<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Mine Safety Appliances Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF MINE SAFETY APPLIANCES CO.]
MINE SAFETY APPLIANCES COMPANY . P.O. BOX 426, PITTSBURGH, PENNSYLVANIA
15230 . PHONE (412) 967-3000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Holders of Common Stock of
Mine Safety Appliances Company:
Notice is hereby given that the Annual Meeting of Shareholders of Mine
Safety Appliances Company will be held on Wednesday, April 23, 1997, at 10:00
A.M., local Pittsburgh time, at the Company's headquarters, 121 Gamma Drive,
RIDC Industrial Park, O'Hara Township, Pittsburgh, Pennsylvania for the
purpose of considering and acting upon the following:
(1) Election of Directors: The election of two directors for a term of
three years;
(2) Selection of Auditors: The selection of independent auditors for the
year ending December 31, 1997;
and such other business as may properly come before the Annual Meeting or any
adjournment thereof.
Only the holders of Common Stock of the Company of record on the books of
the Company at the close of business on February 21, 1997 are entitled to
notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting, please execute and date the accompanying form of proxy
and return it to the Company in the enclosed self-addressed, stamped envelope
at your earliest convenience. If you attend the meeting, you may, if you wish,
withdraw your proxy and vote your shares in person.
By Order of the Board of
Directors,
Donald H. Cuozzo
Secretary
March 14, 1997
<PAGE>
March 14, 1997
MINE SAFETY APPLIANCES COMPANY
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Mine Safety Appliances Company (the "Company") of
proxies in the accompanying form to be voted at the Annual Meeting of
Shareholders of the Company to be held on Wednesday, April 23, 1997, and at
any and all adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. If a proxy in the
accompanying form is duly executed and returned, the shares of Common Stock
represented thereby will be voted and, where a specification is made by the
shareholder, will be voted in accordance with such specification. A
shareholder giving the accompanying proxy has the power to revoke it at any
time prior to its exercise upon written notice given to the Secretary of the
Company.
The mailing address of the principal executive offices of the Company is
P.O. Box 426, Pittsburgh, Pennsylvania 15230.
VOTING SECURITIES AND RECORD DATE
As of February 21, 1997, the Company had 5,195,022 shares of Common Stock
issued and outstanding. Holders of Common Stock of the Company of record on
the books of the Company at the close of business on February 21, 1997 are
entitled to notice of and to vote at the Annual Meeting and at any adjournment
thereof. Such holders are entitled to one vote for each share held and do not
have cumulative voting rights with respect to the election of directors.
Holders of outstanding shares of the Company's 4 1/2% Cumulative Preferred
Stock are not entitled to vote at the meeting.
See "Security Ownership" for information with respect to share ownership by
the directors and executive officers of the Company and the beneficial owners
of 5% or more of the Company's Common Stock.
PROPOSAL NO. 1 ELECTION OF DIRECTORS
Two directors will be elected at the Annual Meeting to serve until the
Annual Meeting in 2000 and until a successor has been elected and qualified.
The Board of Directors recommends a vote FOR the election of the two nominees
named below, each of whom has consented to be named as a nominee and to serve
if elected. Properly executed proxies timely received in the accompanying form
will be voted for the election of the nominees named below, unless otherwise
directed thereon, or for a substitute nominee designated by the Board in the
event a nominee named becomes unavailable for election.
The following table sets forth certain information about the nominees, both
of whom are currently members of the Board, and about the other directors
whose terms of office will continue after the Annual Meeting:
1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND ANY DIRECTOR OTHER
NAME POSITION WITH THE COMPANY AGE SINCE DIRECTORSHIPS
- ----- ---------------------------- ---- -------- -------------
NOMINEES FOR TERMS EXPIRING IN 2000:
<S> <C> <C> <C> <C>
Calvin A. Campbell, Chairman, President and 62 1994 Eastman Chemical Company
Jr. Chief Executive Officer of
Goodman Equipment
Corporation (manufacturer
of underground mining
locomotives and plastics
blow molding machinery)
G. Donald Gerlach Partner of Reed Smith Shaw 63 1989 None
& McClay (attorneys-at-
law); Vice Chairman of
Keystone Financial Corp.
(hospital investment
manager)
<CAPTION>
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1998:
<S> <C> <C> <C> <C>
Helen Lee Henderson Investor; President of 58 1991 None
Chiron Productions, Ltd.
