
<PAGE>
 
                                                                  Exhibit 10.3



                             PPG INDUSTRIES, INC.



                          DEFERRED COMPENSATION PLAN











                                                     Effective:  January 1, 1996
<PAGE>
 
                               Table of Contents
                               -----------------
<TABLE>
<S>                            <C>
 
Section    I .................... Definitions
         
Section   II .................... Deferrals
         
Section  III .................... Investment Options
         
Section   IV .................... Savings Plan Restoration  Contributions
         
Section    V .................... Withdrawal Provisions
         
Section   VI .................... Specific Provisions
                                  Related to Benefits

Section  VII .................... Administration and Claims
        
Section VIII .................... Amendment and Termination
        
Section   IX .................... Miscellaneous
        
Section    X .................... Change in Control
</TABLE>

                                   -Page 1.1-
<PAGE>
 
                            SECTION I - DEFINITIONS
                            -----------------------

1.01  Account means all deferred Award amounts, all deferred Salary amounts
      and all Restoration Contributions and earnings on each in a Participant's
      account at any particular time.

1.02  Administrator means an officer or officers of the Company appointed
      by the Committee, and any person(s) designated by such Administrator to
      assist in the administration of the Plan.

1.03  Affiliate means any business entity, other than a Subsidiary
      Corporation, in which PPG has an equity interest.

1.04  Award means  a grant to a Participant under either the IC Plan or MAP
      which such person may elect to defer.  Awards to Participants may be made
      in the form of cash ("cash component"), shares of PPG stock ("stock
      component"), or a combination of both.

1.05  Beneficiary means the person or persons designated by a Participant
      to receive benefits hereunder following the Participant's death, in
      accordance with Section 6.02.  For purposes of this Section 1.05, "person
      or persons" is limited to an individual, a Trustee or a Participant's
      estate.

1.06  Board means the Board of Directors of PPG Industries, Inc.
 
1.07  Code means the Internal Revenue Code of 1986, and amendments thereto.

1.08  Committee means the Officers-Directors Compensation Committee (or any
      successor) of the Board.

1.09  Company or PPG means PPG Industries, Inc.

1.10  Conversion Formula means dividing an amount by the average of the
      closing sale prices for PPG Stock reported on the New York Stock Exchange-
      Composite Tape for the first five days during which the New York Stock
      Exchange is open during the Plan Year immediately following the last day
      of the Plan Year to which the Award relates.

1.11  Corporation means PPG and any Subsidiary Corporation and any
      Affiliate designated by the Administrator as eligible to participate in
      the Plan, and which, by proper authorization of the Board of Directors or
      other governing body of such Subsidiary Corporation or Affiliate, elects
      to participate in the Plan.

1.12  Disability means any long-term disability.  The Administrator, in his
      complete and sole discretion, shall determine a Participant's Disability;
      provided, however, that a Participant who is approved to receive Long-Term

                                   -Page 1.2-
<PAGE>
 
      Disability benefits pursuant to the PPG Industries, Inc. Long-Term
      Disability Plan shall be considered to have a Disability.  The
      Administrator may require that a Participant submit to an examination from
      time to time, but no more often than annually, at the expense of the
      Company, by a competent physician or medical clinic, selected by the
      Administrator, to confirm Disability.  On the basis of such medical
      evidence, the determination of the Administrator as to whether or not a
      condition of Disability exists or continues shall be conclusive.

1.13  Earnings Growth Plan means the PPG Industries, Inc. 1984 Earnings
      Growth Plan.

1.14  Employee means any full-time or permanent part-time salaried employee
      (including any officer) of the Corporation.

1.15  ERISA means the Employee Retirement Income Security Act of 1974, as
      amended.

1.16  Financial Hardship means an unexpected need for cash arising from an
      illness, casualty loss, sudden financial reversal, or other such
      unforeseeable occurrence, as determined by the Administrator, in his
      complete and sole discretion.

1.17  Former Participant means a Participant who becomes ineligible to
      receive an Award but who continues to have an Account hereunder.

1.18  IC Plan means the PPG Industries, Inc. Incentive Compensation and
      Deferred Income Plan for Key Employees.

1.19  Insider means a Participant who at any time within the prior six (6)
      months was a person subject to Section 16 of the Securities Act of 1934.

1.20  Interest Account means a record-keeping account maintained for a
      Participant who elects to defer all or part of an Award/Salary and/or
      maintain all or part of a deferred Award/Salary in the form of cash.

                                   -Page 1.3-
<PAGE>
 
1.21  Interest Rate means the rate of interest to be credited during a Plan
      Year, as established prior to the beginning of the Plan Year.  Such rate
      shall be either the Declared Rate or the Minimum Rate, as provided in the
      Plan.

            Declared Rate - means the greatest of:

            (a) the 90-day Treasury Bill yield plus 2.0 percentage points
                (Established: for Plan Year 1996 - as of September 15, 1995 and
                for Plan Years after 1996 - as of October 15 of the Plan Year
                prior to the Plan Year in which the rate is to be effective); or

            (b) the average of the month's end 10-year Treasury Note yield over
                the previous 36 month period (as of the last business day of
                September of the Plan Year prior to the Plan Year in which the
                average rate is to be effective); or

            (c) The Minimum Rate.
 
            Minimum Rate - means the average of the daily closing yields during
            October for the 10-year Treasury Note.

      The Declared Rate and the Minimum Rate will be announced to
      Participants prior to the beginning of the Plan Year to which such rates
      apply.

1.22  MAP means the PPG Industries, Inc. Management Award and Deferred
      Income Plan.

1.23  Participant means an Employee approved to participate in either the
      IC Plan or MAP. As used herein, "Participants" may be used collectively to
      include Retired Participants, Terminated Participants and Former
      Participants.

1.24  Plan or DCP means the PPG Industries, Inc. Deferred Compensation
      Plan.

1.25  Plan Year means the calendar year.

1.26  PPG Stock means Common Stock of the Company.  Shares of PPG Stock
      issued under the Plan may be either authorized but unissued shares or
      issued shares acquired by the Company and held in its treasury.

