
<PAGE>
                                                                   Exhibit 10.4 

  
                             PPG INDUSTRIES, INC.



                            INCENTIVE COMPENSATION

                                      AND

                             DEFERRED INCOME PLAN

                                      FOR

                                 KEY EMPLOYEES


                                                   Effective:  February 15, 1995
                                               As Amended Thru:  January 1, 1996
<PAGE>
 
                               Table of Contents
                               -----------------


Section      I                                  Definitions
                                         
Section     II                                  Awards
                                         
Section    III                                  Capital Enhancement
                                                   Account
                                         
Section    IV                                   Withdrawal Provisions
                                         
Section     V                                   Specific Provisions Related
                                                   to Benefits
                                         
Section    VI                                   Administration & Claims
                                         
Section   VII                                   Amendment & Termination
                                         
Section  VIII                                   Miscellaneous
                                         
Section    IX                                   Change in Control




                                       i
<PAGE>
 
                            SECTION I - DEFINITIONS
                            -----------------------

1.01  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.

1.02  Award means a grant of incentive compensation.

1.03  Beneficiary means the person or persons designated by a Participant to
      receive benefits hereunder following the Participant's death, in
      accordance with section 5.02; provided, however, in the event a
      Participant fails to designate a Beneficiary in accordance with Section
      5.02, his/her Beneficiary shall be the Beneficiary designated under the
      Deferred Compensation Plan. For purposes of this Section 1.05, "person or
      persons" is limited to an individual, a Trustee or a Participant's estate.

1.04  Board means the Board of Directors of PPG Industries, Inc.

1.05  Capital Enhancement Account or Account means a bookkeeping account or
      accounts maintained for a Participant who, for such period or periods as
      the Committee may establish or permit, elects to defer all or any part of
      an Award in the form of cash or Salary, as provided in Section 3.01.
 
1.06  CEA-1 means all funds contributed to the Capital Enhancement Account
      during the period August 1, 1985 thru July 31, 1986, and earnings thereon.

1.07  CEA-2 means all funds contributed to the Capital Enhancement Account
      during the period November 1, 1987 thru December 31, 1988, and earnings
      thereon.

1.08  CEBC means the Compensation and Employee Benefits Committee of the
      Company.

1.09  Code means the Internal Revenue Code of 1986, as amended.

1.10  Committee means the Officers-Directors Compensation Committee, as
      further defined in Section 6.01, (or any successor) of the Board.

1.09  Company or PPG means PPG Industries, Inc.


                                  -Page 1.1-
<PAGE>
 
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.





                                  -Page 1.2-
<PAGE>
 
1.11  Corporation means PPG and any Subsidiary Corporation designated by
      the Committee 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, elects to participate in the Plan.

1.12  Deferred Compensation Plan means the PPG Industries, Inc. Deferred
      Compensation Plan.

1.13  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
      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.

1.14  Employee means any full-time, or permanent part-time 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  Minimum Rate - means the average of the daily closing yields during
      November of 10-year Treasury Notes.

1.19  Participant means an Employee who is approved by the CEBC, or the
      Committee, as appropriate, to participate.  Participants shall be limited
      to key Employees of the Corporation who contribute the most to the growth
      and profitability of the Company.



                                  -Page 1.3-
<PAGE>
 
1.20  Plan Year means the calendar year.









                                  -Page 1.4-
<PAGE>
 
1.21  Pre-tax Earnings means the consolidated earnings of the Company and its
      consolidated Subsidiaries and equity affiliates before the deduction of
      income taxes, minority interest and the amount to be set aside in the
      Reserve as provided in Section 2.01. The Reserve shall not be adjusted for
      any restatements of prior years' earnings.

1.22  PPG Stock means Common Stock of the Company.

1.23  Reserve means the aggregate of the amounts available for the making
      of Awards as provided in Section 2.01.

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

1.25  Salary means the regular base salary to be paid to a Participant by
      the Corporation.

1.26  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.

1.27  Terminated Participant means a Participant who maintains an Account
      in the Plan following his/her termination of employment from the
      Corporation.


                                  -Page 1.5-
<PAGE>
 
                              SECTION II - AWARDS
                              -------------------

2.01  The Reserve
      -----------

     (a)  For purposes of establishing a Reserve, an amount shall be set aside
          each year to be calculated as follows:

          (1)  Multiply consolidated shareholders' equity as of the beginning of
               the year by 12%;

          (2)  Subtract the result of (1) above from Pre-tax Earnings for the
               year;

          (3)  Multiply the result of (2) above by 5%.

