Rule 424(b)(5)
Registration No. 33-04983
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 5, 1986
$100,000,000
PPG Industries, Inc.
[LOGO OF PPG INDUSTRIES, INC.]
6 7/8% Notes Due 2005
Interest payable February 1 and August 1 Due August 1, 2005
------------
The Notes are not redeemable prior to maturity and are not subject to a sinking
fund.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Company(1)(2)
----------- ------------- -------------
Per Note................................... 99.892% 0.650% 99.242%
Total...................................... $99,892,000 $650,000 $99,242,000
(1) Plus accrued interest, if any, from August 3, 1995.
(2) Before deduction of expenses payable by the Company estimated to be
$150,000.
------------
The Notes are offered by the several Underwriters when, as and if issued by
the Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Notes will be made on or about August 3, 1995.
CS First Boston
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
The date of this Prospectus Supplement is July 31, 1995.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The net proceeds from the offering will be available for general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
Company for the periods indicated.
YEAR ENDED DECEMBER 31,
------------------------
SIX
MONTHS
ENDED
JUNE 30,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- --------
Ratio of earnings to fixed
charges..................... 5.06 2.78 4.09 5.01 8.43 13.25
--------
For the purpose of this ratio, "earnings" consist of consolidated earnings
before income taxes, plus fixed charges exclusive of capitalized interest and
less undistributed income of unconsolidated affiliates carried on the equity
basis. Earnings for the periods indicated were affected by (income) charges
from business divestitures and realignments as follows, in millions: $(0.3),
$84.3, $10.4, $126.4 and $85.0, respectively, for the years ended December 31,
1990, 1991, 1992, 1993 and 1994 and $0.0 for the six months ended June 30,
1995. "Fixed charges" consist of interest, whether expensed or capitalized
(including amortization of debt discount), and that portion of rentals which is
representative of interest. The ratios set forth above are not directly
comparable to those set forth in the accompanying Prospectus under "Summary of
Financial Information".
DESCRIPTION OF THE NOTES
The following description of the terms of the 6 7/8% Notes Due 2005 (the
"Notes") offered hereby supplements and modifies the description of the general
terms and provisions of the Debt Securities set forth in the accompanying
Prospectus, to which reference is hereby made.
GENERAL
The Notes will be unsecured obligations of the Company and will be issued
under an Indenture dated as of August 1, 1982 as supplemented (such Indenture
as so supplemented is hereinafter called the "Indenture"), between the Company
and Harris Trust and Savings Bank, as Trustee (the "Trustee"). The Notes will
be limited to $100,000,000 aggregate principal amount and will mature on August
1, 2005. The Notes will bear interest at the rate of 6 7/8% per annum from
August 3, 1995 or from the most recent interest payment date to which interest
has been paid or provided for, payable semiannually on February 1 and August 1
of each year, commencing on February 1, 1996, to the persons in whose names the
Notes are registered at the close of business on the January 15 or July 15, as
the case may be, next preceding such interest payment date. The Notes are to be
issued only in registered form without coupons in denominations of $1,000 and
integral multiples thereof. The Notes are not redeemable prior to maturity and
are not subject to a sinking fund.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered
securities (collectively, the "Global Notes") which will be deposited with, or
on behalf of, The Depository Trust Company, New York, New York (the
"Depositary") and registered in the name of the Depositary's nominee. Except as
set forth below, the Global Notes may be transferred, in whole and not in part,
only to the Depositary or another nominee of the Depositary.
S-2
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold securities
of institutions that have accounts with the Depositary or its nominee
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic book-
entry changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own the Depositary. Access to the
Depositary's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through, or maintain a
custodial relationship with, a participant, either directly or indirectly. The
Depositary agrees with and represents to its participants that it will
administer its book-entry system in accordance with its rules and by-laws and
requirements of law.
Upon the issuance of the Global Note, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Notes represented by such Global Note to the accounts of participants.
The accounts to be credited shall be designated by the Underwriters. Ownership
of beneficial interests in the Global Note will be limited to participants or
persons that may hold interests through participants. Ownership of interests in
the Global Note will be shown on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) and such participants (with respect to the
owners of beneficial interests in the Global Note). The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and laws may impair
the ability to transfer beneficial interests in the Global Note.
