
employment, divided by 60.
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(k) "Former Participant" shall mean a Vested Participant who ceases
to be a Participant prior to his Normal or Deferred Retirement Date
for a reason other than retirement or termination of employment.
(l) "Incentive Compensation Plan" shall mean the PPG Industries,
Inc. Incentive Compensation and Deferred Income Plan for Key Employees,
as amended from time to time.
(l) "Management Award Plan" shall mean the PPG Industries, Inc.
Management Award and Deferred Income Plan, as amended from time to
time.
(m) "Participant" shall mean an Employee of the Company who is
eligible to participate, in accordance with ARTICLE III.
(n) "Plan" shall mean the PPG Industries, Inc. Nonqualified
Retirement Plan.
(o) "Prior Employer Benefit" shall mean the amount of any benefit
payable at Normal Retirement Age from any qualified or
nonqualified retirement plan or profit sharing plan to which a
Participant is entitled as a result of prior employment with any
employer other than the Company. In the event such amount is
payable in any manner other than a monthly straight-life annuity,
such amount will be converted to a monthly straight-life annuity,
using acceptable actuarial assumptions, as determined by the
Administrative Committee and consistent with the procedures of the
Qualified Plan.
(p) "Qualified Plan" shall mean the PPG Industries, Inc. Retirement
Income Plan, as amended from time to time, and any successor plan.
(q) "Subsidiary" shall mean any corporation, fifty percent or more
of the outstanding voting stock or voting power of which is owned,
directly or indirectly, by the Company and any partnership or
other entity in which the Company has a fifty percent or more
ownership interest.
(r) "Terminated Vested Participant" shall mean a Vested Participant
who terminates employment prior to his Early Retirement Date.
(s) "Vested Participant" shall mean a Participant who has satisfied
the vesting requirements of the Qualified Plan.
2.2 Wherever used herein, the following words and phrases shall have the
meaning set forth in the Qualified Plan:
"Active Employees' Pension Surviving Spouse Benefit (AEP/SSB)"
"Benefit Commencement Date"
"Covered Compensation"
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"Credited Service"
"Deferred Retirement Date"
"Early Retirement Date"
"Normal Retirement Date"
"Retired Employees' Pension Surviving Spouse Benefit (REP/SSB)"
"Social Security Early Retirement Age"
"Social Security Normal Retirement Age"
2.3 Wherever used herein, the masculine shall include the feminine and the
singular shall include the plural unless a different meaning is clearly
indicated by the context.
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ARTICLE III
Requirements for Participation
3.1 An Employee shall be a Participant in this Plan if he is a participant
in either the Incentive Compensation Plan or the Management Award Plan.
3.2 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be a participant in the Incentive Compensation Plan or
the Management Award Plan, unless otherwise designated by the
Administrative Committee to remain as a Participant.
3.3 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be an active participant under the Qualified Plan.
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ARTICLE IV
Eligibility for Benefits
4.1 Standard Benefit
Subject to Section 4.4, any Participant or Former Participant whose
Normal Retirement Date, Early Retirement Date, Deferred Retirement Date,
or any Terminated Vested Participant whose termination date occurs on or
after January 1, 1989, shall be eligible to receive the Standard Benefit
as provided in Section 5.1, unless specifically designated by the
Administrative Committee to receive the Special Short Service Benefit as
provided in Section 5.2.
4.2 Special Short Service Benefit
Subject to Section 4.4:
(a) Any Participant whose Normal Retirement Date or Deferred
Retirement Date occurs on or after January 1, 1989, and who meets
all of the following criteria shall be eligible to receive the
Special Short Service Benefit as provided in Section 5.2:
(1) He has been specifically designated by the
Administrative Committee to receive the Special Short Service Benefit; and
(2) He has less than thirty (30) years of Credited
Service on his Retirement Date.
(b) Any Participant whose Early Retirement Date occurs on or after
January 1, 1989, and who meets all of the following criteria shall
be eligible to receive the Special Short Service Benefit as
provided in Section 5.2:
(1) He has been specifically designated by the
Administrative Committee to receive the Special Short Service Benefit; and
(2) He has less than thirty (30) years of Credited Service
on his Retirement Date; and
(3) He has been specifically approved by the Administrative
Committee to retire prior to his Normal Retirement Date.
4.3 Subject to Section 4.4, any Participant or Former Participant whose
Normal Retirement Date, Early Retirement Date, Deferred Retirement Date,
or any Terminated Vested Participant whose termination date occurs on or
after January 1, 1989; and
(a) Whose benefit under the Qualified Plan is limited or reduced as
a result of Section 415 and/or Section 401(a)(17) of the Internal Revenue Code;
or
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(b) Who was eligible to receive a benefit in accordance with
Section 5.5 of the PPG Industries, Inc. Supplemental Retirement Plan II
but whose benefit under this Plan is greater than such benefit,
and whose benefit under the Qualified Plan is limited or reduced
as a result of having deferred salary under the terms of the
Capital Enhancement Account provision of the Incentive
Compensation Plan
shall be eligible to receive the Excess Benefit as provided in Section
5.6.
4.4 A Participant who is entitled to receive a benefit in accordance with
Section 5.5 of the PPG Industries, Inc. Supplemental Retirement Plan II
shall not be entitled to receive a benefit under this Plan.
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ARTICLE V
Amounts of Benefits
5.1 Standard Benefit
(a) Subject to the provisions of Sections 5.3, 5.4 and 5.7, for a
Participant or Former Participant who retires on his Normal
Retirement Date or Deferred Retirement Date or for a Terminated
Vested Participant whose Benefit Commencement Date is his Normal
Retirement Date, the monthly benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Credited Service
LESS
Other payments specifically designated by the Administrative
Committee to be deducted which are made pursuant to an
individual employee contract to provide retirement income or
deferred compensation regardless of whether the contract is
made with the Company, a Subsidiary, or other employer.
(b) Subject to the provisions of Sections 5.3, 5.4 and 5.7, for a
Participant or Former Participant who retires on his Early
Retirement Date or for a Terminated Vested Participant whose
Benefit Commencement Date is prior to his Normal Retirement Date,
the monthly benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Credited Service
MULTIPLIED BY
The Early Retirement Reduction Factor
LESS
Other payments specifically designated by the Administrative
Committee to be deducted which are made pursuant to an
individual employee contract to provide retirement income or
deferred compensation regardless of whether the contract is
made with the Company, a Subsidiary, or other employer.
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5.2 Special Short Service Benefit
(a) For purposes of this Section 5.2 only, "Plan Service" shall
mean one and one-half (1 1/2) times Credited Service, with any half (1/2)
month rounded up to the next full month, up to a maximum of thirty
(30) years.
(b) Subject to Section 5.7, for a Participant who retires on his
Normal Retirement Date or Deferred Retirement Date, the monthly
benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Plan Service
LESS
Any Prior Employer Benefit plus other payments, if
specifically designated by the Administrative Committee to
be deducted, which are made pursuant to an individual
employee contract to provide retirement income, regardless
of whether the contract is made by the Company, a
Subsidiary, or any other employer.
(c) Subject to Section 5.7, for a Participant who retires on his
Early Retirement Date, Plan Service shall be reduced by one month for
each month the Participant's Benefit Commencement Date precedes
his Normal Retirement Date; provided, however, that the
Administrative Committee may approve a lesser reduction.
(d) The monthly benefit for a Participant described in subparagraph
(c) of this section 5.2 shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Plan Service, as adjusted in accordance
with paragraph (c) above.
MULTIPLIED BY
The Early Retirement Reduction Factor
LESS
Any Prior Employer Benefit plus other payments, if
specifically designated by the Administrative Committee to
be deducted, which are made pursuant to an individual
employee contract to provide retirement income, regardless
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of whether the contract is made by the Company, a
Subsidiary, or any other employer.
5.3 Terminated Vested Participant
In the case of a Terminated Vested Participant, the benefit amount
payable under this Plan shall be calculated on his termination date
using his Credited Service, Final Average Monthly Incentive, and Covered
Compensation as of the date of termination.
5.4 Former Participant
In the case of a Former Participant, the benefit amount payable under
this Plan shall be calculated as if his employment had terminated on the
date his participation in the Plan ceased, using his Credited Service,
Final Average Monthly Incentive, and Covered Compensation as of the date
of cessation of participation.
Where a Former Participant subsequently retires or becomes a Terminated
Vested Participant, the benefit amount payable under this Plan shall be
calculated in accordance with this Section 5.4.
5.5 Supplemental Early Retirement
(a) A Participant or Former Participant who is eligible for a
Supplemental Early Retirement Benefit under the Qualified Plan
shall be eligible to have his benefit under this Plan calculated
in a manner similar to the calculation of the Qualified Plan
benefit.
(b) The Administrator shall adopt rules for the calculation of the
benefit pursuant to this Section 5.5. Such rules shall be applied
in a uniform and nondiscriminatory manner.
5.6 Excess Benefit
(a) In the event a Participant's benefit under the Qualified Plan
is limited or reduced as a result of Section 415 and/or Section 401(a)(17) of
the Internal Revenue Code, or, in the case of a Participant described
in paragraph (b) of Section 4.3, whose benefit under the Qualified
Plan is limited or reduced as a result of his having deferred
salary under the terms of the Capital Enhancement Account
provision of the Incentive Compensation Plan, this Plan shall
provide a benefit equal to the amount of such limitation or
reduction.
(b) The Administrator shall adopt rules for the calculation of the
benefit pursuant to this Section 5.6. Such rules shall be applied
in a uniform and nondiscriminatory manner.
(c) Any benefit payable in accordance with this Section 5.6 shall
be in addition to any other benefit which may be payable hereunder.
<PAGE>
5.7 Lump-Sum Benefit
(a) A Participant who is also eligible to participate in the PPG
Industries, Inc. 1984 Earnings Growth Plan at the time of his
Normal, Early or Deferred Retirement Date, and whose Normal, Early
or Deferred Retirement Date is on or after January 1, 1991, may
elect to receive any benefits payable hereunder in a lump sum, in
lieu of a monthly annuity in accordance with this Section 5.7.
(b) The following conditions apply to all elections pursuant to
this Section 5.7:
(1) A Participant may elect a lump sum benefit only if such
Participant elects his Benefit Commencement Date under the
Qualified Plan to be his Retirement Date.
(2) For Participants who elect to receive a lump-sum
benefit on and after January 1, 1993, and who are married on the date
their lump-sum benefit is payable, the election to receive a
lump sum must contain a consent to and acknowledgement of
the effect of such lump-sum election by the Participant's
spouse.
