<PAGE>
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:
[_] 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 Section 240.14a-11(c) or Section 240.14a-12
PPG INDUSTRIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
Notes:
<PAGE>
LOGO
OF PPG
PPG Industries, Inc. One PPG Place Pittsburgh, Pennsylvania 15272
March 9, 1998
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders of
PPG Industries, Inc. to be held on Thursday, April 16, 1998, in The Westin
William Penn Hotel, William Penn Place, Pittsburgh, Pennsylvania. This year
the Meeting will begin at 11:00 A.M. instead of the usual 2:00 P.M. starting
time. 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 and certain executive
officers. This year you are being asked to elect four Directors and to elect
Auditors.
It is important that your shares be represented at the Annual Meeting. You
are, therefore, urged to complete, date and sign the accompanying Proxy and
Voting Instruction Card and return it promptly in the reply envelope provided,
whether or not you plan to attend personally.
Sincerely yours,
/s/ Raymond W. LeBoeuf
Raymond W. LeBoeuf
Chairman of the Board
<PAGE>
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 16, 1998
Notice is hereby given that the Annual Meeting of Shareholders of PPG
Industries, Inc. will be held on Thursday, April 16, 1998, at 11:00 A.M.,
prevailing time, in THE WESTIN WILLIAM PENN HOTEL, WILLIAM PENN PLACE,
PITTSBURGH, PENNSYLVANIA, for the purpose of considering and acting upon the
following:
1. The election of four Directors; and
2. The election of Auditors.
Only shareholders of record of the Company as of the close of business on
February 17, 1998, 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 9, 1998
<PAGE>
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--APRIL 16, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Voting Securities.......................................................... 2
Election of Directors...................................................... 5
Committees of the Board.................................................. 8
Compensation of Directors................................................ 10
Other Transactions....................................................... 11
Compensation of Executive Officers......................................... 11
Compensation Committee Report on Executive Compensation.................. 11
Summary of Named Executives' Compensation................................ 16
Option Grants............................................................ 17
Option Exercises and Fiscal Year-End Values.............................. 21
Retirement Plans......................................................... 21
Change In Control Arrangements........................................... 23
Shareholder Return Performance Graph..................................... 24
Election of Auditors....................................................... 25
Miscellaneous.............................................................. 25
Vote Required............................................................ 25
Solicitation Costs....................................................... 26
Shareholder Proposals.................................................... 26
Section 16(a) Beneficial Ownership Reporting Compliance.................. 26
Other Matters............................................................ 27
</TABLE>
<PAGE>
PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--APRIL 16, 1998
This Proxy Statement is being mailed to the shareholders of PPG Industries,
Inc. (hereinafter sometimes called "PPG" or the "Company") on or about March
9, 1998, 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 16, 1998, at 11:00 A.M.,
prevailing time, in THE WESTIN WILLIAM PENN HOTEL, WILLIAM PENN PLACE,
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.
------------------
VOTING SECURITIES
As of the close of business on February 17, 1998, there were outstanding
177,493,327 shares of the Common Stock of the Company, par value $1.66 2/3 per
share (hereinafter sometimes called the "Common Stock"), the only class of
voting securities of the Company outstanding. Only shareholders of record as
of the close of business on February 17, 1998, 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 for
nominees, 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.
Set forth below is certain information with respect to the beneficial
ownership of shares of Common Stock, and ownership of Common Stock
Equivalents, as of February 17, 1998, 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"),
Jerry E. Dempsey, who retired as CEO in 1997, and the four other most highly
compensated Executive Officers (as
2
<PAGE>
defined under the Securities and Exchange Act of 1934) of the Company (in
addition to the CEO and the retired CEO) and (ii) such persons and all other
Executive Officers, as a Group.
<TABLE>
<CAPTION>
Shares of Beneficially Owned Common Stock and
Common Stock Equivalents (/1/)
------------------------------------------------
Beneficially Owned Common Stock
Name Common Stock (/2/) Equivalents (/3/) Total (/4/)
---- ------------------ ----------------- -----------
<S> <C> <C> <C>
Raymond W. LeBoeuf......... 347,059 33,589 380,648
Erroll B. Davis, Jr. ...... 1,107 3,256 4,363
Michele J. Hooper.......... 1,600 1,267 2,867
Allen J. Krowe............. 4,000 10,249 14,249
Ned C. Lautenbach.......... 1,000 72 1,072
Steven C. Mason............ 2,000 8,338 10,338
Harold A. McInnes.......... 2,400 10,266 12,666
Robert Mehrabian........... 2,000 6,180 8,190
Vincent A. Sarni........... 287,583 647 288,230
Thomas J. Usher............ 1,000 528 1,528
David G. Vice.............. 7,000 4,147 11,147
David R. Whitwam........... 2,000 8,165 10,165
Jerry E. Dempsey........... 325,838 0 325,838
E. Kears Pollock........... 169,699 19,587 189,286
Frank A. Archinaco......... 172,141 7,627 179,768
William H. Hernandez....... 145,554 5,364 150,918
Russell L. Crane........... 118,502 16,660 135,162
All of the above and all
other
Executive Officers as a
Group (/5/)............... 1,769,579 144,176 1,913,755
</TABLE>
- ---------
(1) Each of the named owners has sole voting power and sole investment power as
to all of the shares beneficially owned by him or her with the exception of
(i) shares held by certain of them jointly with, or directly by, their
spouses and (ii) the Common Stock Equivalents which are shown in the second
column and described more fully below and which have no voting power.
