1. PPG Industries, Inc. One PPG Place Pittsburgh, Pennsylvania 15272
March 3, 2006
DEAR SHAREHOLDER:
You are cordially invited to attend the 2006 Annual Meeting of Shareholders of PPG Industries, Inc. to be
held on Thursday, April 20, 2006, in the East Club Lounge, Heinz Field, 900 Art Rooney Avenue, Pittsburgh,
Pennsylvania. The meeting will begin at 11:00 A.M. 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, your Board of Directors and its
committees, and certain of PPG’s officers.
This year, you are being asked to elect four Directors. You are also being asked to consider approval of the
PPG Industries, Inc. Omnibus Incentive Plan. For the reasons set forth in the Proxy, your Board of Directors
recommends that you vote to approve the plan. Last, you are being asked to endorse the appointment of
Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2006.
It is important that your shares be represented at the Annual Meeting. You are, therefore, urged to vote by
telephone or Internet or by completing, dating and signing the accompanying Proxy and Voting Instruction Card
and returning it promptly in the return envelope provided, whether or not you plan to attend personally.
Sincerely yours,
Charles E. Bunch
Chairman of the Board and
Chief Executive Officer
2. PPG INDUSTRIES, INC.
One PPG Place, Pittsburgh, Pennsylvania 15272
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 20, 2006
Notice is hereby given that the 2006 Annual Meeting of Shareholders of PPG Industries, Inc. will be held on
Thursday, April 20, 2006, at 11:00 A.M., prevailing time, in the EAST CLUB LOUNGE, HEINZ FIELD, 900
ART ROONEY AVENUE, PITTSBURGH, PENNSYLVANIA, for the purpose of considering and acting upon
the following:
1. The election of four Directors;
2. A Board of Directors proposal to approve the PPG Industries, Inc. Omnibus Incentive Plan; and
3. A proposal to endorse the appointment of Deloitte & Touche LLP as the Company’s independent
registered public accounting firm for 2006.
Only shareholders of record of the Company as of the close of business on February 17, 2006, are entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof.
Admission to the Annual Meeting will be by Admission Card only. If you are a shareholder of record or a
PPG Industries Employee Savings Plan participant and plan to attend, you may obtain an Admission Card by
following the instructions provided in your proxy materials. 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
Annual Meeting.
James C. Diggs, Senior Vice President,
General Counsel & Secretary
Pittsburgh, Pennsylvania
March 3, 2006
4. This Proxy Statement is being mailed to the shareholders of PPG Industries, Inc. (hereinafter sometimes
called “PPG” or the “Company”) on or about March 3, 2006, 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 by following the instructions accompanying this Proxy Statement, will be voted at
the 2006 Annual Meeting of Shareholders of the Company (hereinafter sometimes called the “Annual Meeting”)
to be held on Thursday, April 20, 2006, at 11:00 A.M., prevailing time, in the EAST CLUB LOUNGE, HEINZ
FIELD, 900 ART ROONEY AVENUE, 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.
5. VOTING SECURITIES
As of the close of business on February 17, 2006, there were outstanding 165,419,462 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 17, 2006, are entitled to notice
of and to vote at the Annual 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 in that class. The proxies solicit discretionary authority to vote
cumulatively.
Set forth below is certain information with respect to the beneficial ownership of shares of the Company’s
Common Stock as of February 17, 2006, by certain persons, including (i) the nominees for Directors, one of
whom, Mr. Bunch, is the Chief Executive Officer of the Company (hereinafter sometimes called the “CEO”); the
continuing Directors; and the persons named in the Summary Compensation Table on page 14 other than the
CEO (the “Named Executives”); and (ii) such persons (including also the three other Executive Officers of the
Company who are not Named Executives) as a Group.
Shares of Beneficially Owned Common Stock
and Common Stock Equivalents(1)
Name of Beneficially Owned Common Stock
Beneficial Owner Common Stock(2) Equivalents(3) Total(4)
Charles E. Bunch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364,496 10,325 374,821
Raymond W. LeBoeuf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341,660 0 341,660
James G. Berges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500 7,426 15,926
Erroll B. Davis, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,237 15,907 27,144
Hugh Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 1,066 1,566
Victoria F. Haynes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 1,914 2,264
Michele J. Hooper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,600 6,291 17,891
Robert Mehrabian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 16,270 28,270
Robert Ripp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,095 866 1,961
Thomas J. Usher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 10,557 21,557
David R. Whitwam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 22,168 32,168
William H. Hernandez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303,064 5,413 308,477
James C. Diggs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,267 8,252 116,519
Kevin F. Sullivan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,224 8,794 135,018
Garry A. Goudy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,812 959 55,771
All Directors and Executive Officers as a Group (5) . . . . . . . . . . 1,459,884 118,330 1,578,214
(1) Each of the named owners has sole voting power and sole investment power as to all the shares beneficially
owned by them with the exception of (i) shares held by certain of them jointly with, or directly by, their
spouses, and (ii) the Common Stock Equivalents shown in the second column and described more fully
below 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 after, February 17, 2006. None of the identified beneficial owners holds more than 1% of the voting
securities of the Company outstanding. The identified beneficial owners as a Group hold 0.88% of the
voting securities of the Company outstanding. Of the shares shown, 10,000 of the shares held by each of
Messrs. Davis, Mehrabian, Usher, Whitwam and Ms. Hooper, 7,500 of the shares held by Mr. Berges, none
of the shares held by each of Messrs. Grant and Ripp and Ms. Haynes, and 291,137; 186,930; 51,105;
75,157; and 43,621 of the shares held by Messrs. Bunch, Hernandez, Diggs, Sullivan and Goudy,
respectively, are shares as to which the beneficial owner has the right to acquire beneficial ownership within
sixty days of February 17, 2006, upon the exercise of Options granted under the PPG Industries, Inc. Stock
Plan.
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6. (3) Certain Directors hold Common Stock Equivalents in their accounts in the PPG Industries, Inc. Deferred
Compensation Plan for Directors (which is described under “ELECTION OF DIRECTORS—Compensation
of Directors” below). Certain Executive Officers hold Common Stock Equivalents in their accounts in the
PPG Industries, Inc. Deferred Compensation 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 that are converted into additional Common Stock Equivalents,
but 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 eighteen persons: the four nominees for Directors, one of whom is the CEO; the six
continuing Directors; the five Named Executives (Messrs. LeBoeuf, Hernandez, Diggs, Sullivan and
Goudy); and the Company’s three other Executive Officers (Ms. Victoria M. Holt and Messrs. J. Rich
Alexander and William A. Wulfsohn).
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7. ELECTION OF DIRECTORS
Four Directors are to be elected to a class that will serve until the 2009 Annual Meeting of Shareholders and
until their successors have been duly elected and qualified, or their earlier retirement or resignation. It is intended
that the shares represented by each proxy will be voted cumulatively as to each class, 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, as of February 17, 2006, are set forth below.
Nominees to Serve in a Class Whose Term Expires in 2009
CHARLES E. BUNCH, Chairman and Chief Executive Officer, PPG Industries, Inc. Mr.
