Exhibit 10(b)
MINE SAFETY APPLIANCES COMPANY
1998 MANAGEMENT SHARE INCENTIVE PLAN
SECTION 1. PURPOSE.
The purpose of the 1998 Management Share Incentive Plan of Mine Safety
Appliances Company (the "Plan") is to benefit the Company's shareholders by
encouraging high levels of performance by individuals whose performance is a
key element in achieving the Company's continued success by rewarding the
creation of shareholder value, and to enable the Company to recruit, reward,
retain and motivate employees to work as a team to achieve the Company's
goals.
SECTION 2. DEFINITIONS IN LAST SECTION.
For purposes of the Plan, capitalized terms, unless defined where the
respective term first appears in this Plan, shall have the meanings given in
the last Section hereof.
SECTION 3. ELIGIBILITY.
Awards may be granted only to Employees who are designated as Participants
from time to time by the Committee. The Committee shall determine which
Employees shall be Participants, the types of Awards to be made to
Participants and the terms, conditions and limitations applicable to the
Awards.
SECTION 4. AWARDS.
Awards may include, but are not limited to, those described in this Section
4. The Committee may grant Awards singly, in tandem or in combination with
other Awards, as the Committee may in its sole discretion determine; provided
that Stock Options may not be granted in tandem with Incentive Stock Options.
Subject to the other provisions of this Plan, Awards may also be granted in
combination or in tandem with, in replacement of, or as alternatives to,
grants or rights under this Plan and any other employee benefit or
compensation plan of the Company.
4.1 Stock Options
A Stock Option is a right to purchase a specified number of Shares at a
specified price during such specified time as the Committee shall determine.
(a) Options granted may be either of a type that complies with the
requirements of incentive stock options as defined in Section 422 of the
Code ("Incentive Stock Options") or of a type that does not comply with
such requirements ("Non-Qualified Stock Options"). The requirements
imposed by the Code and the regulations thereunder for qualification as an
Incentive Stock Option, whether or not specified in this Plan, shall be
deemed incorporated within any Award Agreement pertaining to an Incentive
Stock Option.
(b) The exercise price per Share of any Stock Option which is intended to be
an Incentive Stock Option shall be no less than the Fair Market Value per
Share subject to the option on the date the Stock Option is granted,
except that in the case of an Incentive Stock Option granted to an
Employee who, immediately prior to such grant, owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or any subsidiary (a "Ten Percent Employee"), the
exercise price per Share shall not be less than one hundred ten percent
(110%) of such Fair Market Value per Share on the date the Incentive Stock
Option is granted. For purposes of this Section 4.1(b), an individual (i)
shall be considered as owning not only shares of stock owned individually
but also all shares of stock that are at the time owned, directly or
indirectly, by or for the spouse, ancestors, lineal descendants and
brothers and sisters (whether by the whole or half blood) of such
individual and (ii) shall be considered as owning proportionately any
shares owned, directly or indirectly, by or for any corporation,
partnership, estate or trust in which such individual is a shareholder,
partner or beneficiary.
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(c) The term of any Stock Option which is intended to be an Incentive Stock
Option shall not be greater than ten years from its date of grant, except
that in the case of a Ten Percent Employee, such term shall not be greater
than five years.
(d) A Stock Option may be exercised, in whole or in part, by giving written
notice of exercise to the Company, specifying the number of Shares to be
purchased.
(e) The exercise price of the Stock Option may be paid in cash or, at the
discretion of the Committee, may also be paid by the tender of Stock
already owned by the Participant, or through a combination of cash and
Stock, or through such other means the Committee determines are consistent
with the Plan's purpose and applicable law. No fractional Shares will be
issued or accepted.