(2) Shares of Common Stock considered to be "Beneficially Owned" include both
Common Stock actually owned and shares of Common Stock as to which there is
a right to acquire ownership on, or within sixty days of, February 17,
1998. Neither any of the identified beneficial owners
3
<PAGE>
nor all of the identified beneficial owners and all other Executive
Officers as a Group, holds more than 1% of the shares of Common Stock
Beneficially Owned. Of the shares shown, 238,238, 188,193, 295,082,
124,612, 117,327, 137,121 and 92,594 of the shares of Messrs. LeBoeuf,
Sarni, Dempsey, Pollock, Archinaco, Hernandez and Crane, respectively, and
1,327,982 of the shares held by all of the identified beneficial owners
named above and all other Executive Officers as a Group are shares as to
which the owner has the right to acquire ownership on, or within sixty days
of, February 17, 1998, upon the exercise of Options granted under the PPG
Industries, Inc. Stock Plan (sometimes also referred to in this Proxy
Statement as the "Stock Plan" or the "Plan").
(3) Certain Directors hold Common Stock Equivalents in their accounts in the
Directors' Common Stock Plan and in their accounts in the Deferred
Compensation Plan for Directors (which plans are described under
"Compensation of Directors" below). Certain Executive Officers hold Common
Stock Equivalents in their accounts in the Company's Deferred Compensation
Plan as a result of their deferral of salary under that plan or 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
carry no voting rights or other rights afforded to a holder of Common
Stock.
(4) This is the sum of the Beneficially Owned Common Stock and the Common
Stock Equivalents as shown in the previous two columns.
(5) The Group consists of nineteen persons: the eight Executive Officers of
the Company as of February 17, 1998 (Messrs. LeBoeuf, Pollock, Archinaco,
Hernandez and Crane and Messrs. C. E. Bunch, J.C. Diggs and G.W. Weber),
Mr. Dempsey as retired CEO, the four nominees for Directors and the six
continuing Directors who are not Executive Officers.
4
<PAGE>
ELECTION OF DIRECTORS
Four Directors are to be elected to a class which will serve until the year
2001 and until their successors have been elected and qualified or their
earlier retirement or resignation. 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 in the Class whose Term Expires in 2001
--------------
ERROLL B. DAVIS, JR., President and Chief Executive Officer,
Wisconsin Power and Light Company and WPL Holdings, Inc. Mr.
Davis, 53, has been a Director of PPG since 1994. He has been
President of Wisconsin Power and Light Company, an electric,
gas and water utility company, since 1987, and Chief Executive
Officer since 1988. He has been President and Chief Executive
Officer of WPL Holdings, Inc., the parent company of Wisconsin
Power and Light Company, since 1990. He is also a director of
Amoco Corporation and WPL Holdings, Inc.
PHOTO
ALLEN J. KROWE, Retired Director and Vice Chairman, Texaco
Inc. Mr. Krowe, 65, has been a Director of PPG since 1987. He
was Vice Chairman of Texaco Inc., an international petroleum
company, from 1993 until his retirement in July, 1997, having
served as Chief Financial Officer from 1988 to 1994. He is
also a director of I.B.J. Schroder Bank & Trust Company and
Navistar International Corporation.
PHOTO
5
<PAGE>
ROBERT MEHRABIAN, Senior Vice President and Segment Executive,
Allegheny Teledyne Inc. Dr. Mehrabian, 56, has been a Director
of PPG since 1992. He has been Senior Vice President and
Segment Executive of Allegheny Teledyne Inc., a manufacturer
of specialty metals, aerospace, electronics, industrial and
consumer products, since August, 1997. From 1990 until July,
1997 he was President of Carnegie Mellon University, an
educational institution. He is also a director of Allegheny
Teledyne Inc., Mellon Bank Corporation, Mellon Bank N.A. and
BEI Technologies, Inc.
PHOTO
NED C. LAUTENBACH, Senior Vice President and Group Executive,
Worldwide Sales and Distribution, IBM Corporation. Mr.
Lautenbach, 54, has been a Director of PPG since November,
1997. He was named Senior Vice President in 1992 and Chairman
of IBM World Trade Corporation from 1993 to 1995, and has been
a member of the Corporate Executive Committee since 1994. IBM
is a producer of information processors, OEM hardware and
software. He is also a director of Eaton Corporation.
PHOTO
--------------
Continuing Directors--Term Expires in 1999
--------------
MICHELE J. HOOPER, President, International Business Group,
Caremark International, Inc. (a subsidiary of Medpartners,
Inc.). Ms. Hooper, 46, has been a Director of PPG since 1995.
She has been Corporate Vice President of Caremark
International, Inc., an alternative-site health care provider,
since 1993, and President, International Business Group of
Caremark International, Inc. since 1992 when Caremark
International, Inc. was spun off from Baxter Healthcare
International. She is also a director of Dayton Hudson
Corporation and The Seagram Company Ltd.