(3) Any election made pursuant to this Section 5.7 shall be
irrevocable after the Latest Election Date; provided,
however, that, in the event of a Participant's death on or
after the Latest Election Date and prior to payment of the
lump-sum benefit, such election shall be deemed to be null
and void on the date of such Participant's death.
For purposes of this Section 5.7, "Latest Election
Date" shall mean:
In the case of a Participant who voluntarily retires, the
latest date which is both at least 6 months and 10 days
prior to his Retirement Date and in the calendar year
preceding the calendar year of his Retirement Date; or
In the case of a Participant who is involuntarily retired,
such Participant's Retirement Date.
(c) Calculation of Lump-Sum Benefit
(1) Any lump-sum benefit payable under this Section 5.7
shall be calculated using mortality assumptions according to the
current actuarial valuation prepared for the Plan, and the
PBGC immediate interest rate.
(2) The PBGC immediate interest rate used to calculate the
lump-sum benefit of a Participant:
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Who voluntarily retires, shall be either the rate in effect
on such Participant's Latest Election Date or the rate in
effect on the Participant's Benefit Commencement Date,
whichever produces the higher benefit; or
Who is involuntarily retired, shall be the rate in effect on
the Participant's Retirement Date.
(d) Payment of Lump-Sum Benefit
Any Lump-Sum Benefit payable pursuant to this Section 5.7,
shall be paid:
(1) In the case of a Participant who voluntarily retires, on
such Participant's Retirement Date; or
(2) In the case of a Participant who is involuntarily
retired, on the date which is 6 months and 10 days following such
Participant's Retirement Date. Such Participant's benefit
shall not accrue interest from the Participant's Retirement
Date through the date the lump-sum benefit is paid.
(e) The Administrative Committee shall have full discretion to
deny a Participant's request to receive a lump sum. Such decisions by
the Committee shall be made in a uniform and nondiscriminatory
manner.
(f) See Attachment 1 for special Lump-Sum payments approved
by the Officers-Directors Compensation Committee.
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ARTICLE VI
Payment of Benefits (Including REP/SSB and AEP/SSB)
6.1 For a Participant, Former Participant, or Terminated Vested
Participant, the following shall apply:
(a) An application for benefits under the Qualified Plan shall be
deemed to be an application for benefits under this Plan.
(b) Benefits under this Plan shall begin on the Benefit
Commencement Date.
(c) Except as otherwise provided in Section 5.7, benefits under
this Plan shall be paid in the same method or form of payment as
benefits are paid under the Qualified Plan and shall be subject to
the same rules and regulations of the Qualified Plan.
(d) Except as otherwise provided in Section 5.7, benefits under
this Plan shall be paid at the same time and for the same duration as
payments under the Qualified Plan.
(e) Except as otherwise provided in Section 5.7, in no event
may a Participant select a method or form of payment of benefits under
this Plan which is different in any way from the method or form of
payment of benefits selected under the Qualified Plan.
(f) Except as otherwise provided in Section 5.7, eligibility
for and payment of the REP/SSB to an Eligible Spouse under this Plan shall
be governed by the same rules and regulations as the Qualified
Plan.
6.2 For a Participant only, the following shall apply:
(a) Eligibility for and payment of the AEP/SSB under this Plan
shall be governed by the same rules and regulations as the Qualified
Plan.
(b) The amount of benefit payable to an Eligible Spouse under
the AEP/SSB shall always be determined under the Standard Benefit
formula, as provided in Section 5.1 of this Plan.
(c) The amount of benefit payable to an Eligible Spouse under
the AEP/SSB of a Participant eligible for the Special Short Service
Benefit shall not be based on the Special Short Service Benefit
formula.
(d) Notwithstanding any other provision of this Section 6.2,
the amount of benefit payable to an Eligible Spouse of a Participant
who:
<PAGE>
(l) is eligible for the Special Short Service Benefit; and
(2) has retired on his Early Retirement Date; and
(3) dies prior to his Benefit Commencement Date;
shall be based on the Special Short Service Benefit formula.
<PAGE>
ARTICLE VII
Forfeiture of Benefits
7.1 In the event a Participant ceases participation under this Plan prior
to becoming vested in the Qualified Plan, no benefit shall be payable under
this Plan.
7.2 (a) Any benefit payable under this Plan to a Participant, Former
Participant, or Terminated Vested Participant on or after
retirement or commencement of benefits, shall be forfeitable in
the event it is found that such Participant is engaged or employed
as a business owner, employee, or consultant in any activity which
is in competition with any line of business of the Company or its
Subsidiaries existing as of the date of termination of employment
or retirement.
(b) All determinations under this Section 7.2 shall be made by the
Administrative Subcommittee at its sole discretion. As the
Administrative Subcommittee finds appropriate, it may suspend
benefits to such Participant and furnish due notice thereof. The
Administrative Subcommittee may thereafter terminate benefits
under this Plan unless such Participant discontinues the
competitive activity and affords written notice to the
Administrative Subcommittee of such discontinuance within ninety
(90) calendar days following the giving of notice of suspension of
benefits.
7.3 If any benefit under the Plan has been payable to and has been
unclaimed by any Participant, Former Participant, Terminated Vested Participant
for a reasonable period of time, as determined by the Administrative
Committee, the Administrative Committee may direct that all rights of
such Participant to payments accrued and to future payments be
terminated absolutely, provided that if such Participant subsequently
appears and identifies himself to the satisfaction of the Administrative
Committee, then the liability will be reinstated.
<PAGE>
ARTICLE VIII
General Provisions
8.1 The entire cost of benefits and administrative expenses for this Plan
shall be paid by the Company.
8.2 The administration of this Plan shall be the responsibility of the
Administrative Committee, which shall interpret the provisions of this
Plan and decide all questions arising in its administration. The
decisions of the Administrative Committee shall be conclusive and
binding for all purposes. The Administrator will administer this Plan
at the direction of the Administrative Committee.
8.3 Nothing contained in this Plan shall be construed as a contract of
employment between the Company and any Participant, and the Plan shall
not afford any Participant a right of continued service with the
Company.
8.4 This Plan is purely voluntary on the part of the Company. The Company,
by action of the Officers-Director Compensation Committee (or any
successor) of the Board of Directors or by such other person or
committee acting in accordance with a procedure adopted and approved by
the Officers-Directors Compensation Committee (or any successor) of the
Board of Directors, may amend, suspend, or terminate the Plan, in whole
or in part at any time.
8.5 (a) Except as provided in paragraph (b) below, no benefits payable
under this Plan may be assigned or alienated or transferred in
whole or in part. No benefits payable under the Plan shall be
subject to legal process or attachment for the payment of any
claim against any person entitled to receive the same.
(b) Paragraph (a) above does not apply to the extent that a
Participant's interest under the Plan is alienated pursuant to a
"Qualified Domestic Relations Order" (QDRO) as defined in Section 414(p)
of the Internal Revenue Code. The Administrator is authorized to
adopt such procedural and substantive rules and to take such
procedural and substantive actions as the Administrator may deem
necessary or advisable to provide for the payment of amounts from
the Plan to an Alternate Payee as provided in a QDRO.
8.5 The Plan is intended to conform to the applicable requirements of the
Act and the Internal Revenue Code. Except to the extent otherwise
provided in the Act and the Code, this Plan shall be construed,
regulated and administered under the laws of the Commonwealth of
Pennsylvania.
<PAGE>
ARTICLE IX
Change in Control
9.1 Notwithstanding any other provisions of this Plan, upon a Change in
Control, as defined in Section 9.2:
(a) All Participants shall be deemed to be Vested Participants;
(b) Any Participant, including Participants described in paragraph
(a) of this Section 9.1, shall be eligible to receive the Special
Short Service Benefit as provided in Section 5.2 if, as of the
date a Change in Control occurs, he has been so designated by the
Administrative Committee.
(c) Paragraph (c) of Section 5.2 shall be revised in its entirety
to read:
(c) For a Participant who retires on his Early Retirement
Date, for purposes of computing his benefit, Plan Service shall be
reduced by the lesser of:
(1) One month for each month the Participant's
Benefit Commencement Date precedes his Normal Retirement Date;
or
(2) 36 months.
9.2 For purposes of this Plan, a "Change in Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either
(i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities");
provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change in Control:
(i) any acquisition directly from the Company,
(ii) any acquisition by the Company,
<PAGE>
(iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 9.2; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination,
(i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
<PAGE>
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Business Combination;
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) A majority of the Board otherwise determines that a Change in
Control shall have occurred.
9.3 Upon, or in reasonable anticipation of, a Change in Control, an amount
sufficient to fund the benefits of all Vested Participants, including
those vested pursuant to Section 9.1, Former Participants, and
Terminated Vested Participants, including an amount sufficient to fund
additional benefits anticipated to accrue during the twenty-four (24)
month period immediately following a Change in Control and including an
amount sufficient to fund the Active Employees' Pension Surviving Spouse
Benefit and the survivor annuity payable to the joint annuitant
designated by any such Participant on his Benefit Commencement Date
shall be paid immediately by the Company to a Trustee. Selection of the
Trustee, the amounts to be paid by the Company and the terms of such
payment (including such terms as are appropriate to cause such payment,
if possible, not to be a taxable event) in order to give effect to the
payment of benefits as provided in Sections 9.4 and 9.5 shall be
determined by the Vice President, Human Resources, and/or the Vice
President, Finance. Notwithstanding such funding, the Company shall be
obligated to pay such benefits to such Vested Participants, Former
Participants and Terminated Vested Participants to the extent such
funding proves to be insufficient. To the extent such funding proves to
be more than sufficient, such excess shall revert to the Company.
Except as regards paragraph (d) of Section 9.2, the Officers-Directors
Compensation Committee shall have the duty and the authority to make the
determination as to whether a Change in Control has occurred, or is
reasonably to be anticipated, and, concomitantly, to direct the making
of the payment contemplated herein.
9.4 The Trustee shall provide for the payment of benefits to Vested
Participants, Former Participants, Terminated Vested Participants,
Eligible Spouses and joint annuitants in accordance with the provisions
of this Plan as in effect on the date of the Change in Control. Any
subsequent attempts to suspend or terminate this Plan or to amend this
Plan in any way which reduces future benefits shall have no effect on
payments made or to be made by the Trustee.