(f) Notwithstanding any other provision contained in the Plan or in any Award
Agreement, but subject to the possible exercise of the Committee's
discretion contemplated in the last sentence of this Section 4.1(f), the
aggregate Fair Market Value on the date of grant, of the Shares with
respect to which Incentive Stock Options are exercisable for the first
time by an Employee during any calendar year under all plans of the
corporation employing such Employee, any parent or subsidiary corporation
of such corporation and any predecessor corporation of any such
corporation shall not exceed $100,000. If the date on which one or more of
such Incentive Stock Options could first be exercised would be accelerated
pursuant to any provision of the Plan or any Award Agreement, and the
acceleration of such exercise date would result in a violation of the
restriction set forth in the preceding sentence, then, notwithstanding any
such provision, but subject to the provisions of the next succeeding
sentence, the exercise dates of such Incentive Stock Options shall be
accelerated only to the date or dates, if any, that do not result in a
violation of such restriction and, in such event, the exercise dates of
the Incentive Stock Options with the lowest option prices shall be
accelerated to the earliest such dates. The Committee may, in its
discretion, authorize the acceleration of the exercise date of one or more
Incentive Stock Options even if such acceleration would violate the
$100,000 restriction set forth in the first sentence of this paragraph and
even if such Incentive Stock Options are thereby converted in whole or in
part to Non-Qualified Stock Options.
4.2 Stock Appreciation Rights
A Stock Appreciation Right is a right to receive, upon surrender of the
right, an amount payable in cash and/or Shares under such terms and conditions
as the Committee shall determine.
(a) A Stock Appreciation Right may be granted in tandem with part or all of
(or in addition to, or completely independent of) a Stock Option or any
other Award under this Plan. A Stock Appreciation Right issued in tandem
with a Stock Option may be granted at the time of grant of the related
Stock Option or at any time thereafter during the term of the Stock
Option; provided, however, that a Stock Appreciation Right issued in
tandem with an Incentive Stock Option can only be granted at the time of
grant of the Incentive Stock Option.
(b) The amount payable in cash and/or Shares with respect to each right shall
be equal in value to a percentage (including up to 100%) of the amount by
which the Fair Market Value per Share on the exercise date exceeds the
Fair Market Value per Share on the date of grant of the Stock Appreciation
Right. The applicable percentage shall be established by the Committee.
The Award Agreement may state whether the amount payable is to be paid
wholly in cash, wholly in Shares or partly in each; if the Award Agreement
does not so state the manner of payment, the Committee shall determine
such manner of payment at the time of payment. The amount payable in
Shares, if any, is determined with reference to the Fair Market Value per
Share on the date of exercise.
(c) Stock Appreciation Rights issued in tandem with Stock Options shall be
exercisable only to the extent that the Stock Options to which they relate
are exercisable. Upon exercise of the tandem Stock Appreciation Right, and
to the extent of such exercise, the Participant's underlying Stock Option
shall automatically terminate. Similarly, upon the exercise of the tandem
Stock Option, and to the extent of such exercise, the Participant's
related Stock Appreciation Right shall automatically terminate.
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(d) Notwithstanding any other provision of this Plan to the contrary, with
respect to a Stock Appreciation Right granted in connection with an
Incentive Stock Option: (i) the Stock Appreciation Right will expire no
later than the expiration of the underlying Incentive Stock Option; (ii)
the value of the payout with respect to the Stock Appreciation Right may
be for no more than one hundred percent (100%) of the difference between
the exercise price of the underlying Incentive Stock Option and the Fair
Market Value of the Shares subject to the underlying Incentive Stock
Option at the time the Stock Appreciation Right is exercised; and (iii)
the Stock Appreciation Right may be exercised only when the Fair Market
Value of the Shares subject to the Incentive Stock Option exceeds the per
Share exercise price of the Incentive Stock Option.