Bunch, 56, has been a Director of PPG since 2002. He was President and Chief Operating
Officer of PPG from July 2002 until he was elected President and Chief Executive Officer in
March 2005 and Chairman and Chief Executive Officer in July 2005. Before becoming
President and Chief Operating Officer, he was Executive Vice President of PPG from 2000
to 2002 and Senior Vice President, Strategic Planning and Corporate Services, of PPG from
1997 to 2000. Mr. Bunch is also a director of the H. J. Heinz Company and a director and the
chairman of the Federal Reserve Bank of Cleveland.
ROBERT RIPP, Chairman of Lightpath Technologies. Mr. Ripp, 64, has been a Director of
PPG since March 2003. He has been Director and Chairman of Lightpath Technologies, a
manufacturer of optical lens and module assemblies for the telecom sector since 1999. He
served as Interim President and Chief Executive Officer of Lightpath from October 2001 to
July 2002. He was Chairman and Chief Executive Officer of AMP Incorporated, an
electrical products company, from 1998 until AMP was acquired in April 1999. He is also a
director of insurance company, ACE Limited, and Safeguard Scientific, Inc.
THOMAS J. USHER, Chairman of the Board of Marathon Oil Corporation and the former
Chairman of the Board of United States Steel Corporation. Mr. Usher, 63, has been a
Director of PPG Industries since 1996. He had been Chairman of the Board, Chief Executive
Officer and President of United States Steel Corporation, a major producer of metal
products, since 2001. He retired from the positions of Chief Executive Officer and President
on September 30, 2004. He subsequently retired as Chairman of the Board of Directors on
January 31, 2006. He served as Chairman of the Board and Chief Executive Officer of USX
Corporation from 1995 until 2001. He is also a director of The PNC Financial Services
Group, Inc., H. J. Heinz Company and Marathon Oil Corporation.
DAVID R. WHITWAM, Retired Chairman of the Board and Chief Executive Officer,
Whirlpool Corporation. Mr. Whitwam, 64, has been a Director of PPG since 1991. He was
Chairman of the Board and Chief Executive Officer of Whirlpool Corporation, a
manufacturer and distributor of household appliances and related products, from 1987 until
his retirement in 2004. He is also a director of Convergys Corporation.
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8. Continuing Directors—Term Expires in 2007
JAMES G. BERGES, Retired President, Emerson Electric Co. Mr. Berges, 58, has been a
Director of PPG since 2000. He was President of Emerson Electric Co. from 1999 until his
retirement in 2005. Emerson Electric Co. is a global manufacturer of products, systems and
services for industrial automation, process control, HVAC, electronics and communications,
and appliances and tools. He is also a director of MKS Instruments, Inc.
ERROLL B. DAVIS, JR., Chancellor, University System of Georgia. Mr. Davis, 61, has been
a Director of PPG since 1994. He was Chairman of the Board and Chief Executive Officer of
Alliant Energy, a global energy service provider formed as the result of a merger of WPL
Holdings, Inc., IES Industries Inc. and Interstate Power Co., in 1998, until his resignation as
CEO in July 2005. Mr. Davis remained Alliant’s Chairman until his retirement in January
2006. Prior to the merger that formed Alliant Energy, he was President and Chief Executive
Officer of Wisconsin Power and Light Company and WPL Holdings, Inc. Mr. Davis is also a
director of BP plc. and Union Pacific Corp.
VICTORIA F. HAYNES, President and Chief Executive Officer of Research Triangle Institute.
Ms. Haynes, 58, has been a Director of PPG since October 2003. She has been the President
and Chief Executive Officer of Research Triangle Institute, which performs scientific
research and development in advanced technologies, public policy, environmental
protection, and health and medicine, since July 1999. She was Vice President of the
Advanced Technology Group and Chief Technical Officer of BF Goodrich Company from
1992 to 1999. Ms. Haynes is also a director of Lubrizol Corporation, Nucor Corporation and
Ziptronix, Inc.
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9. Continuing Directors—Term Expires in 2008
HUGH GRANT, Chairman of the Board, President and Chief Executive Officer, Monsanto
Company, a global provider of technology-based solutions and agricultural products that
improve farm productivity and food quality. Mr. Grant, 47, has been a Director of PPG since
2005. He was named Executive Vice President and Chief Operating Officer of Monsanto
Company at the time of an initial public offering in 2000 and remained in that position for
the subsequent spin-off of the company in 2002. Mr. Grant was named to his current position
in 2003.
MICHELE J. HOOPER, Former President and Chief Executive Officer, Voyager Expanded
Learning, Inc. Ms. Hooper, 54, has been a Director of PPG since 1995. She was President
and Chief Executive Officer of Voyager Expanded Learning, a developer and provider of
learning programs and teacher training for public schools, from 1999 until 2000. Prior to
that, she was President and Chief Executive Officer of Stadtlander Drug Company, Inc., a
provider of disease-specific pharmaceutical care from 1998 until Stadtlander was acquired in
1999. She is also a director of AstraZeneca plc.
ROBERT MEHRABIAN, Chairman of the Board, President and Chief Executive Officer,
Teledyne Technologies Inc. Dr. Mehrabian, 64, has been a Director of PPG since 1992. He
has been Chairman of the Board, President and Chief Executive Officer of Teledyne
Technologies Inc., a provider of sophisticated electronic components, instruments and
communication products, systems engineering solutions, aerospace engines and components
and on-site gas and power generation systems, since 2000. He was President and Chief
Executive Officer of Teledyne Technologies Inc. from its formation (as a spin-off of
Allegheny Teledyne Inc.) in 1999 until 2000. He was Executive Vice President of Allegheny
Teledyne Inc., a manufacturer of specialty metals, aerospace, electronics, industrial and
consumer products, from 1998 until 1999. He is also a director of Teledyne Technologies
Inc. and Mellon Financial Corporation.
Committees of the Board
The Board of Directors has appointed four standing committees, including an Audit Committee, a
Nominating and Governance Committee, an Officers-Directors Compensation Committee and an Investment
Committee. During 2005, the Board held nine meetings, the Audit Committee held six meetings, the Nominating
and Governance Committee held four meetings, the Officers-Directors Compensation Committee held four
meetings and the Investment Committee held two meetings. The average attendance at meetings of the Board and
Committees of the Board during 2005 was over 98%, and each Director attended at least 94% of the total number
of meetings of the Board and Committees of the Board on which such Director served. All of the eleven
Directors then in office attended the 2005 Annual Meeting of Shareholders. Descriptions of the Audit,
Nominating and Governance, Officers-Directors Compensation and Investment Committees are set forth below.
None of the members of those Committees is a past or present employee or officer of the Company.
The Board of Directors has determined that all Directors, other than Mr. Bunch, are independent under the
independence criteria for Directors established by the New York, Philadelphia and Pacific Stock Exchanges and
the categorical independence standards adopted by the Board of Directors. The categorical independence
standards adopted by the Board of Directors are attached to this Proxy Statement as Annex A and are also set
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10. forth in the Board’s Corporate Governance Guidelines, which are available on the Company’s website at
www.ppg.com under “Corporate Governance.” The Charters of all of the committees of the Board, along with the
Company’s Global Code of Ethics and its Code of Ethics for Senior Financial Officers, are also available on the
Company’s website and will be made available to any shareholder in print upon written request delivered to the
Secretary of the Company at One PPG Place, Pittsburgh, Pennsylvania 15272.
