EXHIBIT (10)(g)
MINE SAFETY APPLIANCES COMPANY
EXECUTIVE INSURANCE PROGRAM
As Amended and Restated January 1, 2001
Section 1 - Purpose
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The purpose of the Executive Insurance Program ("EIP" or "Plan") is to
enable Mine Safety Appliances Company (the "Company") to assist certain of the
Company's senior management employees in providing life insurance benefits for
their families and dependents during their working career with the Company and
to provide them with additional flexibility and post-employment benefits upon
their retirement from active employment with the Company. This result is to be
accomplished by substituting, for each eligible employee, all but $50,000 of
group term life insurance with individual life insurance. All of the premium
cost will be paid by the Company.
Section 2 - Definitions
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The following definitions shall apply for purposes of the Plan unless
another meaning is clearly required by the context.
"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
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Exchange Act.
"Beneficiary" shall mean any person, persons or entity who or which may be
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designated by a Participant as the recipient of any benefits to which the same
may be entitled under the terms of the Plan upon the death of the Participant.
"Board" shall mean the Board of Directors of the Company as it may be
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constituted from time to time.
"Company" shall mean Mine Safety Appliances Company, including any
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subsidiaries or affiliates, or any successor thereto, except that in the
definitions provided in this Section 2 of Change in Control and of Person,
"Company" shall mean only the Mine Safety Appliances Company.
"Change in Control" shall be deemed to have occurred if the event set forth
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in any one of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates (which term shall have the
meaning set forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act)) representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities,
excluding
any Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (i) of paragraph (III) below; or
(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on January 1, 2001, constitute the Board and any new
director (other than a director whose initial assumption of office is
in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board
or nomination for election by the Company's shareholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on January 1, 2001 or
whose appointment, election or nomination for election was previously
so approved or recommended; or
(III) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least fifty-one percent (51%) of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after
such merger or consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities; or
(IV) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least fifty-one percent (51%) of the
combined voting power of the voting securities of which are owned by
shareholders of the Company in substantially the same proportions as
their ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
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"Death Benefit" shall mean the gross amount payable by an Insurer under the
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terms of a policy issued hereunder upon the death of a Participant. A portion
of the Death Benefit, referred to as the "Insurance Amount" (as listed in the
"Table of Insurance Amounts" attached hereto), will be paid to the Participant's
Beneficiaries and the balance paid to the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
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from time to time.
"Insurer" shall mean the Connecticut Mutual Life Insurance Company and/or
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any other insurance carrier selected by the Company to issue Policies hereunder
and which is authorized to do business in the Commonwealth of Pennsylvania.
"Participant" shall mean any member of senior management of the Company
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authorized by the Board to participate in the Plan.
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange
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Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
or (v) any individual or entity [including the trustees (in such capacity) of
any such entity which is a trust] which is, directly or indirectly, the
Beneficial Owner of securities of the Company representing five percent (5%) or
more of the combined voting power of the Company's then outstanding securities
immediately before the date hereof or any Affiliate of any such individual or
entity, including, for purposes of this Plan, any of the following: (A) any
trust (including the trustees thereof in such capacity) established by or for
the benefit of any such individual; (B) any charitable foundation (whether a
trust or a corporation, including the trustees or directors thereof in such
capacity) established by any such individual; (C) any spouse of any such
individual; (D) the ancestors (and spouses) and lineal descendants (and spouses)
of such individual and such spouse; (E) the brothers and sisters (whether by the
whole or half blood or by adoption)of either such individual or such spouse; or
(F) the lineal descendants (and their spouses) of such brothers and sisters.
"Plan" shall mean the Executive Insurance Program described herein.
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"Policy" shall mean an insurance contract issued by an Insurer on the life
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of a Participant.
"Retired Participant" shall mean a Participant who has terminated his
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active employment as an employee of the Company on or after a date when his
combined age and service satisfy the "Rule of 70" as follows: the sum of the
Participant's age (measured in full and partial years, in increments of one-
twelfth (1/12) year) and the Participant's years of employment with the Company
(measured in full and partial years, in increments of one-twelfth (1/12) year)
equals or exceeds 70.
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Section 3 - Eligibility
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Those members of management who are eligible to participate in the
Executive Insurance Program shall be the Chief Executive Officer of the Company
and such other key members of senior management as shall be designated from time
to time by the Chief Executive Officer of the Company and approved for
participation by the Board of Directors.