4.3 Restricted Stock
Restricted Stock is Stock that is issued to a Participant and is subject to
such terms, conditions and restrictions as the Committee deems appropriate,
which may include, but are not limited to, restrictions upon the sale,
assignment, transfer or other disposition of the Restricted Stock and the
requirement of forfeiture of the Restricted Stock upon termination of
employment under certain specified conditions. The Committee may provide for
the lapse of any such term or condition or waive any term or condition based
on such factors or criteria as the Committee may determine. Subject to the
restrictions stated in this Section 4.3 and in the applicable Award Agreement,
the Participant shall have, with respect to Awards of Restricted Stock, all of
the rights of a shareholder of the Company, including the right to vote the
Restricted Stock and the right to receive any cash dividends on such Stock.
Unless otherwise determined by the Committee, dividends or other distributions
on Restricted Stock which are paid in Shares or other securities or property
shall be held subject to the same terms, conditions and restrictions as the
Restricted Stock on which they are paid.
4.4 Performance Awards
Performance Awards may be granted under this Plan from time to time based on
such terms and conditions as the Committee deems appropriate; provided that
such Awards shall not be inconsistent with the terms and purposes of this
Plan. Performance Awards are Awards the payment or vesting of which is
contingent upon the achievement of specified levels of performance under
specified Performance Criteria during a specified Performance Period by the
Company, a subsidiary or subsidiaries, any branch, department or other portion
thereof or the Participant individually, as determined by the Committee at the
time the Performance Award is granted. Performance Awards may be in the form
of performance units, performance shares and such other forms of Performance
Awards as the Committee shall determine. The maximum amount that may be paid
in cash or in Fair Market Value (determined as of the date of payment or
vesting) of Shares or other securities under all Performance Awards under the
Plan paid to any one Participant during a calendar year shall in no event
exceed $200,000.
4.5 Other Awards
The Committee may from time to time grant Stock, other Stock-based and non-
Stock-based Awards under the Plan (singly, in tandem or in combination with
other Awards), including without limitation those Awards pursuant to which
Shares are or may in the future be acquired, Awards denominated in Stock
units, securities convertible into Stock, phantom securities, dividend
equivalents and cash. The Committee shall determine the terms and conditions
of such other Stock, Stock-based and non-Stock-based Awards, provided that
such Awards shall not be inconsistent with the terms and purposes of this
Plan.
SECTION 5. AWARD AGREEMENTS.
Each Award under this Plan shall be evidenced by an Award Agreement setting
forth the number of Shares or other securities, Stock Appreciation Rights, or
units subject to the Award, if any, and such other terms and conditions
applicable to the Award (and not inconsistent with this Plan) as are
determined by the Committee.
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(a) Award Agreements shall include the following terms:
(i) Non-assignability: A provision that the relevant Award shall not be
assigned, pledged or otherwise transferred except by will or by the laws
of descent and distribution and that during the lifetime of a
Participant, the Award shall be exercised only by such Participant or by
the Participant's guardian or legal representative; provided, however,
that, in the Committee's discretion, and except in the case of Incentive
Stock Options, an Award Agreement may expressly provide for specifically
limited transferability.
(ii) Termination of Employment: A provision describing the treatment of an
Award in the event of the Retirement, Disability, death or other
termination of a Participant's employment with the Company, including
but not limited to terms relating to the vesting, time for exercise,
forfeiture or cancellation of an Award in such circumstances.
(iii) Rights as Shareholder: A provision that a Participant shall have no
rights as a shareholder with respect to any securities covered by an
Award until the date the Participant becomes the holder of record.
Except as provided in Section 8 hereof, no adjustment shall be made for
dividends or other rights, unless the Award Agreement specifically
requires such adjustment, in which case, grants of dividend equivalents
or similar rights shall not be considered to be a grant of any other
shareholder right.