1.27  PPG Stock Account means a record-keeping account maintained for a
      Participant who elects to defer all or part of an Award/Salary and/or to
      maintain all or part of a deferred Award/Salary in the form of Stock
      Account Shares.

                                   -Page 1.4-
<PAGE>
 
1.28  Restoration Contributions means contributions to a Participant's
      Savings Plan Restoration Account in accordance with Section IV.

1.29  Retired Participant means a Participant who elects to maintain an
      Account in the Plan after his/her Retirement Date.

1.30  Retirement Date means the first day of the month following a
      Participant's termination of employment, provided such Participant is
      eligible to receive a benefit from a retirement plan sponsored by the
      Corporation on such date.

1.31  Salary means a Participant's monthly base salary from the Corporation
      (excluding bonuses, commissions and other non-regular forms of
      compensation) and including payments from the PPG Industries Salary
      Continuance Plan, before reductions for deferrals under the Plan or under
      any other Plan sponsored by the Corporation.  In the case of Salary
      Continuance, Salary deferral elections shall be applied to the actual
      amount of Salary Continuance being paid.
 
1.32  Savings Plan means the PPG Industries Employee Savings Plan.

1.33  Savings Plan Election means the sum of the percentage the Participant
      is contributing to the Savings Plan as Savings and as Elective Deferrals
      not to exceed the percentage eligible for the Company match in the Savings
      Plan.

1.34  Savings Plan Interest Account means a record-keeping account
      maintained for a Participant who is eligible to receive Restoration
      Contributions.  The Interest Rate credited in the Savings Plan Interest
      Account shall be the same as that credited to the Interest Account.

1.35  Savings Plan Matching Percentage means the percentage of the
      Company's Matching Contributions for a Plan Year in the Savings Plan.

1.36  Savings Plan PPG Stock Account means a record-keeping account
      maintained for a Participant who is eligible to receive Savings Plan
      Restoration Contributions in accordance with Section IV, in the form of
      Stock Account Shares.

1.37  Savings Plan Restoration Account means all Restoration Contributions
      and earnings thereon in a Participant's Account at any particular time.

1.38  Stock Account Share means a record-keeping unit which is equivalent
      to one share of PPG Stock.

1.39  Subsidiary means any corporation of which fifty percent (50%) or more of
      the outstanding voting stock or voting power is owned, directly or
      indirectly, by the Company and any partnership or other entity in which
      the Company has a fifty percent (50%) or more ownership interest.

                                   -Page 1.5-
<PAGE>
 
1.40  Terminated Participant means a Participant who maintains an Account
      in the Plan following his/her termination of employment from the
      Corporation.

1.41  Unscheduled Withdrawal means a distribution of all or a portion of a
      Participant's Interest Account and/or PPG Stock Account requested by a
      Participant, or a Beneficiary, if the Participant is deceased, in
      accordance with Section 5.07.

                                   -Page 1.6-
<PAGE>
 
                            SECTION II - DEFERRALS
                            ----------------------

2.01  Deferral of Award
      -----------------

      (a) In accordance with the provisions of either the IC Plan or MAP,
          whichever is applicable, the value of that portion of the cash
          component of a deferred Award which the Participant has designated to
          the Interest Account shall be credited to the Interest Account on the
          day such deferral would otherwise have been paid to the Participant.

      (b) In accordance with the provisions of either the IC Plan or MAP,
          whichever is applicable, the value of:

           (1) that portion of the cash component of a deferred Award which the
               Participant has designated to the PPG Stock Account; and/or

           (2) the value of the stock component of a deferred Award

           shall be credited to the PPG Stock Account in the Participant's
           Account on the day such deferral would otherwise have been paid to
           the Participant.

      (c) Subject to paragraph (e) below, all crediting elections pursuant
          to this Section 2.01 are subject to the transfer provisions of Section
          3.04

      (d) Amounts credited to the PPG Stock Account shall be credited in
          the form of whole and fractional Stock Account Shares determined
          according to the Conversion Formula.

      (e) Any amount designated by the Participant for in-service
          withdrawal in accordance with either the IC Plan or MAP must be
          credited to the Interest Account and is not subject to the transfer
          provisions of Section 3.04.

2.02  Deferral of Salary
      ------------------

      (a) Prior to the beginning of each quarter, a Participant may elect
          to defer a percentage, in whole percentages only, of his/her Salary as
          follows:

            Minimum Deferral  Maximum Deferral
            ----------------  ----------------

                  1%                50%

                                   -Page 2.1-
<PAGE>
 
      (b) Elections made pursuant to this Section 2.02 shall remain in
          effect until the earlier of:

           (1) The first day of the quarter following the quarter the
               Participant rescinds or modifies the election; or

           (2) The first day of the Plan Year following the Plan Year in which
               the Participant becomes a Former Participant.

      (c) Any election filed by a Participant pursuant to this Section
          2.02 must be received by the Administrator on or before the last
          business day of the quarter prior to the quarter in which such
          election is to become effective.  Deferred Salary shall be credited to
          the Participant's Account on the first day of the month following the
          month in which the deferral is made.

      (d) A Participant is ineligible to defer or continue to have
          deferred any Salary percentage during a quarter in which the
          Participant's salary is subject to a garnishment, tax lien, child
          support or any similar attachment to Salary.

      (e) A Participant who becomes ineligible for Salary deferral, in
          accordance with Paragraph (d) above, may thereafter resume Salary
          deferral upon the discontinuance of the attachment to the Salary and
          in accordance with the Salary election provisions of this Section
          2.02.

  2.02.01 Salary Deferral Crediting Elections
          -----------------------------------

          (a)  At the time an election is made to defer Salary, the Participant
               must also designate in whole percentages whether such amount is
               to be credited to the Interest Account, the PPG Stock Account, or
               a combination of both.

          (b)  A Salary deferral crediting election shall remain in effect
               through an entire quarter.  A Salary deferral crediting election
               may be changed by a Participant for a subsequent quarter by
               notification to the Administrator on or before the last business
               day of the quarter, to be effective on the first day of the next
               quarter.

          (c)  All crediting elections pursuant to this Section 2.02.01 are
               subject to the transfer provisions of Section 3.04.

