<PAGE> 1
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SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
PPG INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PPG INDUSTRIES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
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<PAGE> 2
PPG Industries, Inc. One PPG Place Pittsburgh, Pennsylvania 15272
March 10, 1995
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders of
PPG Industries, Inc. to be held on Thursday, April 20, 1995, at 2:00 P.M. in The
Pittsburgh Hilton, Gateway Center, Pittsburgh, Pennsylvania. We look forward to
greeting personally those shareholders who will be able to be present.
This booklet includes the notice of the Annual Meeting and the Proxy
Statement, which contains information about the business of the Annual Meeting
and about your Board of Directors and its committees. This year you are being
asked to elect three Directors, to elect Auditors, and to approve a proposal to
amend the Company's Restated Articles of Incorporation to increase the number of
authorized shares of Common Stock.
It is important that your shares be represented at the Annual Meeting
whether or not you are able to attend personally. You are, therefore, urged to
complete, date and sign the accompanying Proxy and Voting Instruction Card and
return it promptly in the return envelope provided.
Sincerely yours,
Jerry E. Dempsey
Chairman of the Board
<PAGE> 3
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 20, 1995
Notice is hereby given that the Annual Meeting of Shareholders of PPG
Industries, Inc. will be held on Thursday, April 20, 1995, at 2:00 P.M.,
prevailing time, in THE PITTSBURGH HILTON, GATEWAY CENTER, PITTSBURGH,
PENNSYLVANIA, for the purpose of considering and acting upon the following:
1. The election of three Directors;
2. The election of Auditors;
3. A proposal to amend the Company's Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock;
and
4. Such other matters as may properly come before the Meeting or any
adjournment thereof.
Only shareholders of record of the Company as of the close of business on
February 21, 1995 are entitled to notice of and to vote at the Meeting or any
adjournment thereof.
Admission to the Meeting will be by Admission Card only. If you are a
shareholder of record or a Savings Plan participant and plan to attend, you may
obtain an Admission Card by marking the box provided on the proxy and voting
instruction card. If your shares are not registered in your name, please advise
the shareholder of record (your bank, broker, etc.) that you wish to attend.
That firm will request an Admission Card for you or provide you with evidence of
your ownership that will gain you admission to the Meeting.
H. Kennedy Linge, Secretary
Pittsburgh, Pennsylvania
March 10, 1995
<PAGE> 4
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--APRIL 20, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Voting Securities........................................................... 2
Election of Directors....................................................... 5
Committees of the Board................................................ 7
Compensation of Directors.............................................. 9
Other Transactions..................................................... 10
Compensation of Executive Officers.......................................... 10
Compensation Committee Report on Executive Compensation................ 10
Summary of Named Executives' Compensation.............................. 15
Option Grants.......................................................... 16
Option Exercises and Fiscal Year-End Values............................ 19
Retirement Plans....................................................... 19
Employment Agreements and Change in Control Arrangements............... 21
Shareholder Return Performance Graph................................... 22
Election of Auditors........................................................ 23
Proposal to Approve an Amendment to the Restated Articles of Incorporation
of the Company to Increase the Number of Authorized Shares of Common
Stock..................................................................... 23
General................................................................ 23
Purposes and Effects of the Amendment.................................. 24
Miscellaneous............................................................... 25
Vote Required.......................................................... 25
Solicitation Costs..................................................... 26
Shareholder Proposals.................................................. 26
Other Matters.......................................................... 26
</TABLE>
<PAGE> 5
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--APRIL 20, 1995
This Proxy Statement is being mailed to the shareholders of PPG Industries,
Inc. (hereinafter sometimes called "PPG" or the "Company") on or about March 10,
1995, in connection with the solicitation of proxies by the Board of Directors
of the Company (hereinafter sometimes called the "Board of Directors" or the
"Board"). Such proxies, which may be given in the form of the accompanying Proxy
and Voting Instruction Card, will be voted at the Annual Meeting of Shareholders
of the Company (hereinafter sometimes called the "Meeting") to be held on
Thursday, April 20, 1995, at 2:00 P.M., prevailing time, in THE PITTSBURGH
HILTON, GATEWAY CENTER, PITTSBURGH, PENNSYLVANIA and at any adjournment thereof.
Proxies may be revoked at will before they have been exercised, but the
revocation of a proxy will not be effective until written notice thereof has
been given to the Secretary of the Company.
------------------------
On April 21, 1994, the Board authorized a two-for-one split of the Common
Stock of the Company in the form of a stock distribution payable on June 10,
1994 to shareholders of record at the close of business on May 10, 1994. In this
Proxy Statement numbers of shares or Options to acquire shares, and per share
prices, of the Company's Common Stock have been restated to reflect the
two-for-one split.
VOTING SECURITIES
As of the close of business on February 21, 1995, there were outstanding
206,407,044 shares of the Common Stock of the Company, par value $1.66 2/3 per
share, the only class of voting securities of the Company outstanding. Only
shareholders of record as of the close of business on February 21, 1995, are
entitled to notice of and to vote at the Meeting. Except with respect to the
election of Directors, each such shareholder is entitled to one vote for each
share so held. With respect to the election of Directors, the right of
cumulative voting exists. That right permits each shareholder to multiply the
number of shares the shareholder is entitled to vote by the number of Directors
to be elected in order to determine the number of votes the shareholder is
entitled to cast, and, then, to cast all or any number of such votes for one
nominee or to distribute them among any two or more nominees. The proxies
solicit discretionary authority to vote cumulatively.
2
<PAGE> 6
Set forth below is certain information with respect to the beneficial
ownership of shares of the Common Stock as of February 21, 1995 by certain
persons, including (i) the nominees for Directors, the continuing Directors, one
of whom is the Chief Executive Officer of the Company (hereinafter sometimes
called the "CEO"), and the four other most highly compensated Executive Officers
of the Company and (ii) such persons and all other Executive Officers, as a
group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership(1)
--------------------------------
Name of Shares of Common Stock
Beneficial Owner Common Stock(2) Equivalents(3)
---------------- --------------- ------------
<S> <C> <C>
Jerry E. Dempsey.................... 162,865 --
Erroll B. Davis, Jr................. 100 24
Stanley C. Gault.................... 10,000 6,666
Allen J. Krowe...................... 4,000 5,492
Steven C. Mason..................... 2,000 3,782
Harold A. McInnes................... 2,400 5,610
Robert Mehrabian.................... 2,000 1,779
Vincent A. Sarni.................... 373,201 24
David G. Vice....................... 3,000 2,512
David R. Whitwam.................... 2,000 3,613
Robert D. Duncan.................... 244,669 --
Peter R. Heinze..................... 99,806 1,735
John J. Horgan...................... 158,981 --
Raymond W. LeBoeuf.................. 207,543 22,090
All of the above and all other
Executive Officers as a
Group(4).......................... 1,303,784 94,715
<FN>
- ------------
(1) None of the identified beneficial owners, including all of the beneficial
owners named above and all other Executive Officers as a Group, holds more
than 1% of the shares of the Common Stock outstanding. Each of the
identified beneficial owners has sole voting power and sole investment power
as to all of the shares beneficially owned with the exception of (i) shares
held by certain of them jointly with, or directly by, their spouses or minor
children and (ii) the Common Stock Equivalents which are described more
fully below and which have no voting power.
3
<PAGE> 7
(2) Of the shares shown, 148,937; 317,080; 170,620; 90,332; 140,599; and 151,210
of the shares of Messrs. Dempsey, Sarni, Duncan, Heinze, Horgan and LeBoeuf,
respectively, and 1,310,523 of the shares held by all of the beneficial
owners named above and all other Executive Officers as a Group are shares as
to which the beneficial owner has the right to acquire beneficial ownership
within sixty days of February 21, 1995, upon the exercise of Options granted
under the Company's 1984 Stock Option Plan (the "Stock Option Plan").