(theatrical and media
productions)
John T. Ryan III Chairman and Chief 53 1981 None
Executive Officer of the
Company
<CAPTION>
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1999:
<S> <C> <C> <C> <C>
Joseph L. Calihan Managing Partner of 59 1993 None
Bradford Capital Partners
(venture capital
investments and
acquisitions); Chairman of
the Board of Bradford
Schools, Inc. (post-
secondary business
schools)
Leo N. Short, Jr. Retired; formerly Chairman 70 1986 None
of the Board and Chief
Executive Officer of the
Company
</TABLE>
Each director has engaged in the principal occupation indicated in the above
table for at least the past five years. Mr. Ryan also served as President of
the Company from April 1990 to December 1996. Mr. Campbell also was Chairman
of the Board (May 1991 to May 1992) and President and Chief Executive Officer
(February 1992 to May 1992) of Cyprus Minerals Company (now Cyprus Amax
Minerals Company).
The Board of Directors has established an Audit Committee, a Compensation
Committee, a Nominating Committee and certain other committees. The Audit
Committee, which met two times during 1996, reviews the preparations for and
scope of the annual audit of the Company's financial statements, makes
recommendations as to the retention of independent auditors and as to their
fees and performs such other duties relating to the financial statements of
the Company and other matters as the Board of Directors may assign from time
to time. The current members of the Audit Committee are directors Calihan,
Campbell, Gerlach and Henderson, each for a term expiring at the 1997
organizational meeting of the Board of Directors.
2
<PAGE>
The Compensation Committee presently consists of directors Campbell,
Gerlach, Henderson and Short, each for a term expiring at the 1997
organizational meeting of the Board. The Compensation Committee, which met two
times in 1996, makes recommendations to the Board with respect to the
compensation of officers of the Company. A report of the Compensation
Committee as to its policies in recommending the 1996 compensation of the
Company's executive officers appears later. The Compensation Committee also
administers the Company's 1987 Management Share Incentive Plan (the "MSIP"),
and is empowered to award restricted shares and grant stock options
thereunder.
The current members of the Nominating Committee are directors Calihan,
Gerlach, Henderson and Ryan, each for a term expiring at the 1997
organizational meeting of the Board. The Nominating Committee, which met two
times in 1996, considers potential candidates for election to the Board of
Directors and makes recommendations to the Board. Any shareholder who desires
to have an individual considered for nomination by the Nominating Committee
must submit a recommendation in writing to the Secretary of the Company not
later than November 30 preceding the annual meeting at which the election is
to be held.
The Board of Directors met six times during 1996. All current directors
attended at least 75% of the combined total of the meetings of the Board and
of all committees on which they served.
VOTE REQUIRED
The two candidates receiving the highest numbers of votes cast by the
holders of Common Stock voting in person or by proxy will be elected as
directors. A proxy vote indicated as withheld from a nominee will not be cast
for such nominee but will be counted in determining whether a quorum exists
for the meeting.
The Company's Restated Articles require that any shareholder intending to
nominate a candidate for election as a director must give written notice,
containing specified information, to the Secretary of the Company not later
than 90 days in advance of the meeting at which the election is to be held. No
such notices were received with respect to the 1997 Annual Meeting. Therefore,
only the nominees named above will be eligible for election at the meeting.
3
<PAGE>
OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual, long-term
and other compensation paid or accrued by the Company and its subsidiaries for
the years 1996, 1995 and 1994 for the persons who were in 1996 the chief
executive officer and the other four most highly compensated executive
officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------------------- ---------------------------
SHARES
UNDERLYING
OTHER RESTRICTED STOCK
NAME AND ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) AWARDS ($)(2) (# OF SHARES) COMPENSATION ($)(3)
- ------------------ ---- ---------- --------- ------------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John T. Ryan
III, 1996 $345,360 $252,800 -- $214,938 8,182 $32,936
Chairman and 1995 335,280 219,500 -- -- -- 28,082
Chief Executive
Officer; 1994 298,356 132,431 -- -- 5,530 25,198
President until
December 1996
Werner E.
Christen, 1996 $316,453 $39,325 -- -- -- --
Vice President 1995 323,153 42,412 -- -- -- --
(Managing
Director 1994 268,736 30,320 -- -- -- --
of MSA Europe
and General
Director of
German
subsidiary)
Thomas B.