So long as the Depositary, or its nominee, is the registered holder and owner
of the Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of the related Notes for all purposes of
such Notes and for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in the Global Note will not be entitled to have
the Notes represented by such Global Note registered in their names, will not
receive or be entitled to receive physical delivery of certificated Notes in
definitive form and will not be considered to be the owners or holders of any
Notes under the Indenture or the Global Note. Accordingly, each person owning a
beneficial interest in the Global Note must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant through which such person owns its interests, to exercise any
rights of a holder of Notes under the Indenture or the Global Note. The Company
understands that under existing industry practice, in the event the Company
requests any action of holders of Notes or an owner of a beneficial interest in
the Global Note desires to take any action that the Depositary, as the holder
of the Global Note, is entitled to take, the Depositary would authorize the
participants to take such action, and the participants would authorize
beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payment of principal of and interest on Notes represented by the Global Note
registered in the name of or held by the Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
and holder of the Global Note.
The Company expects that the Depositary, upon receipt of any payment of
principal or interest in respect of the Global Note, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Note as
shown on the records of the Depositary. The Company also expects that payments
by participants to owners of beneficial interests in the Global Note held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such participants. Neither the Company nor the Trustee will
have any responsibility or liability for any aspect of the records relating to,
or payments made on account of,
S-3
beneficial ownership interests in the Global Note for any Notes or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between the
Depositary and its participants or the relationship between such participants
and the owners of beneficial interests in the Global Note owning through such
participants.
Unless and until they are exchanged in whole or in part for certificated
Notes in definitive form, the Global Notes may not be transferred except as a
whole by the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
The Notes represented by the Global Note may be exchanged for certificated
Notes in definitive form of like tenor as such Notes in denominations of $1,000
and in any greater amount that is an integral multiple thereof if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company in its discretion at any time determines not to have
all of the Notes represented by the Global Note and notifies the Trustee
thereof, or (iii) an Event of Default has occurred and is continuing with
respect to the Notes. Any Note that is exchanged pursuant to the preceding
sentence will be exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depositary shall direct.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
and a Terms Agreement dated July 31, 1995 (together, the "Underwriting
Agreement"), the Company has agreed to sell to CS First Boston Corporation,
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. (the "Underwriters"), and
the Underwriters have severally but not jointly agreed to purchase from the
Company, the following respective principal amounts of the Notes:
PRINCIPAL
AMOUNT
NAME ---------
CS First Boston Corporation..................... $ 33,400,000
Goldman, Sachs & Co............................. 33,300,000
J.P. Morgan Securities Inc...................... 33,300,000
------------
Total....................................... $100,000,000
============
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent, and that the Underwriters will be
obligated to purchase all of the Notes if any are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the Notes to the public initially at the offering price set
forth on the cover page of this Prospectus Supplement and to certain dealers at
such price less a concession of 0.40% of the principal amount per Note, and the
Underwriters and such dealers may allow a discount of 0.25% of the principal
amount per Note on sales to certain other dealers. After the initial public
offering the public offering price and concession and discount to dealers may
be changed by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that one or more of the
Underwriters intend to make markets in the Notes, but are not obligated to do
so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of, or trading market for, the
Notes.
In the ordinary course of their respective businesses, affiliates of J.P.
Morgan Securities Inc. have engaged, and in the future may engage, in
commercial banking and investment banking transactions with the Company and
affiliates of the Company.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, or to contribute to payments which the Underwriters may be required to
make in respect thereof.
S-4
VALIDITY OF THE NOTES
The validity of the Notes to which this Prospectus Supplement relates will be
passed upon for the Company by Guy A. Zoghby, Senior Vice President and General
Counsel of the Company, and for the Underwriters by Sullivan & Cromwell, New
York, New York. Mr. Zoghby beneficially owns an aggregate of 25,475 shares of
the common stock of the Company directly and indirectly through the Company's
employee savings plan, exclusive of those shares which have accrued for his
account in such plan during the year 1995. In addition, Mr. Zoghby holds
options entitling him to acquire 180,937 shares of such common stock.