(3) Directors who neither are nor were employees of the Company hold Common
Stock Equivalents in their accounts in the Directors' Retirement Plan (which
Plan is described under "Compensation of Directors" below). Certain
Directors also hold Common Stock Equivalents in their accounts in the
Deferred Compensation Plan for Directors (which Plan is also described under
"Compensation of Directors"). Certain Executive Officers hold Common Stock
Equivalents in their accounts as a result of their deferral of awards made
to them under the Company's Incentive Compensation and Deferred Income Plan
for Key Employees (the "Incentive Compensation Plan") and the 1984 Earnings
Growth Plan. Common Stock Equivalents are hypothetical shares of Common
Stock having a value on any given date equal to the value of a share of
Common Stock. Common Stock Equivalents earn dividend equivalents until the
Common Stock Equivalents are paid, but they have no voting rights or other
rights of a holder of the Common Stock.
(4) The Group consists of 17 persons: the eight Executive Officers of the
Company as of February 21, 1995 (Messrs. Dempsey, Duncan, LeBoeuf, Heinze,
and Horgan, and R. L. Crane, W. H. Hernandez, and G. A. Zoghby) and the
three nominees for Directors and the six continuing Directors, who are not
Executive Officers.
</TABLE>
4
<PAGE> 8
ELECTION OF DIRECTORS
Three Directors are to be elected to serve a term of three years and until
their successors have been elected and qualified. It is intended that the shares
represented by each proxy will be voted cumulatively, in the discretion of the
proxies, for the nominees for Directors set forth below, each of whom is an
incumbent, or for any substitute nominee or nominees designated by the Board of
Directors in the event any nominee or nominees become unavailable for election.
The principal occupations of, and certain other information regarding, the
nominees and the continuing Directors, are set forth below.
------------------
Nominees to Serve for a Term of Three Years
------------------
<TABLE>
<CAPTION>
Name and
Principal Occupation Certain Other Information
-------------------- -------------------------
<S> <C>
ERROLL B. DAVIS, JR. Mr. Davis, 50, has been a Director of PPG since
President and Chief December 1994. He has been President of Wisconsin
Executive Officer, Power and Light Company, an electric, gas and water
Wisconsin Power and Light utility company since 1987, and Chief Executive
Company and WPL Holdings Officer since 1988. He has been President and Chief
Executive Officer of WPL Holdings, the parent company
of Wisconsin Power and Light Company, since 1990. He
is also a director of Sentry Insurance Company and of
Amoco Corporation.
ALLEN J. KROWE Mr. Krowe, 62, has been a Director of PPG since 1987.
Vice Chairman, He has been Vice Chairman of Texaco Inc., an
Texaco Inc. international petroleum company, since 1993, having
served as Chief Financial Officer from 1988 to 1994
and as Senior Vice President from 1988 to 1993. He is
also a director of I.B.J. Schroder Bank & Trust
Company and Texaco Inc. and serves on the Advisory
Board of Infomart.
ROBERT MEHRABIAN Dr. Mehrabian, 53, has been a Director of PPG since
President, 1992. He has been President of Carnegie Mellon
Carnegie Mellon University, an educational institution, since 1990.
University He was Dean of the College of Engineering at the
University of California, Santa Barbara from 1983 to
1990. He is also a director of DQE Inc. and Mellon
Bank Corporation.
</TABLE>
5
<PAGE> 9
------------------
Continuing Directors--Term Expires in 1996
------------------
<TABLE>
<CAPTION>
Name and
Principal Occupation Certain Other Information
-------------------- -------------------------
<S> <C>
HAROLD A. MCINNES Mr. McInnes, 67, has been a Director of PPG since
Retired Chairman of the 1986. He was Chairman of the Board and Chief
Board and Chief Executive Executive Officer of AMP Incorporated, an electrical
Officer, AMP Incorporated products company, from 1990 until his retirement in
1993, having served as Vice Chairman of the Board
from 1986 until 1990. He is also a Director and
Chairman of the Executive Committee of the Board of
Directors of AMP Incorporated.
VINCENT A. SARNI Mr. Sarni, 66, has been a Director of PPG since 1984.
Retired Chairman of the He was Chairman of the Board and Chief Executive
Board and Chief Executive Officer of PPG from 1984 until his retirement in
Officer, PPG Industries, 1993. He is also a director of Amtrol Inc., Hershey
Inc. Foods Corp., The LTV Corporation and PNC Financial
Corp.
DAVID G. VICE Mr. Vice, 61, has been a Director of PPG since 1988.
Retired Vice-Chairman He was Vice-Chairman, Products and Technology, of
Products and Technology, Northern Telecom Limited, a telecommunications
Northern Telecom Limited systems company, from 1990 until his retirement in
1992, having served as President from 1985 until
1990. He is also a director of Sun Life Assurance
Company of Canada.
</TABLE>
------------------
Continuing Directors--Term Expires in 1997(1)
------------------
<TABLE>
<CAPTION>
Name and
Principal Occupation Certain Other Information
-------------------- -------------------------
<S> <C>
JERRY E. DEMPSEY Mr. Dempsey, 62, has been a Director of PPG since
Chairman of the Board and August 1993. He joined PPG in August 1993 as Chairman
Chief Executive Officer, of the Board and Chief Executive Officer-Elect and in
PPG Industries, Inc. September 1993 he became Chairman of the Board and
Chief Executive Officer. From 1991 until he joined
PPG, he was Senior Vice President of WMX
Technologies, Inc., a waste treatment and disposal
company, and Chairman of its publicly traded,
majority-owned subsidiary, Chemical Waste Management,
having served as President and Chief Executive
Officer of Chemical Waste Management since 1985. He
is also a director of WMX Technologies, Inc. and
Navistar International.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
Name and
Principal Occupation Certain Other Information
-------------------- -------------------------
<S> <C>
STANLEY C. GAULT(1) Mr. Gault, 69, has been a Director of PPG since 1980.
Chairman of the Board and He has been Chairman of the Board and Chief Executive
Chief Executive Officer, Officer of The Goodyear Tire & Rubber Company, a
The Goodyear Tire manufacturer and distributor of tires, chemicals,
& Rubber Company polymers, plastic film and other rubber products,
since 1991. He was Chairman of the Board and Chief
Executive Officer of Rubbermaid Incorporated, a
manufacturer and distributor of plastic and rubber
products, from 1980 to 1991. He is also a director of
Avon Products, Inc., International Paper Company,
Rubbermaid Incorporated and The Timken Company. In
addition, he serves as a director of The New York
Stock Exchange, Inc.
STEVEN C. MASON Mr. Mason, 59, has been a Director of PPG since 1990.
Chairman of the Board and He has been Chairman of the Board and Chief Executive
Chief Executive Officer, Officer of Mead Corporation, a forest products
Mead Corporation company, since 1992, having served as Vice Chairman
since 1991, and as President and Chief Operating
Officer from 1982 until 1991. He is also a director
of Duriron Company, Inc.
DAVID R. WHITWAM Mr. Whitwam, 53, has been a Director of PPG since
Chairman of the Board and 1991. He has been Chairman of the Board and Chief
Chief Executive Officer, Executive Officer of Whirlpool Corporation, a
Whirlpool Corporation manufacturer and distributor of household appliances
and related products, since 1987.
<FN>
- ------------
(1) Mr. Gault, in accordance with the retirement policy of the Company, will
retire as a Director effective at the 1996 Annual Meeting of Shareholders of
the Company.