(iv) Withholding: A provision requiring the withholding of applicable taxes
required by law from all amounts paid in satisfaction of an Award to a
Participant. In the case of an Award paid in cash, the withholding
obligation shall be satisfied by withholding the applicable amount and
paying the net amount in cash to the Participant. In the case of Awards
paid in Shares or other securities of the Company, (i) a Participant may
satisfy the withholding obligation by paying the amount of any taxes in
cash, (ii) with the approval of the Committee (or, in the case of
deduction, by the unilateral action of the Committee), Shares or other
securities may be deducted by the Company from the payment or delivered
to the Company by the Participant to satisfy the obligation in full or
in part as long as such withholding or delivery of Shares or other
securities does not violate any applicable laws, rules or regulations of
federal, state or local authorities. The number of Shares or other
securities to be deducted or delivered shall be determined by reference
to the Fair Market Value of such Shares or securities on the applicable
date.
(b) Award Agreements may include such other terms as are necessary and
appropriate to effect an Award to the Participant, including but not
limited to (i) the term of the Award, (ii) vesting provisions, (iii)
deferrals, (iv) any requirements for continued employment with the
Company, (v) any other restrictions or conditions (including performance
requirements) on the Award and the method by which restrictions or
conditions lapse, (vi) the effect upon the Award of a Change in Control,
(vii) the price, amount or value of Awards, (viii) such Participant's
permitted transferees, if any, (ix) all Shares issued or issuable to such
Participant in connection with an Award in the event of such Participant's
termination of employment, and (x) any other terms and conditions which
the Committee shall deem necessary and desirable.
SECTION 6. SHARES OF STOCK SUBJECT TO THE PLAN.
(a) Subject to the adjustment provisions of Section 8 hereof, the maximum
aggregate number of Shares which may be granted pursuant to the Plan is
600,000 Shares.
(b) Any Shares which are subject to any unexercised or undistributed portion
of any terminated, expired, exchanged or forfeited Award (or Awards
settled in cash in lieu of Shares) shall become available for grant
pursuant to new Awards.
(c) The Committee may make such additional rules for determining the number of
Shares granted under the Plan as it deems necessary or appropriate.
(d) The Stock which may be issued pursuant to an Award under the Plan may be
treasury Stock or authorized but unissued Stock or Stock acquired,
subsequently or in anticipation of the transaction, in the open market or
otherwise to satisfy the requirements of the Plan, or any combination of
such Stock.
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(e) Subject to the adjustment provisions of Section 8 hereof, the maximum
aggregate number of Shares available for grants of Stock Options or Stock
Appreciation Rights to any one Participant under the Plan shall not exceed
300,000 Shares. The limitation in the preceding sentence shall be
interpreted and applied in a manner consistent with Section 162(m) of the
Code.
SECTION 7. ADMINISTRATION.
(a) The Plan and all Awards granted pursuant thereto shall be administered by
the Committee so that, insofar as is possible and practicable,
transactions with respect to Awards under the Plan shall be exempt from
Section 16(b) of the Exchange Act. A majority of the members of the
Committee shall constitute a quorum. The vote of a majority of a quorum
(or the unanimous consent in writing of the members of the Committee)
shall constitute action by the Committee.
(b) The Committee shall periodically determine the Participants in the Plan
and the nature, amount, pricing, timing, and other terms of Awards to be
made to such individuals.
(c) The Committee shall have the power to interpret and administer the Plan.
All questions of interpretation with respect to the Plan, the number of
Shares or other securities, Stock Appreciation Rights, or units granted,
and the terms of any Award Agreements shall be determined by the
Committee, and its determination shall be final and conclusive upon all
parties in interest. In the event of any conflict between an Award
Agreement and the Plan, the terms of the Plan shall govern.
(d) The Committee may delegate to the officers or employees of the Company the
authority to execute and deliver such instruments and documents, to do all
such ministerial acts and things, and to take all such other ministerial
steps deemed necessary, advisable or convenient for the effective
administration of the Plan in accordance with its terms and purpose.
(e) Notwithstanding the foregoing provisions of this Section 7, no power given
the Committee herein shall be used after a Change in Control to affect
detrimentally the rights of any Participant with respect to any Awards
hereunder which are outstanding immediately prior to the Change in
Control.