The Company’s independent Directors meet separately, without any PPG management or employees
present, at each meeting of the Board of Directors. The Board has designated the Chair of the Nominating and
Governance Committee (currently Mr. Whitwam) to serve as Presiding Director of the independent Director
sessions. In their discretion, the independent Directors may select another independent Director to serve as
Presiding Director for a particular session.
Audit Committee—The functions of the Audit Committee are primarily to review with the Company’s
independent auditors and the Company’s officers and internal auditors their respective reports and
recommendations concerning audit findings and the scope of and plans for their future audit programs and to
review audits, annual financial statements, accounting and financial controls. The Audit Committee also appoints
the independent registered public accounting firm for the Company and assists the Board in oversight of the
Company’s compliance with legal and regulatory requirements. The members of the Audit Committee are James
G. Berges, Erroll B. Davis, Jr., Michele J. Hooper (Chair), Robert Mehrabian and Robert Ripp. All of the
members of the Audit Committee are independent under the standards adopted by the Board of Directors and the
criteria established by the New York, Philadelphia and Pacific Stock Exchanges.
Audit Committee Report to Shareholders—The Audit Committee of the Board of Directors has oversight
responsibility for the Company’s financial reporting process and the quality of its financial reporting, among
other responsibilities. The Audit Committee operates under a written Audit Committee Charter adopted by the
Board of Directors. The Audit Committee Charter is available on the Company’s website at www.ppg.com. In
connection with the December 31, 2005 financial statements, the Audit Committee:
1) Reviewed and discussed the audited financial statements with management,
2) Discussed with the Company’s independent registered public accounting firm, Deloitte & Touche LLP,
the matters required by Statement on Auditing Standards (“SAS”) No. 61, as amended by SAS Nos. 89
and 90 (“Communication with Audit Committees”) and Rule 2-07 of Regulation S-X, and
3) Received the written independence disclosures from Deloitte & Touche LLP required by Independence
Standards Board Standard No. 1, and has discussed with Deloitte & Touche LLP their independence.
Based upon these reviews and discussions, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2005, for filing with the Securities and Exchange Commission.
The Audit Committee:
James G. Berges
Erroll B. Davis, Jr.
Michele J. Hooper (Chair)
Robert Mehrabian
Robert Ripp
Nominating and Governance Committee—The Nominating and Governance Committee of the Board of
Directors is composed of five Directors, all of whom are independent under the standards adopted by the Board
of Directors and the criteria established by the New York, Philadelphia and Pacific Stock Exchanges. The
members of the Nominating and Governance Committee are James G. Berges, Hugh Grant, Victoria F. Haynes,
Michele J. Hooper and David R. Whitwam (Chair). The Committee’s Charter, which is available on the
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11. Company’s website at www.ppg.com, describes the composition, purposes and responsibilities of the Committee.
Among other things, the Charter provides that the Committee will be composed of independent, non-employee
Directors. The Charter also provides that the Committee shall be responsible to identify and recommend 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 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 be Chairman of the Board, Vice Chairman of the Board, if any,
President, and the Executive Officers of the Company. The Committee also recommends to the Board 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 Charter gives the Committee
the responsibility to develop and recommend corporate governance guidelines to the Board, and to recommend to
the Board the process and criteria to be used in evaluating the performance of the Board and to oversee the
evaluation of the Board.
The Committee will consider nominees for Director recommended by shareholders and evaluate such
nominees against the same criteria used to evaluate all candidates for Director. Shareholders recommending a
nominee for Director should send such recommendation to the Secretary of PPG at One PPG Place, Pittsburgh,
Pennsylvania 15272. Except for the representations set forth under (b) below in this paragraph, a shareholder
recommendation of a Director nominee should be submitted with the same information as required by the
Company’s Bylaws to be included in a written notice of a shareholder nomination of a person to stand for
election at a meeting of shareholders. 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, held 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 held 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.
The Committee identifies candidates for the Board of Directors by soliciting recommendations from
Committee members and incumbent Directors and considering recommendations from shareholders. The
Committee also has authority to retain and terminate search firms to assist in identifying Director candidates.
From time to time, search firms have been paid a fee to identify candidates. Although there are no specific
minimum qualifications a nominee must meet in order to be recommended for the Board, the committee uses
several criteria, as described in its Charter, in considering candidates for Director. Among those criteria are: the
experience of the candidate, their knowledge of national and international operations of industrial businesses,
awareness of the Company’s societal responsibilities in conducting its operations, and any potential conflict of
interest. The Committee’s Charter also provides that it should seek to establish a Board that, taken as a whole,
should, among other things, be representative of the broad scope of shareholder interests, without orientation to
any particular constituencies; challenge management in a constructive way to reach the Company’s goals; be
sensitive to the cultural and geographical diversity of the Company; be comprised principally of active or retired
senior executives of publicly held corporations or financial institutions; and include Directors whose overriding
credentials reflect maturity, experience, insight and prominence in the community.
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12. Officers-Directors Compensation Committee—The Officers-Directors Compensation Committee (in the
Compensation Committee Report below sometimes referred to as the “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 Charles E. Bunch) and all Executive Officers of the Company. The members of the Officers-Directors
Compensation Committee are Robert Mehrabian, Robert Ripp, Thomas J. Usher (Chair) and David R. Whitwam.
All of the members of the Officers-Directors Compensation Committee are independent under the standards
adopted by the Board of Directors and the criteria established by the New York, Philadelphia and Pacific Stock
Exchanges.
Investment Committee—The Investment Committee reviews the investment policies of the Company
concerning its pension plans and certain benefit plans and the asset investment policies of the PPG Industries
Foundation. The Committee also reviews (i) the selection of providers of services to such pension and benefit
plans of the Company and to the Foundation, (ii) the allocations of assets among classes and the performance of
the investments of such pension and benefit plans and the Foundation, and (iii) the actuarial assumptions
concerning and the funding levels of the Company’s pension plans. The members of the Investment Committee
are Erroll B. Davis, Jr. (Chair), Hugh Grant, Victoria F. Haynes and Thomas J. Usher. All of the members of the
Investment Committee are independent under the standards adopted by the Board of Directors and the criteria
established by the New York, Philadelphia and Pacific Stock Exchanges.
Shareholder Communications with the Board
Shareholders may send communications to any Director in writing by sending them to the Director in care
of the Secretary of PPG at One PPG Place, Pittsburgh, Pennsylvania 15272. The Secretary will forward all such
written communications to the Director to whom it is addressed.