</TABLE>
COMMITTEES OF THE BOARD
The Board of Directors has appointed several standing committees, including
an Audit Committee, a Nominating Committee and an Officers-Directors
Compensation Committee. During 1994, the Board held ten meetings, while the
Audit Committee held three meetings, the Nominating Committee three meetings and
the Officers-Directors Compensation Committee five meetings. The average
attendance at meetings of the Board and Committees of the Board during 1994 was
over 90 percent, and each Director attended at least 80 percent of the total
number of meetings of the Board and Committees of the Board on which such
Director served. Descriptions of the Audit, Nominating and Officers-Directors
Compensation Committees are set forth below. None of the members of those
Committees is a past or present employee or Officer of the Company.
7
<PAGE> 11
Audit Committee--The functions of the Audit Committee are primarily to
review with the independent public accountants and the Company's internal
auditors their respective reports and recommendations concerning audit findings
and the scopes and plans of their future audit programs and to meet with
Officers of the Company and separately with the independent public accountants
and with the internal auditors to review audits, annual financial statements,
accounting and financial controls and compliance with appropriate codes of
conduct. The Audit Committee also recommends to the Board of Directors the
independent public accountants to be recommended for election annually by the
shareholders. The members of the Audit Committee are Mrs. Lucie J. Fjeldstad and
Messrs. Stanley C. Gault, Allen J. Krowe, Robert Mehrabian and David G. Vice.
Nominating Committee--The Nominating Committee recommends to the Board of
Directors the persons to be nominated by the Board to stand for election as
Directors at each Annual Meeting of Shareholders, the person or persons to be
elected by the Board to fill any vacancy or vacancies in its number and the
persons to be elected by the Board to key offices and positions of the Company.
The Nominating Committee also annually reports to the Board the Committee's
assessment of the performance of the Board as a whole. The members of the
Nominating Committee are Messrs. Allen J. Krowe, Steven C. Mason, Harold A.
McInnes, Robert Mehrabian and David R. Whitwam.
The Company's bylaws provide that nominations for persons to stand for
election as Directors may be made by holders of record of Common Stock entitled
to vote in the election of the Directors to be elected; provided that a
nomination may be made by a shareholder at a meeting of shareholders only if
written notice of such nomination is received by the Secretary of the Company
not later than (i) with respect to an election to be held at an Annual Meeting
of Shareholders, the date on which a shareholder proposal would have to be
submitted to the Company in order to be set forth in the Company's Proxy
Statement, as provided in the applicable proxy rules of the Securities and
Exchange Commission (with respect to the 1996 Annual Meeting, that date is
November 10, 1995) and (ii) with respect to an election to be held at a special
meeting of shareholders, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders. Each such
nomination by a shareholder must set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) such other information regarding each
8
<PAGE> 12
nominee proposed by such shareholder as would be required to be included in a
Proxy Statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated by the Board of Directors; and (e) the
written consent of each nominee, signed by such nominee, to serve as a Director
of the Company if so elected.
Officers-Directors Compensation Committee--The Officers-Directors
Compensation Committee (in the Compensation Committee Report below sometimes
referred to as the "Committee") annually evaluates the performance of the CEO,
administers and interprets the Company's Incentive Compensation and Deferred
Income Plan for Key Employees, Earnings Growth Plans and the Stock Option Plan
and fixes the compensation and benefits of the Officers of the Company who are
also Directors (currently only Mr. Dempsey) and of the members of the Company's
Management Committee who are the Executive Officers of the Company. The members
of the Officers-Directors Compensation Committee are Mrs. Lucie J. Fjeldstad and
Messrs. Stanley C. Gault, Steven C. Mason, Harold A. McInnes, David G. Vice and
David R. Whitwam.
COMPENSATION OF DIRECTORS
Directors who are not also Officers receive a basic annual retainer of
$30,000 and a fee of $1,000 for each Board or Committee meeting they attend. In
addition, the members of the Audit Committee receive an annual retainer of
$4,000 while the members of the Nominating and Officers-Directors Compensation
Committees receive an annual retainer of $3,000 for each Committee. The Chairman
of each Committee receives an additional $1,000 annually. Any Director who is
also an Officer receives no compensation as a Director.
Under the Company's Deferred Compensation Plan for Directors, each Director
must defer receipt of such compensation as the Board mandates. Currently, the
Board mandates deferral of one-third of each payment of the basic annual
retainer of each Director who is permitted to defer taxation under the tax laws
applicable to such Director. Under the Plan, each Director may also elect to
defer the receipt of all compensation. All deferred payments are held in the
form of Common Stock Equivalents and earn dividend equivalents until paid.
Payments will be made in cash. Common Stock Equivalents are hypothetical shares
of Common Stock having a value on any given date equal to the value of a share
of Common Stock.
Under the Directors' Retirement Plan, each Director who neither is nor was
an employee of the Company and who serves on the Board of Directors as of the
day following each Annual Meeting of Shareholders is credited with Common Stock
Equivalents worth one-half of the Director's basic annual retainer. No more than
ten annual credits may be made for the account of any Director. Directors who
were less than ten years from the normal retirement age for Directors on the day
following the 1988 Annual Meeting of shareholders were credited with $10,000
worth of Common Stock Equivalents for each prior year of service as a Director,
but the number of such
9
<PAGE> 13
years of prior service for which such credits were made, plus the number of
annual credits expected to be made on a Director's behalf through the Director's
normal retirement age, did not exceed ten. The Common Stock Equivalents held in
each Director's account earn dividend equivalents. Upon termination of service,
the Common Stock Equivalents held in a Director's account will be paid in cash
in annual installments to the Director, or the Director's spouse in the event of
the Director's death.
As part of its overall program to promote charitable giving, the Company
has established a Directors' charitable award program funded by insurance
policies on the lives of Directors. Each of the Company's Directors participates
in the program. Upon the death of an individual Director, the Company will
donate an amount up to and including a total of $1 million to one or more
qualifying charitable organizations recommended by such Director and approved by
the Company. The Company will subsequently be reimbursed from the proceeds of
the life insurance policies. Individual Directors derive no financial benefit
from this program since all charitable deductions accrue solely to the Company.
OTHER TRANSACTIONS
PPG and its subsidiaries purchase products and services from and/or sell
products and services to companies of which certain of the Directors of PPG are
executive officers or were executive officers during 1994. PPG does not consider
the amounts involved in such transactions material. Such purchases from and
sales to each company involved less than 1% of the consolidated gross revenues
for 1994 of the purchaser and seller and all of such transactions were in the
ordinary course of business and at competitive terms and prices no less
favorable to PPG than those which could be obtained from other parties. Some of
such transactions are continuing, and it is anticipated that similar
transactions will recur from time to time. Also, PPG has entered into a lease
agreement with Flo K. Gault, wife of Director Stanley C. Gault, under which PPG
will lease premises in Louisville, Kentucky for use as a glass storage and
handling center. PPG will pay $4,641 per month (plus applicable taxes and
insurance premiums) over the five-year term of the lease. The lease was
negotiated at arm's-length in the ordinary course of business and the cost to
PPG will be comparable to the cost of leasing similar suitable premises.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Officers-Directors Compensation Committee of the Board of Directors is
responsible for determining and administering the policies which govern the
executive compensation programs of the Company. The Committee which consists
entirely of independent outside Directors met five times in 1994 to establish
Company performance goals, base salary pay levels, target annual bonus
10
<PAGE> 14
awards and annual bonus payments and to establish long-term incentives for
Officers of the Company.