PHOTO
6
<PAGE>
RAYMOND W. LEBOEUF, Chairman of the Board and Chief Executive
Officer, PPG Industries, Inc. Mr. LeBoeuf, 51, has been a
Director of PPG since 1995 when he also became President and
Chief Operating Officer of the Company. He served as Executive
Vice President from April, 1994 to December, 1995, Vice
President, Coatings and Resins from March, 1994 to April,
1994, and Vice President, Finance and Chief Financial Officer
from 1988 until March, 1994. He is also a director of Praxair,
Inc.
PHOTO
VINCENT A. SARNI, Retired Chairman of the Board and Chief
Executive Officer, PPG Industries, Inc. Mr. Sarni, 69, has
been a Director of PPG since 1984. He was Chairman of the
Board and Chief Executive Officer of PPG from 1984 until his
retirement in 1993. He is also a director of Hershey Foods
Corp., The LTV Corporation and PNC Bank Corp.
PHOTO
DAVID G. VICE, Retired Vice-Chairman, Products and Technology,
Northern Telecom Limited. Mr. Vice, 64, has been a Director of
PPG since 1988. He was Vice-Chairman, Products and Technology,
of Northern Telecom Limited, a telecommunications systems
company, from 1990 until his retirement in 1992. He is also a
director of Sun Life Assurance Company of Canada and Stackpole
Limited.
PHOTO
--------------
Continuing Directors--Term Expires in 2000
--------------
STEVEN C. MASON, Retired Chairman of the Board and Chief
Executive Officer, Mead Corporation. Mr. Mason, 62, has been a
Director of PPG since 1990. He was Chairman of the Board and
Chief Executive Officer of Mead Corporation, a forest products
company, from 1992 until his retirement in November, 1997. He
is also a director of Cincinnati Bell Inc. and The Elder-
Beerman Stores Corp.
PHOTO
7
<PAGE>
THOMAS J. USHER, Chairman of the Board and Chief Executive
Officer, USX Corporation. Mr. Usher, 55, has been a Director
of PPG since 1996. He has been Chairman of the Board and Chief
Executive Officer of USX Corporation, a major producer of
energy and metal products, since 1995. He served as President
of the U.S. Steel Group from 1991 until 1994 and as President
and Chief Operating Officer of USX from 1994 until 1995. He is
also a director of PNC Bank Corp. and Transtar, Inc.
PHOTO
DAVID R. WHITWAM, Chairman of the Board and Chief Executive
Officer, Whirlpool Corporation. Mr. Whitwam, 56, has been a
Director of PPG since 1991. He has been Chairman of the Board
and Chief Executive Officer of Whirlpool Corporation, a
manufacturer and distributor of household appliances and
related products, since 1987.
PHOTO
COMMITTEES OF THE BOARD
The Board of Directors has appointed several standing committees, including
an Audit Committee, a Nominating and Governance Committee and an Officers-
Directors Compensation Committee. During 1997, the Board held nine meetings,
while the Audit Committee held three meetings, the Nominating and Governance
Committee five meetings and the Officers-Directors Compensation Committee
three meetings. The average attendance at meetings of the Board and Committees
of the Board during 1997 was over 95%. Descriptions of the Audit, Nominating
and Governance 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.
Audit Committee--The functions of the Audit Committee are primarily to
review with the independent public accountants and the Company's officers and
internal auditors their respective reports and recommendations concerning
audit findings and the scopes of and plans for their future audit programs,
and 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 Erroll B. Davis, Jr., Michele J. Hooper, Allen J.
Krowe, Steven C. Mason, Robert Mehrabian and David G. Vice.
Nominating and Governance Committee--The Nominating and Governance Committee
recommends to the Board of Directors the persons to be nominated by the Board
to stand for election
8
<PAGE>
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, the
persons to be elected by the Board to be Chairman of the Board, Vice Chairman
of the Board, President and the Executive Officers of the Company, actions to
be taken regarding the structure, organization and functioning of the Board,
and the persons to serve as members of the standing committees of, and certain
committees appointed by, the Board. The Nominating and Governance 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 and
Governance Committee are Michele J. Hooper, Allen J. Krowe, Harold A. McInnes,
Robert Mehrabian, Thomas J. Usher 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, on the third Thursday in April, ninety days prior to such
Annual Meeting and (ii) with respect to an election to be held at an Annual
Meeting of Shareholders on a date other than the third Thursday in April, or
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 notice of nomination from 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 be present at the
meeting in person or by proxy 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 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 approves, adopts, administers, interprets, amends,
suspends and terminates the compensation plans of the Company applicable to,
and fixes the compensation and benefits of, all Officers of the Company
serving as Directors of the Company (currently only Mr. LeBoeuf) and all
Executive Officers of the Company. The members of the Officers-Directors
Compensation Committee are Erroll B. Davis, Jr., Steven C. Mason, Harold A.
McInnes, Thomas J. Usher, David G. Vice and David R. Whitwam.
9
<PAGE>
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 Governance 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. Each Director may also elect to defer the receipt
of (i) an additional one-third of each payment of the basic annual retainer,
(ii) all of the basic annual retainer or (iii) 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 the Common Stock of the
Company (and cash as to any fractional Common Stock Equivalents). 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 carry no voting rights or other rights afforded to a holder of
Common Stock.