Compensation of Directors
During 2005, Directors who are not also Officers received an annual retainer of $90,000. The Chair of the
Audit Committee also received an additional annual fee of $7,500 and the Chair of each other Committee also
received an additional annual fee of $5,000. In addition, on February 16, 2005, each Director who is not also an
Officer was granted, under the PPG Industries, Inc. Stock Plan (the “Stock Plan”), Nonqualified Options to
purchase 2,500 shares of common stock at an exercise price of $71.88 per share. The Options are exercisable
three years after the date of grant. Effective in 2006, each outside Director will receive an annual retainer of
$150,000, of which $90,000 will be paid in cash and $60,000 will be paid in restricted stock units, which units
will pay dividend equivalents from the date of grant. As a part of their 2006 compensation, on February 15, 2006,
each Director who is not also an Officer was granted, under the Stock Plan, 1,007 Restricted Stock Units, which
are valued at $59.63 per unit (the closing market price on February 15, 2006). In addition, effective in 2006, the
chair of the Audit Committee receives an annual retainer of $15,000, and the chairs of the other Committees each
receive an annual retainer of $10,000. Last, the Company pays premiums on behalf of each Director who is not
also an Officer for Accidental Death & Dismemberment insurance, Directors’ liability insurance and aircraft
travel insurance coverage. Any Director who is also an Officer receives no compensation as a Director.
Under the PPG Industries, Inc. Deferred Compensation Plan for Directors (the “Deferred Compensation
Plan for Directors”), each Director may elect to defer the receipt of all or any portion of the compensation paid to
such Director for serving as a PPG Director. All deferred payments are held in the form of Common Stock
Equivalents and earn dividend equivalents until paid. Payments out of the deferred accounts are made in the form
of Common Stock of the Company (and cash as to any fractional Common Stock Equivalents).
Common Stock Equivalents under the Deferred Compensation Plan for Directors 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 that are converted into additional Common Stock Equivalents but carry no
voting rights or other rights afforded to a holder of Common Stock.
9
13. As part of its overall program to promote charitable giving, the Company established a Directors’ charitable
award program funded by insurance policies on the lives of Directors who were initially elected before July 17,
2003. 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. This program is not applicable to any Director initially elected on or after July 17, 2003.
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. 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 2005 of each of the purchaser and the seller 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 COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Officers-Directors Compensation Committee of the Board of Directors is responsible for determining
and administering the policies that govern the executive compensation programs of the Company. The
Committee, consisting entirely of independent outside Directors, met four times in 2005 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 Executive 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 that support business
strategies and linking executive and shareholder interests. The Committee believes this is generally best
accomplished by competitively compensating the executives, 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. To reinforce this link, there are formal stock
ownership guidelines for senior management. Executives with ownership levels below the guidelines receive
20% of their annual bonus award in Common Stock of the Company.
Annual Compensation Programs
The levels of base salary and target annual bonuses for the Executive Officers are established annually
under a program intended to maintain parity with the market for similar positions. Total annual compensation is
targeted at approximately the median of the market value for each position based on data available from several
independent market surveys. The companies compared for annual compensation and long-term incentive
purposes include certain companies in the Standard and Poor’s (S&P) 500 Materials Sector as well as other
industrial companies of similar size and/or markets in the S&P 500. Thus, this comparison set of companies is
not the same set of companies included in the indices used in the Comparison of Five-Year Cumulative Total
Shareholder Return graph on page 27.
The Executive Officers’ base salaries are generally maintained below the median of the market surveys of
comparison data. Annual bonus awards under the Company’s Executive Officers’ Annual 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.
10
14. 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 earnings growth, Return on
Capital (ROC) and Return on Equity (ROE). On a limited basis, the Committee may consider certain
non-operating adjustments in determining whether the financial performance targets are met. 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 assessment of the CEO is determined by the
Committee, with input from the full Board. The other Executive Officers are assessed by the CEO.
Final awards for Executive Officers of the Company are subject to the negative discretion of the Committee
as permitted in the PPG Industries, Inc. Executive Officers’ Annual Incentive Compensation Plan approved by
the shareholders. If minimum thresholds of earnings growth, ROC and ROE are not achieved, no awards are
granted by the Committee.
Long-Term Incentive Programs
The Committee has established long-term incentive programs that motivate key employees to invest in the
stock of the Company and to cause the Company to grow and profit, provide compensation levels competitive
with opportunities available elsewhere in industry and encourage key employees to continue in the employ of the
Company.
Long-term incentives for the Executive Officers are currently provided under the Stock Plan and the PPG
Industries, Inc. Executive Officers’ Long Term Incentive Plan (the “LTI Plan”). These programs, in combination,
provide compensation opportunities competitive with long-term incentive compensation opportunities for large
companies identified as potential competitors for executive talent.
The Stock Plan has been approved by shareholders and provides for the granting of stock options to selected
employees. The number of stock options granted to the Executive Officers is determined so that an estimate of
potential value of the options and payments under the LTI Plan, when combined with annual compensation
discussed above, will approximate the median 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 15, 16
and 17, Mr. Bunch and certain of 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 Options
provisions of the Stock Plan are inapplicable to options originally granted on or after January 1, 2003.
The LTI Plan provides long-term incentives for the Executive Officers to deliver strong company financial
performance on a continuing basis. The Company currently grants two types of long-term incentive awards to the
Executive Officers in addition to stock options—Total Shareholder Return Shares (“TSR Shares”) and
Performance-Based Restricted Stock Units (“RSUs”).
TSR Shares represent a contingent share grant that is made at the beginning of a three-year performance
period. The grant is settled in a combination of cash and shares of the Company’s common stock at the end of the
period if the Company’s total shareholder return in relation to the total shareholder return of companies
11
15. comprising the S&P 500 Materials Sector during the period exceeds certain pre-determined percentile thresholds.
If minimum performance is not achieved, no payment is made with respect to the grant. If performance is above
target, payment may exceed the original number of contingent shares awarded. The minimum and maximum
number of shares that may be issued upon settlement of a TSR Share ranges from 0% to 220% of the original
number of contingent shares awarded.
RSUs also represent a contingent share grant that is made at the beginning of a three-year performance
period and that is settled in shares of the Company’s common stock at the end of the period if the Company
achieves certain pre-determined performance thresholds. Unlike TSR Shares, however, the performance criteria
applicable to RSUs are earnings per share growth and cash flow return on capital. If minimum performance is not
achieved, no shares are issued with respect to the grant. If performance is above target, the number of shares
issued may exceed the original number of contingent shares awarded. The minimum and maximum number of
shares that may be issued upon settlement of an RSU ranges from 0% to 150% of the original number of
contingent shares awarded.
Please see pages 17 and 18 for additional plan detail and information concerning grants of TSR Shares and
RSUs to Mr. Bunch and the Named Executives.
The diversification of long-term incentive instruments—stock options and performance-based grants of TSR
Shares and RSUs—is consistent with the Committee’s philosophy of providing a balanced and competitive
compensation program that aligns the interests of PPG executives and its share-holders by tying compensation to
performance.
CEO Compensation
Mr. Bunch was elected President and CEO effective March 31, 2005, and Chairman and CEO effective
July 1, 2005, succeeding Mr. LeBoeuf. Mr. Bunch’s base salary in 2005 increased by 25% over the amount he
received in 2004. This change reflects his promotion to Chairman and CEO and the base compensation
appropriate to that position as determined according to the competitive salary program described above.