Philosophy
The philosophy of the Committee is that the interests of the Company and
its shareholders require attracting and retaining the best possible executive
talent, motivating executives to achieve goals which support business strategies
and linking executive and shareholder interests. The Committee believes this is
generally best accomplished by compensating the CEO and other Executive Officers
(referred to collectively in this Proxy Statement as the "Executives")
competitively while having a significant portion of their total compensation
variable and related to the performance of the Company against established goals
and their overall personal performance in directing the enterprise and by the
utilization of equity-based plans. Recruitment of highly qualified executives
from outside the Company may occasionally require guaranteeing a minimum amount
of variable compensation in the early years of the executive's employment.
Annual Compensation Programs
The levels of base salary and target annual bonuses for the Executives,
including the CEO and the other four Executives named in the compensation tables
below (collectively, the "Named Executives") are established annually under a
program also applicable to other professional associates. Total annual
compensation is targeted at the arithmetic average (mean) of a group of
comparison companies selected because of their traditional high Return on Equity
(ROE) performance and for which compensation data are available. The Committee
believes that the most direct competitors for executive talent are not the
companies that are included in the Dow Jones Industrial Diversified Index. Thus,
the high ROE companies used for compensation purposes are not the same as the
companies included in the index used in the Comparison of Five-Year Cumulative
Total Shareholder Return graph on page 22.
The Executives' base salaries are maintained below the salary range
midpoints which are set at the average of the salary range midpoints of the
comparison group of ROE companies. Annual bonus awards under the Company's
Incentive Compensation Plan are then targeted at a level which, when combined
with base salaries, will approximate the average base salary and annual bonus
paid by the group of comparison companies. Thus a competitive total compensation
is achieved when target performance is met but with a larger percent of pay at
risk than is the case in comparison companies.
Annual bonus compensation will exceed the average of the comparison
companies when Company financial performance meets or exceeds targets
established by the Committee and individual performance has had a positive
effect on meeting strategic objectives of the Company. Annual bonus compensation
will be below the average of the comparison companies when
11
<PAGE> 15
Company financial performance does not meet targets and individual performance
does not have a positive effect on strategic objectives. The financial
performance targets established by the Committee are based on earnings and cash
flow. Certain one time adjustments are not included in determining the earnings
and cash flow. Bonus awards are calculated against these financial targets and
then are increased or decreased by the Committee based on personal performance
ratings related to achievement of strategic objectives of the Company. The
personal performance rating for the CEO is determined by the Committee and the
other Executives are rated by the CEO.
Final awards are subject to the discretion of the Committee as permitted in
the plan approved by the shareholders. If minimum thresholds of earnings and
cash flow are not achieved, no awards are granted by the Committee. The
Committee has traditionally determined that 20% of the annual bonus award be
paid in Common Stock of the Company to build ownership levels and to align
executive interest more closely with the shareholders.
Long Term Incentive Program
It is the Committee's policy to promote the growth and profitability of the
Company by providing key employees an opportunity to invest in the stock of the
Company, and thereby provide them with additional incentive to cause the Company
to grow and profit, make their compensation competitive with opportunities
available in industry and encourage them to continue in the employ of the
Company.
Long term incentives are currently provided under the 1984 Stock Option
Plan which has been approved by shareholders and provides for the granting of
stock options to key management employees. Option grants are established each
year to be competitive with long term incentives of the comparison group of
companies. The number of stock options granted to each executive is determined
so that the potential value of the Options when combined with annual
compensation discussed above will approximate total annual and long-term
compensation paid to executives in the comparison companies. The number of
Option shares granted is not determined by past performance, but the Options are
performance related since the value of the Option is ultimately determined by
the future performance of the Company as reflected by stock price. The number of
stock options granted is not dependent on the number granted in the past or the
number presently held.
Also, as shown in the Option Grant Table and related footnotes on pages 17
and 18, some Named Executives exercised existing Options in a manner entitling
them to receive Restored Options under the Restored Option provisions of the
Stock Option Plan approved by shareholders in 1992. The Restored Option
provisions encourage Optionees to exercise Options earlier during the Option
Term, thereby building their stock ownership to better align their interests
with the interests of shareholders.
12
<PAGE> 16
CEO Compensation
Mr. Dempsey's annualized base salary for 1994 was raised 3.3% over his
annualized salary for 1993 to $620,000. This salary change was based on the
competitive base salary program described above. His annual bonus for 1994 was
based 80% on Company financial goals and 20% on non-financial goals related to
strategic objectives of the Company. Financial goals were weighted 65% on
earnings targets and 35% on cash flow targets. The financial performance of the
Company against both earnings and cash flow targets established by the Committee
significantly exceeded those targets in 1994. The Committee also rated the CEO's
performance toward achieving strategic objectives related to succession
planning, strategic planning, capital allocation, compensation and benefits and
responsiveness to PPG's shareholders as exceeding requirements. Mr. Dempsey's
1994 annual bonus, therefore, exceeded established targets as well as the bonus
guaranteed by his employment contract.
Mr. Dempsey was granted 100,000 stock options at fair market value on the
date of grant, consistent with the Committee philosophy that the potential value
of the Options combined with targeted annual compensation will be competitive
with total annual and long-term compensation provided by the comparison group of
companies.
Mr. Dempsey also elected to receive a Restored Option for 12,948 shares in
1994 under the Restored Option provisions of the 1984 Stock Option Plan.
Other Named Executives
The accompanying compensation tables list four Executives other than the
CEO ("Other Named Executives"). The Other Named Executives' base salaries were
increased over 1993 base salaries consistent with our base pay practice
discussed above. Messrs. Duncan and LeBoeuf also received base pay increases at
the time they were promoted and elected to the Office of the Chief Executive.
The Office of the Chief Executive, consisting of Messrs. Dempsey, Duncan and
LeBoeuf, was formed to address such broad issues as succession planning,
strategic planning, capital allocation, compensation and benefits and
responsiveness to PPG's Shareholders.
The Other Named Executives' annual bonus awards were based on the same
weights and financial performance measures as the CEO with non-financial
measures directly related to their corporate and strategic business unit
objectives. Annual bonus awards of all of the Other Named Executives were higher
in 1994 than in 1993 and higher than target awards established by the Committee
because Company financial performance exceeded targets and the personal
performance of each against non-financial measures exceeded requirements.
The number of Options granted to Other Named Executives is related to the
level of responsibility determined by the Optionee's job grade level on the date
of grant. Job grade levels
13
<PAGE> 17
are established by an evaluation methodology developed by an independent
consultant. The 1994 Option grants represent a level of long-term incentives
which are competitive with the average provided by our comparison group of
companies. A significant number of the Options granted to Messrs. Duncan,
LeBoeuf and Horgan in 1992 were intended to replace long-term incentives
previously provided by the 1984 Earnings Growth Plan which were terminated in
1992. The Other Named Executives also elected to receive Restored Options as
stated in the Option/SAR Grants in the Last Fiscal Year table on page 17.
Gains realized from exercising Options under the long-term incentive 1984
Stock Option Plan are exempt from the deductibility limitations under Section
162(m) of the Internal Revenue Code. Compensation paid from the annual bonus
plan does not qualify for exemption from deductibility limits under Section
162(m). The Committee believes the annual bonus plan must be sufficiently
flexible to allow the Committee to adjust awards appropriately for the effect of
unusual events such as acquisitions, divestitures and other major corporate,
accounting or legal changes impacting on earnings and cash flow. This ability to
exercise discretion under the terms of the annual bonus plan in the view of the
Committee is in the best interest of the Company and its shareholders and
outweighs the need to qualify all plans so that income paid through the plans is
exempt from the deductibility limits of Section 162(m) of the Internal Revenue
Code. Nonetheless, all taxable income for 1994 of the CEO and Other Named
Executives qualified under Section 162(m) as deductible by the Company.