          (d)  The number of Stock Account Shares credited to the PPG Stock
               Account shall be determined by the closing price for PPG Stock on
               the last business day of the month in which the deferral is made.

                                   -Page 2.2-
<PAGE>
 
                    SECTION III - DEFERRAL ACCOUNT OPTIONS
                    --------------------------------------

3.01  Interest Account
      ----------------

      Except as otherwise provided in Sections 5.03 and 6.06, amounts
      deferred to the Interest Account shall accrue interest equivalents at the
      Declared Rate.

3.02  PPG Stock Account
      -----------------

      (a) Amounts credited to the PPG Stock Account shall be credited in
          the form of Stock Account Shares.

      (b) Participants shall not receive cash dividends or have voting or
          other shareholders' rights as to Stock Account Shares; however, Stock
          Account Shares shall accrue whole and fractional dividend equivalents,
          in the form of additional Stock Account Shares, on the basis of the
          closing sale price for PPG Stock, reported on the Composite Tape for
          the day on which a dividend is paid, based on the number of whole
          Stock Account Shares in the PPG Stock Account on the record date.

3.03  Transfers from IC Plan, MAP and/or the Earnings Growth Plan
      -----------------------------------------------------------

      (a) Any amount previously deferred under either the IC Plan or MAP,
          which has not been withdrawn prior to January 1, 1996, shall be
          transferred to the Participant's Account in this Plan effective
          January 1, 1996.  Amounts credited to the interest account under the
          prior plan(s) shall be transferred to the Interest Account and amounts
          credited to the PPG stock account under the prior plan(s) shall be
          transferred to the PPG Stock Account.

      (b) (1)  Subject to subparagraph (2) below, any amount which a
               Participant currently has in his/her account in the Earnings
               Growth Plan shall be transferred to the Participant's Account in
               this Plan effective January 1, 1996. Amounts credited to the
               interest account in the Earnings Growth Plan shall be transferred
               to the Interest Account, and amounts credited as earnings growth
               shares in the Earnings Growth Plan shall be transferred to the
               PPG Stock Account.

          (2)  Subparagraph (1) above shall not apply in the case of a
               Participant who has filed a withdrawal election with respect to
               his/her earnings growth account under the Earnings Growth Plan.
               Such account shall remain in the Earnings Growth Plan and subject
               to the provisions thereof.

                                  -Page 3.1-
<PAGE>
 
3.04  Transfers
      ---------

      (a) A Participant (excluding Insiders) who has a balance in his/her
          Account, may elect to transfer some or all of his/her Account balance
          between the PPG Stock Account and the Interest Account.  Transfers
          shall be subject to the following provisions:

          (1) Participants must file a transfer request with the Administrator
              on or before the last business day of a quarter, to be effective
              on the first day of the next quarter.

          (2) The number and value of Stock Account Shares shall be determined
              by the closing price for PPG Stock on the last business day of the
              quarter in which the election is received by the Administrator.

      (b) Insiders are prohibited from making interaccount transfers.

                                  -Page 3.2-
<PAGE>
 
              SECTION IV - SAVINGS PLAN RESTORATION CONTRIBUTIONS
              ---------------------------------------------------

4.01  Restoration Contributions
      -------------------------

      Participants who are currently contributing to the Savings Plan may
      be eligible to receive Restoration Contributions as follows:

      (a) For Participants whose Salary exceeds the amount specified in
          (S)401(a)(17) of the Code, Restoration Contributions shall equal the
          sum of (1) and (2) below:

          (1)  Lesser of:

               Excess Salary times Savings Plan Election times Savings Plan
               Matching Percentage; or

               Amount of monthly deferred Salary.

          (2)  If the difference between the Participant's Salary deferral and
               Excess Salary ("Difference") is greater than zero:

               Difference times Savings Plan Election times Savings Plan
               Matching Percentage.

      (b) For a Participant whose Salary equals or is less than the amount
          specified in (S)401(a)(17) of the Code and such Participant elects to
          defer Salary in accordance with Section 2.02, Restoration
          Contributions shall equal the amount of the deferred Salary times the
          Participant's Savings Plan Election times the Savings Plan Matching
          Percentage.

      (c) For purposes of this Section 4.01 Excess Salary means Salary
          minus the amount specified in (S)401(a)(17) of the Code divided by 12.

4.02  Savings Plan Restoration Account
      --------------------------------

      (a) Restoration Contributions shall be credited monthly and shall be
          maintained in the Savings Plan Restoration Account.  The Savings Plan
          Restoration Account shall consist of a Savings Plan Interest Account,
          and a Savings Plan PPG Stock Account.

                                  -Page 4.1-
<PAGE>
 
      (b) Restoration Contributions shall be credited to the Savings Plan
          PPG Stock Account and shall be credited in the form of Stock Account
          Shares, the number of which shall be determined by using the closing
          price for PPG Stock on the last business day of the month in which
          such Restoration Contributions are made, and credited to the
          Participant's Savings Plan Restoration Account on the first day of the
          month following the month in which the Restoration Contributions are
          made.

      (c) Participants shall not receive cash dividends or have voting or
          other shareholders' rights as to Stock Account Shares; however, Stock
          Account Shares shall accrue whole and fractional dividend equivalents,
          in the form of additional Stock Account Shares, on the basis of the
          closing sale price for PPG Stock, reported on the Composite Tape for
          the day on which a dividend is paid, based on the number of whole
          Stock Account Shares in the Savings Plan PPG Stock Account on the
          record date.

4.03  Vesting
      -------

      Restoration Contributions shall be 100% vested at the time such
      Restoration Contributions are credited to a Participant's Account.

4.04  Transfers
      ---------

      Restoration Contributions may be transferred to the Savings Plan
      Interest Account, in accordance with Section 3.04, beginning the Plan Year
      in which a Participant reaches his/her 55th birthday.

4.05  Withdrawal Provisions
      ---------------------
 
      (a) The Savings Plan Restoration Account is not subject to
          provisions of Sections 5.01, 5.06 or 5.07.