Consistent with the Company’s philosophy, the fixed salary portion of Mr. Bunch’s compensation remained
below the median base salary paid by the comparison companies. His annual bonus for 2005 was determined
70% on performance of the Company against financial goals and 30% on personal performance against
non-financial goals related to strategic objectives of the Company. The 2005 financial results of the Company,
together with the Committee’s assessment of Mr. Bunch’s performance toward achieving strategic objectives
related to growth initiatives, strategic planning, capital allocation, responsiveness to PPG’s shareholders and the
general management of corporate issues, are reflected in his 2005 bonus. Mr. Bunch did not receive payment
under the LTI Plan for the 2003-2005 performance period because the minimum performance threshold was not
achieved.
Mr. Bunch was granted 80,000 options at Fair Market Value on the dates of grant, and contingent
allocations of 20,000 TSR Shares and 20,000 RSUs under the LTI Plan. These grants are consistent with the
Committee’s philosophy that the estimated value of long-term compensation 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.
Mr. LeBoeuf retired as Chairman on July 1, 2005. His base salary, paid for six months of active employment,
remained unchanged from the 2005 rate. His annual bonus was subject to a six-month proration and was
determined in a manner similar to Mr. Bunch’s bonus. Mr. LeBoeuf did not receive payment under the LTI Plan
for the 2003-2005 performance period because the minimum performance threshold was not achieved.
Other Named Executives’ Compensation
The accompanying compensation tables also list four Executive Officers other than Mr. Bunch and
Mr. LeBoeuf (“Other Named Executives”). The Other Named Executives’ base salaries were increased over
12
16. 2004 base salaries consistent with the base pay practice discussed above. Current base salary levels remained
below the median base 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 Other Named Executives did not receive payment under the LTI Plan for the
2003-2005 performance period because the minimum performance threshold was not achieved.
The sizes of the stock option grants to Other Named Executives under the Stock Plan and contingent TSR
Shares and RSUs under the LTI Plan are consistent with the philosophy above and represent a level of long-term
incentive that is competitive with the median provided by comparison companies for individuals with similar
levels of responsibility. Certain of the Other Named Executives also received Restored Options under the Stock
Plan as stated in the Option/SAR Grants in Last Fiscal Year table and related footnotes on pages 15, 16 and 17.
As noted above, the Restored Options provisions of the Stock Plan are inapplicable to all stock options originally
granted on or after January 1, 2003.
Other Compensation
In addition to the compensation described above, the Company provides the Executive Officers certain other
benefits and items of compensation. Such benefits and other items of compensation include financial counseling
services, certain tax reimbursement payments, limited personal use of PPG’s corporate aircraft, payment of
organizational membership dues and certain other de minimus benefits. The costs to the Company associated
with these benefits and other items of compensation for Mr. Bunch and the Named Executives are reflected in the
Summary Compensation Table on page 14.
Deductibility of Compensation
The annual and long-term incentive compensation programs for Executive Officers of the Company were
designed to comply with the tax deductibility requirements of Section 162(m) of the Internal Revenue Code.
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
Robert Mehrabian
Robert Ripp
Thomas J. Usher (Chair)
David R. Whitwam
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Officers-Directors Compensation Committee of the Board of Directors was at any time
during 2005 an officer or employee of the Company or any of its subsidiaries nor is any such person a former
officer of the Company or any of its subsidiaries. In addition, no “compensation committee interlocks” existed
during 2005.
13
17. COMPENSATION OF EXECUTIVE OFFICERS
Summary of Executive Compensation
There is shown below information concerning the annual and long-term compensation of Mr. Bunch and the
Named Executives for services in all capacities to the Company for the fiscal years ended December 31, 2005,
2004 and 2003.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
Other Securities
Name and Annual Underlying LTIP All Other
Principal Salary Bonus Compensation Options/SARs Payouts Compensation
Position Year ($) ($)(1) ($)(2) (#) ($) ($)(3)
R. W. LeBoeuf (4) . . . . . . . . . . . . . . 2005 557,693 775,000 77,781 314,637 0 174,236
Retired Chairman and 2004 1,000,000 3,000,000 123,529 500,495 0 202,268
Chief Executive Officer 2003 950,000 1,400,000 88,984 305,037 5,698,176 323,798
C. E. Bunch (5) . . . . . . . . . . . . . . . . . 2005 750,000 1,500,000 15,841 158,338 0 131,809
Chairman and Chief 2004 600,000 1,200,000 10,833 185,459 0 88,316
Executive Officer 2003 550,000 625,000 11,715 121,662 1,958,748 126,970
W. H. Hernandez . . . . . . . . . . . . . . . 2005 465,000 484,000 2,658 124,938 0 72,364
Sr. Vice President, 2004 450,000 680,000 3,315 107,179 0 55,229
Finance 2003 415,000 375,000 4,137 68,899 1,424,544 83,586
J. C. Diggs . . . . . . . . . . . . . . . . . . . . 2005 430,000 393,300 10,133 73,011 0 68,694
Sr. Vice President and General 2004 415,000 545,000 9,013 52,113 0 53,745
Counsel and Secretary 2003 385,000 330,000 6,263 38,910 1,424,544 82,562
K. F. Sullivan (6) . . . . . . . . . . . . . . . 2005 350,333 346,800 7,964 57,680 0 43,300
Sr. Vice President 2004 340,583 362,000 10,001 58,115 0 32,603
Chemicals 2003 331,250 255,000 7,113 39,998 284,909 35,697
G. A. Goudy (6) . . . . . . . . . . . . . . . . 2005 337,500 357,500 4,601 13,600 0 31,627
Sr. Vice President 2004 297,250 435,000 4,561 34,758 0 20,134
Automotive Aftermarket 2003 282,083 314,500 4,451 40,702 256,418 23,047
(1) Cash and market value of Common Stock awarded.
(2) The following are included in the amounts shown under Other Annual Compensation for Mr. LeBoeuf for
2003, 2004 and 2005: Organization dues of $10,281, $17,459 and $6,577, respectively, and personal aircraft
usage costs of $66,118, $79,324 and $62,958, respectively. The amounts applicable to personal use of the
Company aircraft represent the aggregate incremental cost to the Company of personal use of the
Company’s aircraft and is calculated based on the Company’s direct incremental operating cost of the
applicable aircraft used. These amounts reflect a change in valuation methodology from prior years in which
the Company had relied upon the Standard Industrial Fare Level (SIFL) rates established by the Internal
Revenue Service as a proxy for aggregate incremental cost. The 2004 and 2003 amounts have been
re-calculated so that amounts are reported on a consistent basis.