<PAGE>
9.5 Notwithstanding any provision of this Plan, including without
limitation, Section 8.4, this Plan may not be:
(a) Amended such that future benefits would be reduced; or
(b) Suspended; or
(c) Terminated;
(1) As to the future accrual of benefits, at any time
during the twenty-four (24) month period following a Change in Control;
or
(2) As to the payment of benefits, at any time prior to
the last payment, determined in accordance with the provisions of
this Plan, to each Vested Participant, Former Participant,
Terminated Vested Participant, Eligible Spouse and joint
annuitant.
<PAGE>
PPG INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN II
Effective January 1, 1982, As Amended Through September 20, 1995
<PAGE>
ARTICLE I
Effective Date
1.1 This Plan shall be effective for retirements and terminations which
occur on and after January 1, 1982.
1.2 Effective January 1, 1989, this Plan shall be frozen. Except as
specifically provided in Section 5.5, no benefit shall accrue after
December 31, 1988.
<PAGE>
ARTICLE II
Definitions
2.1 Wherever used herein, the following words and phrases shall have the
meanings set forth below unless a different meaning is plainly required
by context:
(a) "Act" shall mean the Employee Retirement Income Security Act of
1974 and amendments thereto.
(b) (1) "Administrative Committee" shall mean the Compensation
and Executive Development Committee appointed by the Board of
Directors of the Company.
(2) "Administrative Subcommittee" shall mean a committee
adopted by the Administrative Committee which shall have the
authority set forth in Section 7.2.
(c) "Administrator" shall mean the Director, Compensation and
Benefits.
(d) "Early Retirement Reduction Factor" shall mean the factor
applied to the benefit payable under the Qualified Plan reducing the
benefit for early retirement.
(e) "Eligible Spouse" shall mean:
(1) For purposes of the payment of an REP/SSB, a spouse
who was legally married to a Participant, Former Participant or
Terminated Vested Participant on his Benefit Commencement
Date; and
(2) For purposes of the payment of an AEP/SSB, a spouse who was
legally married to a Participant during the one year period
immediately prior to the Participant's death.
(f) "Final Average Monthly Salary" shall mean Final Average Monthly
Salary, as that term is defined in the Qualified Plan, except that
Monthly Salary shall have the meaning as set forth in this Section
2.1.
(g) "Former Participant" shall mean a Vested Participant who ceases to
be a Participant prior to his Normal or Deferred Retirement Date
for a reason other than retirement or termination of employment.
(h) "Monthly Salary" shall mean Monthly Salary, as that term is
defined in the Qualified Plan, increased by the amount of Salary
deferred pursuant to Section 7 of the Incentive Compensation and
Deferred Income Plan for Key Employees.
<PAGE>
(i) "Participant" shall mean an Employee of the Company who is
eligible to participate, as defined in ARTICLE III.
(j) "Plan" shall mean the PPG Industries, Inc. Supplemental Executive
Retirement Plan II.
(k) "Primary Old Age Social Security" shall mean:
(1) Except as provided in paragraph (3) below, in the case
of a Participant who retires on his Normal Retirement Date or
Deferred Retirement Date, a calculation of the maximum
monthly Primary Old Age benefit payable under the Act on the
Participant's Social Security Normal Retirement Age which
assumes that for each year until reaching such age, a
person's earnings had equaled or exceeded the Social
Security maximum taxable wage base. For purposes of this
subsection 2.1(i)(1), the Act shall mean the Social Security
Act in effect on the Participant's Normal Retirement Date.
(2) Except as provided in paragraph (3) below, in the case
of a Participant who retires prior to his Normal Retirement Date,
or in the case of a Former Participant or Terminated Vested
Participant, a calculation of the maximum monthly Primary
Old Age benefit payable under the Act on such Participant's
Normal Retirement Date which assumes that:
(A) For each year, including the year of the
Participant's Early Retirement Date or Vested Participant's
termination date, or the date a Vested Participant
ceases to be a Participant, or the date a Former
Participant ceases to be a Participant, or the
Terminated Vested Participant's termination date, a
person's earnings had equaled or exceeded the Social
Security maximum taxable wage base; and
(B) For each year thereafter until such
Participant's Normal Retirement Date, a person's earnings equal or
exceed the maximum taxable wage base in effect on such
Participant's Early Retirement Date, date of cessation
of participation, or termination date.
For purposes of this subsection
2.1(i)(2)(B), the Act shall mean the Social Security Act in effect on such
Participant's Early Retirement Date, date of cessation
of participation, or termination date.
(3) In the case of a Participant who is approved to
receive benefits pursuant to the PPG Industries, Inc. Permanent
Termination Salary Extension (PTSE) Plan, a calculation of
the Primary Old Age benefit pursuant to paragraph (1) or (2)
above, whichever is applicable, which assumes the
<PAGE>
Participant's Normal or Early Retirement Date or termination
date, whichever is applicable, is the date benefits commence
under the PTSE Plan.
(l) "Prior Employer Benefit" shall mean the amount of any benefit
payable at Normal Retirement Age from any qualified or
nonqualified retirement plan or profit sharing plan to which a
Participant is entitled as a result of prior employment with any
employer other than the Company. In the event such amount is
payable in any manner other than a monthly straight-life annuity,
such amount will be converted to a monthly straight-life annuity,
using acceptable actuarial assumptions, as determined by the
Administrative Committee and consistent with the procedures of the
Qualified Plan.
(m) "Qualified Plan" shall mean the PPG Industries, Inc. Retirement
Income Plan, as amended from time to time, or any successor plan.
(n) "Terminated Vested Participant" shall mean a Vested Participant
who terminates employment prior to his Early Retirement Date.
(o) "Vested Participant" shall mean a Participant who has
satisfied or subsequently satisfies the vesting requirements of the Qualified
Plan during the period he is a Participant of this Plan.
2.2 Wherever used herein, the following words and phrases shall have the
meaning set forth in the Qualified Plan:
"Active Employees' Pension Surviving Spouse Benefit (AEP/SSB)"
"Benefit Commencement Date"
"Credited Service"
"Deferred Retirement Date"
"Early Retirement Date"
"Normal Retirement Date"
"Retired Employees' Pension Surviving Spouse Benefit (REP/SSB)"
"Social Security Early Retirement Age"
"Social Security Normal Retirement Age"
<PAGE>
2.3 Wherever used herein, the following words and phrases shall have the
meaning set forth in the PPG Industries, Inc. Incentive Compensation and
Deferred Income Plan for Key Employees:
"Company"
"Employee"
"Subsidiary".
2.4 Wherever used herein, the masculine shall include the feminine
and the singular shall include the plural unless a different meaning is
clearly indicated by the context.
<PAGE>
ARTICLE III
Requirements for Participation
3.1 An Employee shall be a Participant in this Plan provided he meets all
of the following criteria:
(a) He is a participant in both the PPG Industries, Inc. Incentive
Compensation and Deferred Income Plan for Key Employees
("Incentive Compensation Plan") and the Qualified Plan on or after
January 1, 1982; and
(b) He has been either:
(1) An Employee approved by the Officers-Directors
Compensation Committee (or any successor) of the Board of Directors of
the Company to be a participant in the Incentive
Compensation Plan for at least five (5) yearly periods; said
yearly periods need not be consecutive or immediately prior
to retirement; or
(2) An Employee who was approved by the Officers-Directors
Compensation Committee (or any successor) of the Board of
Directors of the Company to be a participant in the
Incentive Compensation Plan for the year 1983; who is
approved by the Compensation and Executive Development
Committee (or any successor) to be a participant in the
Management Award Plan; and whose combined participation in
the Incentive Compensation Plan and the Management Award
Plan aggregates at least five (5) yearly periods, said
yearly periods need not be consecutive or immediately prior
to retirement. Participation in the Management Award Plan
by Employees other than those who satisfy the requirements
of this subsection 3.1(b)(2) shall be of no relevance in
satisfying the requirements for participation in this Plan.
3.2 Where a person has met the requirements of Section 3.1 above, except
that he did not satisfy the condition of subsection 3.1(a) on January 1,
1982, the Administrative Committee may designate such a person to be a
Participant in this Plan.
3.3 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be a participant under the Incentive Compensation Plan
or, in the case of an Employee who satisfies the requirements of
subsection 3.1(b)(2), ceases to be a participant under the Management
Award Plan, unless otherwise designated by the Administrative Committee
to remain as a Participant.
3.4 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be an active participant under the Qualified Plan.
<PAGE>
ARTICLE IV
Eligibility for Benefits
4.1 Standard Benefit
Any Participant or Former Participant whose Normal Retirement Date,
Early Retirement Date, Deferred Retirement Date, or any Terminated
Vested Participant whose termination date occurs on or after January 1,
1982, and prior to January 1, 1989, shall be eligible to receive the
Standard Benefit as provided in Section 5.1 of this Plan, unless
specifically designated by the Administrative Committee to receive the
Special Short Service Benefit as provided in Section 5.2 of this Plan.
4.2 Special Short Service Benefit
(a) Any Participant whose Normal Retirement Date or Deferred
Retirement Date occurs on or after January 1, 1982, and prior to
January 1, 1989, and who meets all of the following criteria:
(1) Has been specifically designated by the Administrative
Committee to receive the Special Short Service Benefit; and
(2) Has less than thirty (30) years of Credited Service at
such retirement;
shall be eligible to receive the Special Short Service
Benefit as provided in Section 5.2 of this Plan.
(b) Any Participant whose Early Retirement Date occurs on or after
January 1, 1982, and prior to January 1, 1989, and who meets all
of the following criteria:
(1) Has been specifically designated by the Administrative
Committee to receive the Special Short Service Benefit; and
(2) Has less than thirty (30) years of Credited Service at
such retirement; and
(3) Has been specifically approved by the Administrative
Committee to retire prior to his Normal Retirement Date;
shall be eligible to receive the Special Short Service Benefit
as provided in Section 5.2 of this Plan.
4.3 Any Participant who would otherwise be eligible to receive a benefit
pursuant to Section 4.1 or 4.2 except that his Normal Retirement Date,
Early Retirement Date, Deferred Retirement Date or termination date is
on or after January 1, 1989, may be eligible to receive a Grandfathered
Benefit in accordance with Section 5.5.
<PAGE>
ARTICLE V
Amounts of Benefits
5.1 Standard Benefit
(a) Subject to the provisions of Sections 5.3, 5.4 and
paragraph (c) below, for a Participant or Former Participant who retires
on his Normal Retirement Date or Deferred Retirement Date or for a
Terminated Vested Participant whose Benefit Commencement Date is
his Normal Retirement Date;
(1) In the case of such Participant who has at least
thirty (30) years of Credited Service, the monthly benefit shall be:
(A) 2.2% times Credited Service times Final
Average Monthly Salary;
LESS
(B) The sum of Primary Old Age Social Security
plus the monthly benefit calculated under the Qualified Plan,
before any reduction, as a straight-life annuity.