     (b)  In no event, may the amount set aside exceed 20% of the cash dividends
          paid on PPG Stock during the year.

     (c)  For purposes of subparagraph (a)(1) above, "shareholders' equity"
          shall be exclusive of the aggregate par or stated value of preferred
          stock outstanding, if any, and of any unpaid cumulative dividends
          thereon.

     (d)  The Reserve shall be reduced by the amount of all Awards, including
          any deferred amounts, first from the amount, if any, set aside for the
          year to which the Awards relate, and then from the amounts which have
          been in the Reserve for the longest period of time.

     (e)  Unawarded amounts set aside prior to the fourth preceding year shall
          be automatically released from the Reserve and returned to income.

     (f)  The Reserve shall not be reduced by interest or dividend equivalents
          on deferred amounts, dividends paid on restricted shares, negative
          amounts resulting from the calculation of the amount to be set aside
          each year, or the expenses of administering the Plan.

     (g)  Not later than the last day of the year to which the Awards relate,
          the Committee may make an allocation (on the basis of estimates of the
          amount to be set aside in the Reserve for such year and unawarded
          amounts in the Reserve) to a group of Employees without determining
          the amounts to be allocated to 




                                  -Page 2.1-
<PAGE>
 
          individuals in such group and such allocation shall create a legal
          obligation upon the Company to pay such amount to the individuals
          comprising such group.









                                  -Page 2.2-
<PAGE>
 
2.02  Awards
      ------

     (a)  The Committee shall determine or approve:

          (1)  The Participants;

          (2)  The maximum amount of all Awards to all Participants; and

          (3)  The amount and the form of the Award to each Participant.

     (b)  The Committee may delegate to another person(s) the authority to
          determine:

          (1)  The Participants, other than Participants who are subject to
               Section 16 of the Securities Exchange Act of 1934; and

          (2)  The amount of Awards to such Participants.
 
     (c)  Awards may be made only from the Reserve; provided, however, that the
          Committee is under no obligation to make Awards; or, if Awards are
          made, to award the total amount set aside in the Reserve each year.

     (d)  Awards may be made in the form of cash, shares of PPG Stock, or a
          combination of both.

2.03  Payment of Awards
      -----------------

      (a) Awards to Participants will be made in the form of cash
          ("cash component"), shares of PPG Stock ("stock component"), or a
          combination of both, as the Committee may determine.

      (b) If all or any part of an Award is made in the form of shares
          of PPG Stock, the number of such shares shall be determined by
          applying the Conversion Formula.  Fractional shares shall be paid in
          cash.

          If the number of such shares is specified, the Reserve shall
          be reduced on account of such shares by an amount determined by
          applying the Conversion Formula in reverse.



                                  -Page 2.3-
<PAGE>
 
          As to shares of PPG Stock which constitute all or any part
          of an Award, the Committee may impose such restrictions concerning
          their transferability and/or their forfeitability as are provided for
          in Section 5.05.

      (c) Payment of Awards shall be made to Participants not later
          than March 15 of the year following the end of the year to which the
          Awards relate.

2.04  Deferral of Awards
      ------------------

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

                                     Minimum Deferral   Maximum Deferral
                                     ----------------   ----------------
          Cash component                     10%              100%
          Stock component                   100%              100%

      (b) Except as otherwise provided in paragraph (c) below, all
          elections pursuant to this Section 2.04 must be filed with the
          Administrator no later than the last day of the Plan Year prior to the
          Plan Year to which an Award relates; and such election shall become
          irrevocable as of the first day of the Plan Year to which it relates.

      (c) Employees who are approved to participate during a Plan Year,
          may make an election in accordance with this Section 2.04 within the
          30-day period following notice to the Participant that he/she has been
          approved.

      (d) Amounts deferred in accordance with this section 2.04 shall
          be credited to the Participant's account in the Deferred Compensation
          Plan and shall be subject to the provisions of the Deferred
          Compensation Plan.

      (e) Amounts deferred in accordance with this Plan prior to
          January 1, 1996, which have not been withdrawn by January 1, 1996,
          shall be transferred to the Deferred Compensation Plan, in accordance
          with the provisions of such Plan.