SECTION 8. EQUITABLE ADJUSTMENTS.
Subject to any required action by the Company's shareholders, upon the
occurrence of any event which affects the Shares in such a way that an
adjustment of outstanding Awards is appropriate in order to prevent the
dilution or enlargement of rights under the Awards (including, without
limitation, any extraordinary dividend or other distribution (whether in cash
or in kind), recapitalization, stock split, reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share exchange,
or other similar corporate transaction or event), the Committee shall make
appropriate equitable adjustments, which may include, without limitation,
adjustments to any or all of the number and kind of Shares (or other
securities) which may thereafter be issued in connection with such outstanding
Awards and adjustments to any exercise price specified in the outstanding
Awards and shall also make appropriate equitable adjustments to the number and
kind of Shares (or other securities) authorized by or to be granted under the
Plan.
SECTION 9. CHANGE IN CONTROL.
Notwithstanding any other provision of the Plan to the contrary, and unless
the applicable Award Agreement shall otherwise provide, immediately prior to
any Change in Control of the Company, (i) all Stock Options and freestanding
Stock Appreciation Rights which are then outstanding hereunder shall become
fully vested and exercisable, (ii) all restrictions with respect to Shares of
Restricted Stock which are then outstanding hereunder shall lapse, and such
Shares shall be fully vested and nonforfeitable, and (iii) with respect to all
Performance Awards which are then outstanding hereunder, all uncompleted
Performance Periods shall be deemed to have been completed, the target level
of performance set forth with respect to each Performance Criterion under such
Performance Awards shall be deemed to have been attained and a pro rata
portion (based on the ratio of (i) the
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number of full and partial months which have elapsed from the beginning of the
Performance Period through the Change in Control to (ii) the number of months
originally contained in the Performance Period) of each such Performance Award
shall become payable to the respective Participant, with the remainder of each
such Performance Award being cancelled for no value.
SECTION 10. RIGHTS OF EMPLOYEES.
(a) Status as an eligible Employee shall not be construed as a commitment that
any Award will be made under the Plan to such eligible Employee or to
eligible Employees generally.
(b) Nothing contained in the Plan (or in any other documents related to this
Plan or to any Award) shall confer upon any Employee or Participant any
right to continue in the employ of the Company or any of its subsidiaries
or constitute any contract or limit in any way the right of the Company or
any subsidiary to change such person's compensation or other benefits or
to terminate the employment of such person with or without cause.
SECTION 11. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS.
Awards shall be subject to the requirement that if at any time the Committee
shall determine, in its discretion, that the listing, registration or
qualification of the Shares subject to the Awards upon any securities exchange
or under any state or federal securities or other law or regulation, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to or in connection with the granting of the Awards
or the issuance or purchase of Shares thereunder, no Awards may be granted or
exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Committee. The holders of such Awards
will supply the Company with such certificates, representations and
information as the Company shall request and shall otherwise cooperate with
the Company in obtaining such listing, registration, qualification, consent or
approval.
SECTION 12. AMENDMENT AND TERMINATION.
The Board may at any time amend, suspend or terminate the Plan. The
Committee may at any time alter or amend any or all Award Agreements under the
Plan to the extent permitted by law. However, no such action by the Board or
by the Committee shall impair the rights of Participants under outstanding
Awards without the consent of the Participants affected thereby. Further, the
Board shall not amend the Plan without the approval of the Company's
shareholders to the extent such approval is required by law, agreement or the
rules of any exchange upon which the Stock shall be listed (or if the Stock
shall be admitted to quotation on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System, the rules of NASDAQ).
SECTION 13. UNFUNDED PLAN.
The Plan shall be unfunded. Neither the Company nor the Board shall be
required to segregate any assets that may at any time be represented by Awards
made pursuant to the Plan. Neither the Company, the Committee, nor the Board
shall be deemed to be a trustee of any amounts to be paid under the Plan.