(3) The following are included in the amounts shown under All Other Compensation for 2005: Company
contributions for Mr. Bunch and each of the Named Executives (except Mr. LeBoeuf) were $10,553 under the
PPG Industries Employee Savings Plan (the “Savings Plan”). The contribution for Mr. LeBoeuf under the
Savings Plan was $5,198. The value of premiums paid with respect to term life insurance for the benefit of
Messrs. LeBoeuf, Bunch, Hernandez, Diggs, Sullivan and Goudy, respectively, was $2,178, $952, $646, $598,
$398 and $511. The amount shown for Mr. LeBoeuf includes $19,189, which is the portion of interest earned on
certain deferred compensation above 120% of the applicable federal rate, and $33,363, representing interest paid
for the period July 1, 2005 to January 3, 2006, on an installment of Mr. LeBoeuf’s lump sum retirement benefit
under the PPG Industries, Inc. Nonqualified Retirement Plan, which installment was paid on January 3, 2006. The
amounts shown for Messrs. LeBoeuf, Bunch, Hernandez, Diggs, Sullivan and Goudy include $19,549, $27,204,
14
18. $12,805, $11,043, $7,053 and $6,427, respectively, in Company contributions under the PPG Industries, Inc.
Deferred Compensation Plan in lieu of Company contributions that could not be made under the Savings Plan
because of the Internal Revenue Code and regulations promulgated thereunder. The figure also includes for
Messrs. LeBoeuf, Bunch, Hernandez, Diggs, Sullivan and Goudy, respectively, $94,760, $93,100, $48,360,
$46,500, $25,296 and $14,136 for dividends accrued but not paid under the LTI Plan.
(4) Mr. LeBoeuf resigned as Chief Executive Officer on March 31, 2005, but remained Chairman of the Board
until his retirement from the Company on July 1, 2005, upon which date he resigned the position of
Chairman. The figures in the columns for “Annual Compensation” and “All Other Compensation” apply to
the period from January 1, 2005 until his retirement except for the interest payment referred to in footnote 3
above, which pertains to the period July 1, 2005 to January 3, 2006. In addition, the 2005 Salary shown for
Mr. LeBoeuf includes a payment of $57,693 he received for unused vacation.
(5) Mr. Bunch was elected President and Chief Executive Officer on March 31, 2005, having previously been
President and Chief Operating Officer, and was elected Chairman and Chief Executive Officer on July 1,
2005.
(6) Messrs. Sullivan and Goudy were elected Executive Officers of the Company within the meaning of Rule
3b-7 of the Securities Exchange Act of 1934, as amended, effective May 1, 2005. As of February 17, 2006,
the Company’s Executive Officers include Mr. Bunch, the Named Executives (except Mr. LeBoeuf, who
retired on July 1, 2005), Ms. Victoria M. Holt and Messrs. J. Rich Alexander and William A. Wulfsohn.
Option Grants
Shown below is further information on grants of Options under the Company’s Stock Plan during fiscal year
2005 to Mr. Bunch and the Named Executives. All of the Options granted in 2005 were Nonqualified Options, as
are all outstanding Options. No Stock Appreciation Rights were granted to Mr. Bunch or to any of the Named
Executives in 2005.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term(2)
Percent of
Total
Options/
Number of SARs
Securities Granted to Exercise
Underlying Employees or Base
Options/SARs in Price Expiration
Name Granted(#)(1) Fiscal 2005(%) ($/Share) Date 0% ($)(3) 5%($) 10%($)
R. W. LeBoeuf . . . . . . . 90,000(4) 5.98 71.88 2/15/2015 0(4) 4,068,000(4) 10,310,400(4)
60,025 3.99 67.55 2/19/2012 0 1,650,688 3,847,002
20,838 1.38 67.55 2/13/2011 0 478,649 1,086,077
5,722 .38 67.55 2/19/2012 0 157,355 366,723
116,875 7.77 67.55 2/15/2010 0 2,180,888 4,819,925
7,364 .49 67.55 2/13/2011 0 169,151 383,812
13,813 .92 67.55 2/19/2012 0 379,858 885,275
314,637(4) 0(4) 9,084,589(4) 21,699,214(4)
C. E. Bunch . . . . . . . . . . 40,000 2.66 71.88 2/15/2015 0 1,808,000 4,582,400
9,603 .64 66.46 2/13/2006 0 31,882 63,860
4,995 .33 66.46 2/13/2006 0 16,583 33,217
537 .04 66.46 2/13/2006 0 1,783 3,571
9,898 .66 66.46 2/16/2009 0 141,739 305,254
31,623 2.10 66.46 2/15/2010 0 580,598 1,282,945
21,682 1.44 66.46 2/13/2011 0 490,013 1,111,853
40,000 2.66 63.01 6/30/2015 0 1,585,200 4,016,800
158,338 0 4,655,798 11,399,900
15
19. Potential Realizable Value at Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term(2)
Percent of
Number of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted(#)(1) Fiscal 2005(%) ($/Share) Date 0% ($)(3) 5%($) 10%($)
W. H. Hernandez . . . . . . 24,000 1.59 71.88 2/15/2015 0 1,084,800 2,749,440
4,483 .30 68.78 2/16/2009 0 66,438 143,097
35,785 2.38 68.78 2/15/2010 0 679,915 1,502,612
6,151 .41 68.78 2/18/2007 0 43,365 88,820
18,834 1.25 65.08 2/18/2007 0 125,623 257,461
16,027 1.06 65.08 2/13/2011 0 354,678 804,716
19,658 1.31 65.08 2/19/2012 0 520,740 1,213,685
124,938 0 2,875,559 6,759,831
J. C. Diggs . . . . . . . . . . . 20,000 1.33 71.88 2/15/2015 0 904,000 2,291,200
16,389 1.09 68.78 2/15/2010 0 311,391 688,174
6,619 .44 68.78 3/2/2007 0 46,664 95,578
1,835 .12 68.78 2/13/2011 0 42,921 97,383
250 .02 68.78 2/15/2010 0 4,750 10,498
2,675 .18 62.93 3/2/2007 0 17,254 35,364
3,464 .23 62.93 2/15/2010 0 60,239 133,087
19,679 1.31 62.93 2/16/2009 0 266,847 574,824
1,589 .11 62.93 2/15/2010 0 27,633 61,049
511 .03 62.93 3/2/2007 0 3,296 6,755
73,011 0 1,684,995 3,993,912
K. F. Sullivan . . . . . . . . 13,600 .90 71.88 2/15/2015 0 614,720 1,558,016
7,465 .50 68.78 2/13/2011 0 174,606 396,168
4,178 .28 68.78 2/15/2010 0 79,382 175,434
5,957 .40 68.78 2/13/2011 0 139,334 316,138
3,724 .25 68.78 2/19/2012 0 104,272 242,991
918 .06 64.57 2/19/2012 0 24,134 56,237
216 .01 64.57 2/19/2012 0 5,679 13,232
5,107 .34 64.57 2/13/2011 0 112,150 254,431
13,632 .91 64.57 2/19/2012 0 358,385 835,096
2,883 .19 64.57 2/16/2009 0 40,131 86,404
57,680 0 1,652,793 3,934,147
G. A. Goudy . . . . . . . . . 13,600 .90 71.88 2/15/2015 0 614,720 1,558,016
13,600 0 614,720 1,558,016
All Shareholders (5) . . . 0 7,471,560,000 18,936,768,000
Named Executives’
Gain as % of All
Shareholders’ Gain . . . . . 0% .275% .261%
(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 Transaction Tape) on the date of grant. The Options
having an Exercise Price of $71.88 granted on February 16, 2005 and the Options granted to Mr. Bunch on
July 1, 2005 having an Exercise Price of $63.01 become exercisable three years after the date of grant. The
16
20. other Options were granted to Mr. Bunch and to certain of the Named Executives under the Restored Option
provisions of the Stock Plan that was approved by PPG’s shareholders. 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 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) plus the number
of shares 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. Restored Options have not been granted upon the exercise of
any original Option granted after December 31, 2002.