2.04.01  Investment Elections
         --------------------

                                  -Page 2.4-
<PAGE>
 
         (a) At the time an election is made to defer all or a portion of the
             cash component of a Award, the Participant must also designate
             whether such amount is to be credited to the Interest Account, the
             PPG Stock Account, or a combination of both in the Deferred
             Compensation Plan.

         (b) At the time an election is made to defer the stock component of an
             Award, such deferral shall be credited to the PPG Stock Account in
             the Deferred Compensation Plan.

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

2.04.02  In-Service Withdrawal Elections
         -------------------------------

         (a) Subject to the provisions of this Section 2.04.02, at the time an
             election is made to defer all or a portion of the cash component of
             an Award, a Participant may designate all or a portion of the cash
             component of such deferred amount, not including any earnings
             thereon, to be paid during a specified quarter/year.

         (b) Withdrawal elections made pursuant to this Section may not specify
             a year which is any sooner than the fourth Plan Year after the Plan
             Year in which the deferred amount is credited to the Participant's
             Account.

         (c) Any amount subject to withdrawal pursuant to this
             Section, must be invested in the Interest Account in the
             Deferred Compensation Plan.

         (d) Any election made in accordance with this
             subsection 2.04.02 shall be irrevocable.


                                  -Page 2.5-
<PAGE>
 
                   SECTION III - CAPITAL ENHANCEMENT ACCOUNT
                   -----------------------------------------

3.01  Deferrals of Salary to Capital Enhancement Account
      --------------------------------------------------

      (a) Subject to any minimum/maximum limits established by the
          Committee, each prospective Participant, or such prospective
          Participant as the Committee deems appropriate, may be given an
          opportunity to make an election to defer payment of all or any part of
          his/her Salary and/or Award, to be credited to the Capital Enhancement
          Account.
       
      (b) (1) Subject to subparagraph (2) below, interest equivalents shall be
              credited on amounts deferred to the Capital Enhancement Account
              as follows:
 
 
                    CEA-1                              CEA-2
                    -----                              -----
 
                 Minimum Rate                         0% - 1987
                   plus 5%                           10% - 1988
                                                     13% - 1989
                                                     15% - 1990
                                                     17% - 1991 and
                                                       thereafter

          (2) Except as otherwise provided in subparagraph (3)
              below, when a Participant's employment terminates, including
              retirement, prior to age 62, interest equivalents shall be
              recalculated at the Minimum Rate for both CEA-1 and CEA-2, for
              the total period such amounts were invested in the Capital
              Enhancement Account, unless the Committee, in its sole
              discretion, specifically determines such Participant is entitled
              to the interest rate described in subparagraph (1) above.

          (3) In the case of a Participant whose termination of
              employment prior to age 62 is the result of a divestiture, such
              Participant shall be entitled to the interest rate described in
              subparagraph (1) above.

      (c) Designations to credit a deferred amount to the Capital
          Enhancement Account shall be made in such terms on such bases as the
          Administrator may prescribe.

                                  -Page 3.1-
<PAGE>
 
3.02  Payment of Deferrals from the Capital Enhancement Account
      ---------------------------------------------------------

      Payments from the Capital Enhancement Account shall be made in
           cash.

3.03  Pre-Retirement Death Benefit
      ----------------------------

      If a Participant dies prior to retirement, the Company shall pay
      a pre-retirement death benefit to such Participant's Beneficiary equal to:

      (a) For a Participant who had a balance in his/her CEA-2 account
          at the time of death, the balance in the CEA-2 account; and

      (b) For Participants who had a balance in his/her CEA-1 account
          at the time of death, and who provided evidence of insurability at the
          time of enrollment in CEA-1, the pre-retirement death benefit shall be
          equal the greater of:

          (1)  The CEA-1 account balance; or

          (2)  The original amount deferred into the CEA-1 account
               (not including interest equivalents credited thereon) times the
               applicable factor in the following TABLE:
 
                                     TABLE
                                     -----
 
                Attained Age on
                August 1, 1985                   Factor
                ---------------                  ------
 
                44 and under                       15
                45 to 54                            9
                55 and older                        8



                                  -Page 3.2-
<PAGE>
 
                      SECTION IV - WITHDRAWAL PROVISIONS
                      ----------------------------------

4.01  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 up to a maximum of ten years.