Section 4 - Amount and Effective Date of Coverage
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The initial amount of life insurance coverage provided under the Plan to
those selected for participation as of the effective date of the Plan shall be
as described in the "Table of Insurance Amounts" attached hereto. The amount of
life insurance provided to executives who are selected for participation after
the effective date of the Plan shall be in an amount determined by the Chief
Executive Officer and approved by the Board at the time of their selection.
The effective date of insurance coverage hereunder shall be the later of
the date of the employee's selection for participation herein or acceptance by
the Insurer as a standard risk. The cancellation of a Participant's group term
life insurance in excess of $50,000, and his actual participation in this Plan
shall be conditioned upon his insurability in a standard risk category for the
benefit to be provided herein or, if not insurable in a standard risk category,
the acceptance by the Company of the non-standard risk category proposed by the
Insurer.
The Board reserves the right to change the amount of insurance on the life
of any Participant from time to time, and any such change in the level of
insurance shall be effective as of the later of the first day of the month
coincident with or next following the effective date of the change or the date
of acceptance by the Insurer of the new insurance amount at standard rates, or
acceptance by the Company of an offer of insurance made by the Insurer at non-
standard rates; provided, however, that, from and after the first date on which
the combined age and service of any Participant (whether a Retired Participant
or an active Participant) satisfy the Rule of 70 (as the satisfaction of such
Rule is described in the definition of Retired Participant which appears in
Section 2 hereof) or will have satisfied the Rule of 70 upon an assumed
immediate termination of employment (as the requirements for satisfaction of
such Rule may have been modified by any written Severance Agreement between the
Company and such Participant), the amount of insurance on the life of such
Participant (sometimes referred to in this Plan as the "Insurance Amount")
cannot be decreased.
Section 5 - Payment for Coverage
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The cost of the applicable amount of life insurance on the life of the
Participant shall be paid when due by the Company. The Company shall annually
furnish each Participant with a statement of imputed income reportable by the
Participant for income tax purposes as a result of the payment.
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Section 6 - Payment of Proceeds Upon Death While Employed
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In the event of the death of the Participant while employed by the Company,
the gross death benefit payable under the Policy shall be split between the
Company and the Participant's Beneficiary. The Beneficiary shall receive an
amount equal to the Insurance Amount and the Company shall receive the
difference between the gross Death Benefit and the Insurance Amount. The
amounts payable to the Company and the Beneficiary shall be paid directly to
each payee by the Insurer directly from the Insurer.
Section 7 - Options Upon Retirement of a Participant
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Subject to Section 8 hereof, at any time prior to the year in which a
Participant becomes a Retired Participant, he shall have the right to make an
irrevocable election in writing of one of the following three options with
respect to his Insurance Amount. If a Participant shall fail to make such an
election, he shall be deemed to have elected the supplemental retirement benefit
payments described in this Section 7 as Option 3.
(1) Maintain the Existing Arrangement. Under this option the Executive
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Insurance Program would remain as it existed prior to the Participant's
retirement. For federal income tax purposes, a Retired Participant will be
deemed to have received imputed income, but the Death Benefit received by the
Participant's Beneficiary will not be subject to federal income tax.
(2) Company-Paid Post-Retirement Death Benefit. Alternatively, the
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Participant can elect not to continue the Executive Insurance Program, but in
lieu thereof, can elect a non-insured post-retirement death benefit equal to the
Insurance Amount in effect at the date of the Participant's retirement. Under
this Option there is no imputed income for tax purposes to the Retired
Participant but the Death Benefit paid to the Participant's Beneficiary by the
Company will be subject to federal income tax when received.
(3) Supplemental Retirement Benefits. Rather than a continuation of the
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Death Benefit described in either Option 1 or Option 2 above, a Participant can
elect to receive a series of supplemental retirement payments which, in the
aggregate, equal three-quarters (75%) of the pre-retirement Insurance Amount
except that for a Participant who will receive supplemental retirement benefits
under this Section 7(3) for the first time on or after January 1, 2001, such
Participant can elect to receive a series of supplemental retirement payments
which, in the aggregate, equal one hundred (100%) percent of the pre-retirement
Insurance Amount. Payment of the supplemental retirement benefits shall be made
in a series of approximately equal semi- monthly payments over a period of 15
years. Payment of such semi-monthly payments to the Retired Participant shall
commence no later than sixty days after the Retired Participant's termination of
employment with the Company.