      (b) At the time of a Participant's termination of employment,
          including termination due to Retirement, Death and/or Disability, any
          amount in the Savings Plan PPG Stock Account shall be transferred to
          the PPG Stock Account and any amount in the Savings Plan Interest
          Account shall be transferred to the Interest Account and shall be
          subject to any election filed by the Participant or the Beneficiary,
          in accordance with the provisions of Section 5.02, 5.03, 5.04 or 5.05.

                                  -Page 4.2-
<PAGE>
 
                       SECTION V - WITHDRAWAL PROVISIONS
                       ---------------------------------


5.01  Scheduled In-Service Withdrawals
      --------------------------------

      Except as otherwise provided in this Section V, payment of any amount
      designated by a Participant for in-service withdrawal, in accordance with
      provisions of either the IC Plan or MAP, whichever is applicable, shall be
      made to the Participant in a lump sum as of the first day of the
      quarter/year specified by the Participant.

5.02  Withdrawals at/after a Participant's Retirement Date
      ----------------------------------------------------

      (a) A Participant may elect a payment schedule applicable to his/her
          Account provided such election is filed with the Administrator:

          (1) Prior to the Participant's Retirement Date; and
 
          (2) In the year prior to the year the first payment is to be made
              and, in all cases, at least six months/ten days prior to the time
              the first payment is to be made.

      (b) Participants may elect:

          (1) One lump-sum payment; or

          (2) Quarterly, semiannual or annual installments - to be made over a
              period of years, up to a maximum period of 15 years; or

          (3) A combination of (1) and (2).

      (c) A Participant may delay the first payment for a period up to ten
          years following his/her Retirement Date; provided, however, that, in
          all cases, payments must begin no later than the year in which the
          Participant's 75th birthday occurs.

      (d) The payment schedule elected by the Participant shall apply to
          his/her entire Account.  Participants may designate the first day of
          the quarter for the commencement of the payment schedule on an annual,
          semiannual or quarterly basis.

                                  -Page 5.1-
<PAGE>
 
          Each installment payment shall be calculated by dividing the
          Participant's account balance by the remaining number of installments
          -(e.g.:  Ten annual installments shall be paid:  1st installment =
            ----                                                            
          1/10 of Account; 2nd installment = 1/9 of Account; 3rd installment =
          1/8 of Account, etc.).  If the installment payment is to be in the
          form of PPG Stock, any stock increment shall be rounded down to the
          nearest whole stock share.  Any remaining stock increments shall
          remain in the Account until subject to further payment.

      (e) In the event a Participant fails to file a payment schedule
          election with the Administrator prior to his/her Retirement Date,
          his/her Account shall be paid in one lump sum in the year following
          the year of such Retirement Date and shall be paid during the first
          quarter of such year which is at least six months/ten days following
          such Retirement Date.

      (f) Payment schedules pursuant to this Section 5.02 shall supersede
          any prior payment election(s) filed with the Administrator; and shall
          become irrevocable on the Participant's Retirement Date.

      (g) Any payment to an Insider pursuant to this Section 5.02 shall be
          paid in cash.

5.03  Withdrawals following Termination
      ---------------------------------

      (a) Except as provided in paragraph (e) below, a Participant may
          elect when to receive a lump-sum payment of his/her Account balance
          following his/her termination date provided such election is filed
          with the Administrator no later than 30 days after such termination
          date.

      (b) Participants must specify the quarter/year that the lump-sum
          payment is to be made; provided, however, that the Participant must
          elect to receive the payment no later than the last quarter of the
          year in which the fifth anniversary of his/her termination date
          occurs.  Payment must occur no earlier than the Plan Year after the
          Plan Year of the Participant's termination and as of the first day of
          the first quarter which is as least six (6) months and 10 days
          following the Participant's termination.

      (c) In the event a Participant fails to file a payment election with
          the Administrator within the time provided in paragraph (a) above,
          his/her Account shall be paid in one lump sum in the year following
          the year of such termination date and shall be paid during the first
          quarter in such year which is at least six months/ten days following
          such termination date.

                                  -Page 5.2-
<PAGE>
 
      (d) The rate of interest credited in the Interest Account following
          a Participant's termination date shall be at the Minimum Rate;
          provided, however, that the Committee shall have the authority to
          approve continuation of the Declared Rate, on a case-by-case basis.

      (e) In the event the Administrator determines, in his sole
          discretion, that a termination is "for cause," the Participant shall
          have no election with respect to payment of his/her Account.  Such
          Participant shall receive his/her entire Account balance as of the
          first day of the first quarter immediately following his/her
          termination date.

      (f) Payment schedules pursuant to this Section 5.03 shall supersede
          any prior payment election(s) filed with the Administrator.

      (g) Any payment to an Insider pursuant to this Section 5.03 shall be
          paid in cash.

5.04  Withdrawals in the event of Disability
      --------------------------------------

      (a) In the event a Participant becomes disabled, he/she may elect a
          payment schedule applicable to his/her Account provided such election
          is filed with the Administrator within 30 days of the Administrator's
          determination that such Participant has a Disability.

      (b) Participants may elect:

          (1)  One lump-sum payment; or

          (2)  Quarterly, semiannual or annual installments - to be made over a
               period of years, up to a maximum period of 15 years; or

          (3)  A combination of (1) and (2).

      (c) A Participant may delay the first payment for a period of up to
          ten years following the determination that he/she has a Disability;
          provided, however, that, in all cases, payments must begin no later
          than the year in which the Participant's 75th birthday occurs.
          Payments must commence no earlier than the Plan Year following the
          Plan Year in which the Participant is determined to have a Disability
          and as of the first day of the first quarter which is at least six (6)
          months and 10 days following the Administrator's determination that
          such Participant has a Disability.

                                  -Page 5.3-
<PAGE>
 
      (d) The payment schedule elected by the Participant shall apply to
          his/her entire Account. Participants may designate the first day of a
          quarter for the commencement of the payment schedule on an annual,
          semiannual or quarterly basis.