      (c) A Participant may delay the first payment; provided, however,
          that, in all cases, payments must be completed no later than the month
          preceding the month in which the Participant's 75th birthday occurs.

      (d) The payment schedule elected by the Participant shall apply
          to his/her entire Account.

          Annual installments shall be each year on the first of the
          month selected by the Participant as the month for such payments to
          commence.

          Semiannual installments shall be paid twice each year with
          the first yearly payment paid the first of the month selected by the
          Participant as the month for such payments to commence, and the second
          yearly payment paid the first of the month which is six month later.

          Quarterly installments shall be paid four times each year
          with the first yearly payment paid the first of the month selected by
          the Participant as the month for such payments to commence,


                                  -Page 4.1-
<PAGE>
 
          and the second, third and fourth payments following with three month
          between each such payment.
         






                                  -Page 4.2-
<PAGE>
 
          Each installment payment shall be calculated by dividing the
          Participant's account balance, increased by the projected rate of
          interest to be earned during the period of the payment schedule, by
          the remaining number of installments -(e.g.:  Ten annual installments
                                                 ----                          
          shall be paid:  1st installment = 1/10 of Account as adjusted; 2nd
          installment = 1/9; 3rd installment = 1/8, etc.).

      (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
          month in such year which is at least six months/ten days following
          such Retirement Date.

4.02  Withdrawals following Termination
      ---------------------------------

      Participants shall receive their entire Account balance, paid in
      a lump sum as soon as possible following their termination of employment.

4.03  Withdrawals in the event of Disability
      --------------------------------------

      (a) In the event a Participant becomes disabled, he/she shall
          receive payments in accordance with the election filed with the
          Administrator at the time the deferral election was filed.

      (b) As provided in such election, the Participant shall receive:

          (1)  One lump-sum payment; or

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

      (c) The payment schedule elected by the Participant shall apply
          to his/her entire Account.

          Annual installments shall be each year on the first of the
          month selected by the Participant as the month for such payments to
          commence.

          Semiannual installments shall be paid twice each year with
          the first yearly payment paid the first of the month selected by the
          Participant as the month for such payments to commence, and the
          second yearly payment paid the first of the month which is six month
          later.


                                  -Page 4.3-
<PAGE>
 
          Quarterly installments shall be paid four times each year
          with the first yearly payment paid the first of the month selected by
          the Participant as the month for such payments to commence, and the
          second, third and fourth payments following with three months between
          each such payment.

          Each installment payment shall be calculated by dividing the
          Participant's account balance, increased by the projected rate of
          interest to be earned during the period of the payment schedule, by
          the remaining number of installments -(e.g.:  Ten annual installments
                                                 ----                          
          shall be paid:  1st installment = 1/10 of Account as adjusted; 2nd
          installment = 1/9; 3rd installment = 1/8, etc.).

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

      (a) Death prior to the Participant's Payment Election
          -------------------------------------------------

          In the event of a Participant's death prior to the time
          he/she files an irrevocable payment election in accordance with
          section 4.01 or 4.03, 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 Payment Election
          --------------------------------------------------

          In the event of a Participant's death on or after the time
          he/she files an irrevocable payment election in accordance with
          section 4.01 or 4.03, the Participant's Beneficiary shall receive the
          remaining balance of the Participant's Account in accordance with the
          payment schedule filed by the Participant.

4.05  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) The Participant shall be required to exhaust all our sources
          of funds, other than the PPG Savings Plan, before the Administrator
          will consider an accelerated withdrawal in accordance with this
          section 4.05.


                                  -Page 4.4-
<PAGE>
 
4.06  Small Account Provision
      -----------------------

      (a) Each scheduled withdrawal must equal a minimum of $5,000, or
          100 shares of PPG Stock.

      (b) If the remaining balance in a Participant's Account is less
          than $5,000, or 100 shares of PPG Stock, the Administrator may, at his
          discretion, distribute the remainder of the Account.




                                  -Page 4.5-
<PAGE>
 
                         SECTION V SPECIFIC PROVISIONS
                         -----------------------------
                              RELATED TO BENEFITS
                              -------------------

5.01  Nonassignability
      ----------------

      (a) Except as provided in paragraph (b) below and in section
          5.02, 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 5.1-
<PAGE>
 
5.02  Beneficiary Designation
      -----------------------

      (a) The Participant shall have the right, at any 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 Capital Enhancement Account shall
          be paid as soon as possible to the Participant's estate.