LESS
(C) Other payments specifically designated by
the Administrative Committee to be deducted which are made
pursuant to an individual employee contract to provide
retirement income or deferred compensation regardless
of whether the contract is made with the Company, a
subsidiary, or other employer.
(2) In the case of such Participant who has less than
thirty (30) years of Credited Service, the monthly benefit shall
be:
(A) 2.2% times Credited Service times Final
Average Monthly Salary;
LESS
(B) The sum of Primary Old Age Social Security
multiplied by a ratio the numerator of which is Credited Service,
expressed in total months, and the denominator of
which is three hundred sixty (360) months, plus the
monthly benefit calculated under the Qualified Plan,
before any reduction, as a straight-life annuity.
LESS
<PAGE>
(C) Other payments specifically designated by the
Administrative Committee to be deducted which are made
pursuant to an individual employee contract to provide
retirement income or deferred compensation regardless
of whether the contract is made with the Company, a
subsidiary, or other employer.
(b) Subject to the provisions of Sections 5.3, 5.4 and paragraph
(c) below, for a Participant or Former Participant who retires on his
Early Retirement Date or for a Terminated Vested Participant whose
Benefit Commencement Date is prior to his Normal Retirement Date:
(1) In the case of such Participant who has at least
thirty (30) years of Credited Service, the monthly benefit shall be:
(A) 2.2% times Credited Service times Final
Average Monthly Salary;
LESS
(B) The sum of Primary Old Age Social Security
plus the monthly benefit calculated under the Qualified Plan,
before any reduction, as a straight-life annuity on
the Normal Retirement Date;
LESS
(C) Other payments specifically designated by the
Administrative Committee to be deducted which are made
pursuant to an individual employee contract to provide
retirement income or deferred compensation regardless
of whether the contract is made with the Company, a
subsidiary, or other employer.
MULTIPLIED BY
(D) The Early Retirement Reduction Factor.
(2) In the case of such Participant who has less than
thirty (30) years of Credited Service, the monthly benefit shall
be:
(A) 2.2% times Credited Service times Final Average
Monthly Salary;
LESS
(B) The sum of Primary Old Age Social Security
multiplied by a ratio the numerator of which is Credited Service,
expressed in total months, and the denominator of
which is three hundred sixty (360) months, plus the
monthly benefit calculated under the Qualified Plan,
<PAGE>
before any reduction, as a straight-life annuity on
the Normal Retirement Date;
LESS
(C) Other payments specifically designated by the
Administrative Committee to be deducted which are made
pursuant to an individual employee contract to provide
retirement income or deferred compensation regardless
of whether the contract is made with the Company, a
subsidiary, or other employer.
MULTIPLIED BY
(D) The Early Retirement Reduction Factor.
(c) Effective January 1, 1989, the Standard Benefit shall be frozen
and the amount of benefit pursuant to this Section 5.1 shall not
exceed the amount accrued as of December 31, 1988.
5.2 Special Short Service Benefit
(a) The Short Service Benefit shall be the benefit calculated in
accordance with this Section 5.2; provided, however, that
effective January 1, 1989, the Short Service Benefit shall be
frozen, and the amount of benefit pursuant to this Section 5.2
shall not exceed the amount accrued as of December 31, 1988.
(b) For purposes of this Section 5.2 only, "Plan Service" shall
mean one and one-half (1 1/2) times Credited Service, with any half (1/2)
month rounded up to the next full month, up to a maximum of thirty
(30) years.
(c) For a Participant who retires on his Normal Retirement Date or
Deferred Retirement Date, the monthly benefit shall be:
(1) 2.2% times Plan Service times Final Average Monthly
Salary;
LESS
(2) The sum of Primary Old Age Social Security multiplied
by a ratio, the numerator of which is Plan Service, and the
denominator of which is three hundred sixty (360) months,
plus Prior Employer Benefit plus the monthly benefit
calculated under the Qualified Plan, before any reduction,
as a straight-life annuity;
LESS
(3) Other payments, if specifically designated by the
Administrative Committee to be deducted, which are made
<PAGE>
pursuant to an individual employee contract to provide
retirement income, regardless of whether the contract is
made by the Company, its Subsidiary, or any other employer.
(d) For a Participant who retires on his Early Retirement Date, for
purposes of computing his benefit, Plan Service shall be reduced
by one (1) month for each month the Participant's Benefit
Commencement Date precedes his Normal Retirement Date; provided,
however, that the Administrative Committee may approve a lesser
reduction.
(e) The monthly benefit for a Participant described in subparagraph
(d) of this Section 5.2 shall be:
(1) 2.2% times Final Average Monthly Salary times Plan
Service, as reduced above;
LESS
(2) The sum of Primary Old Age Social Security multiplied
by a ratio, the numerator of which is Plan Service, as reduced
above, and the denominator of which is three hundred sixty
(360) months, plus the monthly benefit calculated under the
Qualified Plan, before any reduction, as a straight-life
annuity on the Normal Retirement Date;
MULTIPLIED BY
(3) The Early Retirement Reduction Factor;
LESS
(4) Prior Employer Benefit;
LESS
(5) Other payments, if specifically designated by the
Administrative Committee to be deducted, which are made
pursuant to an individual employee contract to provide
retirement income, regardless of whether the contract is
made by the Company, its Subsidiary, or any other employer.
5.3 Terminated Vested Participant
In the case of a Terminated Vested Participant, the benefit amount
payable under this Plan shall be calculated on his termination date
using his Credited Service, Final Average Monthly Salary, Primary Old
Age Social Security, and the benefit payable at his Social Security
Normal Retirement Age under the Qualified Plan calculated as of the date
of termination.
<PAGE>
5.4 Former Participant
In the case of a Former Participant, the benefit amount payable under
this Plan shall be calculated as if his employment had terminated on the
date his participation in the Plan ceased, using his Credited Service,
Final Average Monthly Salary, Primary Old Age Social Security, and the
benefit payable at his Social Security Early Retirement Age under the
Qualified Plan calculated as of such date.
Where a Former Participant subsequently becomes a Terminated Vested
Participant, the benefit amount payable under this Plan shall be
calculated as enumerated in the immediately preceding paragraph.
5.5 Grandfathered Benefits
(a) A Participant shall be eligible to receive the benefit
provided in this Section 5.5 if, and only if, such benefit is greater
than the benefit, if any, payable to him from the PPG Industries, Inc.
Nonqualified Retirement Plan.
(b) Grandfather-I Benefit
(1) Subject to paragraph (a) above, the Grandfather-I
Benefit is payable to a Participant whose Normal Retirement Date, Early
Retirement Date, Deferred Retirement Date is on or after
January 1, 1989 and prior to January 2, 1994, or whose
termination date is on or after January 1, 1989 and prior to
January 1, 1994.
(2) The Grandfather-I Benefit shall be calculated in
accordance with Section 5.1, without regard to paragraph (c) thereof,
or Section 5.2, without regard to paragraph (a) thereof, and
as further modified in accordance with subparagraph (3)
below.
(3) In calculating the Grandfather-I benefit:
"Final Average Monthly Salary" shall mean the greater
of Final Average Monthly Salary or a final average monthly
salary calculated as if the Participant had received an
annual 4% increase to his base salary on each anniversary of
the date such Participant's base salary was increased prior
to September 2, 1988; provided, however, that such
calculation shall be adjusted in accordance with any
benefits paid to such Participant from the PPG Industries,
Inc. Permanent Termination Salary Extension Plan.
"Early Retirement Reduction Factor" shall mean the
factor in the Qualified Plan on December 31, 1988 used to reduce a
benefit for early retirement.
<PAGE>
The Administrator may adjust the formula in
Section 5.1 or 5.2 to insure that the total of the benefit payable
hereunder and the benefit payable from the Qualified Plan is
not reduced as a result of the early retirement reduction
factors in the Qualified Plan on and after January 1, 1989.
(c) Grandfather-II Benefit
(1) Subject to paragraph (a) above, the Grandfather-II
Benefit is payable to a Participant who would have been eligible to
receive the Grandfather-I benefit except that his
termination from the Company occurs on or after January 1,
1994.
(2) The Grandfather-II Benefit shall equal a benefit amount
which, when added to the Qualified Plan benefit payable on
the Participant's Benefit Commencement Date, will provide a
total benefit equal to the total benefit the Participant
would have received had he terminated employment on December
31, 1993, with a Benefit Commencement Date of January 1,
1994. Such calculation shall apply whether or not the
Participant could actually have elected a Benefit
Commencement Date of January 1, 1994..
5.6 Lump-Sum Benefit
(a) A Participant who is also eligible to participate in the PPG
Industries, Inc. 1984 Earnings Growth Plan at the time of his
Normal, Early or Deferred Retirement Date, and whose Normal, Early
or Deferred Retirement Date is on or after January 1, 1991, may
elect to receive any benefits payable hereunder in a lump sum, in
lieu of a monthly annuity in accordance with this Section 5.6.
(b) The following conditions apply to all elections pursuant to
this Section 5.6:
(1) A Participant may elect a lump sum benefit only if
such Participant elects his Benefit Commencement Date under the
Qualified Plan to be his Retirement Date.
(2) For Participants who elect to receive a lump-sum
benefit on and after January 1, 1993, and who are married on the date
their lump-sum benefit is payable, the election to receive a
lump sum must contain a consent to and acknowledgement of
the effect of such lump-sum election by the Participant's
spouse.
(3) Any election made pursuant to this Section 5.6
shall be irrevocable after the Latest Election Date; provided,
however, that, in the event of a Participant's death on or
after the Latest Election Date and prior to payment of the
<PAGE>
lump-sum benefit, such election shall be deemed to be null
and void on the date of such Participant's death.
For purposes of this Section 5.6, "Latest Election Date"
shall mean:
In the case of a Participant who voluntarily retires, the
latest date which is both at least 6 months and 10 days
prior to his Retirement Date and in the calendar year
preceding the calendar year of his Retirement Date; or
In the case of a Participant who is involuntarily
retired, such Participant's Retirement Date.
(c) Calculation of Lump-Sum Benefit
(1) Any lump-sum benefit payable under this Section 5.6
shall be calculated using mortality assumptions according to the
current actuarial valuation prepared for the Plan, and the
PBGC immediate interest rate.