          Each installment payment shall be the applicable fraction of the
          Participant's Account balance -(e.g.:  Ten annual installments shall
                                          ----                                
          be paid:  1st installment = 1/10 of Account;  2nd installment = 1/9 of
          Account;  3rd installment = 1/8 of Account, etc.). .).  If the
          installment payment is to be in the form of PPG Stock, any stock
          increment shall be rounded down to the nearest whole stock share.  Any
          remaining stock increments shall remain in the Account until subject
          to further payment.

      (e) In the event a Participant fails to file a payment schedule
          election with the Administrator within the period specified in
          paragraph (a) above, his/her Account shall be paid in one lump sum in
          the year following the year he/she incurs a Disability, and shall be
          paid during the first quarter in such year which is at least six
          months/ten days following such Disability date.

      (f) Payment schedules pursuant to this Section 5.04 shall supersede
          any prior payment election(s) filed with the Administrator; and shall
          become irrevocable when filed in accordance with paragraph (a).

      (g) Any withdrawal by an Insider pursuant to this Section 5.04 shall
          be paid in cash.

5.05  Withdrawals following a Participant's death
      -------------------------------------------

      (a) Death prior to a Participant's Election Date
          --------------------------------------------

          In the event of a Participant's death prior to his/her Election
          Date, the Participant's entire Account shall be paid to the
          Participant's Beneficiary as soon as possible following the
          Participant's death.

      (b) Death on or after a Participant's Election Date
          -----------------------------------------------

          In the event of a Participant's death on or after his/her Election
          Date, the Participant's Beneficiary may elect to receive the remaining
          balance of the Participant's Account paid as a lump sum, or in
          accordance with the payment schedule filed by the Participant.

          Such election must be filed by the Beneficiary within 60-days
          following the Participant's death.  If no such election is made, the
          balance in the Participant's Account shall be paid in a lump sum.  Any
          lump sum payment made in accordance with this paragraph shall be paid

                                  -Page 5.4-
<PAGE>
 
          in the Plan Year after the Plan Year of the Participant's death and as
          of the first day of the first quarter which is at least six (6) months
          and 10 days following the Participant's death.

      (c) For purposes of this Section 5.05 "Election Date" means the date
          on which the Participant's election schedule becomes irrevocable in
          accordance with paragraph (f) of Section 5.02 or paragraph (f) of
          Section 5.04.

5.06  Withdrawals upon finding of Financial Hardship
      -----------------------------------------------

      (a) Upon a finding that the Participant, or Beneficiary if the
          Participant is deceased, has suffered a Financial Hardship, the
          Administrator may, in his sole discretion, permit the acceleration of
          a withdrawal under the Plan in an amount reasonably necessary to
          alleviate such Financial Hardship.

      (b) If the Administrator permits a withdrawal due to Financial
          Hardship, the Participant shall cease Salary deferrals, if any, and
          may not make any deferrals under the Plan, in the form of an Award or
          Salary, until one entire Plan Year has elapsed following the Plan Year
          in which such withdrawal is made.

      (c) The Participant shall be required to exhaust all other sources
          of funds, other than the Savings Plan, before the Administrator will
          consider an accelerated withdrawal in accordance with this Section
          5.06.

      (d) A withdrawal pursuant to this Section 5.06 shall nullify any in-
          service withdrawal election filed in accordance with Section 5.01.

      (e) Notwithstanding any other provision of this Section 5.06, a
          Participant who is an Insider or officer of PPG may withdraw funds
          only from the Interest Account.

      (f) Notwithstanding any other provision of this Section 5.06, funds
          in the Savings Plan Restoration Account are not subject to withdrawal
          due to Financial Hardship.

5.07  Unscheduled Withdrawals
      -----------------------

      (a) A Participant, or Beneficiary if the Participant is deceased,
          may request an Unscheduled Withdrawal of all or a portion of the
          Participant's Interest Account and/or PPG Stock Account.  All such
          payments shall be made in a single sum and shall be paid in cash.

                                  -Page 5.5-
<PAGE>
 
          An Insider or officer of PPG may request an Unscheduled Withdrawal
          only from available funds in the Interest Account.  A Participant, or
          Beneficiary, may request not more than one (1) Unscheduled Withdrawal
          in a Plan Year.

      (b) An Unscheduled Withdrawal must be a minimum of 25% of the
          Participant's Interest and PPG Stock Accounts.

      (c) An election to withdraw 75% or more of the Participant's
          Interest and Stock Accounts shall be deemed a request to withdraw the
          entire Account balance in these two accounts.

      (d) Prior to payment of any Unscheduled Withdrawal, a penalty of 10%
          of the Unscheduled Withdrawal amount shall be withheld and forfeited
          (or 5% if such Unscheduled Withdrawal is made during the Plan Year in
          which a Change in Control occurs, or the Plan Year immediately
          following such Change in Control) and the Participant shall cease
          Salary deferrals, if any, effective on the date the withdrawal is paid
          and may not make any deferrals under the Plan, in the form of an Award
          or Salary, until one entire Plan Year has elapsed following the Plan
          Year in which such Unscheduled Withdrawal is made.

      (e) A withdrawal pursuant to this Section 5.07 shall nullify any
          scheduled    in-service withdrawal election filed in accordance with
          Section 5.01.

5.08  Methods of Payment
      ------------------
 
      (a)  PPG Stock Account
           -----------------

           Except as provided in paragraph (a) of Section 5.07 and except for
           Insiders, any payment from the PPG Stock Account shall be paid in the
           form of PPG Stock.
 
           Notwithstanding any other provision of this Plan, any payments to
           any Insider shall be paid in the form of cash.

           At the time of the final scheduled payment, if payments were
           disbursed from the PPG Stock Account in shares of PPG Stock, any
           remaining fractional shares of PPG Stock shall be converted to and
           paid in cash.

      (b)  Interest Account
           ----------------

           Payments from the Interest Account shall be made in cash.

                                  -Page 5.6-
<PAGE>
 
      (c) All payments to Participants, or their Beneficiaries, shall be
          made on the first business day of a calendar quarter.

5.09  Small Account Provision
      -----------------------

      (a) Each scheduled withdrawal must equal a minimum of $2,000.

      (b) If the remaining balance in a Participant's Account is less than
          $2,000, the Administrator may, at his discretion, distribute the
          remainder of the Account.