The Supplemental Retirement Benefit Option may be elected by a Participant
at any time on or after August 1, 1991. It shall be available to any
Participant who retires on or after that date as well as to any previously
Retired Participant who had previously elected either Option 1 or Option 2. If
the supplemental retirement payments of Option 3 are elected, and in the event
of
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the death of the Retired Participant prior to the completion of the 15-year
payment period, the then unpaid installments shall continue to be paid to the
Retired Participant's Beneficiary or, at the discretion of the Board, may be
commuted and paid to such Beneficiary in a single sum as soon as may be
practicable after the Board's decision to make such a single sum payment.
Section 8 - Effect of a Change in Control
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Notwithstanding any other provision of this Plan, if a Participant's
termination of employment occurs on, or within the three-year period immediately
following, a Change in Control and the Participant thereupon becomes a Retired
Participant within the meaning of Section 2 hereof (the determination of such
Retired Participant status taking into account any relevant provision in any
written Severance Agreement the Participant may have with the Company), then,
not later than the fifth (5th) business day following such termination, the
Company shall pay the Retired Participant a lump sum amount equal to the present
value of the series of supplemental retirement payments described as Option 3 in
Section 7 hereof to which the Retired Participant would otherwise be entitled if
the Retired Participant had elected Option 3. The Company's payment of such
lump sum shall be in lieu of making payment to the Retired Participant in
accordance with any option described in Section 7 hereof. For purposes of this
Section 8, such present value shall be determined using a discount rate equal to
120% of the applicable rate provided in section 1274(b)(2)(B) of the Internal
Revenue Code of 1986, as amended from time to time.
Section 9 - Administration, Amendment, Termination
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The Board, or its delegate, shall be the "Administrator" of this Plan, and
shall have full power and authority to interpret, construe and administer the
same. Any such interpretation and construction shall be final and binding upon
any and all parties in interest. In addition, the Board shall have the right to
amend this Plan from time to time, and to terminate it at any time..
Notwithstanding the foregoing provisions of this Section 9, no amendment or
termination of this Plan by the Board and no act (or failure to act) by the
Board (or its delegate) as Administrator shall affect detrimentally the rights
under the Plan of any Retired Participant or of any active Participant whose
combined age and service have satisfied the Rule of 70 (as the satisfaction of
such Rule is described in the definition of Retired Participant which appears in
Section 2 hereof) or will have satisfied the Rule of 70 upon an assumed
immediate termination of employment (as the requirements for satisfaction of
such Rule may have been modified by any written Severance Agreement between the
Company and such Participant).
Section 10 - Miscellaneous Matters
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(a) No Right to Assets. No Participant, Beneficiary or other person or
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entity claiming entitlement to any benefit from or through such person shall
have any right to or title in any policy or any other asset obtained by the
Company for the purpose of funding the benefits provided hereunder except as
otherwise expressly provided herein.
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(b) Alienation. Except with respect to the designation of a
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Beneficiary to be the recipient of any death benefits hereunder, or the
assignment of the incidents of ownership of any death benefits hereunder, the
interest of Participants and their Beneficiaries under the Plan are not in any
way subject to their debts or other obligations and may not be voluntarily or
involuntarily sold, transferred, assigned, alienated or encumbered, and any
attempt to do so shall be void
(c) Construction. The Plan shall be construed and administered
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according to the laws of the Commonwealth of Pennsylvania and any federal laws
which may from time to time be applicable. Whenever any words are used herein
in the masculine gender, they shall be construed as though they were also used
in the feminine gender in all cases where they would apply, and whenever any
words are used in the singular form, they shall be construed as though they were
also used in the plural form in all cases where they would so apply. Headings
of Sections of this instrument are inserted for convenience of reference only
and as such they constitute no part of this Plan and are not to be considered in
the construction hereof.
(d) Limitation of Benefit. All benefits hereunder except those
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described in Section 8 and Options 2 and 3 of Section 7 shall be payable solely
by the Insurer(s) under the Policies issued hereunder, and the Company does not
assume any liability or responsibility therefor or guarantee such benefits. The
liability and responsibility of the Company are strictly limited to the
provisions of this Plan.
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TABLE OF INSURANCE AMOUNTS
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Title Amount
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Chairman $1,000,000
President $ 750,000
Vice President $ 600,000
Executive $ 300,000
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