Under the Directors' Common Stock 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 age 70 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 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
age 70, did not exceed ten. The Common Stock Equivalents held in each
Director's account earn dividend equivalents until paid. Upon termination of
service, the Common Stock Equivalents held in a Director's account will be
paid in Common Stock (and cash as to any fractional Common Stock Equivalents)
in annual installments to the Director, or the Director's spouse in the event
of the Director's death. The number of installments shall be equal to the
Director's number of full years of service as a Director, not to exceed ten.
Common Stock Equivalents under the Directors' Common Stock Plan 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 carry no voting
rights or other rights afforded to a holder of Common Stock.
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
10
<PAGE>
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
designated 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 1997. PPG does not
consider the amounts involved in such transactions material. Such purchases
from, and sales to, each company in 1997 involved less than 1% of the
consolidated gross revenues for 1997 of either party to such transactions and
all of such transactions were in the ordinary course of business. Some of such
transactions are continuing, and it is anticipated that similar transactions
will recur from time to time.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Officers-Directors Compensation Committee of the Board of Directors
(sometimes referred to in this Report as the "Committee") 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 three times in 1997 to establish Company
performance goals, base salary pay levels and target annual bonus awards, to
approve annual bonus payments and to establish and approve long-term
incentives for the CEO, the retired CEO and the other four executives named in
the Summary Compensation Table on page 16 (collectively, the "Named
Executives") and certain other 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
11
<PAGE>
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 to their overall personal performance in directing the
enterprise. The Committee also utilizes equity based plans for a portion of
compensation to link executive and shareholder interests.
Annual Compensation Programs
The levels of base salary and target annual bonuses for the Executives,
including the Named Executives, are established annually under a program also
applicable to other professional associates. Total annual compensation is
targeted at the median of a group of large industrial companies for which
compensation data are available through an independent consulting firm. The
Committee believes that the most direct competitors for executive talent are
not necessarily the companies that are included in the Dow Jones Industrial
Diversified Index. Thus, the companies compared for annual compensation
purposes and the companies compared for long-term 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 24.
The Executives' base salaries are maintained below the median of the salary
range midpoints of comparison data. Annual bonus awards under the Company's
Incentive Compensation Plan are then targeted at a level that, when combined
with base salaries, approximates the median base salary and annual bonus paid
by companies represented in the salary data. Competitive total compensation is
achieved when target performance is met but with a larger percent of pay at
risk than is the case in the comparison companies.
Total annual compensation should exceed the median of the comparison data
when Company financial performance exceeds targets established by the
Committee and individual performance contributes to meeting strategic
objectives of the Company. Total annual compensation should be below the
median of the comparison data when Company financial performance does not meet
targets and/or individual performance does not have a positive effect on
strategic objectives.
The financial performance targets established by the Committee are based on
sales growth, Return on Capital (ROC) and cash return on capital. Certain one-
time accounting adjustments are not included in determining ROC and cash
return on capital. Bonus awards are calculated using these financial targets
and an assessment of personal performance related to achievement of strategic
objectives of the Company. The personal performance rating of the CEO and the
retired CEO is determined by the Committee and the other Executives are rated
by the CEO.
12
<PAGE>
Final awards are subject to the discretion of the Committee as permitted in
the Incentive Compensation Plan approved by the shareholders. If minimum
thresholds of sales growth, ROC, and cash return on capital 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 the interests of the Executives
more closely with those of the shareholders.
Long-Term Incentive Program
The Committee has established a long-term incentive program that motivates
key employees to invest in the stock of the Company and to cause the Company
to grow and profit, provides compensation levels competitive with
opportunities available elsewhere in industry and encourages key employees to
continue in the employ of the Company.
Long-term incentives are currently provided under the PPG Industries, Inc.
Stock 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 incentive data for
large companies identified by an independent compensation consulting firm as
potential competitors for executive talent. The number of stock options
granted to each executive is determined so that an estimate of 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 Company performance and is not dependent on the number granted in the
past or the number presently held. 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.
Also, as shown in the Option/SAR Grants in Last Fiscal Year table and
related footnotes on pages 18, 19 and 20, the Named Executives exercised
existing options in a manner entitling them to receive Restored Options under
the Restored Option provisions of the Stock Plan. The Restored Option
provisions encourage Optionees to exercise options earlier during the option
term, thereby building stock ownership to better align their interests with
the interests of shareholders.
CEO Compensation
Mr. LeBoeuf was elected CEO effective on July 1, 1997, and Chairman and CEO
on November 1, 1997, succeeding Mr. Dempsey. Mr. LeBoeuf's base salary in 1997
increased by 33% over the amount he received in 1996. This change reflects his
promotion to CEO and subsequently to Chairman and CEO and the base
compensation appropriate to those positions as determined
13
<PAGE>
according to the competitive salary program described above. Consistent with
the Company's philosophy, the fixed salary portion of Mr. LeBoeuf's
compensation is below the median base salary paid by the comparison companies.