(2) The PBGC immediate interest rate used to calculate
the lump-sum benefit of a Participant:
Who voluntarily retires, shall be either the rate in effect
on such Participant's Latest Election Date or the rate in
effect on the Participant's Benefit Commencement Date,
whichever produces the higher benefit; or
Who is involuntarily retired, shall be the rate in effect on
the Participant's Retirement Date.
(d) Payment of Lump-Sum Benefit
Any Lump-Sum Benefit payable pursuant to this Section 5.6,
shall be paid:
(1) In the case of a Participant who voluntarily
retires, on such Participant's Retirement Date; or
(2) In the case of a Participant who is involuntarily
retired, on the date which is 6 months and 10 days following such
Participant's Retirement Date. Such Participant's benefit
shall not accrue interest from the Participant's Retirement
Date through the date the lump-sum benefit is paid.
(e) The Administrative Committee shall have full discretion to
deny a Participant's request to receive a lump sum. Such decisions by
the Committee shall be made in a uniform and nondiscriminatory
manner.
<PAGE>
(f) See Attachment 1 for special Lump-Sum payments approved
by the Officers-Directors Compensation Committee.
5.7 Supplemental Early Retirement
(a) A Participant or Former Participant who is eligible for a
Supplemental Early Retirement Benefit under the Qualified Plan
shall be eligible to have his benefit under this Plan calculated
in a manner similar to the calculation of the Qualified Plan
benefit.
(b) The Administrator shall adopt rules for the calculation
of the benefit pursuant to this Section 5.7. Such rules shall be applied
in a uniform and nondiscriminatory manner.
<PAGE>
ARTICLE VI
Payment of Benefits (Including REP/SSB and AEP/SSB)
6.1 For a Participant, Former Participant, or Terminated Vested
Participant, the following shall apply:
(a) An application for benefits under the Qualified Plan shall be
deemed to be an application for benefits under this Plan.
(b) Benefits under this Plan shall begin on the Benefit
Commencement
Date.
(c) Except as provided in Section 5.6, benefits under this
Plan shall be paid in the same method or form of payment as benefits are paid
under the Qualified Plan and shall be subject to the same rules
and regulations of the Qualified Plan.
(d) Except as provided in Section 5.6, benefits under this
Plan shall be paid at the same time and for the same duration as payments
under the Qualified Plan.
(e) Except as provided in Section 5.6, in no event may such
Participant select a method or form of payment of benefits under
this Plan which is different in any way from the method or form of
payment of benefits selected under the Qualified Plan.
(f) Except as provided in Section 5.6, eligibility for and
payment of the REP/SSB to an Eligible Spouse under this Plan shall be
governed by the same rules and regulations as the Qualified Plan.
6.2 For a Participant only, the following shall apply:
(a) Eligibility for and payment of the AEP/SSB under this
Plan shall be governed by the same rules and regulations as the Qualified
Plan.
(b) The amount of benefit payable to an Eligible Spouse shall
always be determined under the Standard Benefit formula, as provided in
Section 5.1 of this Plan.
(c) The amount of benefit payable to an Eligible Spouse of a
Participant eligible for the Special Short Service Benefit shall
not be based on the Special Short Service Benefit formula.
(d) Notwithstanding any other provision of this Section 6.2, the
amount of benefit payable to an Eligible Spouse of a Participant
who:
(1) is eligible for the Special Short Service Benefit;
and
<PAGE>
(2) has retired on his Early Retirement Date; and
(3) dies prior to his Benefit Commencement Date;
shall be based on the Special Short Service Benefit formula.
<PAGE>
ARTICLE VII
Forfeiture of Benefits
7.1 In the event a Participant ceases participation under this Plan prior
to becoming vested in the Qualified Plan, no benefit shall be payable under
this Plan.
7.2 (a) Any benefit payable under this Plan to a Participant, Former
Participant, or Terminated Vested Participant on or after
retirement or commencement of benefits, shall be forfeitable in
the event it is found that such Participant is engaged or employed
as a business owner, employee, or consultant in any activity which
is in competition with any line of business of the Company or its
Subsidiaries existing as of the date of termination of employment
or retirement.
(b) All determinations under this Section 7.2 shall be made by the
Administrative Subcommittee at its sole discretion. As the
Administrative Subcommittee finds appropriate, it may suspend
benefits to such Participant and furnish due notice thereof. The
Administrative Subcommittee may thereafter terminate benefits
under this Plan unless such Participant discontinues the
competitive activity and affords written notice to the
Administrative Subcommittee of such discontinuance within ninety
(90) calendar days following the giving of notice of suspension of
benefits.
7.3 If any benefit under the Plan has been payable to and has been
unclaimed by any Participant, Former Participant, Terminated Vested
Participant, or his beneficiary, for a reasonable period of time, as
determined by the Administrative Committee, since the whereabouts or
existence of such Participant or beneficiary was last known to the
Administrative Committee, the Administrative Committee may direct that
all rights of such Participant or beneficiary to payments accrued and to
future payments be terminated absolutely, provided that if such Participant
or beneficiary subsequently appears and identifies himself to the
satisfaction of the Administrative Committee, then the liability will be
reinstated.
<PAGE>
ARTICLE VIII
General Provisions
8.1 The entire cost of benefits and administrative expenses for this Plan
shall be paid by the Company and its Subsidiaries.
8.2 The administration of this Plan shall be the responsibility of the
Administrative Committee, which shall interpret the provisions of this
Plan and decide all questions arising in its administration. The
decisions of the Administrative Committee shall be conclusive and
binding for all purposes. The Company's Employee Benefits
Administration Department will administer this Plan at the direction of
the Administrative Committee.
8.3 Nothing contained in this Plan shall be construed as a contract of
employment between the Company and its Subsidiaries and any Participant,
and the Plan shall not afford any Participant a right of continued
service with the Company and its Subsidiaries.
8.4 This Plan is purely voluntary on the part of the Company and its
Subsidiaries. The Company, by action of the Officers-Directors
Compensation Committee (or any successor) of the Board of Directors or
by such other person or committee acting in accordance with a procedure
adopted and approved by the Officers-Directors Compensation Committee
(or any successor) of the Board of Directors, may amend, suspend, or
terminate the Plan, in whole or in part at any time.
8.5 (a) Except as provided in paragraph (b) below, no benefits payable
under this Plan may be assigned or alienated or transferred in
whole or in part. No benefits payable under the Plan shall be
subject to legal process or attachment for the payment of any
claim against any person entitled to receive the same.
(b) Paragraph (a) above does not apply to the extent that a
Participant's interest under the Plan is alienated pursuant to a
"Qualified Domestic Relations Order" (QDRO) as defined in Section 4l4(p)
of the Internal Revenue Code. The administrator is authorized to
adopt such procedural and substantive rules and to take such
procedural and substantive actions as the Administrator may deem
necessary or advisable to provide for the payment of amounts from
the Plan to an Alternate Payee as provided in a QDRO.
8.6 The Plan is intended to conform to the applicable requirements of the
Act and the Internal Revenue Code. Except to the extent otherwise
provided in the Act and the Code, this Plan shall be construed,
regulated and administered under the laws of the Commonwealth of
Pennsylvania.
<PAGE>
ARTICLE IX
Change in Control
9.1 Notwithstanding any other provision of this Plan, upon a Change in
Control, as defined in Section 9.2:
(a) All Participants shall be deemed to be Vested Participants;
(b) An Employee who has satisfied the requirements of subsection (a)
of Section 3.1 but who has not satisfied the requirements of
subsection (b) of Section 3.1, shall be deemed to be a Participant
and a Vested Participant, provided such Employee was approved by
the Officers-Directors Compensation Committee (or any successor)
of the Board of Directors of the Company to be a participant in
the Incentive Compensation Plan for the year during which a Change
in Control occurs; and
(c) Any Participant, including Participants described in subsections
(a) and (b) of this Section 9.1, shall be eligible to receive the
Special Short Service Benefit as provided in Section 5.2 if, as of
the date a Change in Control occurs, he has been so designated by
the Administrative Committee.
(d) Paragraph (c) of Section 5.2 shall be revised in its entirety to
read:
(1) For a Participant who retires on his Early Retirement
Date, for purposes of computing his benefit, Plan Service shall be
reduced by the lesser of:
(A) One month for each month the Participant's
Benefit Commencement Date precedes his Normal Retirement Date;
or
(B) 36 months.
9.2 For purposes of this Plan, a "Change in Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either
(i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or
<PAGE>
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities");
provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control:
(i) any acquisition directly from the Company,
(ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 9.2; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination,
(i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
<PAGE>
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan
(or related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Business Combination;
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) A majority of the Board otherwise determines that a Change in
Control shall have occurred.
9.3 Upon, or in reasonable anticipation of, a Change in Control, an amount
sufficient to fund the benefits of all Vested Participants, including
those vested pursuant to Section 9.1, Former Participants, and
Terminated Vested Participants, including an amount sufficient to fund
additional benefits anticipated to accrue during the twenty-four (24)
month period immediately following a Change in Control and including an
amount sufficient to fund the Active Employees' Pension Surviving Spouse
Benefit and the survivor annuity payable to the joint annuitant
designated by any such Participant on his Benefit Commencement Date
shall be paid immediately by the Company to a Trustee. Selection of the
Trustee, the amount to be paid by the Company and the terms of such
payment (including such terms as are appropriate to cause such payment,
if possible, not to be a taxable event) in order to give effect to the
payment of benefits as provided in Sections 9.4 and 9.5 shall be
determined by the Vice President, Human Resources, and/or the Vice
President, Finance. Notwithstanding such funding, the Company shall be
obligated to pay such benefits to such Vested Participants, Former
Participants and Terminated Vested Participants to the extent such
funding proves to be insufficient. To the extent such funding proves to
be more than sufficient, such excess shall revert to the Company.
Except as regards Subsection 9.2(d), the Officers-Directors
Compensation Committee shall have the duty and the authority to make the
determination as to whether a Change in Control has occurred, or is
<PAGE>
reasonably to be anticipated, and, concomitantly, to direct the making
of the payment contemplated herein.
9.4 The Trustee shall provide for the payment of benefits to Vested
Participants, Former Participants, Terminated Vested Participants,
Eligible Spouses and joint annuitants in accordance with the provisions
of this Plan as in effect on the date of the Change in Control. Any
subsequent attempts to suspend or terminate this Plan or to amend this
Plan in any way which reduces future benefits shall have no effect on
payments made or to be made by the Trustee.