                                  -Page 5.7-
<PAGE>
 
                       SECTION VI - SPECIFIC PROVISIONS
                       --------------------------------
                              RELATED TO BENEFITS
                              -------------------

6.01  Nonassignability
      ----------------

      (a) Except as provided in paragraph (b) below and in Section 6.02,
          no person shall have any power to encumber, sell, alienate, or
          otherwise dispose of his/her interest under the Plan prior to actual
          payment to and receipt thereof by such person; nor shall the
          Administrator recognize any assignment in derogation of the foregoing.
          No interest hereunder of any person shall be subject to attachment,
          execution, garnishment or any other legal, equitable, or other
          process.

      (b) Paragraph (a) above shall not apply to the extent that a
          Participant's interest under the Plan is alienated pursuant to a
          "Qualified Domestic Relations Order" ("QDRO") as defined in (S)414(p)
          of the Code.

          (1) The Administrator is authorized to adopt such procedural and
              substantive rules and to take such procedural and substantive
              actions as the Administrator may deem necessary or advisable to
              provide for the payment of amounts from the Plan to an Alternate
              Payee as provided in a QDRO.  Such rules and actions shall be
              consistent with the principal purposes of the Plan.

          (2) Under no circumstances may the Administrator accept an order as
              a QDRO following a Participant's death.

          (3) An Alternate Payee may not establish an account in the Plan.
              All amounts taken from a Participant's Account, as provided in a
              QDRO, must be distributed as soon as possible following the
              acceptance of an order as a QDRO.
 
          (4) In the sole discretion of the Administrator, a Participant's
              scheduled withdrawal or otherwise requested withdrawal may be
              delayed for a period, not to exceed six months, if the
              Administrator has notice that part or all of the Participant's
              Account may be subject to alienation pursuant to a QDRO.

                                  -Page 6.1-
<PAGE>
 
6.02  Beneficiary Designation
      -----------------------

      (a) The Participant shall have the right, at any time and from time
          to time, to designate any person(s) as Beneficiary.  The designation
          of a Beneficiary shall be effective on the date it is received by the
          Administrator, provided the Participant is alive on such date.

      (b) Each time a Participant submits a new Beneficiary designation
          form to the Administrator, such designation shall cancel all prior
          designations.

      (c) In the case of a Participant who does not have a valid
          Beneficiary designation on file at the time of his/her death, or in
          the case the designated Beneficiary predeceases the Participant, the
          entire balance in the Participant's Account shall be paid as soon as
          possible to the Participant's estate.

      (d) Any Beneficiary designated by the Participant under the IC Plan
          or MAP filed before January 1, 1996, shall remain in effect for this
          Plan, until a new Beneficiary designation form is filed in accordance
          with this Section 6.02, on or after January 1, 1996.

6.03  Limited Right to Assets of the Corporation
      ------------------------------------------

      The Benefits paid under the Plan shall be paid from the general
      funds of the Company, and the Participants and any Beneficiary shall be no
      more than unsecured general creditors of the Company with no special or
      prior right to any assets of the Company for payment of any obligations
      hereunder.

6.04  Protective Provisions
      ---------------------

      The Participant or Beneficiary shall cooperate with the
      Administrator by furnishing any and all information requested by the
      Administrator in order to facilitate the payment of benefits hereunder. If
      a Participant refuses to cooperate, he/she may be deemed ineligible to
      receive a distribution and/or ineligible to continue to actively
      participate in the Plan.

6.05  Withholding
      -----------

      The Participant or Beneficiary shall make appropriate arrangements
      with the Administrator for satisfaction of any federal, state or local
      income tax withholding requirements and Social Security or other employee
      tax requirements applicable to the payment of benefits under the Plan.  If
      no other arrangements are made, the Administrator may provide for such
      withholding and tax payments by any means he deems appropriate, in his
      sole discretion.

                                  -Page 6.2-
<PAGE>
 
6.06  Forfeiture Provision
      --------------------

      In the event the Company becomes aware that a Participant is engaged
      or employed as a business owner, employee, or consultant in any activity
      which is in competition with any line of business of the Corporation, or
      has engaged in any activity otherwise determined to be detrimental to the
      Company, the Administrative Subcommittee may:

      (a) Terminate such Participant's participation in the Plan, and
          distribute the entire amount in the Participant's Account in a lump
          sum;

      (b) Recalculate all earnings in the Account as though all
          investments had been invested in the Interest Account and accruing
          interest at the Minimum Rate;

      (c) Both (a) and (b) above; or

      (d) Apply any other diminution or forfeiture of benefits, which is
          specifically approved by the Administrative Subcommittee.

      For purposes of this Section 6.06, the Administrative Subcommittee
      shall consist of the Senior Vice President, Human Resources and
      Administration, the Director, Compensation and Benefits, and a
      representative of the Law Department, as appointed by the General Counsel
      of PPG. The Administrative Subcommittee shall report all of its activities
      to the Committee.

                                  -Page 6.3-
<PAGE>
 
                     SECTION VII - ADMINISTRATION & CLAIMS
                     -------------------------------------

7.01  Administration
      --------------

      (a) The Administrator shall administer the Plan and interpret,
          construe and apply its provisions in accordance with its terms.  The
          Administrator shall have the complete authority to:

          (1) Determine eligibility for benefits;

          (2) Construe the terms of the Plan; and

          (3) Control and manage the operation of the Plan.

      (b) The Administrator shall have the authority to establish rules
          for the administration and interpretation of the Plan and the
          transaction of its business.  The determination of the Administrator
          as to any disputed question shall be conclusive.  All actions,
          decisions and interpretations of the Administrator shall be performed
          in a uniform and nondiscriminatory manner.

      (c) The Administrator may employ counsel and other agents and may
          procure such clerical, accounting and other services as the
          Administrator may require in carrying out the provisions of the Plan.

      (d) The Administrator shall not receive any compensation from the
          Plan for his services.

      (e) The Corporation shall indemnify and save harmless the
          Administrator against all expenses and liabilities arising out of the
          Administrator's service as such, excepting only expenses and
          liabilities arising from the Administrator's own gross negligence or
          willful misconduct, as determined by the Committee.