EXPERTS
The consolidated financial statements and related supplemental schedule as of
December 31, 1994 and 1993 and for each of the three years in the period ended
December 31, 1994 incorporated in the accompanying Prospectus by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports also incorporated in the accompanying Prospectus by reference and
have been so incorporated in reliance upon such reports given upon the
authority of that firm as experts in accounting and auditing.
S-5
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P R O S P E C T U S
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PPG Industries, Inc.
Debt Securities
------------
PPG Industries, Inc. (the "Company") may, from time to time, offer up to
$350,000,000 aggregate principal amount of its debt securities (the "Debt
Securities") on terms to be determined at the time of sale. The terms of the
Debt Securities in respect of which this Prospectus is being delivered (the
"Offered Debt Securities"), including, where applicable, the aggregate
principal amount, denominations, currency of payment, maturity, premium, if
any, rate of interest (which may be fixed or variable), if any, time of payment
of any interest, purchase price, provisions for redemption or sinking fund, if
any, and other provisions, are set forth in the accompanying Prospectus
Supplement ("Prospectus Supplement"), together with the terms of offering of
the Offered Debt Securities. The Debt Securities may be sold by the Company
directly, through agents designated from time to time or to one or more
underwriters or dealers for public offering pursuant to terms of offering fixed
at the time of sale.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
May 5, 1986
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER, OR DEALER. THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C.; and at its Chicago
Regional Office, Everett McKinley Dirksen Building, 219 South Dearborn Street,
Room 1204, Chicago, Illinois 60604, and its New York Regional Office, 75 Park
Place, 14th Floor, New York, New York 10007. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information can be inspected also at the offices of the
New York Stock Exchange, the Pacific Stock Exchange and the Philadelphia Stock
Exchange, the national securities exchanges on which the Company's securities
are listed. This Prospectus does not contain all of the information set forth
in the Registration Statement and exhibits thereto filed by the Company with
the Commission under the Securities Act of 1933, and to which reference is
hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1985, which has been filed by the Company with the Securities and Exchange
Commission, is incorporated herein by reference and made a part hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents. Any statement contained in a document
incorporated by reference herein or deemed to be incorporated by reference
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
in the Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents which have been or may be incorporated
herein by reference (other than exhibits to such documents not specifically
incorporated therein). Such requests should be directed to PPG Industries,
Inc., One PPG Place, Pittsburgh, Pennsylvania 15272, Attention: Director,
Investor Relations, (412) 434-2120.
2
THE COMPANY
The business of the Company, a Pennsylvania corporation, is concentrated in
three basic segments: glass, coatings and resins, and chemicals. The Company's
principal executive offices are located at One PPG Place, Pittsburgh,
Pennsylvania 15272 and its telephone number is (412) 434-3131.
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
to the Company from the sale of the Debt Securities will be added to the
Company's general funds and will be used for general corporate purposes. The
Company expects that it may from time to time engage in additional public or
private financings of a character and in an amount to be determined as the
occasion arises.
SUMMARY OF FINANCIAL INFORMATION
The following summary of financial information was derived from and is
qualified by reference to the financial statements and other information and
data contained in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1985 and the Computation of Ratio of Earnings to Fixed
Charges filed as an exhibit to the Registration Statement of which this
Prospectus is a part. See "Incorporation of Certain Documents by Reference."
YEAR ENDED DECEMBER 31
----------------------------------
1981 1982 1983 1984 1985
------ ------ ------ ------ ------
(MILLIONS
OF
DOLLARS,
EXCEPT
PER
SHARE
AMOUNTS
AND
RATIOS)
Net sales.................................... $3,354 $3,296 $3,682 $4,242 $4,346
Earnings before income taxes................. 345 202 375 527 537
Net earnings................................. 211 155 233 303 303
Earnings per share of common stock........... $3.14 $2.25 $3.34 $4.33 $4.54
Ratio of earnings to fixed charges (1)....... 5.68 3.37 5.68 7.54 7.07
----------
(1) Earnings used to compute this ratio are earnings before income taxes and
minority interest plus fixed charges, excluding capitalized interest. Fixed
charges are interest, both capitalized and expensed, amortization of debt
premium and discount and a portion of rentals considered to represent an
interest factor.