9.5 Notwithstanding any provision of this Plan, including without
limitation, Section 8.4, this Plan may not be:
(a) Amended such that future benefits would be reduced; or
(b) Suspended; or
(c) Terminated;
(1) As to the further accrual of benefits, at any
time during the twenty-four (24) month period following a Change in
Control; or
(2) As to the payment of benefits, at any time prior to
the last payment, determined in accordance with the provisions of
this Plan, to each Vested Participant, Former Participant,
Terminated Vested Participant, Eligible Spouse and joint
annuitant.
<PAGE>
PPG INDUSTRIES, INC.
DIRECTORS' RETIREMENT PLAN
1. PURPOSE. The purpose of this Plan is to promote the interests of
the Company' and its shareholders by providing Non-Employee Directors with
retirement benefits to encourage them to continue to serve on the Board
of Directors.
2. DEFINITIONS.
"Account" means the account maintained for each Non-Employee Director
to which Common Stock Units and Dividend Equivalents are credited.
"Annual Contribution" means the Common Stock Units credited to an
Account each year under Section 4.1.
"Board" means the Board of Directors of the Company.
"Change in Control" has the same meaning as given to that term in the
PPG Industries, Inc. Deferred Compensation Plan for Directors, as such
plan may be amended from time to time.
"Committee" means the Officers-Directors Compensation Committee of the
Board.
"Common Stock" means the common stock, par value $1.66 2/3 per share,
of the Company.
"Common Stock Unit" means a hypothetical share of Common Stock.
"Company" means PPG Industries, Inc.
"Dividend Equivalent" means an additional number of Common Stock Units
the Company shall credit to each Account as of each dividend payment
date declared with respect to the Company's Common Stock. The
additional number of Common Stock Units to be credited to each Account
shall be equal to:
(a) the product of (i) the dividend per share of the Common
Stock which is payable as of the dividend payment date,
multiplied by (ii)
<PAGE>
the number of whole Common Stock Units
credited to the Account as of the applicable dividend record
date;
DIVIDED BY
(b) the closing price of a share of the Common Stock on the
dividend payment date (or if such stock was not traded on
that date, on the next preceding date on which it was
traded), as reported in the New York Stock Exchange
Composite Transactions.
"Eligible Spouse" means the spouse who is legally married to a
Participant at the time of his or her death.
"Non-Employee Director" means a director of the Company who is not a
present or former employee of the Company or any of its subsidiaries.
"Normal Retirement Age" means 70 years of age.
"Participant" means a Non-Employee Director who has become eligible to
receive benefits under this Plan. A Non-Employee Director becomes a
Participant when he or she (1) retires from the Board and (2) attains
Normal Retirement Age; provided however, that the Committee may waive
the requirement that the Participant attain Normal Retirement Age.
"Plan" means the PPG Industries, Inc. Directors' Retirement Plan.
"Retainer" means the base annual retainer fee paid to each Non-Employee
Director by the Company. It does not include committee retainer fees,
meeting attendance fees, committee chairperson's retainer fees or any
other compensation other than the base annual retainer fee.
"Service" means the period of time a Non-Employee Director serves on
the Board.
3. EFFECTIVE DATE. This Plan shall be effective on and after January 1,
1988.
4. CREDITING ACCOUNTS.
4.1 Commencing in the year 1988, each year on the day following the Annual
Meeting of Shareholders of the Company, the Company shall credit the
Account of each Non-Employee Director who serves on the Board on that
day with the
<PAGE>
number of Common Stock Units determined by dividing one-
half of such Director's Retainer by the average closing price of the
Common Stock in the New York Stock Exchange Composite Transactions
during the 5 days for which such price is available immediately
preceding such day of crediting. No more than 10 such Annual
Contributions shall be made to each Account and the total number of such
Annual Contributions to an Account under this Section 4.1 plus the
number which is multiplied by $10,000 to determine the amount credited
to the Account under Section 4.2 will not exceed 10.
4.2 On the day following the 1988 Annual Meeting of Shareholders of the
Company, the Company shall credit the Account of each Non-Employee
Director who is age 61 or older on that date with the number of Common
Stock Units determined by (1) multiplying $10,000 times his or her
number of full fiscal years of Service, but such number of full fiscal
years of Service shall not exceed the number determined by subtracting
60 from the Non-Employee Director's age on the day immediately following
the 1988 Annual Meeting of Shareholders and (2) then dividing that
amount by the average closing price of the Common Stock in the New York
Stock Exchange Composite Transactions during the 5 days for which such
price is available immediately preceding such day.
5. PAYMENTS OF BENEFITS.
5.1 Only Participants or Eligible Spouses will receive benefits under this
Plan. Except as set forth in Section 5.4, the Account of a Non-Employee
Director will be forfeited if he or she does not become a Participant.
5.2 Benefits will be paid in annual installments each year on May 1 (or on
the next business day if May 1 is not a business day) commencing the
first May 1 the Participant is eligible to receive benefits; provided,
however, that the first payment to a Participant shall not be made until
6 months and 10 days after the Participant ceases to be a Non-Employee
Director. The number of annual installments paid to each Participant
shall be equal to his or her number of full fiscal years of Service, but
shall not exceed 10 annual installments. The number of Common Stock
Units attributable to each installment shall be equal to the whole
number obtained by dividing the number of Common Stock Units then
credited to the Participant's Account by the number of unpaid
installments. Common Stock Units with respect to which payment has not
yet occurred shall continue to be credited with Dividend Equivalents.
As of the date on which the last payment of benefits is made to any
Participant, the Company shall pay the Participant, in cash, calculated
in the manner described in Section 5.3, the net amount of any remaining
fractional Common Stock Unit.
<PAGE>
5.3 Benefits shall be paid, in the discretion of the Committee, in the form
of Common Stock or cash; provided that, benefits paid to any Participant
who becomes eligible to receive benefits under this Plan on or after
November 1, 1990, shall be paid only in cash. If paid in the form of
cash, the amount of each payment shall be calculated by multiplying the
number of Common Stock Units attributable to such payment by the average
closing price of the Common Stock in the New York Stock Exchange
Composite Transactions for the 5 trading days for which such price is
available immediately preceding the date of payment.
5.4 If a Non-Employee Director dies prior to retiring, or after retiring
from the Board but before becoming eligible to receive benefits
hereunder, he or she shall be deemed to have become a Participant
eligible to receive benefits hereunder immediately prior to his or her
death, and such benefits shall be paid to the Participant's Eligible
Spouse. If a Participant dies after becoming eligible to receive
benefits hereunder, but prior to receiving all the benefits due him or
her hereunder, such remaining benefits shall be paid to the
Participant's Eligible Spouse. Unpaid benefits under this Plan will be
forfeited in the event the Participant's death and Participant's
Eligible Spouse's death occur prior to the total amount of benefits due
hereunder having been paid.
6. CHANGES IN STOCK. In the event of any change in the outstanding shares
of the Common Stock, or in the number thereof, by reason of any stock
dividend or split, recapitalization, merger, consolidation, exchange of
shares or other similar change, a corresponding change will be made in
the number of Common Stock Units and Dividend Equivalents, if any,
credited to each Account, unless the Committee determines otherwise.
7. ACCELERATION. The Committee, in its sole discretion, may accelerate
the payment of benefits hereunder to any Participant or his or her Eligible
Spouse for reasons of changes in tax laws or in the event of a Change in
Control of the Company; provided that no payment of benefits may be
accelerated hereunder to any Participant or his or her Eligible Spouse
if such Participant was a director of the Company on or after November
1, 1990.
8. CHANGE IN CONTROL. Upon, or in reasonable anticipation of, a Change in
Control (as defined above), the Company shall immediately make a payment
in cash to a trustee on such terms as the Senior Vice President, Human
Resources and Administration, and the Senior Vice President, Finance, or
either of them, shall deem appropriate (including such terms as are
appropriate to cause such payment, if possible, not to be a taxable
event to Participants) of a sufficient
<PAGE>
amount to insure that Participants receive the payment of all amounts as
contemplated under the Plan.
9. GENERAL PROVISIONS. The entire cost of benefits and administrative
expenses for this Plan shall be paid by the Company. This Plan is
purely voluntary on the part of the Company. The Company, by action of
the Board or, except as limited by the Company's bylaws, the Committee,
may amend, suspend or terminate this Plan in whole or part at any time,
but no such amendment, suspension or termination shall adversely affect
the rights of any Non-Employee Director or Eligible Spouse of a deceased
Non-Employee Director with respect to Common Stock Units and Dividend
Equivalents credited prior to such amendment, suspension or termination
or Dividend Equivalents which would otherwise have been credited in the
future with respect to Common Stock Units credited prior to such
amendment, suspension or termination.
As Amended 9/20/95
<PAGE>
PPG INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
1. Purpose
The purpose of the PPG Industries, Inc. Deferred Compensation Plan
for Directors (the "Plan") is to offer each non-employee member of
the Board of Directors of PPG Industries, Inc. (the "Corporation")
the opportunity to defer receipt of the compensation to be earned for
services as a director of the Corporation until after termination of
service as a director.
2. Definitions
(a) "Account" or "Accounts" means one or more of the Stock Account
or the Capital Enhancement Account maintained for a
Participant.
(b) "Beneficiary" means the person or entity designated by the
Participant or the Participant's legal representative as
provided under Section 7(b).
(c) "Capital Enhancement Account" means a bookkeeping account or
accounts maintained for a Participant who, for such period or
periods as the Committee may establish or permit, elects to
defer to it all or any part of his or her Compensation.
(d) "Committee" means the Officers-Directors Compensation
Committee (or any successor) of the Board of Directors of the
Company.
(e) "Common Stock" means the common stock, par value $1.66 2/3 per
share, of the Corporation.
(f) "Common Stock Unit" means a hypothetical share of Common
Stock.
(g) "Compensation" means a Participant's retainer and meeting fees
earned for services as a director and as chairman or a member
of a committee of the Board of Directors.
(h) "Dividend Equivalents" means an additional number of Common
Stock Units the Corporation shall credit to each Stock Account
as of
<PAGE>
each dividend payment date declared with respect to the
Corporation's Common Stock. The additional number of Common
Stock Units to be credited to each Stock Account shall be
equal to:
(1) the product of (i) the dividend per share of the Common
Stock which is payable as of the dividend payment date,
multiplied by (ii) the number of whole Common Stock
Units credited to the Stock Account as of the applicable
dividend record date;
DIVIDED BY
(2) the closing price of a share of the Common Stock on the
dividend payment date (or if such stock was not traded
on that date, on the next preceding date on which it was
traded), as reported in the New York Stock Exchange
Composite Transactions.