Through the programs and actions of the Committee described above, a very
significant portion of the Company's executive compensation is linked directly
to Company performance and stock appreciation. The Officers-Directors
Compensation Committee intends to continue the policy of linking executive
compensation to corporate performance and returns to shareholders.
The Officers-Directors Compensation
Committee:
Lucie J. Fjeldstad Harold A. McInnes
Stanley C. Gault David G. Vice
Steven C. Mason David R. Whitwam
14
<PAGE> 18
SUMMARY OF NAMED EXECUTIVES' COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1994, 1993 and 1992, of those persons who (i) served as the
chief executive officer of the Company at any time during 1994 and (ii) the
other four most highly compensated Executive Officers of the Company at December
31, 1994. In this Proxy Statement, the five persons named in the table below are
referred to as the Named Executives.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------
Annual Compensation Awards
----------------------------------- ----------------------------
Other Securities
Annual Restricted Underlying All Other
Name and Salary Bonus Compensa- Stock Options/SARs Compensa-
Principal Position Year ($) ($)(1) tion($) Award(s)($)(2) (#)(3) tion($)(4)
- ---------------------------- ---- ------- --------- --------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
J. E. Dempsey 1994 616,667 1,360,000 27,145 112,948 7,041
Chairman and CEO 1993 250,000 312,000 730 50,000 348,969
(Eff. 9/1/93)(5)
R. D. Duncan 1994 364,983 600,000 5,258 150,759 5,572
Executive Vice President 1993 319,600 376,000 0 90,958 8,336
1992 300,000 200,000 1,127 137,158 7,764
R. W. LeBoeuf 1994 335,483 600,000 5,130 89,332 11,073
Executive Vice President 1993 273,958 275,000 0 84,592 16,617
1992 255,000 225,000 1,272 113,608 14,280
P. R. Heinze 1994 307,617 420,000 859 55,277 6,902
Sr. Vice President, 1993 279,076 190,000 0 55,254 11,841
Chemicals (Employed 1992 108,335 110,000 0 236,687 15,000 5,493
8/1/92)
J. J. Horgan 1994 287,867 335,000 1,510 59,155 5,347
Sr. Vice President, 1993 254,117 275,000 0 38,000 8,564
Fiber Glass 1992 240,000 160,000 891 86,000 7,595
<FN>
- ------------
(1) Cash and market value of Common Stock awarded.
(2) Upon joining PPG, Mr. Heinze was granted 7,000 restricted shares of PPG
Common Stock valued at $236,687 (based on the market value of PPG Common
Stock of $33.8125 per share on August 3, 1992, which was the date the shares
were granted). The restrictions cover the three-year period ending August 1,
1995, and ownership rights vest pro rata on a monthly basis throughout this
three-year period. During this vesting period, Mr. Heinze receives dividends
on the non-vested portion of the award. In 1994, this amounted to $1,524.
This amount has been included in the "All Other Compensation" column. At
December 31, 1994,
15
<PAGE> 19
there were 1,361 shares still subject to restriction. This equates to 7/36
of the restricted stock award. Using the closing market price on December
31, 1994, these 1,361 restricted shares had a value equal to $50,527.
(3) As more fully described in the Compensation Committee Report on Executive
Compensation above, the number of Options granted to certain Other Named
Executives in 1992 is in part due to the decision of the Officers-Directors
Compensation Committee to use Options granted under the Company's 1984 Stock
Option Plan to replace the long-term incentives previously provided by the
Company's 1984 Earnings Growth Plan. No awards were made in 1992, 1993, or
1994 under the Earnings Growth Plan. As more fully described in the Option
Grant Table below, some of the Options granted to certain Named Executives
in 1992, 1993, and 1994 were granted under the Restored Option provisions of
the Stock Option Plan that were approved by shareholders in 1992.
(4) The following are included in the amounts shown under All Other Compensation
for 1994: Company contributions under the Company's Employee Savings Plan
were $4,650, each for Messrs. Dempsey, Duncan, LeBoeuf, Heinze and Horgan.
Under the Company's Benefit Account Plan, $300, each was credited to Messrs.
Dempsey, Duncan, LeBoeuf, Heinze and Horgan. The value of premiums paid with
respect to term life insurance for the benefit of Messrs. Dempsey, Duncan,
LeBoeuf, Heinze and Horgan, respectively, was $2,091, $622, $340, $428, and
$397. The amount shown for Mr. LeBoeuf includes $5,783, which is the portion
of interest earned on certain deferred compensation above 120% of the
applicable federal rate. The amount shown for Mr. Heinze includes $1,524 of
dividends on the non-vested portion of the restricted stock award that is
more fully described in Footnote 2. The amount shown for Mr. Dempsey in 1993
includes $346,250, which was the August 2, 1993 market value of 10,000
shares of PPG Common Stock which were granted to Mr. Dempsey when he joined
PPG.
(5) Mr. Dempsey was employed as Chairman and CEO-Elect effective August 1, 1993
and became Chairman and CEO on September 1, 1993.
</TABLE>
OPTION GRANTS
Shown below is further information on grants of Options under the Company's
Stock Option Plan during fiscal year 1994 to the Named Executives. All of the
Options granted in 1994 were Nonqualified Options, as are all outstanding
Options. No Stock Appreciation Rights were granted in 1994 and none are
outstanding.
16
<PAGE> 20
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term(2)
------------------------------------------------------------ -------------------------------------------
Percent of
Total
Number of Options/SARs
Securities Granted to
Underlying Employees in Exercise or
Options/SARs Fiscal Year Base Price Expiration
Name Granted(#)(1) 1994 ($/Share) Date 0%($)(3) 5%($) 10%($)
---- ------------ ------------ ----------- ---------- -------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. E. Dempsey 100,000 5.0 39.000 2/15/2004 0 2,453,000 6,216,000
12,948 0.7 41.625 8/01/2003 0 297,092 731,886
R. D. Duncan 43,000 2.2 39.000 2/15/2004 0 1,054,790 2,672,880
51,192 2.6 37.875 2/18/2002 0 925,807 2,217,381
1,052 0.1 38.500 2/18/1996 0 4,155 8,511
5,529 0.3 38.500 2/17/1997 0 33,561 70,439
5,313 0.3 38.500 2/16/1998 0 44,098 94,943
7,264 0.4 38.500 2/15/1999 0 77,289 170,704
11,009 0.6 38.500 2/11/2000 0 144,108 327,077
12,928 0.6 38.500 2/18/2002 0 237,617 569,220
13,472 0.7 38.500 2/16/2003 0 286,011 704,316
R. W. LeBoeuf 39,000 2.0 39.000 2/15/2004 0 956,670 2,424,240
50,332 2.5 37.875 2/18/2002 0 910,254 2,180,131
P. R. Heinze 38,000 1.9 39.000 2/15/2004 0 932,140 2,362,080
6,892 0.3 38.750 8/02/2002 0 127,502 305,385
1,273 0.1 38.750 2/16/2003 0 27,191 66,985
9,112 0.5 38.125 2/16/2003 0 191,489 471,774
J. J. Horgan 36,000 1.8 39.000 2/15/2004 0 883,080 2,237,760
9,480 0.5 38.250 2/18/2002 0 173,105 414,655
13,675 0.7 39.000 2/18/2002 0 254,629 609,905
All Shareholders(4) 0 5,080,163,000 12,873,336,000
Named Executive
Officers' Gain as
% of All Share-
holders' Gain 0% 0.197% 0.193%
<FN>
- ------------
(1) All Options were granted at Fair Market Value (the closing price for the
Company's Common Stock as reported on the New York Stock Exchange-Composite
Transactions) on the date of grant. Five of the Options shown were granted
on February 16, 1994, at an
17
<PAGE> 21
Exercise Price of $39.00 and become exercisable one year after the date of
grant. The other Options shown in the table were granted to certain of the
Named Executives under the Restored Option provisions of the Stock Option
Plan that were approved by the shareholders in 1992. Under the Restored
Option provisions, which apply to all Nonqualified Options outstanding on
December 1, 1992, or granted thereafter, an Optionee who surrenders (or
certifies ownership of) shares of Common Stock in payment of the Option
Price of an Option is granted a new Nonqualified Option (a "Restored
Option") covering the number of shares equal to the number of shares
surrendered (or certified as to ownership) and surrendered or withheld to
satisfy tax obligations. Restored Options have the same expiration date as
the original Option, the exercise of which generated the Restored Option, an
Exercise Price equal to the Fair Market Value of the Common Stock on the
Date of Grant of the Restored Option and become exercisable six months after
the Date of Grant.