5.03  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.

5.04  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.

5.05  Restricted Shares of PPG Stock
      ------------------------------

      (a) The Committee may, on such terms as it deems appropriate,
          restrict the transferability of all or any number of such shares as
          constitute all or any part of an Award to installments over periods
          not exceeding five years and/or provide for the forfeitability of all
          or any number of such shares over a period not exceeding five years.
          During the period of restriction as to transferability and/or
          provision as to forfeitability, Participants 

                                  -Page 5.2-
<PAGE>
 
          shall receive dividends and have voting and other shareholders'
          rights as to such shares.





                                  -Page 5.3-
<PAGE>
 
      (b) No restriction on the transferability and/or provisions as to
          the forfeitability of any shares of PPG Stock may be imposed so as to
          obtain beyond the normal retirement date of the Participant awarded
          such shares.  Further, all restrictions on the transferability and/or
          provisions as to the forfeitability of any shares of PPG Stock shall
          be such as to terminate in the event of death, total and permanent
          disability or early retirement, upon the occurrence of a Change in
          Control, or upon the occurrence of the commencement of a tender offer
          or an exchange offer.

      (c) Any restrictions on the transferability and/or provisions as
          to the forfeitability of any shares of PPG Stock shall be reflected in
          a legend imprinted on the certificate(s) representing such shares.

5.06  The shares of PPG Stock delivered under the Plan may be either authorized
      but unissued shares or issued shares acquired by the Company and held in
      its Treasury.

5.07  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.

5.08  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 accruing interest at the Minimum Rate for the
          total period such amounts were credited in the Account;


                                  -Page 5.4-
<PAGE>
 
      (c) Apply 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 5.08, 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 5.5-
<PAGE>
 
                      SECTION VI ADMINISTRATION & CLAIMS
                      ----------------------------------

6.01  Administration
      --------------

      (a) The Committee shall be comprised of at least three members of
          the Board, none of whom shall, at the time of exercising discretion in
          administering the Plan, be eligible, or have been eligible at any time
          within one year, for selection as a person, to whom stock may be
          allocated or to whom stock options or stock appreciation rights may be
          granted pursuant to the Plan or any other plan of the Company or any
          of its affiliates entitling Participants therein to acquire stock,
          stock options or stock appreciation rights of the Company or any of
          its affiliates.

          The Committee, for purposes of administering the Plan, shall
          meet and act as necessary to determine or approve the maximum amount
          of Awards to all Participants, the form of Awards to Participants and
          the amount of Awards to Participants subject to Section 16 of the
          Securities Exchange Act of 1934 and such other Participants as the
          Committee deems appropriate.

      (b) 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.

      (c) 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.

      (d) 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.

                                  -Page 6.1-
<PAGE>
 
      (e) The Administrator shall not receive any compensation from the
          Plan for his services.

      (f) 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.

6.02  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 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


                                  -Page 6.2-
<PAGE>
 
          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.



                                  -Page 6.3-
<PAGE>
 
      (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;

          (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 6.4-
<PAGE>
 
                     SECTION VII AMENDMENT AND TERMINATION
                     -------------------------------------

7.01  Amendment of the Plan
      ---------------------

      (a) Except as provided in paragraph (b) below, the Board or the
          Committee may amend the Plan, in whole or in part, at any time.

      (b) The Plan shall not be amended, without shareholder approval,
          so as to increase the percentage of Pre-tax Earnings to be set aside
          in the Reserve each year or extend the period of time after which
          unawarded amounts are automatically released from the Reserve and
          returned to income.

7.02  Termination of the Plan
      -----------------------

      The Board or the Committee may terminate the Plan at any time.
      Upon a termination pursuant to this Section 7.02, the Committee has the
      sole discretion to determine distribution schedules for any or all
      Accounts, notwithstanding a Participant's previous distribution schedule.

7.03  Company Action.
      ---------------

      The Company's power to amend or terminate the Plan shall be
      exercisable by the Board or by the Committee, or by any individual
      authorized by the Board to exercise such powers.

7.04  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 7.04 shall be
      binding and conclusive.


                                  -Page 7.1-
<PAGE>
 
                          SECTION VIII MISCELLANEOUS
                          --------------------------

8.01  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.

8.02  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.

8.03  Trust
      -----

      The Company shall be responsible for the payment of all benefits under the
      Plan. At its discretion, the Company 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.