His annual bonus for 1997 was determined 80% on performance of the Company
against financial goals and 20% on personal performance against non-financial
goals related to strategic objectives of the Company. Financial goals were
weighted equally related to sales growth, ROC and cash return on capital. The
financial performance of the Company in 1997 was on target for ROC and cash
return on capital goals, excluding acquisitions. The sales growth goal was not
met. The Committee rated Mr. LeBoeuf's 1997 performance toward achieving
strategic objectives related to the corporate reorganization, management
transition, growth initiatives, strategic planning, capital allocation,
responsiveness to PPG's shareholders and the general management of corporate
issues as meeting requirements. Mr. LeBoeuf's 1997 annual bonus was slightly
below the established target level.
Mr. Dempsey retired as Chairman and CEO on November 1, 1997. His base salary
was paid for ten months of active employment. On a prorated basis, it
increased 3% over his 1996 base salary. His annual bonus was subject to the
same ten month proration and the 80% financial portion was otherwise
determined on the same corporate financial goals and performance as Mr.
LeBoeuf's.
Mr. LeBoeuf was granted 75,000 option shares at Fair Market Value on the
date of grant consistent with the Committee's philosophy that the estimated
value of the options combined with targeted annual compensation will be
competitive with total annual and long-term compensation provided by companies
that are potential competitors for executive talent. Also, in 1997 Mr. LeBoeuf
received Restored Options for 169,640 shares under the Restored Option
provisions of the Stock Plan.
Mr. Dempsey was awarded a basic stock option grant of 25,000 option shares
in 1997. Mr. Dempsey received Restored Options for 60,547 shares in 1997 under
the Restored Option provisions of the Stock Plan.
Other Named Executives' Compensation
The accompanying compensation tables also list four Executives other than
Mr. LeBoeuf and Mr. Dempsey ("Other Named Executives"). The Other Named
Executives' base salaries were increased over 1996 base salaries consistent
with the base pay practice discussed above. The increase in base salary over
1996 for Messrs. Archinaco and Pollock reflects their promotions to Executive
Vice President and recognizes their performance in that capacity. Messrs.
Hernandez and Crane received base salary increases in 1997 reflecting movement
to a more competitive level in line with the Company's base salary philosophy.
Current levels of base salaries are below the median base
14
<PAGE>
salary position of the comparison companies. The Other Named Executives'
annual bonus awards were based on Company financial performance measures and
non-financial measures directly related to their corporate objectives.
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 are established by an evaluation methodology
developed by an independent consultant. The 1997 option grants are consistent
with the philosophy cited above and represent a level of long-term incentives
that is competitive with the average provided by the comparison companies to
individuals holding positions with similar levels of responsibility. The Other
Named Executives also received Restored Options as stated in the Option/SAR
Grants in Last Fiscal Year table and related footnotes on pages 18, 19 and 20.
Deductibility of Compensation
Gains realized from exercising options under the long-term incentive Stock
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 program 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 sales growth, ROC and cash return on
capital. 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 1997 of the CEO, retired CEO and Other Named Executives qualified under
Section 162(m) as deductible by the Company.
Summary
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 returns to shareholders. The Officers-Directors
Compensation Committee intends to continue this policy.
The Officers-Directors Compensation
Committee:
Erroll B. Davis, Jr. Thomas J. Usher
Steven C. Mason David G. Vice
Harold A. McInnes David R. Whitman
15
<PAGE>
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, 1997, 1996 and 1995, of those persons who (i) served
as the Chief Executive Officer of the Company at any time during 1997 and (ii)
the other four most highly compensated Executive Officers of the Company at
December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------
Annual Compensation Awards
------------------------------------ ---------------------------
Other Securities
Annual Underlying All Other
Name and Compensa- Options/SARs Compensa-
Principal Position Year Salary ($) Bonus ($) (/1/) tion ($) (#) tion ($) (/2/)
------------------ ---- ---------- --------------- --------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
R. W. LeBoeuf 1997 600,833 650,000 6,060 244,640 43,679
Chairman and Chief 1996 450,000 675,000 7,250 127,758 37,359
Executive Officer 1995 387,367 625,000 7,315 158,094 20,585
J. E. Dempsey 1997 566,833 780,000 17,979 85,547 55,577
Retired Chairman and Chief 1996 661,633 1,400,000 15,924 146,798 42,785
Executive Officer 1995 640,667 1,440,000 30,956 108,868 11,722
E. K. Pollock 1997 370,167 300,000 6,093 103,280 20,825
Executive Vice President 1996 323,000 315,000 2,558 79,540 19,596
1995 272,117 235,000 1,835 64,161 9,768
F. A. Archinaco 1997 370,167 300,000 3,617 127,602 26,860
Executive Vice President 1996 323,000 300,000 2,463 97,952 24,826
1995 291,567 325,000 2,286 82,757 14,081
W. H. Hernandez 1997 296,667 220,000 986 36,370 18,364
Sr. Vice President, 1996 276,667 295,000 850 30,106 17,130
Finance 1995 236,858 300,000 3,925 37,000 9,465
R. L. Crane 1997 282,500 200,000 2,656 48,343 20,073
Sr. Vice President, 1996 271,883 280,000 3,287 29,968 19,217
Human Resources and 1995 253,150 284,000 5,426 33,723 13,056
Administration
</TABLE>
- ---------
(1) Cash and market value of Common Stock awarded.