(2) The dollar amounts under these columns are the result of calculations at 0%,
and at the 5% and 10% rates set by the Securities and Exchange Commission
and, therefore, are not intended to forecast possible future appreciation,
if any, of PPG's Common Stock price. PPG did not use an alternative formula
for a grant date valuation, as the Company is not aware of any formula which
will determine with reasonable accuracy a present value based on future
unknown or volatile factors.
(3) No gain to the Optionees is possible without an increase in stock price. A
zero percent gain in stock price will result in zero gain for the Optionee.
(4) Based on 207.1 million issued shares (other than Treasury shares), these
amounts are the total increase in shareholder value using the 0%, 5%, and
10% assumed annual appreciation rates and the price and terms of the
February 16, 1994 grant.
</TABLE>
18
<PAGE> 22
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to exercises during 1994 of Options
granted under the Company's Stock Option Plan and information with respect to
unexercised Options granted in 1994 and prior years under the Stock Option Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
Shares December 31, 1994(#) at December 31, 1994($)(1)
Acquired on Value ----------------------------- -----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. E. Dempsey 14,011 98,077 35,989 112,948 89,973 0
R. D. Duncan 120,944 937,655 127,620 99,567 138,064 0
R. W. LeBoeuf 56,000 476,000 112,210 89,332 387,297 0
P. R. Heinze 18,503 94,301 52,332 47,112 155,893 0
J. J. Horgan 20,792 244,031 107,284 49,675 620,231 0
<FN>
- ------------
(1) Based on the closing price on the New York Stock Exchange-Composite
Transactions of the Company's Common Stock on December 30, 1994 (last
trading day of fiscal year), which was $37.125 per share.
</TABLE>
RETIREMENT PLANS
The Company's qualified retirement plan for salaried employees and
nonqualified retirement plan provide benefits after retirement. The annual
benefits payable upon retirement under those plans to persons in hypothetical
five-year average annual covered compensation and credited years-of-service
classifications (assuming retirement as of December 31, 1994, at age 65) are
estimated in the following table.
19
<PAGE> 23
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Base and Incentive
5-Year Avg. Credited Years-of-Service
Total --------------------------------------------------------------
Compensation 15 20 25 30 35
- ------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $ 25,570 $ 34,093 $ 42,617 $ 51,140 $ 59,664
150,000 31,570 42,093 52,617 63,140 73,664
175,000 37,570 50,093 62,617 75,140 87,664
200,000 43,570 58,093 72,617 87,140 101,664
225,000 49,570 66,093 82,617 99,140 115,664
250,000 55,570 74,093 92,617 111,140 129,664
300,000 67,570 90,093 112,617 135,140 157,664
400,000 91,570 122,093 152,617 183,140 213,664
450,000 103,570 138,093 172,617 207,140 241,664
500,000 115,570 154,093 192,617 231,140 269,664
600,000 139,570 186,093 232,617 279,140 325,664
750,000 175,570 234,093 292,617 351,140 409,664
850,000 199,570 266,093 332,617 399,140 465,664
</TABLE>
The compensation covered by the Company's qualified retirement plan for
salaried employees, which is compulsory and noncontributory, is the salary of a
participant as limited by applicable Internal Revenue Service ("IRS")
regulations. The compensation covered by the Company's nonqualified retirement
plan, which is available only to those employees who participate in the
qualified retirement plan for salaried employees and in the Company's Incentive
Compensation Plan or Management Award Plan, is the compensation paid under the
latter two plans, which for the Named Executives in the Summary Compensation
Table on page 15 is shown in the "Bonus" column under "Annual Compensation".
Additional benefits may be paid to certain participants under the Company's
nonqualified retirement plan equal to any benefit which cannot be paid under the
Company's qualified retirement plan for salaried employees because of the
restrictions of any applicable IRS regulations. The benefit payable under the
Company's qualified retirement plan for salaried employees is a function of a
participant's highest consecutive five-year average annual covered compensation
during the ten years immediately prior to retirement and credited years-of-
service while a plan participant. The benefit payable under the Company's
nonqualified retirement plan is a function of the participant's five-year
average annual covered compensation for the highest five years out of the final
ten years immediately prior to retirement and credited years-of-service. The
highest five-year average annual covered compensation under both plans through
1994 for Messrs. Dempsey, Duncan, LeBoeuf, Heinze and Horgan is $674,165,
$569,717, $455,788, $347,598 and $423,997, respectively. The annual benefits
payable under the plans as shown in the table above are estimated on the basis
of a straight life annuity notwithstanding the
20
<PAGE> 24
availability of a joint and survivor annuity or lump sum benefit and are not
subject to reduction for social security benefits. For purposes of the plans,
Mr. Dempsey has one and one-half years, Mr. Duncan thirty-three years, Mr.
LeBoeuf fourteen years, Mr. Heinze two and one-half years and Mr. Horgan
nineteen years.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into employment agreements with certain key
executives, including the Named Executives, which agreements provide for the
continued employment of such executives for a period of two years following a
change in control of the Company. The employment agreements contemplate that
during such two-year period, such executives would continue to be employed in
capacities, and compensated on a basis, commensurate with their capacities and
compensation before the change in control occurred. The employment agreements
contemplate, further, that in the event the executive's employment is terminated
during such two-year period, (a) by the executive because either he has not been
employed in a commensurate capacity or he has not been commensurately
compensated, or (b) by the Company other than for cause, the executive would be
entitled to receive, subject to certain limitations (including that he seek
other employment), basically the salary and the awards under the Incentive
Compensation Plan that he would have received through the remainder of the
two-year period had his employment with the Company not terminated, reduced by
any similar payments received from any other employment.
In connection with his employment on August 1, 1992, Mr. Heinze received an
Option grant of 15,000 shares of the Company's Common Stock and a grant of 7,000
restricted shares of the Company's Common Stock. The restricted shares may not
be sold or transferred by him until August 1, 1995 and if his employment is
terminated for any reason before then, he must forfeit a proportionate number of
the restricted shares. In addition, if his employment is terminated prior to
August 1, 1995, other than for cause, his base salary and target bonus at the
time of termination would be continued on a monthly basis for two years
following termination. Such payments would be reduced by any earnings from
employment obtained during the same two-year period.
In connection with the employment by the Company on August 1, 1993 of Mr.
Dempsey, the Company agreed that if, during his first two years of employment,
his employment is terminated by the Board of Directors, except for cause, his
base salary and minimum bonus under the Incentive Compensation Plan would be
continued on a monthly basis for one year following separation and the
limitation on the 10,000 shares of Common Stock granted to him upon his
employment which prohibits the sale or transfer of such shares until August 1,
1996, would be removed. Mr. Dempsey's minimum bonus under the Incentive
Compensation Plan for 1994 and 1995 is $400,000 each year.