7.02  Claims
      ------

      (a) Every person receiving or claiming benefits under the Plan shall
          be conclusively presumed to be mentally and physically competent and
          of age.  If the Administrator determines that such person is mentally
          or physically incompetent or is a minor, payment shall be made to the
          legally appointed guardian, conservator, or other person who has been
          appointed by a court of competent jurisdiction to care for the estate
          of such person, provided that proper proof of such appointment is
          furnished in a form and manner suitable to the Administrator. Any
          payment made under the provisions of the paragraph (a) shall be a

                                  -Page 7.1-
<PAGE>
 
          complete discharge of any liability therefor under the Plan. The
          Administrator shall not be required to see to the proper application
          of any such payment.

     (b)  Claims Procedure
          ----------------

          Claims for benefits by a Participant or Beneficiary shall be filed,
          in writing, with the Administrator.  If the Administrator denies the
          claim, in whole or in part, the Administrator shall furnish a written
          notice to the claimant setting forth a statement of the specific
          reasons for the denial of the claim, references to the specific
          provisions of the Plan on which the denial is based, a description of
          any additional material or information necessary to perfect the claim
          and an explanation of why such material or information is necessary,
          and an explanation of the review procedure.  Such notice shall be
          written in a way calculated to be understandable by the claimant.

          The written notice from the Administrator shall be furnished to the
          claimant within ninety (90) days following the date on which the claim
          was filed, except that if special circumstances require an extension
          of time, the Administrator shall notify the claimant of this need
          within such 90-day period.  Such notice shall inform the claimant the
          nature of the circumstances necessitating the need for additional time
          and the date by which the claimant will be furnished with the decision
          regarding the claim.  Such extension may provide for up to an
          additional 90 days.

     (c)  Review Procedure
          ----------------

          Within sixty (60) days of the date the Administrator denies a claim,
          in whole or in part, the claimant, or his/her authorized
          representative, may request that the decision be reviewed.  Such
          request shall be in writing, shall be filed with the Administrator,
          and shall contain the following information:

          (1) The date on which the denial was received by the claimant;

          (2) The date on which the claimant's request for review was filed
              with the Administrator;

          (3) The specific portions of the denial which the claimant requests
              the Administrator to review;

          (4) A statement setting forth the basis on which the claimant
              believes that a review of the decision is required;

                                  -Page 7.2-
<PAGE>
 
          (5) Any written material which the claimant desires the
              Administrator to take into consideration in reviewing the claim.

          The Administrator shall afford the claimant, or his/her authorized
          representative, an opportunity to review documents pertinent to the
          claim, and shall conduct a full and fair review of the claim and its
          denial.  The Administrator's decision on such review shall be
          furnished to the claimant in writing, and shall be written in a manner
          calculated to be understandable to the claimant.  Such decision shall
          include a statement of the specific reason(s) for the decision,
          including references to the specific provision(s) of the Plan relied
          upon.

          The written notice from the Administrator shall be furnished to the
          claimant within sixty (60) days following the date on which the
          request for review was received by the Administrator, except that if
          special circumstances require an extension of time, the Administrator
          shall notify the claimant of this need within such 60-day period.
          Such notice shall inform the claimant the nature of the circumstances
          necessitating the need for additional time and the date by which the
          claimant will be furnished with the decision regarding the claim.
          Such extension may provide for up to an additional 60 days.

                                  -Page 7.3-
<PAGE>
 
                   SECTION VIII - AMENDMENT AND TERMINATION
                   ----------------------------------------

8.01  Amendment of the Plan
      ---------------------

      Except as provided in Section X, the Committee may amend the Plan, in
      whole or in part, at any time; however, except as provided in Section X,
      no such amendment may decrease the amount of benefit currently accrued in
      Participants' Accounts.

      Except as provided in Section X, the Administrator shall have the
      authority to adopt amendments to the Plan, in whole or in part, at any
      time, necessary for the implementation and/or administration of the Plan,
      which will not result in a material change to the Plan. Moreover, except
      as provided in Section X, no such amendment by the Administrator may
      decrease the amount of benefit currently accrued in Participants'
      Accounts.
 
8.02  Termination of the Plan
      -----------------------

      Except as provided in Section X, the Committee may terminate the
      Plan at any time.   Upon a termination pursuant to this Section 8.02, the
      Committee has the sole discretion to determine distribution schedules for
      any or all Accounts, notwithstanding a Participant's previous distribution
      schedule.

8.03  Constructive Receipt
      --------------------

      In the event the Administrator determines that amounts deferred
      under the Plan have been constructively received by Participants and must
      be recognized as income for federal income tax purposes, distributions
      shall be made to Participants, as determined by the Administrator. The
      determination of the Administrator under this Section 8.03 shall be
      binding and conclusive.

                                  -Page 8.1-
<PAGE>
 
                          SECTION IX - MISCELLANEOUS
                          --------------------------

9.01  Successors of the Company
      -------------------------

      The rights and obligations of the Company under the Plan shall inure
      to the benefit of, and shall be binding upon, the successors and assigns
      of the Company.

9.02  ERISA Plan
      ----------

      The Plan is intended to be an unfunded plan maintained primarily to
      provide deferred compensation benefits for "a select group of management
      or highly compensated employees" within the meaning of Sections 201, 301
      and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title
      I of ERISA.

9.03  Trust
      -----

      The Company shall be responsible for the payment of all benefits under the
      Plan. Except as otherwise required by Section X, the Company, at its
      discretion, may establish one or more grantor trusts for the purpose of
      providing for payment of benefits under the Plan. Such trust(s) may be
      irrevocable, but the assets thereof shall be subject to the claims of the
      Company's creditors. Benefits paid to the Participant from any such trust
      shall be considered paid by the Company for purposes of meeting the
      obligations of the Company under the Plan.

9.04  Employment Not Guaranteed
      -------------------------

      Nothing contained in the Plan nor any action taken hereunder shall
      be construed as a contract of employment or as giving any Participant any
      right to continued employment with the Corporation.