8.04  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.

8.05  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.

8.06  Headings
      --------


                                  -Page 8.1-
<PAGE>
 
      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.

8.07  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.

8.08  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.

8.09  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.

8.10  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 8.2-
<PAGE>
 
                         SECTION IX CHANGE IN CONTROL
                         ----------------------------

9.01  Change in Control
      -----------------

      (a) Upon, or in reasonable anticipation of, a Change in Control
          (as defined in section 9.02):

          (1)  Awards in the form of cash shall be made for the
               year during which the Change in Control occurs, and then paid
               immediately to a trustee on such terms as the Senior Vice
               President, Human Resources and Administration and the Senior Vice
               President, Finance, or either of them, or their successors, shall
               deem appropriate (including such terms as are appropriate to
               cause such payment, if possible, not to be a taxable event to
               Participants) in order to cause the Awards so paid to be paid
               either not later than the end of the first calendar quarter
               following the end of the year to which the Awards relate or on a
               deferred basis in accordance with the elections of Participants
               then in effect as to the timing of the receipt of Awards for such
               year.

          (2)  Participants who are eligible to receive an Award
               for the Plan Year in which a Change in Control occurs shall be
               eligible to receive an Award for the Plan Year following the
               Change in Control.

          (3)  The amount of the Award payable to each Participant
               shall be:

               one-half of the regular Award if the Change in Control
               occurs during the first six months of the year; or

               the full regular Award, if the Change in Control occurs
               during the second six months of the year

               either calculated at a rating of 12 for all performance
               categories.

          (4)  All deferred amounts credited to the Capital
               Enhancement Account shall be paid immediately to a trustee on
               such terms as the Senior Vice President, Human Resources and
               Administration and the Senior Vice President, Finance, or either
               of them, or their 

                                  -Page 9.1-
<PAGE>
 
               successors shall deem appropriate (including
               such terms as are appropriate to cause such payment, if possible,
               not to be a taxable event to Participants) in order to give
               effect to the elections of Participants with respect to the
               timing of the receipt of such deferred amounts.

      (b) By way of example of the operation of paragraph (a) above:

          If the Change in Control occurred on August 1 of a Plan
          Year, a Participant in a position with 1000 total points and an
          incentive award value of $1.75 per point would receive an Award of no
          less than $21,000 calculated as follows:  1000 x 1.75 x 12 = $21,000.

          If the Change in Control occurred on April 1 of a Plan Year,
          such Participant would receive $10,500.

          If the Plan were to be continued to the end of the year, and
          performance exceeded the 12 rating, a higher Award would be paid.

      (c) Notwithstanding any other provision of this section, if an
          Award ultimately made for such Plan Year is greater than the Award
          made pursuant to this section, the Participant shall be entitled to
          the difference between such Awards.

          If the Participant has elected his/her Award to be deferred,
          payment of such difference shall be made to a trustee in accordance
          with the provisions set forth in subparagraph (a)(4) above.

      (d) For purposes of this section, the fair market value of a
          share of PPG Stock on any date shall be the closing sale price as
          reported for such date (or, if no price is reported for such date, for
          the next preceding date for which a price is reported) on the New York
          Stock Exchange-Composite Tape.

9.02  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 


                                  -Page 9.2-
<PAGE>
 
          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").




                                  -Page 9.3-
<PAGE>
 
          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

          Any acquisition by any corporation pursuant to a transaction
          which complies with clauses (i), (ii) and (iii) of paragraph (c) of
          this section 9.02.

      (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



                                  -Page 9.4-
<PAGE>
 
               entitled to vote generally in the election of directors, as the
               case may be, of the corporation resulting from such Business
               Combination (including, without limitation, a corporation which
               as a result of such transaction owns the Company or all or
               substantially all of the Company's assets either directly or
               through one or more subsidiaries) in substantially the same
               proportions as their ownership, immediately prior to such
               Business Combination of the Outstanding Company Common Stock and
               Outstanding Company Voting Securities, as the case may be;

          (ii) No Person (excluding any employee benefit plan (or
               related trust) of the Company or such corporation resulting from
               such Business Combination) beneficially owns, directly or
               indirectly, 20% or more of, respectively, the then outstanding
               shares of common stock of the corporation resulting from such
               Business Combination or the combined voting power of the then
               outstanding voting securities of such corporation 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 9.5-