21
<PAGE> 25
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock with the
cumulative total return of the Standard & Poor's Composite - 500 Stock Index
("S&P 500 Index") and the Dow Jones Industrial Diversified Index for the five
year period beginning December 31, 1989 and ending December 31, 1994. The S&P
500 Index and the Dow Jones Industrial Diversified Index data presented in the
graph are based on the companies that comprised those indexes at the time the
graph was prepared on January 24, 1995. The information presented in the graph
assumes that the investment in the Company's Common Stock and each Index was
$100 on December 31, 1989 and that all dividends were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
PPG INDUSTRIES, INC., DOW JONES INDUSTRIAL DIVERSIFIED INDEX AND S&P 500 INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 DJID PPG
<S> <C> <C> <C>
'89 100 100 100
'90 97 93 123
'91 126 115 136
'92 136 134 183
'93 150 163 217
'94 152 150 219
</TABLE>
22
<PAGE> 26
ELECTION OF AUDITORS
It is proposed that action be taken at the Meeting with respect to the
election of Deloitte & Touche LLP, Certified Public Accountants, as Auditors for
the Company for the year 1995. Deloitte & Touche LLP have been regularly engaged
by the Company for many years for the examination of accounts and other
purposes. Representatives of Deloitte & Touche LLP are expected to be present at
the Meeting and, while they do not plan to make a statement (although they will
have the opportunity if they desire to do so), they will be available to respond
to appropriate questions from shareholders.
UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE, THE BOARD RECOMMENDS THAT THE
SHAREHOLDERS ELECT DELOITTE & TOUCHE LLP AS AUDITORS FOR THE COMPANY FOR THE
YEAR 1995.
------------------------
PROPOSAL TO APPROVE AN AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION OF THE COMPANY TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
GENERAL
The Board of Directors has approved an amendment to the first paragraph of
Article Fifth of the Company's Restated Articles of Incorporation to increase
the number of shares of Common Stock, par value $1.66 2/3 per share, which the
Company is authorized to issue, from 300 million to 600 million. The Board
recommends that the Company's shareholders approve the amendment as follows:
"RESOLVED, that the first paragraph of Article Fifth of the Restated
Articles of Incorporation of PPG Industries, Inc. be amended and restated
to read in its entirety as follows:
'FIFTH. 5.1 The aggregate number of shares of all classes of
capital stock which the corporation shall have authority to issue is
610,000,000, of which 10,000,000 shares shall be Preferred Stock,
without par value, issuable in one or more series and 600,000,000 shares
shall be Common Stock, par value $1.66 2/3 share.' "
The Company's authorized capital stock currently consists of 10 million
shares of Preferred Stock, without par value, and 300 million shares of Common
Stock, par value $1.66 2/3 per share. None of the shares of Preferred Stock has
been issued. On April 21, 1994 the Board approved a two-for-one split of the
Common Stock in the form of a 100% Common Stock distribution payable June 10,
1994 to shareholders of record on May 10, 1994. The stock split doubled the
number of shares of Common Stock issued on June 10, 1994, leaving few unissued
shares of Common Stock available for issuance without further action by the
shareholders. On February 21, 1995 (the
23
<PAGE> 27
record date for the 1995 Annual Meeting of Shareholders), 290,573,068 shares of
Common Stock had been issued, of which 206,407,044 were outstanding and
84,166,024 were held in the treasury of the Company. Therefore, on February 21,
1995, there were 9,426,932 unissued shares of Common Stock available for
issuance without further action by the shareholders.
The additional shares of Common Stock for which authorization is sought
would be a part of the existing class of Common Stock and, if and when issued,
would have the same rights and privileges as the shares of Common Stock
presently outstanding. The shares of Common Stock presently outstanding entitle
the holders to cumulative voting rights but not to preemptive rights to purchase
additional shares of Common Stock, if and when issued. The amendment would make
no change in either respect. To the extent, of course, that the additional
authorized shares are not distributed pro rata to existing shareholders, some
dilution in the holdings of those shareholders would occur. The amendment would
have no effect on the authorized but unissued shares of Preferred Stock.
PURPOSES AND EFFECTS OF THE AMENDMENT
The Board believes that it is desirable to have the additional authorized
shares of Common Stock available for possible future stock dividends or splits,
the Company's Dividend Reinvestment and Stock Purchase Plan and employee benefit
plans, financing and acquisition transactions and other general corporate
purposes. Having such additional authorized shares of Common Stock available for
issuance in the future will give the Company greater flexibility and will allow
such shares to be issued without the expense and delay of a special
shareholder's meeting. The additional shares of Common Stock will be available
without further action by the shareholders, unless such action is required by
applicable law or the rules of any stock exchange on which the Company's
securities may then be listed. The New York Stock Exchange, on which the issued
shares of the Company's Common Stock are listed, currently requires specific
shareholder approval as a prerequisite to listing shares in several instances,
including acquisition transactions where the present or potential issuance of
shares could result in an increase in the number of shares of Common Stock
outstanding of 20% or more.
The increase in the number of authorized shares of Common Stock is not
designed to deter or prevent a change in control; however, under certain
circumstances the Company could use the additional shares to create voting
impediments or to frustrate persons seeking to effect a takeover or otherwise
gain control of the Company by, for example, privately placing such shares with
purchasers who might side with the Board in opposing a hostile takeover bid.
There has been no attempt to take the Company over at any time in the past, and
the Company is not aware of any current attempt to take it over.
24
<PAGE> 28
The Company has no agreements, commitments or plans with respect to the
sale or issuance of any additional shares of Common Stock, except with respect
to the Company's Dividend Reinvestment and Stock Purchase Plan, and executive
compensation and employee benefit plans and then only in the ordinary course of
administering those plans.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THIS PROPOSAL.
MISCELLANEOUS
VOTE REQUIRED
The Annual Meeting of Shareholders will not be organized for the
transaction of business unless a quorum is present. The presence in person or by
proxy of shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast shall constitute a quorum. Votes withheld and
abstentions will be counted but broker non-votes will not be counted in
determining the presence of a quorum.
In the election of Directors, the three nominees who receive the greatest
number of votes cast at the Annual Meeting by the holders of the Common Stock
present in person or by proxy and entitled to vote, assuming the presence of a
quorum, will be elected as Directors for a term of three years. Since no written
notice was received by the Company from a shareholder that a nomination would be
made by the shareholder at the Meeting pursuant to the nomination procedure
provided for in the Company's bylaws, votes may only be cast for or withheld
from the Company's nominees.
Approval of the proposal to elect Deloitte & Touche LLP as Auditors for the
Company for the year 1995 requires the affirmative vote of a majority of the
votes cast on the proposal assuming the presence of a quorum.
With respect to the proposal to amend the Company's Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock, the
affirmative vote of a majority of the votes cast on the proposal, assuming the
presence of a quorum, is required to adopt the proposed amendment.
25
<PAGE> 29
Pennsylvania law provides that abstentions or votes withheld and broker
non-votes are not votes cast. Therefore, with respect to the election of
Directors and the adoption of the two proposals being voted upon, abstentions,
votes withheld and broker non-votes do not count either for or against such
election or adoption.
SOLICITATION COSTS
The costs of the solicitation of proxies will be borne by the Company.
Arrangements may be made by the Company with brokerage houses and other
custodians, nominees and fiduciaries for them to forward solicitation materials
to the beneficial owners of the shares such brokerage houses and other
custodians, nominees and fiduciaries who hold of record, and the Company may
reimburse them for the reasonable expenses they incur in so doing. To assist in
the solicitation of proxies, the Company has engaged D. F. King & Co., Inc., for
a fee of $12,000, plus out-of-pocket expenses. Directors, Officers or regular
employees of the Company may, without additional compensation therefor, also
make solicitations.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present for consideration at the
1996 Annual Meeting of Shareholders must be received by the Secretary of the
Company not later than November 10, 1995, in order to be eligible for inclusion
in the Proxy Statement and Proxy Card relating to such Annual Meeting.