9.05  Gender, Singular and Plural
      ---------------------------

      All pronouns and variations thereof shall be deemed to refer to the
      masculine, feminine, or neuter, as the identity of the person(s) requires.
      As the context may require, the singular may be read as the plural and the
      plural as the singular.

9.06  Headings
      --------

      The headings of the Sections, subsections and paragraphs of the Plan
      are for convenience only and shall not control or affect the meaning or
      construction of any of its provisions.

                                  -Page 9.1-
<PAGE>
 
9.07  Validity
      --------

      If any provision of the Plan is held invalid, void or unenforceable,
      the same shall not affect, in any respect, the validity of any other
      provision(s) of the Plan.

9.08  Waiver of Breach
      ----------------

      The waiver by the Company of any breach of any provision of the Plan
      by a Participant or Beneficiary shall not operate or be construed as a
      waiver of any subsequent breach.

9.09  Applicable Law
      --------------

      The Plan is intended to conform and be governed by ERISA.  In any
      case where ERISA does not apply, the Plan shall be governed and construed
      in accordance with the laws of the Commonwealth of Pennsylvania.

9.10  Notice
      ------

      Any notice required or permitted to be given to the Administrator
      under the Plan shall be sufficient if in writing and either hand-
      delivered, or sent by first class mail to the principal office of the
      Company at One PPG Place, Pittsburgh, PA 15272, directed to the attention
      of the Administrator. Such notice shall be deemed given as of the date of
      delivery.

                                  -Page 9.2-
<PAGE>
 
                         SECTION X - CHANGE IN CONTROL
                         -----------------------------

10.01  Payments to a Trustee
       ---------------------

       Upon, or in reasonable anticipation of, a Change in Control, as defined
       in Section 10.02 below, the Senior Vice President, Human Resources and
       Administration and the Senior Vice President, Finance, or either of them
       or their successor, shall cause an amount, as they deem appropriate, to
       be paid to a trustee on such terms as they shall deem appropriate
       (including such terms as are appropriate to cause such payment not to be
       a taxable event to Participants, if possible, and to cause such Awards to
       be distributable to Participants in accordance with elections filed with
       the Administrator). Such amount shall be paid in cash and shall be
       sufficient, at a minimum, to equal to all deferred amounts credited to
       the Interest Account, the Savings Plan Interest Account, the PPG Stock
       Account and the Savings Plan PPG Stock Account. Amounts in the PPG Stock
       Account and the Savings Plan PPG Stock Account, shall be converted to
       cash on the basis of the fair market value of PPG Stock on the date of
       the occurrence of the Change in Control, or, if higher, within 30 days of
       such date.

10.02  Definition:  Change in Control
       ------------------------------

       A "Change in Control" shall mean:

      (a) The acquisition by any individual, entity or group (within the
          meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
          of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
          ownership (within the meaning of Rule 13d-3 promulgated under the
          Exchange Act) of 20% or more of either (i) the then outstanding shares
          of common stock of the Company (the "Outstanding Company Common
          Stock") or (ii) the combined voting power of the then outstanding
          voting securities of the Company entitled to vote generally in the
          election of directors (the "Outstanding Company Voting Securities").

          For purposes of this subsection (a) the following acquisitions shall
          not constitute a Change in Control:

          Any acquisition directly from the Company;

          Any acquisition by the Company;

          Any acquisition by any employee benefit plan (or related trust)
          sponsored or maintained by the Company or any corporation controlled
          by the Company; or

                                  -Page 10.1-
<PAGE>
 
          Any acquisition by any corporation pursuant to a transaction which
          complies with clauses (i), (ii) and (iii) of paragraph (c) of this
          Section 10.02.

      (b) Individuals who, as of September 20, 1995, constitute the Board
          (the "Incumbent Board") cease for any reason to constitute at least a
          majority of the Board; provided, however, that any individual becoming
          a director subsequent to such date whose election, or nomination for
          election by the Company's shareholders, was approved by a vote of at
          least a majority of the directors then comprising the Incumbent Board
          shall be considered as though such individual were a member of the
          Incumbent Board, but excluding, for this purpose, any such individual
          whose initial assumption of office occurs as a result of an actual or
          threatened election contest with respect to the election or removal of
          directors or other actual or threatened solicitation of proxies or
          consents by or on behalf of a Person other than the Board; or

      (c) Approval by the shareholders of the Company of a reorganization,
          merger or consolidation or sale or other disposition of all or
          substantially all of the assets of the Company (a "Business
          Combination"), in each case, unless, following such Business
          Combination:

          (i)  All or substantially all of the individuals and entities who
               were the beneficial owners, respectively, of the Outstanding
               Company Common Stock and Outstanding Company Voting Securities
               immediately prior to such Business Combination beneficially own,
               directly or indirectly, more than 60% of, respectively, the then
               outstanding shares of common stock and the combined voting power
               of the then outstanding voting securities entitled to vote
               generally in the election of directors, as the case may be, of
               the corporation resulting from such Business Combination
               (including, without limitation, a corporation which as a result
               of such transaction owns the Company or all or
               substantially all of the Company's assets either directly or
               through one or more subsidiaries) in substantially the same
               proportions as their ownership, immediately prior to such
               Business Combination of the Outstanding Company Common Stock and
               Outstanding Company Voting Securities, as the case may be;


          (ii) No Person (excluding any employee benefit plan (or related
               trust) of the Company or such corporation resulting from such
               Business Combination) beneficially owns, directly or indirectly,
               20% or more of, respectively, the then outstanding shares of
               common stock of the corporation resulting from such Business

                                  -Page 10.2-
<PAGE>
 
               Combination or the combined voting power of the then outstanding
               voting securities of such corporation except to the extent that
               such ownership existed prior to the Business Combination; and

         (iii) At least a majority of the members of the board of directors
               of the corporation resulting from such Business Combination were
               members of the Incumbent Board at the time of the execution of
               the initial agreement, or of the action of the Board, providing
               for such Business Combination; or

      (d) Approval by the shareholders of the Company of a complete
          liquidation or dissolution of the Company; or

      (e) A majority of the Board otherwise determines that a Change in
          Control shall have occurred.

                                  -Page 10.3-