(i) "Participant" means an eligible director who has elected to
participate in the Plan.
(j) "Stock Account" means a bookkeeping account maintained for a
Participant who elects to defer to it all or any part of his
or her Compensation and to which Common Stock Units and
Dividend Equivalents are credited.
3. Eligibility
All directors of the Corporation who are not at the time also serving
as salaried employees of the Corporation are eligible to participate
in the Plan.
4. Deferral of Compensation
(a) Each Participant shall have such Compensation as the Board of
Directors mandates deferred under the Plan and credited to the
Stock Account. In addition, each Participant may elect to
have additional Compensation deferred under the Plan and
credited to the Stock Account and/or, as permitted by the
Committee, the Capital Enhancement Account.
(b) Subject to any rules, regulations, procedures or resolutions
adopted by the Committee, an election to defer shall be made
in writing prior
<PAGE>
to the start of the calendar year for which
it is to become effective and shall be effective upon filing
with the Secretary of the Corporation. Once deferral has been
elected and filed with the Secretary of the Corporation, it
shall become irrevocable for the next succeeding calendar year
and, unless revoked in writing or superseded by a new election
effective for calendar years after the year in which such
revocation or new election is executed, shall continue in
effect for each calendar year thereafter.
(c) Deferred amounts shall be credited on the books of the
Corporation to an account in the name of the Participant on
the same date that it would otherwise be payable and shall
thereafter be paid from the general funds of the Corporation.
No assets of the Corporation shall be segregated or earmarked
in respect to any amounts credited to the Accounts of
Participants and all such amounts shall constitute unsecured
contractual obligations of the Corporation.
(d) The number of Common Stock Units to be credited to the Stock
Account of a Participant shall be equal to the quotient
obtained by dividing the unpaid deferred amount to be credited
to the Stock Account by the closing price of a share of the
Common Stock on the date on which such deferred amount is
credited on the books of the Corporation (or if such stock was
not traded on that date, on the next preceding date on which
it was traded), as reported on the New York Stock Exchange
Composite Transactions. Dividend Equivalents shall be
credited to each Stock Account as of each dividend payment
date declared with respect to the Corporation's Common Stock.
(e) Interest equivalents in respect to unpaid deferred amounts
credited to the Capital Enhancement Account shall be credited
at the same interest rate, and in the same manner, as interest
equivalents are credited to the Capital Enhancement Account
under the PPG Industries, Inc. Incentive Compensation and
Deferred Income Plan for Key Employees; provided, however,
that (i) pre-retirement death benefits as a multiple of
amounts deferred thereunder and (ii) reduction of the rate of
interest equivalents in case of termination of service prior
to age 62, shall not apply to amounts deferred hereunder.
(f) The sum of each Participant's deferrals of Compensation under
Section 4(a), to his Capital Enhancement Account shall be not less
<PAGE>
than such minimum, and not more than such maximum, as the
Committee shall specify.
5. Payment of Deferred Amounts
(a) Payments from the Stock Account and the Capital Enhancement
Account shall be made in the form of cash.
(b) Subject to Section 5(d), a Participant may elect to have the
amount deferred paid in from one to 15 annual installments
after he or she shall cease to be a director of the
Corporation.
Such installment(s) shall commence upon or following
(i) a specified date;
(ii) an event certain;
(iii) the earlier of a specified date or an event certain.
Installments shall continue to be payable as soon as
practicable after the first day of January of each year
thereafter.
Subject to Sections 5(d) and 5(e), payment of deferred amounts
shall commence no later than January of the first calendar
year which is the later of:
(i) the year following attainment of age seventy (or such
other age as may supersede the age referred to in
Section 403(f)(3) of Title 42 United States Code); or
(ii) the year following such Participant's retirement.
Where deferred amounts, interest equivalents and Dividend
Equivalents are payable in installments, the amount of each
installment will be calculated such as to provide
approximately equal distributions over the period designated.
Notwithstanding the foregoing, no installment may be in an
amount less than $1,000, and, if and to the extent necessary,
installments shall be accelerated so as to provide for such
minimum installment(s). In calculating the amount of each
installment, the amount in the Participant's Stock Account
shall be calculated by multiplying the number of Common Stock
Units in the Participant's Stock Account on date of such
<PAGE>
payment by the average closing price of the Common Stock in
the New York Stock Exchange Composite Transactions for the 5
trading days for which such price is available immediately
preceding the date of payment.
(c) Death or Disability
(i) In the event of the death or disability of a
Participant either while serving as a director of the
Corporation or prior to the commencement of any
payments hereunder, any amount due under the Plan shall
be paid in a lump sum to the Participant's beneficiary,
or in the case of disability, to the Participant, as
soon as practicable after the death or disability.
(ii) In the event of the death or disability of a
Participant on or after the commencement of installment
payments, in accordance with Section 5(b), payments
shall continue to paid to the Participant's
beneficiary, or in the case of disability, to the
Participant, in accordance with the election made by
the Participant in accordance with Section 5(b);
provided, however, that the Secretary of the Committee
shall have the power to accelerate the payment of any
installment(s) because of hardship or other
circumstances deemed by him, in his discretion, to
warrant such acceleration.
(d) Payment Elections
Any prior election as to the number of installments made by a
Participant who is serving as a director of the Corporation on
February 19, 1992 shall be null and void.
Participants may elect the number and the date or event for
the commencement of installment payments in accordance with
the following:
(i) Such elections must be made at least six months and ten
days prior to the first payment date; and
(ii) In all cases, the elections must be made in the
calendar year preceding the first payment date.
<PAGE>
(e) Notwithstanding any other provision of this Plan, the first
installment to a Participant shall not be paid until six
months and ten days after the Participant shall cease to be a
director of the Corporation.
6. Change in Control
(a) Upon, or in reasonable anticipation of, a Change in Control
(as defined below), the Corporation shall immediately make a
payment in cash to a trustee on such terms as the Senior Vice
President, Human Resources and Administration, and the Senior
Vice President, Finance, or either of them, shall deem
appropriate (including such terms as are appropriate to cause
such payment, if possible, not to be a taxable event to
Participants) of a sufficient amount to insure that
Participants receive the payment of all amounts as
contemplated under the Plan.
(b) Except as regards Section 6(c)(v), the Committee shall have
the duty and the authority to make the determination as to
whether a Change in Control has occurred, or is reasonably to
be anticipated, and, concomitantly, to direct the making of
the payment contemplated herein.
(c) A "Change in Control" shall mean:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (x) the then
outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined
voting power of the then outstanding voting securities
of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of
this subsection (i), the following acquisitions shall
not constitute a Change in Control: (a) any
acquisition directly from the Company, (b) any
acquisition by the Company, (c) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled
by the Company or (d) any
<PAGE>
acquisition by any corporation pursuant to a transaction which complies
with clauses (a), (b) and (c) of subsection (iii) of
this Section 6(c); or
(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director
subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office
occurs as a result of an actual or threatened election
contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in
each case, unless, following such Business Combination,
(a) all or substantially all of the individuals and
entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination (including,
without limitation, a corporation which as a result of
such transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (b) no Person
<PAGE>
(excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such Business Combination or
the combined voting power of the then outstanding
voting securities of such corporation except to the
extent that such ownership existed prior to the
Business Combination and (c) at least a majority of the
members of the board of directors of the corporation
resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company; or
(v) A majority of the Board otherwise determines that a
Change in Control shall have occurred.
7. General Provisions
(a) Either the Board of Directors of the Corporation or the
Committee may modify or amend the Plan, in whole or in part,
from time to time, or terminate the Plan at any time, without
the consent of any Participant or Beneficiary of any
Participant; provided, however, that any modification,
amendment or termination shall be of general application to
all Participants and Beneficiaries and shall not, without the
consent of the Participant or, in the event of his death, the
Participant's Beneficiary or estate adversely affect (i) any
amount theretofore deferred or credited to the Participant's
Account(s) or (ii) the right of the Participant to receive all
amounts theretofore credited to the Participant's Account(s),
as of the date of such modification, amendment or termination;
and provided further that any modification, amendment or
termination that would materially increase or accelerate the
payment of any amount under the Plan shall be approved by the
Board of Directors. The Plan shall remain in effect until
terminated pursuant to this paragraph.
<PAGE>
(b) No rights under the Plan may be transferred or assigned except
that a Participant may designate, in writing filed with the
Secretary of the Corporation, his spouse or children, a
trustee or his or her executor or executrix as Beneficiary to
receive any unpaid amounts under the Plan after the death of
the Participant. In the absence of any such designation or in
the event that the designated person or entity shall not be in
existence at the time a payment under the Plan comes due, the
Beneficiary of the Participant shall be the Participant's
legal representative.
(c) The Committee shall have full power to administer and
interpret the Plan and to adopt such rules, regulations,
procedures and resolutions consistent with the terms of the
Plan as the Committee deems necessary or advisable to carry
but the terms of the Plan.
(d) The place of administration of the Plan shall be conclusively
deemed to be within the Commonwealth of Pennsylvania, and the
validity, construction, interpretation and administration of
the Plan, and of any determinations or decisions made
thereunder, and the rights of any and all persons having or
claiming to have any interest therein or thereunder, shall be
governed by, and determined exclusively and solely in
accordance with, the internal laws of the Commonwealth of
Pennsylvania.
As Amended -- September 20, 1995
<PAGE>
CHANGE IN CONTROL
EMPLOYMENT AGREEMENT
AGREEMENT by and between PPG Industries, Inc., a Pennsylvania
corporation (the "Company"), and _________________________________(the
"Executive"), dated as of ______________________ _____ , 199__.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change in Control
and to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change in Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change in Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall mean the
first date during the Change in Control Period (as defined in Section l(b))
while the Executive is an employee of the Company on which a Change in Control
(as defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change in Control occurs and if the Executive's
employment with the Company is terminated
<PAGE>
prior to the date on which the
Change in Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or anticipation of a Change
in Control, then for all purposes of this Agreement the "Effective Date" shall
mean the date immediately prior to the date of such termination of employment.
(b) The "Change in Control Period" shall mean the period commencing
on the date hereof and ending on the earlier of (i) the Executive's date of
Retirement, or (ii) the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the "Renewal Date"), unless
previously terminated, the Change in Control Period shall be automatically
extended so as to terminate the earlier of (i) the Executive's date of
Retirement, or (ii) three years from such Renewal Date, unless at least 60
days prior to the Renewal Date the Company shall give notice to the Executive
that the Change in Control Period shall not be so extended.