(2) The dollar amounts under these columns are the result of calculations using assumed rates of appreciation in
the market price of PPG’s common stock as permitted by Item 402(c) of Regulation S-K. These dollar
amounts are not intended to forecast possible future appreciation, if any, in the market price of PPG’s
Common Stock.
(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) The Options granted to Mr. LeBoeuf with an expiration date of February 15, 2015 were forfeited upon his
retirement on July 1, 2005 and will, therefore, afford him no gain associated with this grant.
(5) Based on approximately 165,300,000 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 based on
the price and terms of the Options granted on February 16, 2005.
Option Exercises and Fiscal Year-End Values
Shown below is information with respect to exercises during 2005 of Options granted under the Stock Plan
and information with respect to unexercised Options granted in 2005 and prior years under the Stock Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
December 31, 2005(#) at December 31, 2005($)(1)
Shares
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
R. W. LeBoeuf . . . . . . . . . . . . . . . 834,980 8,762,603 331,338 140,000 0 0
C. E. Bunch . . . . . . . . . . . . . . . . . . 82,050 543,389 291,137 140,000 700,700 0
W. H. Hernandez . . . . . . . . . . . . . 136,185 1,881,023 186,930 118,519 457,275 0
J. C. Diggs . . . . . . . . . . . . . . . . . . 92,889 1,197,480 51,105 77,918 0 0
K. F. Sullivan . . . . . . . . . . . . . . . . 81,323 702,826 75,157 58,856 250,250 0
G. A. Goudy . . . . . . . . . . . . . . . . . 56,985 846,879 43,621 33,600 4,276 0
(1) Based on the closing price of the Company’s Common Stock as reported on the New York Stock Exchange
Composite Transaction Tape on December 30, 2005 (the last trading day of fiscal year), which was $57.90
per share.
Long-Term Incentive Plan Awards
During 2005, the Officers-Directors Compensation Committee made grants of TSR Shares and grants of
RSUs to Mr. Bunch and the Named Executives under the LTI Plan. The grants made to Mr. LeBoeuf in 2005
were forfeited upon his retirement on July 1, 2005.
17
21. Under the LTI Plan, contingent share grants are made for three-year plan periods and are paid out at the end
of the period if the Company achieves target performance. Performance is measured by determining the
percentile rank of the total shareholder return of PPG Common Stock (stock price plus accumulated dividends) in
relation to the total shareholder return of companies comprising the S&P Materials Sector Index. If target
performance is met at the end of the three-year award period, payments will equal the original contingent share
grant. Payments at the end of the period will be zero if threshold performance is not achieved and may exceed the
original targeted contingent grant if PPG total shareholder return is above certain objective, predetermined
performance standards. Contingent share awards earn dividend equivalents during the three-year award period,
which are credited under the PPG Industries, Inc. Deferred Compensation Plan.
Also under the LTI Plan, performance-based restricted stock units are granted for three-year plan periods
and are paid out at the end of the period if the Company achieves target performance. Performance is measured
by earnings per share growth and cash flow return on capital. Payments at the end of the period will be zero if
threshold performance is not achieved and may exceed the original grant if performance is above certain
objective, predetermined performance standards. Performance-based restricted stock units do not earn dividend
equivalents.
In no event, however, may payments to Executive Officers under the LTI Plan exceed the maximums stated
in the LTI Plan. Any payments made at the end of the award period under the LTI Plan may be in the form of
stock, cash (based on the market value of the number of contingent shares paid in the form of cash) or a
combination of both, and may be deferred into the PPG Industries, Inc. Deferred Compensation Plan.
LONG-TERM INCENTIVE PLANS—AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts
Under Non-Stock Price-Based Plans
Number of Performances or
Shares, Units Other Period Until
or Other Maturation or Minimum Threshold Target Maximum
Name Rights(#) Payout (# of shares) (# of shares) (# of shares) (# of shares)
Total Shareholder
Return Shares:
R. W. LeBoeuf . . . . . . . 23,000(1) 1/1/2005 – 12/31/2007 0(1) 9,200(1) 23,000(1) 50,600(1)
C. E. Bunch . . . . . . . . . . 20,000 1/1/2005 – 12/31/2007 0 8,000 20,000 44,000
W. H. Hernandez . . . . . . 6,000 1/1/2005 – 12/31/2007 0 2,400 6,000 13,200
J. C. Diggs . . . . . . . . . . . 5,000 1/1/2005 – 12/31/2007 0 2,000 5,000 11,000
K. F. Sullivan . . . . . . . . 3,600 1/1/2005 – 12/31/2007 0 1,440 3,600 7,920
G. A. Goudy . . . . . . . . . 3,600 1/1/2005 – 12/31/2007 0 1,440 3,600 7,920
Restricted Stock Units:
R. W. LeBoeuf . . . . . . . 23,000(1) 1/1/2005 – 12/31/2007 0(1) 11,500(1) 23,000(1) 34,500(1)
C. E. Bunch . . . . . . . . . . 20,000 1/1/2005 – 12/31/2007 0 10,000 20,000 30,000
W. H. Hernandez . . . . . . 6,000 1/1/2005 – 12/31/2007 0 3,000 6,000 9,000
J. C. Diggs . . . . . . . . . . . 5,000 1/1/2005 – 12/31/2007 0 2,500 5,000 7,500
K. F. Sullivan . . . . . . . . 3,400 1/1/2005 – 12/31/2007 0 1,700 3,400 5,100
G. A. Goudy . . . . . . . . . 3,400 1/1/2005 – 12/31/2007 0 1,700 3,400 5,100
(1) The grants made to Mr. LeBoeuf in 2005 were forfeited upon his retirement on July 1, 2005. Mr. LeBoeuf
has not and will not receive any payments associated with these grants.
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22. Retirement Plans
The Company’s qualified retirement plan for salaried employees and nonqualified retirement plan both
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, 2006, at Social Security Normal Retirement Age) are estimated in the
following table:
PENSION PLAN TABLE
Base and
Incentive
5-Year Avg.
Total
Compensation Credited Years-of-Service
15 20 25 30 35
$ 500,000 106,268.00 143,103.00 179,938.00 216,733.00 253,607.00
750,000 163,968.00 220,803.00 277,638.00 334,473.00 391,307.00
1,000,000 221,668.00 298,503.00 375,338.00 452,173.00 529,007.00
1,250,000 279,368.00 376,203.00 473,038.00 569,873.00 666,707.00
1,500,000 337,068.00 453,903.00 570,738.00 687,573.00 804,407.00
1,750,000 394,768.00 531,603.00 668,438.00 805,273.00 942,107.00
2,000,000 452,468.00 609,303.00 766,138.00 922,973.00 1,079,807.00
2,250,000 510,168.00 687,003.00 863,838.00 1,040,673.00 1,217,507.00
2,500,000 567,868.00 764,703.00 961,538.00 1,158,373.00 1,355,207.00
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 PPG Industries, Inc. Executive Officers’ Annual Incentive Compensation Plan, the PPG Industries, Inc.