DESCRIPTION OF THE DEBT SECURITIES
The Offered Debt Securities are to be issued under an Indenture, dated as of
August 1, 1982 (the "Indenture"), between the Company and Harris Trust and
Savings Bank, as Trustee (the "Trustee"), a copy of which is incorporated by
reference as an Exhibit to this Registration Statement. The following summaries
of certain provisions of the Indenture do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the Indenture. Capitalized terms are defined in the Indenture unless
otherwise defined herein. Wherever particular provisions or defined terms of
the Indenture are referred to, such provisions or defined terms are
incorporated herein by reference.
GENERAL
The Indenture provides for the issuance, from time to time in one or more
series, of unsecured obligations of the Company which may be debentures, notes
or other evidences of indebtedness ("Debt Securities"). The Indenture does not
limit the amount of Debt Securities which may be authenticated and delivered
thereunder. Each series of Debt Securities may be established in or pursuant to
a resolution of the Company's Board of Directors or in one or more indentures
supplemental to the Indenture.
The Prospectus Supplement relating to the Offered Debt Securities will
describe the following terms of the Offered Debt Securities: (1) the title of
the Offered Debt Securities; (2) any limit on the aggregate principal amount of
the Offered Debt Securities; (3) the date or dates on which the Offered Debt
Securities will mature;
3
(4) the rate or rates (which may be fixed or variable) at which the Offered
Debt Securities will bear interest, if any, and the date from which such
interest will accrue; (5) the dates on which such interest will be payable and
the Regular Record Dates for such Interest Payment Dates; (6) any mandatory or
optional sinking fund or analogous provisions; (7) the date, if any, after
which, and the price or prices at which, the Offered Debt Securities may be
redeemed at the option of the Company; (8) if applicable, the terms and
conditions upon which the Offered Debt Securities may be repayable prior to
final maturity at the option of the holder thereof or otherwise; (9) any
additional restrictive covenants included for the benefit of Holders of the
Offered Debt Securities; (10) any additional Events of Default provided with
respect to the Offered Debt Securities; (11) the currency of payment of
principal of and premium, if any, and interest, if any, on the Offered Debt
Securities; and (12) any index used to determine the amount of payments of
principal of and premium, if any, and interest, if any, on the Offered Debt
Securities. Unless otherwise indicated in the Prospectus Supplement, principal
of (and premium, if any) and interest (if any) on the Offered Debt Securities
will be payable, and transfers of the Offered Debt Securities will be
registrable, at the office of the Trustee or its designee, provided that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as it appears in the Security Register.
((S)(S) 201, 301, 305 and 1002)
The Offered Debt Securities will be issued only in fully registered form
without coupons and, unless otherwise indicated in the Prospectus Supplement,
in denominations of $1,000 or any integral multiple thereof. ((S)302) No
service charge will be made for any registration of transfer or exchange of
Offered Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. ((S) 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Debt Securities to be sold at a substantial discount below their principal
amount. Special federal income tax and other considerations applicable thereto
will be described in the Prospectus Supplement relating thereto.
RESTRICTIVE COVENANTS
The following restrictive covenants are applicable so long as the Debt
Securities of any series are Outstanding except that one or more of such
covenants may be made inapplicable to Debt Securities of a particular series at
the time of establishment of such series. The Prospectus Supplement relating to
such series will state which covenants are inapplicable to such series.