(c) "Retirement" shall mean termination of employment on or after
(i) an Executive's "normal retirement date" as defined in the PPG Industries,
Inc. Retirement Income Plan, provided such termination is voluntary, or (ii)
with respect to any Executive that the Company may subject to compulsory
retirement under the Age Discrimination in Employment Act (29 U.S.C. Section
621 et. seq.) (ADEA) as a "bona fide executive or a high policy maker", such
Executive's "normal retirement date".
(d) The "Compensation Multiplier" shall mean: (i) if the Executive
is subject to compulsory retirement, then the number of years and fractions of
years remaining (such fractions to be expressed as the number of whole months
and any partial month,
<PAGE>
divided by 12) from the Executive's Date of Termination
(as defined in Section 5(e)) to his normal retirement date, not to exceed
three (unless such Executive's termination of employment is a Window Period
Termination, as defined in Section 5(c), in which case the multiplier shall
not exceed two) or, (ii) if the Executive is not subject to compulsory
retirement, then the multiplier shall be three, or if the Executive's
termination of employment is a Window Period Termination, then two.
2. Change in Control. For the purpose of this Agreement, a "Change
in Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date
<PAGE>
hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business Combination"), in
each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation
<PAGE>
except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination;
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) A majority of the Board otherwise determines that a Change in
Control shall have occurred.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the earlier of
(i) the Executive's date of Retirement and (ii) the third anniversary of the
Effective Date, (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the
120-day period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or
location less than 35 miles from such location.
<PAGE>
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with
the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of the Executive's responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the Employment Period,
the Executive shall receive an annual base salary ("Annual Base Salary"),
which shall be paid at a monthly rate, at least equal to twelve times the
highest monthly base salary paid or payable, including any base salary which
has been earned but deferred, to the Executive by the Company and its
affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary shall be reviewed no more than 12 months after
the last salary increase awarded to the Executive prior to the Effective Date
and thereafter at least annually. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive under this
Agreement.
<PAGE>
Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by, controlling or
under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary during
the Employment Period, the Executive shall be awarded, for each fiscal year
ending during the Employment Period, an annual bonus (the "Annual Bonus") in
cash at least equal to the Executive's highest bonus under the Company's
Incentive Compensation and Deferred Income Plan for Key Employees, or any
comparable bonus under any predecessor or successor plan, for the last three
full fiscal years prior to the Effective Date (annualized in the event that
the Executive was not employed by the Company for the whole of such fiscal
year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no
later than the end of the third month of the fiscal year next following the
fiscal year for which the Annual Bonus is awarded, unless the Executive shall
elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the 120-day period immediately
preceding the Effective Date
<PAGE>
or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(iv) Welfare Benefit Plans. During the Employment Period,
the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs) to
the extent applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable
to the Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial
<PAGE>
planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable
to the Executive, as in effect generally at any time thereafter with respect
to other peer executives of the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal secretarial
and other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its affiliated
companies as in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance
<PAGE>
with Section 12(b) of this Agreement of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 90th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 90 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties.
For purposes of this Agreement, "Disability" shall mean disability which,
after the expiration of more than 52 weeks after its commencement, is
determined to be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the Executive's legal
representative (such agreement to acceptability not to be withheld
unreasonably).
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief Executive
Officer of the Company which specifically identifies the manner in which the
Board or Chief Executive Officer believes that the Executive has not
substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive
<PAGE>
in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
<PAGE>
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than as provided in Section 4(a)(i)(B) hereof or
the Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date (herein referred to as a "Window Period Termination") shall be
deemed to be a termination for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which
<PAGE>
(i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be
not more than thirty days after the giving of such notice). The failure by
the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability,
the Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.
6. Obligations of the Company upon Termination. (a) Good Reason;
Other Than for Cause, Death or Disability. If, during the Employment Period,
the Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:
<PAGE>
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid, (2)
the product of (x) the higher of (I) the Recent Annual Bonus and
(II) the Annual Bonus paid or payable, including any bonus or
portion thereof which has been earned but deferred (and annualized
for any fiscal year consisting of less than twelve full months or
during which the Executive was employed for less than twelve full
months), for the most recently completed fiscal year during the
Employment Period, if any (such higher amount being referred to as
the "Highest Annual Bonus") and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (3)
any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) the Executive's
Compensation Multiplier and (2) the sum of (x) the Executive's
Annual Base Salary and (y) the Highest Annual Bonus; and
C. an amount equal to the difference between (a) the actuarial
equivalent of the benefit under the Company's qualified defined
benefit retirement plan (the "Retirement Plan") (utilizing
actuarial assumptions no less favorable to the Executive than
those in effect immediately prior
<PAGE>
to the Effective Date) and under
any excess or supplemental retirement plan or plans in which the
Executive participates (together, the "SERP") which the Executive
would receive if the Executive's employment continued for a number
of years (including fractional parts, if any) equal to the
Executive's Compensation Multiplier after the Date of Termination
assuming for this purpose that all accrued benefits are fully
vested, and, assuming that the Executive's compensation in each of
such years (and fraction of years, if any) is that required by
Section 4(b)(i) and Section 4(b)(ii), and (b) the actuarial
equivalent of the Executive's actual benefit (paid or payable), if
any, under the Retirement Plan and the SERP as of the Date of
Termination;
(ii) for a number of years (including fractional parts, if any)
equal to the Executive's Compensation Multiplier after the Executive's Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue
benefits to the Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance with the Company's
[life insurance, medical and dental plans] if the Executive's employment had
not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive [life insurance, medical or dental benefits] under another employer
provided plan, the [life insurance, medical and dental benefits] described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility
(but not the time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed
<PAGE>
for the number of
years (including fractional parts, if any) after the Date of Termination equal
to the Executive's Compensation Multiplier and to have retired on the last day
of such period;
(iii) if, on the Date of Termination, the Company was paying the
expense of providing financial counseling for the Executive, the Company
shall, continue to pay the expense of comparable financial counseling services
for a number of years (including fractional parts, if any) equal to the
Executive's Compensation Multiplier. The scope and provider of such
counseling shall be selected by the Executive in his sole discretion; and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the
most favorable benefits provided by the Company and affiliated companies to
the estates and beneficiaries of peer executives of the Company and such
affiliated companies under
<PAGE>
such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously
deferred by the Executive, and (z) Other
<PAGE>
Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor, subject to
Section 12(f), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or any
of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract
or agreement except as explicitly modified by this agreement.
8. Full Settlement; Legal Fees. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the
<PAGE>
Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then unless the Executive's termination was a Window
Period Termination, the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is
<PAGE>
required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
Deloitte & Touche LLP or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would, pursuant to this
Section 9, require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten
business days after the Executive is
<PAGE>
informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control
<PAGE>
all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs the Executive
to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension
of the statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not
<PAGE>
be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.
10. Other Employment. (a) The Executive shall have no obligation
to seek or accept other employment after termination of employment with the
Company in mitigation of the amount of payment received from the Company
pursuant to this Agreement. However, in the event that the Executive does
accept other employment, he shall be required to return to the Company such
part (if any) of the payment received from the Company pursuant to this
Agreement as may be required by the provisions of Section 10(b).
(b) If the Executive obtains employment with another employer
within the period of time after his Termination Date that is equal in years
(and fractions thereof, if any) to such Executive's Compensation Multiplier
(the "Mitigation Period"), then the Executive shall remit to the Company such
portion of the Executive's lump sum payment from the Company (without
interest) which is equal to the cash value of any salary and bonus payments
received (or earned but deferred) from his new employer during the Mitigation
Period.
11. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or
<PAGE>
representatives of the
Executive in violation of this Agreement). After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 10 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
12. Successors. (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
13. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without
<PAGE>
reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
_________________________
_________________________
_________________________
If to the Company:
PPG Industries, Inc.
One PPG Place
Pittsburgh, Pennsylvania 15272
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
<PAGE>
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement
or the failure to assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this
Agreement, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, prior to the Effective Date, the Executive's employment may be terminated
by either the Executive or the Company at any time prior to the Effective
Date, in which case the Executive shall have no further rights under this
Agreement. From and after the Effective Date this Agreement shall supersede
any other agreement between the parties with respect to the subject matter
hereof and any such other agreement shall be null and void in its entirety and
of no effect.
IN WITNESS WHEREOF and intending to be legally bound hereby, the
Executive has hereunto set the Executive's hand and, pursuant to the
authorization from
<PAGE>
its Board of Directors, the Company has caused this Agreement to be executed
in its name on its behalf, all as of the date first written above.
__________________________
[Typed name of Executive]
PPG INDUSTRIES, INC.
By:______________________
Name: Russell L. Crane
Title: Senior Vice President, Human Resources
and Administration
<PAGE>
Exhibit 11
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Computation of Earnings Per Share
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net income.................... $ 170.4 $145.5 $ 606.4 $ 363.6
Weighted average number of
shares of common stock
outstanding................. 200.9 212.5 204.0 212.7
Weighted average number of
shares of common stock
outstanding and common
stock equivalents.......... 203.2 214.3 206.4 214.4
Primary earnings per share.... $ 0.85 $ 0.68 $ 2.97 $ 1.71
Fully diluted earnings
per share................... $ 0.84 $ 0.68 $ 2.94 $ 1.70
</TABLE>
NOTES:
The common stock equivalents consist of the shares reserved for issuance under
PPG's stock option plan and deferred under PPG's incentive compensation,
management award, and earnings growth plans.
The fully diluted earnings per share calculations are submitted in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of less than
three percent.
All amounts are in millions except per share data.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 118
<SECURITIES> 0
<RECEIVABLES> 1,320
<ALLOWANCES> 0
<INVENTORY> 760
<CURRENT-ASSETS> 2,375
<PP&E> 6,393
<DEPRECIATION> 3,629
<TOTAL-ASSETS> 6,188
<CURRENT-LIABILITIES> 1,580
<BONDS> 745
0
0
<COMMON> 484
<OTHER-SE> 2,157
<TOTAL-LIABILITY-AND-EQUITY> 6,188
<SALES> 5,335
<TOTAL-REVENUES> 5,335
<CGS> 3,167
<TOTAL-COSTS> 3,167
<OTHER-EXPENSES> 524
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62
<INCOME-PRETAX> 996
<INCOME-TAX> 378
<INCOME-CONTINUING> 606
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 606
<EPS-PRIMARY> 2.97
<EPS-DILUTED> 2.97
</TABLE>
