The Company’s stock-based compensation includes stock options, restricted stock units (“RSUs”), market stock units ("MSUs") and grants of contingent shares that are earned based on achieving targeted levels of total shareholder return ("TSR"). All current grants of stock options, RSUs, MSUs and contingent shares made before April 21, 2026 were made under the PPG Industries, Inc. Amended and Restated Omnibus Incentive Plan (“PPG Amended Omnibus Plan”), which was amended and restated effective April 21, 2016.

On April 16, 2026, the Company’s shareholders approved the PPG Industries, Inc. 2026 Omnibus Incentive Plan (the “2026 Omnibus Plan”) to replace the PPG Amended Omnibus Plan which expired by its terms on April 21, 2026. The 2026 Omnibus Incentive Plan authorizes the Company to issue 6,903,753 shares of stock in the form of equity awards to employees, including 5,403,753 shares that were previously authorized under the PPG Amended Omnibus Plan and 1,500,000 additional shares approved by shareholders for issuance under the 2026 Omnibus Plan. Any equity awards granted under the PPG Amended Omnibus Plan between December 31, 2025 and April 21, 2026, the date that the 2026 Omnibus Plan became effective, have reduced the number of shares available for issuance under the 2026 Omnibus Incentive Plan on a one-for-one basis.

The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal to the expected life of the option. The expected term assumption is estimated based on the weighted average term of historical stock option grants. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over past time periods equal in length to the expected life of the options.

Performance-based RSUs vest based on achieving specific annual performance targets for adjusted earnings per share growth and cash flow return on capital over the three calendar year-end periods following the date of grant. Unless forfeited, the performance-based RSUs will be paid out in the form of stock, cash or a combination of both at the Company’s discretion at the end of the three-year performance period if PPG meets the performance targets.

The amount paid upon vesting of performance-based RSUs may range from 0% to 200% of the original grant, based upon the level of adjusted earnings per share growth achieved and frequency with which the annual cash flow return on capital performance target is met over the three calendar year periods comprising the vesting period. Beginning with 2026 grants, the amount paid upon vesting of performance-based RSUs may range from 0% to 200% of the original grant based upon the level of adjusted earnings per share growth and level of cash flow return on capital growth achieved over the three calendar year periods comprising the vesting period. Performance against the earnings per share growth and the cash flow return on capital target is calculated annually, and the annual payout for each goal is weighted equally over the three-year period.

The Company provides grants of performance-based MSUs to selected key executives. MSUs vest at the end of the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock at the end of the vesting period. The number of shares earned at the end of the three-year performance period may range from 0% to 200%, based on absolute stock price appreciation or depreciation over the performance period. Payout is subject to achieving a specified threshold level of adjusted earnings per share. The Company estimates the fair value of the MSUs at the grant date using a Monte Carlo simulation model and recognizes the resulting expense over the requisite three-year service period. PPG will account for any forfeitures as they occur. The fair value of the MSUs granted during the nine months ended September 30, 2026 was calculated with the following assumptions:

The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal in length to the performance period. The expected dividend yield is based on the quarterly dividend amount and the average three-month stock price, both as of the grant date. The expected volatility is based on historical stock price volatility over a look back term from the grant date equal in length to the performance period.

The Company also provides grants of contingent shares to selected key executives that may be earned based on PPG's TSR over the three-year period following the date of grant. Contingent share grants (referred to as “TSR awards”) are made annually and are paid out at the end of each three-year period based on the Company’s stock performance. Performance is measured by determining the percentile rank of the total shareholder return of PPG common stock in relation to the TSR of a designated peer group for the three-year period following the date of grant. For awards granted prior to 2026, the peer group is the S&P 500 Index as it existed at the beginning of the performance period, excluding any companies that were removed from the index because they ceased to be publicly traded. Beginning with awards granted in 2026, the peer group was changed to the S&P 500 Capital Goods and Materials Index as it existed at the beginning of the performance period, excluding any companies that were removed from the index because they ceased to be publicly traded. The change was made to align the TSR performance measure more closely with a peer group of companies operating in industries similar to those of the Company. The payment of awards following the three-year award period is based on performance achieved in accordance with the scale set forth in the plan agreement and may range from 0% to 200% of the initial grant. A payout of 100% is earned if target performance is achieved. Contingent share awards earn dividend equivalents for the award period, which are paid to participants or credited to the participants’ deferred compensation plan accounts with the award payout at the end of the period based on the actual number of contingent shares that are earned. Any payments made at the end of the award period may be in the form of stock, cash or a combination of both. The TSR awards are classified as liability awards, and compensation expense is recognized over the three-year award period based on the fair value of the awards (giving consideration to the Company’s percentile rank of TSR) remeasured in each reporting period until settlement of the awards.