(2) The following are included in the amounts shown under All Other
Compensation for 1997: Company contributions under the Company's Employee
Savings Plan for Messrs. LeBoeuf, Dempsey, Pollock, Archinaco, Hernandez
and Crane, respectively, were $9,588, $7,990, $9,588, $9,588, $9,588 and
$9,371 and under the Company's Benefit Account Plan were $300,
16
<PAGE>
$250, $300, $300, $300 and $300, respectively. The value of premiums paid
with respect to term life insurance for the benefit of Messrs. LeBoeuf,
Dempsey, Pollock, Archinaco, Hernandez and Crane, respectively, was $657,
$2,899, $703, $549, $264 and $582. The amount shown for Mr. LeBoeuf
includes $11,473, for Mr. Archinaco $5,481, and for Mr. Crane $2,458, which
are the portions of interest earned on certain deferred compensation above
120% of the applicable federal rate. The amounts shown for Messrs. LeBoeuf,
Dempsey, Pollock, Archinaco, Hernandez, and Crane include $21,662, $26,020,
$10,264, $10,942, $8,212 and $7,362, respectively, in Company contributions
under the PPG Industries, Inc. Deferred Compensation Plan in lieu of
contributions which could not be made under the Company's Employee Savings
Plan because of the Internal Revenue Code and Regulations.
OPTION GRANTS
Shown on pages 18, 19 and 20 is further information on grants of Options
under the Company's Stock Plan during fiscal year 1997 to the Named
Executives. All of the Options granted in 1997 were Nonqualified Options, as
are all outstanding Options. No Stock Appreciation Rights were granted in 1997
and none are outstanding.
17
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants Appreciation for Option Term (/2/)
----------------------------------------------------- ------------------------------------------
Percent
Number of of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) (/1/) Fiscal 1997 ($/Share) Date 0% ($) (/3/) 5% ($) 10% ($)
---- ----------------- ------------ ----------- ---------- ------------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
R. W. LeBoeuf 75,000 2.36 55.125 2/18/2007 0 2,599,875 6,589,125
40,565 1.28 53.625 2/14/2005 0 1,038,667 2,487,649
34,134 1.08 53.625 2/15/2004 0 745,316 1,736,567
6,402 .21 53.625 2/15/1999 (/5/) (/5/) (/5/)
5,930 .19 64.063 2/15/1999 0 38,942 79,800
21,103 .67 64.063 2/18/2002 0 373,460 825,275
8,993 .29 64.063 2/11/2000 0 90,802 190,715
12,202 .39 64.063 2/19/2001 0 168,473 362,729
40,311 1.27 64.063 2/18/2002 0 713,384 1,576,442
------- ------------ -------------
244,640 5,768,919 13,848,302
J. E. Dempsey 25,000 .79 55.125 2/18/2007 0 866,625 2,196,375
28,430 .90 57.367 2/13/2006 0 899,326 2,214,782
17,736 .56 59.000 10/31/2002 0 289,097 638,851
14,381 .46 59.000 10/31/2002 0 234,410 518,004
------- ------------ -------------
85,547 2,289,458 5,568,012
E. K. Pollock 30,000 .95 55.125 2/18/2007 0 1,039,950 2,635,650
1,470 .05 59.000 2/16/1998 (/6/) (/6/) (/6/)
5,154 .17 59.000 2/18/2002 0 84,010 185,647
3,837 .12 59.000 2/15/1999 0 23,214 47,540
4,528 .15 59.000 2/19/2001 0 57,551 123,977
16,814 .53 59.000 2/14/2005 0 473,650 1,134,441
3,597 .12 59.000 2/18/2002 0 58,631 129,564
9,910 .32 57.375 2/18/2002 0 157,123 347,098
4,515 .15 57.375 2/11/2000 0 40,838 85,762
9,314 .30 57.375 2/18/2002 0 147,673 326,223
14,141 .45 57.375 2/13/2006 0 447,351 1,101,796
------- ------------ -------------
103,280 2,529,991 6,117,698
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants Appreciation for Option Term (/2/)
----------------------------------------------------- ------------------------------------------
Percent
Number of of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) (/1/) Fiscal 1997 ($/Share) Date 0% ($) (/3/) 5% ($) 10% ($)
---- ----------------- ------------ ----------- ---------- ------------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
F. A. Archinaco 30,000 .95 55.125 2/18/2007 0 1,039,950 2,635,650
19,295 .61 59.250 2/18/2002 0 315,859 697,900
1,687 .06 59.250 2/19/2001 0 21,543 46,393
4,597 .15 59.250 2/19/2001 0 58,704 126,418
12,344 .39 59.250 2/18/2002 0 202,071 446,482
6,597 .21 59.250 2/16/2003 0 132,930 301,549
1,484 .05 56.563 2/16/2003 0 28,548 64,757
26,004 .82 56.563 2/13/2006 0 810,987 1,997,289
4,571 .15 56.563 2/16/2003 0 87,932 199,465
21,023 .67 56.563 2/14/2005 0 567,768 1,359,915
------- ------------- --------------
127,602 3,266,292 7,875,818
W. H. Hernandez 27,000 .85 55.125 2/18/2007 0 935,955 2,372,085
3,839 .12 59.000 2/18/2002 0 62,575 138,281
5,531 .18 57.375 2/18/2002 0 87,694 193,723
------- ------------- --------------
36,370 1,086,224 2,704,089
R. L. Crane 23,000 .73 55.125 2/18/2007 0 797,295 2,020,665
5,257 .17 53.000 2/16/2003 0 94,784 214,959
2,897 .10 59.875 2/16/2003 0 58,997 133,827
534 .02 59.875 2/18/2002 0 8,835 19,520
16,655 .53 59.875 2/14/2005 0 476,083 1,140,451
------- ------------- --------------
48,343 0 1,435,994 3,529,422
All Shareholders (/4/) 0 6,172,104,000 15,642,583,000
Named Executive
Officers' Gain as % of
All Shareholders' Gain 0% .265% .253%
</TABLE>
- --------
(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. Six of the Options shown
were granted on February 19, 1997, at an Exercise Price of $55.125 and
became exercisable one year after the date of grant. The other Options
shown on the table were granted to the Named Executives under the Restored
Option provisions of the Company's Stock Plan that were
19
<PAGE>
approved by the shareholders in 1992. Under the Restored Option provisions,
an Optionee who surrenders (or certifies ownership of) shares of Common
Stock in payment of the Option Price of an Option may be 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 has chosen not to
use an alternative formula for a grant date valuation.