SECTION 14. LIMITS OF LIABILITY.
(a) Any liability of the Company to any Participant with respect to an Award
shall be based solely upon contractual obligations created by the Plan and
the Award Agreement.
(b) Neither the Company nor any member of the Board or of the Committee, nor
any other person participating in any determination of any question under
the Plan, or in the interpretation, administration or application of the
Plan, shall have any liability to any party for any action taken or not
taken, in good faith under the Plan.
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SECTION 15. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan shall become effective upon its adoption by the Board (the
"Effective Date"); provided, however, that the grant of any Award shall be
subject to and contingent upon obtaining the approval of this Plan by the
Company's shareholders within twelve (12) months after the date the Plan is
adopted by the Board. Subject to obtaining such approval, the Committee shall
have authority to grant Awards hereunder from the Effective Date until the
tenth (10th) anniversary of the Effective Date, subject to the ability of the
Board to terminate the Plan as provided in Section 12 hereof.
SECTION 16. 1987 MANAGEMENT SHARE INCENTIVE PLAN.
Outstanding grants of options, Restricted Stock and all other outstanding
awards under the Company's 1987 Management Share Incentive Plan shall continue
to be subject to, and administered in accordance with, the terms of that plan.
SECTION 18. DEFINITIONS.
For purposes of the Plan, the following terms, as used herein, shall have
the respective meanings specified:
(a) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange Act.
(b) "Award" or "Awards" means an award granted pursuant to Section 4 hereof.
(c) "Award Agreement" means an agreement described in Section 5 hereof entered
into between the Company and a Participant, setting forth the terms,
conditions and any limitations applicable to the Award granted to the
Participant.
(d) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.
(e) "Beneficiary" means a person or persons designated by a Participant (if
the terms of the relevant Award Agreement permit such a designation) to
receive, in the event of death, any unpaid portion of an Award held by the
Participant. Any Participant so permitted by an Award Agreement may,
subject to such limitations as may be prescribed by the Committee,
designate one or more persons primarily or contingently as beneficiaries
in writing upon forms supplied by and delivered to the Company, and may
revoke such designations in writing. If a Participant having a right to
designate a beneficiary under an Award Agreement fails effectively to
designate a beneficiary, then the Award will be paid in the following
order of priority:
(I) Surviving spouse;
(II) Surviving children in equal shares; or
(III) To the estate of the Participant.
(f) "Board" means the Board of Directors of the Company as it may be comprised
from time to time.
(g) A "Change in Control" shall be deemed to have occurred if the event set
forth in any one of the following paragraphs of this Section 18(g) 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) 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
March 11, 1998, 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
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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 March 11, 1998 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
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.
(h) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute. References to specified provisions of the
Code shall also include any successor provisions.
(i) "Committee" means a committee of the Board appointed to administer the
Plan (which committee may also be the Compensation Committee of the
Board). The Committee shall be composed of two or more directors as
appointed from time to time to serve by the Board. If for any reason a
Committee shall not have been appointed by the Board, the Board shall
serve as such Committee.
(j) "Company" means Mine Safety Appliances Company, a Pennsylvania
corporation, or any successor corporation (except that Company shall not
mean any successor corporation thereto in determining under Section 18(g)
hereof whether or not any Change in Control of the Company has occurred).
(k) "Disability" shall mean the inability, in the opinion of the Committee, of
a Participant, because of an injury or sickness, to work at a reasonable
occupation which is available with the Company or at any gainful
occupation to which the Participant is or may become fitted, except that
in the case of Incentive Stock Options, Disability shall mean permanent
and total disability as defined in Section 422(e)(3) of the Code.
(l) "Employee" means any individual who is an employee of the Company or any
Participating Subsidiary.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended and
in effect from time to time, or any successor statute.