OTHER MATTERS
So far as is known, no matters other than those described herein are
expected to come before the Meeting. It is intended, however, that the proxies
solicited hereby will be voted on any other matters which may properly come
before the Meeting, or any adjournment thereof, in the discretion of the person
or persons voting such proxies unless the shareholder has indicated on the Proxy
Card that the shares represented thereby are not to be voted on such other
matters.
Pittsburgh, Pennsylvania
March 10, 1995
26
<PAGE> 30
[X] Please mark your
votes like this
-------- ------------------ -------------- -------------------
Common Div. Reinv. Plan Savings Plan Can. Savings Plan
PPG INDUSTRIES, INC.
LOGO One PPG Place PROXY AND VOTING INSTRUCTION CARD
PITTSBURGH, PA 15272
- --------------------------------------------------------------------------------
PPG'S DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1, 2 AND 3.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
1. ELECTION OF THREE DIRECTORS FOR WITHHELD 2. ELECTION OF 3. PROPOSAL TO AMEND THE
(See Reverse) [ ] [ ] DELOITTE & FOR AGAINST ABSTAIN RESTATED ARTICLES TO FOR AGAINST ABSTAIN
TOUCHE LLP [ ] [ ] [ ] INCREASE THE NUMBER [ ] [ ] [ ]
FOR, EXCEPT VOTE WITHHELD FROM THE AS AUDITORS OF AUTHORIZED SHARES
FOLLOWING NOMINEE(S): FOR 1995. OF COMMON STOCK.
_____________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
To obtain an Admission card to the Annual
Meeting, place an "X" in the box to the right. [ ]
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
Signature(s) ___________________________________________________________ Date ____________________________
NOTE: Please sign as name(s) appear hereon. Give full title if signing for a corporation
or partnership or as attorney, agent or in another representative capacity.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
PPG INDUSTRIES, INC.
LOGO One PPG Place
Pittsburgh, PA 15272
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 20, 1995
The Annual Meeting of Shareholders of PPG Industries, Inc. will be held on
Thursday, April 20, 1995 at The Pittsburgh Hilton, Gateway Center,
Pittsburgh, Pennsylvania, at 2:00 p.m.
The top (blue shaded) portion of this form is your PROXY AND VOTING
INSTRUCTION CARD. Please COMPLETE, SIGN and DATE the CARD and then DETACH and
RETURN the completed CARD promptly in the enclosed reply envelope. You should
do so even if you plan to attend the Annual Meeting. If you do attend, you
may override your proxy and vote in person if you wish.
If you plan to attend the Annual Meeting, please mark an "X" in the box
provided on the CARD. An admission card will be mailed to you at the address
printed on the card. If your shares are held in joint names, you will each
receive an admission card. If you intend to bring a guest, please print their
name on the lines below the admission card request box. If your admission
card should be sent to an address other than the address imprinted on the
card, please print that address on the lines below the admission card request
box.
PLEASE COMPLETE, SIGN AND DATE YOUR PROXY AND VOTING INSTRUCTION CARD,
DETACH IT AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE.
<PAGE> 31
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PPG INDUSTRIES, INC. FOR
THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 20, 1995.
The undersigned, having received the Notice of Annual Meeting of Shareholders
and Proxy Statement, each dated March 10, 1995, hereby appoints J.E. DEMPSEY,
H.K. LINGE and G.A. ZOGHBY, or any of them, with full power of substitution
to each, proxies to represent the undersigned and to vote all of the shares of
the Common Stock of PPG Industries, Inc., (the "Company") that the undersigned
would be entitled to vote if personally present at the 1995 Annual Meeting of
Shareholders of the Company, or any adjournment thereof, as directed on the
reverse side hereof and in their discretion on such other matters as may
properly come before the meeting or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE
SIDE HEREOF. IF NO DIRECTION IS GIVEN, HOWEVER, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR PROPOSED BY
THE BOARD OF DIRECTORS (THOSE NOMINEES ARE ERROLL B. DAVIS, JR., ALLEN J. KROWE
AND ROBERT MEHRABIAN) FOR THE ELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS
FOR 1995, AND FOR THE PROPOSAL TO AMEND THE RESTATED ARTICLES OF THE COMPANY TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. Shares to be voted
FOR the election of the nominees proposed by the Board of Directors will be
voted cumulatively, in the discretion of the proxies, for any nominees other
than nominees with respect to whom authority to vote FOR has been withheld.
This card votes all of the shares of the Common Stock of the Company held under
the same registration in any one or more of the following manners: as a
shareholder of record; in the PPG Industries, Inc. Dividend Reinvestment and
Stock Purchase Plan; and in the PPG Canada Inc. Employee Savings Plan. With
respect to shares held in the PPG Industries Employee Savings Plan (the
"Plan"), this card constitutes a direction to the Trustee for the Plan to vote
the shares of Common Stock of the Company allocated to the undersigned's
account in the Plan as indicated on the reverse side hereof.
PLEASE COMPLETE, SIGN AND DATE THIS CARD ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED REPLY ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 32
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
PROXY CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PPG INDUSTRIES,
INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 20, 1995.
The undersigned, having received the Notice of Annual Meeting of Shareholders
and Proxy Statement, each dated March 10, 1995, hereby appoints J.E. DEMPSEY,
H.K. LINGE and G.A. ZOGHBY, or any of them, with full power of substitution
to each, Proxies to represent the undersigned and to vote all of the shares of
the Common Stock of PPG Industries, Inc. (the "Company" or "PPG") that the
undersigned would be entitled to vote if personally present at the 1995 Annual
Meeting of Shareholders of the Company, or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE
SIDE HEREOF. IF NO DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS PROPOSED BY THE
BOARD OF DIRECTORS (THOSE NOMINEES ARE ERROLL B. DAVIS, JR., ALLEN J. KROWE AND
ROBERT MEHRABIAN), FOR THE ELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR
1995 AND FOR THE PROPOSAL TO AMEND THE RESTATED ARTICLES OF THE COMPANY TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. Shares to be voted
FOR the election of the nominees proposed by the Board of Directors will be
voted cumulatively, in the discretion of the Proxies, for any nominees other
than nominees with respect to whom authority to vote FOR has been withheld. In
their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED REPLY ENVELOPE.
Please mark your votes with an "X".
PPG'S DIRECTORS RECOMMEND A VOTE
"FOR" ITEMS 1, 2 and 3
FOR WITHHELD
1. ELECTION OF THREE DIRECTORS: [ ] [ ]
(See Reverse)
FOR, EXCEPT VOTE WITHHELD FROM
THE FOLLOWING NOMINEES:
-------------------------------
FOR AGAINST ABSTAIN
2. ELECTION OF DELOITTE & TOUCHE LLP [ ] [ ] [ ]
AS AUDITORS FOR 1994.
FOR AGAINST ABSTAIN
3. PROPOSAL TO AMEND THE RESTATED [ ] [ ] [ ]
ARTICLES TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF
COMMON STOCK.
--------------------------------- ------------------, 1995
SIGNATURE/S/ DATED
PLEASE SIGN AS NAME(S) APPEAR
HEREON AND RETURN PROMPTLY. GIVE
FULL TITLE IF SIGNING FOR A
CORPORATION OR PARTNERSHIP OR
AS ATTORNEY, AGENT OR IN ANOTHER
REPRESENTATIVE CAPACITY.