(3) No gain to the Optionees is possible without an increase in stock price. A
0% gain in stock price will result in zero gain for the Optionee.
(4) Based on 178,050,000 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 19, 1997, grant.
(5) No future appreciation is shown since this grant was exercised on August
4, 1997.
(6) No future appreciation is shown since this grant was exercised on February
12, 1998.
20
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to exercises during 1997 of Options
granted under the Company's Stock Plan and information with respect to
unexercised Options granted in 1997 and prior years under the Company's Stock
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
December 31, 1997 (#) at December 31, 1997 ($)(1)
------------------------- ------------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
R. W. LeBoeuf 194,904 2,883,177 171,605 163,539 1,266,819 150,000
J. E. Dempsey 73,012 1,176,088 270,082 57,117 2,854,063 50,000
E. K. Pollock 88,026 1,397,505 97,552 67,880 312,492 60,000
F. A. Archinaco 107,470 1,256,517 87,327 83,082 47,793 89,832
W. H. Hernandez 12,104 347,011 110,121 32,531 1,864,031 54,000
R. L. Crane 30,748 690,865 69,594 43,086 888,888 46,000
</TABLE>
- ---------
(1) Based on the closing price on the New York Stock Exchange-Composite
Transactions of the Company's Common Stock on December 31, 1997 (last
trading day of fiscal year), which was $57.125 per share.
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 January 1, 1998, and date of birth
in 1932) are estimated in the following table.
21
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Base and Incentive Credited Years-of-Service
5-Year Avg. ----------------------------------------------------------------
Total
Compensation 15 20 25 30 35
- ------------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 300,000 $ 66,285 $ 88,380 $110,476 $132,571 $ 154,666
400,000 90,285 120,380 150,476 180,571 210,666
500,000 114,285 152,380 190,476 228,571 266,666
600,000 138,285 184,380 230,476 276,571 322,666
750,000 174,285 232,380 290,476 348,571 406,666
850,000 198,285 264,380 330,476 396,571 462,666
1,000,000 234,285 312,380 390,476 468,571 546,666
1,150,000 270,285 360,380 450,476 540,571 630,666
1,300,000 306,285 408,380 510,476 612,571 714,666
1,450,000 342,285 456,380 570,476 684,571 798,666
1,600,000 378,285 504,380 630,476 756,571 882,666
1,750,000 414,285 552,380 690,476 828,571 966,666
1,900,000 450,285 600,380 750,476 900,571 1,050,666
</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 16 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 ten years immediately prior to retirement and credited years-of-
service. The highest five-year average annual covered compensation under both
plans through 1997 for Messrs. LeBoeuf, Dempsey, Pollock, Archinaco, Hernandez
and Crane is $873,528, $1,546,117, $510,205, $547,436, $420,851 and $469,510,
respectively. The annual benefits payable under the
22
<PAGE>
plans as shown in the table above are estimated on the basis of a straight
life annuity notwithstanding the 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. LeBoeuf has seventeen years of
service, Mr. Dempsey four years, Mr. Pollock thirty-one and one-half years,
Mr. Archinaco thirty-two and one-half years, Mr. Hernandez seven years and Mr.
Crane thirty-four and one-half years.
CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into arrangements with certain key executives,
including the Named Executives, providing for the continued employment of such
executives for a period of up to three years following a change in control of
the Company. The arrangements contemplate that during such three-year period,
such executives as are employed by the Company at the time of the change in
control 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 arrangements contemplate, further, that in the event
the executive's employment is terminated (a) for any reason by the executive
during a thirty-day window period beginning one year after a change in
control, (b) at any time during the three years following a change in control
by the executive because either he has not been employed in a commensurate
capacity or he has not been commensurately compensated or (c) by the Company
at any time during the three years following a change in control other than
for cause, the executive would be entitled to receive, subject to certain
conditions, a payment. This payment would basically be the salary and the
awards under the Incentive Compensation Plan that the Executive would have
received for (i) the next two years (or until the executive's retirement date,
if earlier) if the termination was under situation (a) above or (ii) for three
years (or until the executive's retirement date, if earlier) if the
termination was under situations (b) or (c) above.