Incentive Compensation and Deferred Income Plan for Key Employees or the PPG Industries, Inc. Management
Award and Deferred Income Plan, is the compensation paid under the latter three plans, which for Mr. Bunch and
the Named Executives in the Summary Compensation Table on page 14 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 2005 for Messrs. LeBoeuf, Bunch,
Hernandez, Diggs, Sullivan and Goudy is $2,436,000.00, $1,190,000.00, $816,000.00, $732,000.00, $576,553.00
and $596,018.00, respectively. For comparison purposes only, the figures used for Mr. LeBoeuf’s 2005
compensation were annualized even though he retired on July 1, 2005 and, therefore, did not receive his entire
2005 compensation. 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 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 had
twenty-four years and eight months of service upon his retirement, and Messrs. Bunch twenty-six and one-half
years, Hernandez fifteen years, Diggs nine years, Sullivan thirty-two and one-half years and Goudy thirty-one
years. Following his retirement on July 1, 2005, Mr. LeBoeuf received a lump sum benefit in accordance with the
terms of the PPG Industries, Inc. Nonqualified Retirement Plan in lieu of a straight-life or a joint and survivor
annuity. The lump sum benefit was paid in two installments, one upon his retirement on July 1, 2005 in the
amount of $8,662,642.59, and the other on January 3, 2006 in the amount of $2,426,395.77, plus interest of
$33,362.94 for the period July 1, 2005 to January 3, 2006.
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23. Change In Control Arrangements
The Company has entered into arrangements with certain key executives, including Mr. Bunch and 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 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 period beginning one year after a change in control, (b) by the executive at any time during the three
years following a change in control because either he or she has not been employed in a commensurate capacity
or he or she 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 PPG Industries, Inc.
Incentive Compensation and Deferred Income Plan for Key Employees or the PPG Industries, Inc. Executive
Officers’ Annual Incentive Compensation Plan, as applicable, that the executive would have received (i) for 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. Payments received under the change in control arrangements described in this paragraph include
a gross-up equal to any excise tax impositions that may be applicable to the benefit at the time of payout.
BOARD OF DIRECTORS PROPOSAL—PROPOSAL TO APPROVE THE
PPG INDUSTRIES, INC. OMNIBUS INCENTIVE PLAN
Purpose. The Board of Directors unanimously recommends that shareholders approve the PPG Industries,
Inc. Omnibus Incentive Plan (the “Omnibus Plan”), a copy of which is attached as Annex B and is incorporated
herein. The Omnibus Plan is intended to consolidate into one plan several of the Company’s existing
compensatory plans providing for equity-based and cash incentive awards to certain of the Company’s
employees, directors and consultants. The Board believes that these plans have been effective in attracting and
retaining key talent and in aligning the long-term interests of plan participants with those of our shareholders.
The Board also believes that administering all future stock and other equity-based awards under a single
plan will increase the efficiency and effectiveness of the Company’s long-term incentive programs, reduce
administrative and regulatory costs, and allow greater transparency with respect to the Company’s equity
compensation practices. Accordingly, on February 16, 2006, the Board adopted and approved, subject to the
approval of the Company’s shareholders, the Omnibus Plan. Shareholder approval of the Omnibus Plan is
required, among other reasons, to ensure the tax deductibility by the Company of certain awards under the
Omnibus Plan pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and
to meet the listing standards of the New York, Pacific and Philadelphia stock exchanges.
Because the Omnibus Plan is designed to consolidate several of the Company’s existing compensatory
plans, approval of the Omnibus Plan by the Company’s shareholders will automatically result in the following:
• each of the PPG Industries, Inc. Executive Officers’ Long Term Incentive Plan, the PPG Industries, Inc.
Long Term Incentive Plan, the PPG Industries, Inc. Stock Plan, and the PPG Industries, Inc. Executive
Officers’ Annual Incentive Compensation Plan will be frozen such that no further awards will be made
under such plans;
• each of the PPG Industries, Inc. Incentive Compensation and Deferred Income Plan for Key Employees
and the PPG Industries, Inc. Management Award and Deferred Income Plan will be amended and
restated to, among other things, eliminate stock and other equity-based awards under these plans in the
future: and
• the aggregate number of shares available for future issuance under the Company’s equity compensation
plans will be reduced.
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24. Awards that are outstanding under each of the existing plans described above as of the effective date of the
Omnibus Plan will not be terminated, but instead will remain outstanding and will be administered under the
terms of the applicable existing plan.
Plan Summary
Administration. The Omnibus Plan is administered by the Officers-Directors Compensation Committee
(the “Committee”) of the Company’s Board of Directors. The Committee has the authority to determine the
individuals to whom awards will be granted, the nature, amount and terms of such awards and the objectives and
conditions for earning such awards.
Awards under the Omnibus Plan. Awards under the Omnibus Plan may include:
• stock options,
• stock appreciation rights (“SARs”),
• restricted stock,
• restricted stock units,
• performance awards,
• other stock-based awards, and
• short-term cash incentive awards.
Stock Options. The Committee may grant nonqualified stock options to a participant. Incentive stock options
(as defined in the Code) may not be granted under the Omnibus Plan. The exercise price for stock options may
not be less than the fair market value of the Company’s common stock on the date such stock options are granted,
and the exercise period may not exceed ten years from the date of grant.
Stock Appreciation Rights. SARs may be granted by the Committee to a participant either separate from or
in tandem with stock options. A SAR entitles the participant to receive, upon its exercise, a payment equal to
(i) the excess of the fair market value of a share of common stock on the exercise date over the SAR exercise
price, times (ii) the number of shares of common stock with respect to which the SAR is exercised. The exercise
period may not exceed ten years from the date of grant. The exercise price for a SAR may not be less than the
fair market value of the Company’s common stock on the date when the SAR is granted, and, in the case of
SARs granted in tandem with stock options, may not be less than the exercise price of the related stock option.
Restricted Stock and Restricted Stock Units. The Committee may award to a participant shares of common
stock subject to specified restrictions (“restricted stock”). The Committee also may award to a participant
restricted stock units representing the right to receive shares of common stock in the future. Shares of restricted
stock and restricted stock units are subject to forfeiture if the participant does not meet certain conditions such as
continued employment over a specified period and/or the attainment of specified performance targets over such
period.
Performance Awards. The Committee may grant performance awards to participants, which entitle
participants to receive a payment from the Company, the amount of which is based upon the attainment of
predetermined performance targets over a specified award period of at least two years. Performance awards may
be paid in cash, shares of common stock or a combination thereof, as determined by the Committee.
Other Stock-Based Awards. The Committee may also grant equity-based or equity-related awards, referred
to as “other stock-based awards,” in addition to options, SARs, restricted stock, restricted stock units, or
performance awards.
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