(n) "Fair Market Value" of a Share, unless otherwise provided in the
applicable Award Agreement, means:
(I) If the Stock is admitted to trading on one or more national
securities exchanges,
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(A) the average of the reported highest and lowest sale prices per
Share as reported on the reporting system selected by the Committee
on the relevant date; or
(B) in the absence of reported sales on that date, the average of the
reported highest and lowest sales prices per Share on the last
previous day for which there was a reported sale; or
(II) If the Stock is not admitted to trading on any national securities
exchange, but is admitted to quotation on the NASDAQ System and has
been designated as a NASDAQ National Market ("NNM") security,
(A) the average of the reported highest and lowest sale prices per
Share as reported on NASDAQ on the relevant date; or
(B) in the absence of reported sales on that date, the average of the
reported highest and lowest sales prices per Share on the last
previous day for which there was a reported sale; or
(III) If the Stock is not admitted to trading on any national securities
exchange, but is admitted to quotation on NASDAQ as a NASDAQ SmallCap
Market security (and has not been designated as a NNM security), the
average of the highest bid and lowest asked prices per Share on the
relevant date; or
(IV) If the preceding clauses (I), (II) and (III) do not apply, the Fair
Market Value determined by the Committee, using such criteria as it
shall determine, in good faith and in its sole discretion, to be
appropriate for such valuation.
(o) "Participant" means an Employee who has been designated by the Committee
to receive an Award Pursuant to this Plan.
(p) "Participating Subsidiary" means a subsidiary of the Company, of which the
Company beneficially owns (whether at the date of adoption of this Plan or
at a later date), directly or indirectly, more than 50% of the aggregate
voting power of all outstanding classes and series of stock.
(q) "Performance Award" means an Award which is granted pursuant to Section
4.4 hereof and is contingent upon the performance of all or a portion of
the Company and/or its subsidiaries and/or which is contingent upon the
individual performance of the Participant to whom it is granted.
(r) "Performance Criteria" means one or more preestablished, objective
measures of performance during a Performance Period by the Company, a
subsidiary or subsidiaries, any department or other portion thereof or the
Participant individually, selected by the Committee in its discretion to
determine whether a Performance Award has been earned in whole or in part.
Performance Criteria may be based on earnings or earnings per share;
earnings before interest and taxes; return on equity, assets or
investment; sales, gross profits or expenses; or stock price. Performance
Criteria based on such performance measures may be based either on the
level of performance of the Company, subsidiary or portion thereof under
such measure for the Performance Period and/or upon a comparison of such
performance with the performance under such measure during a prior period
or with the performance of a peer group of corporations selected or
defined by the Committee at the time of making a Performance Award. The
Committee may in its discretion also determine to use other objective
performance measures as Performance Criteria.
(s) "Performance Period" means an accounting period of the Company or a
subsidiary of not less than one year, as determined by the Committee in
its discretion.
(t) "Person" shall have the meaning given in Section 3(a)(9) of the Exchange
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,
(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
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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 Effective Date or any
Affiliate of any such individual or entity, including, for purposes of this
Section 18(t), 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.
(u) "Restricted Stock" means Shares which have certain restrictions attached
to the ownership thereof, which may be issued under Section 4.3.
(v) "Retirement" means a termination of employment with the Company or a
Participating Subsidiary at or after age 65 with the prior written consent
of the Committee.
(w) "Share" means a share of Stock.
(x) "Stock" means the Common Stock, without par value, of the Company, or, in
the event that the outstanding Common Stock is hereafter changed into, or
exchanged for, different stock or securities, such other stock or
securities.
(y) "Stock Appreciation Right" means a right, the value of which is determined
relative to the appreciation in value of Shares, which may be issued under
Section 4.2.
(z) "Stock Option" means a right to purchase Shares granted pursuant to
Section 4.1 and includes Incentive Stock Options and Non-Qualified Stock
Options as defined in Section 4.1
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