The Company will not, and will not permit any Restricted Subsidiary to, incur
or guarantee any debt secured by a mortgage or lien on any of the principal
manufacturing or research properties, plants or facilities of the Company or
any Restricted Subsidiary, or on any shares of stock or indebtedness of any
Restricted Subsidiary, without making effective provision for securing the Debt
Securities of any series to which this covenant applies (and, if the Company so
elects, any indebtedness ranking equally with such Debt Securities) equally and
ratably with or prior to such secured debt. These covenants will not apply to
debt secured by (a) mortgages or liens on property existing at the time
acquired or on property of any corporation existing at the time it becomes a
subsidiary, (b) purchase money mortgages, (c) mortgages or liens on property to
finance the cost of exploration, development or improvement of such property,
(d) mortgages or liens on property in favor of the United States or any state
thereof, or any other country, or any political subdivision of any of the
foregoing, to secure payments pursuant to any contract or statute or to secure
any indebtedness incurred for the purpose of financing all or any part of the
purchase price or the cost of construction of the property subject to such
mortgages or liens, (e) mortgages or liens securing indebtedness owing to the
Company or a wholly-owned Restricted Subsidiary by a Subsidiary, or (f)
extensions, renewals or replacements of any of the foregoing. Notwithstanding
these covenants, the Company and its Restricted Subsidiaries may incur or
guarantee any secured debt which would otherwise be subject to the foregoing
restrictions, provided that after giving effect thereto the sum of the
aggregate amount of such debt then outstanding (not including secured debt
permitted under the foregoing exceptions) and the aggregate "value" of sale and
leaseback transactions (as defined) at such time does not exceed 5% of the
"shareholders' interest" (defined to include the aggregate of capital and
surplus, less treasury stock at cost, of the Company and its Restricted
Subsidiaries consolidated as of the end of the latest fiscal year). ((S) 1004)
4
Sales and leasebacks of real property by the Company or a Restricted
Subsidiary (except those for a temporary period of not more than three years)
will be prohibited unless (a) the property involved could be mortgaged to the
extent of the "value" of the sale and leaseback transaction without equally and
ratably securing the Debt Securities of any series to which this covenant
applies or (b) an amount equal to the proceeds of sale or the fair value of the
property sold (whichever is higher) is applied to the retirement of Funded Debt
of the Company (with provision for a credit in certain cases for Debt
Securities otherwise acquired or retired). ((S) 1005)
Neither the Company nor any Restricted Subsidiary may transfer to an
Unrestricted Subsidiary any assets which in the opinion of the Board of
Directors constitute a major manufacturing or research property, plant or
facility of the Company and its Restricted Subsidiaries taken as a whole. ((S)
1005)
The term "Restricted Subsidiary" means any subsidiary other than foreign
subsidiaries or subsidiaries in territories or possessions of the United States
or leasing, real estate investment, or financing subsidiaries unless such a
subsidiary is designated as a Restricted Subsidiary by the Board of Directors.
Restricted Subsidiaries may become Unrestricted Subsidiaries by designation of
the Board of Directors but only if in the opinion of the Board they do not own
a major manufacturing or research property, plant or facility of the Company
and its Restricted Subsidiaries taken as a whole. Any newly acquired or formed
Subsidiary may be designated an Unrestricted Subsidiary by action of the Board
of Directors within 90 days of such acquisition or formation. ((S) 101)
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (a) failure to pay principal of or premium, if any,
on any Debt Security of that series when due; (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform, or breach of, any other
covenant or warranty of the Company in the Indenture (other than a covenant or
warranty included in the Indenture solely for the benefit of series of Debt
Securities other than that series), continued for 60 days after written notice
as provided in the Indenture; (e) acceleration of the maturity of more than
$10,000,000 principal amount of any indebtedness for money borrowed by the
Company under the terms of the instrument under which such indebtedness is
issued or secured, if such acceleration is not annulled within 10 days after
written notice as provided in the Indenture; (f) certain events in bankruptcy,
insolvency or reorganization; and (g) any other Event of Default provided with
respect to Debt Securities of that series. ((S) 501) If an Event of Default
with respect to Debt Securities of any series at the time Outstanding occurs
and is continuing, either the Trustee or the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of that
series to be due and payable immediately. At any time after such a declaration
of acceleration with respect to Debt Securities of any series has been made,
but before a judgment or decree for payment of the money due has been obtained,
the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such declaration and its consequences. ((S) 502)
The Indenture provides that the Trustee will be under no obligation, subject
to the duty of the Trustee during default to act with the required standard of
care, to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity. ((S) 603) Subject to
such provisions for indemnification of the Trustee, the Holders of a majority
in principal amount of the Outstanding Debt Securities of any series will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Debt Securities of that series. ((S) 512)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. ((S) 1009)
5
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Outstanding Debt Securities of each series affected by such modification or
amendment provided that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby, (a)
change the stated maturity date of the principal of, or any installment of
principal of or interest (if any) on, any Debt Security, (b) reduce the