23
<PAGE>
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, 1992, and ending December 31, 1997. 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 February 10, 1998. The information presented in the
graph assumes that the investment in the Company's Common Stock and each Index
was $100 on December 31, 1992, 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
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG PPG, DJID INDEX AND S&P 500 INDEX
Measurement period PPG DJID S&P 500
(Fiscal year Covered) Index Index
- ---------------------- ----- ----- -------
Measurement PT -
12/31/92 $100 $100 $100
FYE 12/31/93 $119 $122 $110
FYE 12/31/94 $120 $112 $112
FYE 12/31/95 $152 $147 $154
FYE 12/31/96 $191 $190 $189
FYE 12/31/97 $198 $249 $252
24
<PAGE>
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 1998. Deloitte & Touche LLP have been regularly
engaged by the Company for many years for the audit of the financial
statements of the Company 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.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS ELECT DELOITTE &
TOUCHE LLP AS AUDITORS FOR THE COMPANY FOR THE YEAR 1998.
------------------
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 number of nominees to be elected 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 or their earlier resignation or retirement. 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 1998 requires the affirmative vote of a majority of the
votes cast on the proposal, assuming the presence of a quorum.
Pennsylvania law provides that abstentions, votes withheld and broker non-
votes are not votes cast. Therefore, with respect to both the election of
Directors and the election of Deloitte & Touche
25
<PAGE>
LLP as Auditors for the Company, 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 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
Shareholders intending to present business for consideration at the 1998
Annual Meeting of Shareholders must give notice to the Secretary of the
Company within the same time limits as set forth on page 9 for nomination of
Directors and such business must otherwise be a proper matter for shareholder
action. If, as expected, the 1999 Annual Meeting of Shareholders is held on
April 15, 1999 (the third Thursday of April, 1999), then, to be timely the
notice must be received by the Secretary of the Company not later than January
15, 1999, in order to be brought before the Meeting. To be eligible for
inclusion in the Proxy Statement and Proxy Card relating to such Annual
Meeting, the notice must be received by the Secretary of the Company not later
than November 10, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Directors and Executive Officers of the Company are required to file
reports of initial ownership and changes of ownership of PPG securities with
the Securities and Exchange Commission and the New York Stock Exchange. To the
Company's knowledge, based solely on review of copies of such reports
furnished to the Company and written representations that no other reports
were required, the required filings of all such Directors and Executive
Officers were filed timely, except that the Company was inadvertently nine
calendar days late in filing a Form 4 on behalf of Ms. Hooper reporting the
purchase in 1997 of 1,500 shares of the Common Stock of the Company.
26
<PAGE>
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 and Voting Instruction Card that the shares represented thereby are
not to be voted on such other matters.
Pittsburgh, Pennsylvania
March 9, 1998
27
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PPG INDUSTRIES, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 16, 1998.
The undersigned, having received the Notice of Annual Meeting of Shareholders
and Proxy Statement, each dated March 9, 1998, hereby appoints R.W. LeBoeuf,
J.C. Diggs and H.K. Linge, 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 1998 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, Robert Mehrabian and Ned C. Lautenbach) and FOR the election of Deloitte
& Touche LLP as Auditors for 1998. 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; in the PPG
Industries Employee Savings Plan and in the PPG Canada Inc. Employee Savings
Plan.
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>
PROXY AND VOTING INSTRUCTION CARD
Please mark
your votes as [X]
indicated in
this example
[LOGO OF PPG INDUSTRIES, INC.]
PPG INDUSTRIES, INC.
One PPG Place To obtain an Admission card to the Annual
Pittsburgh, PA 15272 Meeting, place an "X" in the box to the
right.
---------------------------------------- [X]
PPG'S DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2.
1. ELECTION OF FOUR DIRECTORS. FOR WITHHELD
(See Reverse) [_] [_]
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):
- ------------------------------------------------------------------------
2. ELECTION OF DELOITTE & TOUCHE LLP FOR AGAINST ABSTAIN
AS AUDITORS FOR 1998. [_] [_] [_]
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 .
[LOGO OF PPG INDUSTRIES, INC.]
PPG INDUSTRIES, INC.
One PPG Place
Pittsburgh, PA 15272
ANNUAL MEETING OF SHAREHOLDERS - 11:00 A.M. - APRIL 16, 1998
The Annual Meeting of Shareholders of PPG Industries, Inc. will be held on
Thursday, April 16, 1998, at The Westin William Penn Hotel, William Penn Place,
Pittsburgh, Pennsylvania, at 11:00 a.m. Please take special notice of the 11:00
a.m. starting time. This differs from the traditional 2:00 p.m. start.
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 request box
provided on the BLUE CARD. An admission card will be mailed to you at the
address already 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 the guest's name on the line next to the admission card request box. If
your admission card should be sent to an address other than the address printed
on the card, please print that address on the line next to the admission card
request box.
PLEASE COMPLETE, SIGN AND DATE YOUR PROXY AND VOTING INSTRUCTION CARD,
DETACH AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE.