principal amount of, or the premium (if any) or rate of interest (if any) on,
any Debt Security, (c) reduce the amount of principal of an Original Issue
Discount Debt Security payable upon acceleration of the Maturity thereof, (d)
change the place or currency of payment of principal of, or premium (if any) or
interest (if any) on, any Debt Security, (e) impair the right to institute suit
for the enforcement of any payment on or with respect to any Debt Security or
(f) reduce the percentage in principal amount of Outstanding Debt Securities of
any series, the consent of whose Holders is required for modification or
amendment of the Indenture or for waiver of compliance with certain provisions
of the Indenture or for waiver of certain defaults. ((S) 902)
The Holders of 66 2/3% in principal amount of the Outstanding Debt Securities
of any series may on behalf of the Holders of all Debt Securities of that
series waive, insofar as that series is concerned, compliance by the Company
with certain restrictive provisions of the Indenture. ((S) 1010) The Holders of
a majority in principal amount of the Outstanding Debt Securities of any series
may on behalf of the Holders of all Debt Securities of that series waive any
past default under the Indenture with respect to that series and its
consequences, except a default in the payment of the principal of (or premium,
if any) or interest (if any) on any Debt Security of that series or in respect
of a provision which under the Indenture cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security of that series
affected. ((S) 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety to, any corporation or may acquire or lease
the assets of any Person, provided that the corporation formed by such
consolidation or into which the Company is merged or which acquires or leases
the assets of the Company substantially as an entirety is organized under the
laws of any United States jurisdiction and assumes the Company's obligations on
the Debt Securities and under the Indenture, that after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, and that certain other conditions are met. (Article Eight)
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities directly, through agents designated
from time to time or to one or more underwriters or dealers for public offering
pursuant to terms of offering fixed at the time of sale. The Prospectus
Supplement describes the method of distribution of the Offered Debt Securities.
Unless otherwise indicated in the Prospectus Supplement, the obligations of the
underwriters to purchase the Offered Debt Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
the Offered Debt Securities if any are purchased.
The Offered Debt Securities may be distributed from time to time in one or
more transactions at a fixed price or prices (which may be changed) or at
prices determined as specified in the Prospectus Supplement. In connection with
the sale of the Offered Debt Securities, underwriters or dealers may be deemed
to have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
the Offered Debt Securities for whom they may act as agent. Underwriters may
sell the Offered Debt Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as agent. Certain of the underwriters, dealers or agents who participate in the
distribution of the Offered Debt Securities may engage in other transactions
with, and perform other services for, the Company in the ordinary course of
business.
6
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Offered Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to dealers, are
set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Debt Securities may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on the resale of the Offered Debt Securities may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933. Underwriters and their controlling persons, dealers and agents may be
entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including
liabilities under the Securities Act of 1933.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or other persons acting as the Company's agent to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date.
EXPERTS
The consolidated financial statements and supplemental schedules incorporated
in this Prospectus by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1985 have been examined by Deloitte Haskins
& Sells, independent certified public accountants, as stated in their opinion
also incorporated herein by reference and have been so incorporated in reliance
upon such opinion given upon the authority of that firm as experts in
accounting and auditing.
7
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NO DEALER, SALESMAN OR OTHER
PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTA-
TION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SE-
CURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEI-
THER THE DELIVERY OF THIS PRO-
SPECTUS SUPPLEMENT OR THE PRO-
SPECTUS NOR ANY SALE MADE HEREUN-
DER SHALL, UNDER ANY CIRCUMSTANC-
ES, CREATE ANY IMPLICATION THAT
THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF OR THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Use of Proceeds............................................................ S-2
Ratio of Earnings to Fixed Charges......................................... S-2
Description of the Notes................................................... S-2
Underwriting............................................................... S-4
Validity of the Notes...................................................... S-5
Experts.................................................................... S-5
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents
by Reference.............................................................. 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Summary of Financial Information........................................... 3
Description of the Debt Securities......................................... 3
Plan of Distribution....................................................... 6
Experts.................................................................... 7
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[LOGO OF PPG INDUSTRIES, INC.]
$100,000,000
PPG Industries, Inc.
6 7/8% Notes Due 2005
PROSPECTUS SUPPLEMENT
CS First Boston Goldman, Sachs &
Co. J.P. Morgan Securities Inc.
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