Hotopp, 1996 $208,320 $91,100 -- $100,908 3,760 $17,077
Senior Vice 1995 201,840 77,000 -- -- -- 15,623
President - 1994 192,204 47,124 -- -- 2,220 14,652
Safety Products;
President from
December 1996
Frederick
Tepper, 1996 $166,560 $60,500 -- $ 56,110 2,100 $26,138
Vice President 1995 161,400 32,700 -- -- -- 23,302
(General
Manager, 1994 150,840 42,784 -- -- 1,710 23,258
Instrument
Division)
James E. Herald, 1996 $150,000 $71,400 -- $ 52,943 1,970 $18,525
Vice President - 1995 150,000 56,500 -- -- -- 17,586
Finance 1994 138,900 37,555 -- -- 1,330 14,626
</TABLE>
(1) For each year, the incremental cost to the Company of personal benefits
provided to any Named Officer did not exceed the lesser of $50,000 or 10%
of aggregate salary and bonus.
(2) The amounts shown in this column represent the market values on February
27, 1996 of restricted shares awarded on that date. At December 31, 1996
the number and market values of restricted shares held by the Named
Officers were as follows: Mr. Ryan, 9,734 shares ($518,336); Mr. Christen,
none; Mr. Hotopp, 4,153 shares ($221,147); Mr. Tepper, 2,604 shares
($138,663); and Mr. Herald, 2,572 shares ($136,959). Holders of restricted
shares receive dividends at the same rate as paid on other shares of
Common Stock.
(3) 1996 amounts include Company matching contributions to the Company's
Retirement Savings and Supplemental Savings Plans as follows: Mr. Ryan,
$16,946; Mr. Hotopp, $11,413; Mr. Tepper, $7,970; and Mr. Herald, $8,260.
1996 amounts also include life insurance premiums paid by the Company as
follows: Mr. Ryan, $15,990; Mr. Hotopp, $5,664; Mr. Tepper, $18,168; and
Mr. Herald, $10,265.
4
<PAGE>
STOCK OPTION GRANTS IN 1996
The following table sets forth information concerning stock options granted
to the Named Officers in 1996 under the MSIP:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES TOTAL OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED (#) IN 1996 ($/SHARE) (1) DATE VALUE (2)
- ---- ----------- ------------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
John T. Ryan III 375 1.3% $49.775 2/27/2001 $ 2,834
7,807 27.0% $45.25 2/27/2006 $104,566
Werner E. Christen -- -- -- -- --
Thomas B. Hotopp 3,763 13.0% $45.25 2/27/2006 $ 50,399
Frederick Tepper 2,100 7.3% $45.25 2/27/2006 $ 28,095
James E. Herald 1,970 6.8% $45.25 2/27/2006 $ 26,426
</TABLE>
- --------
(1) The exercise price is the market value of the Common Stock on the date the
options were granted, except that in the case of the option for 375 shares
granted to Mr. Ryan it is 110% of such value. The options became
exercisable on August 27, 1996. Except for the option for 7,807 shares
granted to Mr. Ryan and 1,558 shares of the options granted to Mr. Hotopp,
all options are intended to qualify as incentive stock options under the
Internal Revenue Code.
(2) The grant date present value of the options has been determined utilizing
the Black-Scholes option pricing model. The assumptions used to arrive at
the present values were: stock price volatility of 18%, expected dividend
yield of 2.22%, expected option term of five years for the option for 375
shares granted to Mr. Ryan and ten years for the remaining options, and a
5.65% risk-free rate of return.
STOCK OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth information concerning stock options under
the MSIP exercised by the Named Officers during 1996 and stock options under
the MSIP held by the Named Officers at December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
UNDERLYING VALUE OF
NUMBER OF UNEXERCISED UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY
ACQUIRED VALUE 12/31/96 OPTIONS AT
NAME ON EXERCISE REALIZED (1) (2) 12/31/96 (3)
- ---- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
John T. Ryan III 5,400 $11,813 13,712 $90,580
Werner E. Christen -- -- -- --
Thomas B. Hotopp -- -- 7,483 $64,832
Frederick Tepper 5,310 $57,314 3,600 $16,800
James E. Herald -- -- 5,900 $42,263
</TABLE>
(1) Represents the difference between the fair market value of the shares
acquired on the date of exercise and the option price.
(2) All options were exercisable at December 31, 1996.
(3) Represents the amount by which the December 31, 1996 market value of the
shares subject to certain unexercised options exceeded the option price of
those options as follows: Mr. Ryan, 13,712 shares; Mr. Hotopp, 7,483
shares; Mr. Tepper, 2,100 shares; and Mr. Herald, 4,900 shares. At
December 31, 1996, the option price of all other unexercised options
exceeded the market value of the option shares.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on 1996 executive compensation:
The Compensation Committee of the Board of Directors is responsible for
recommending to the Board salaries and bonuses to be paid to the Company's
corporate officers, including its executive officers. The Compensation
Committee was also responsible in 1996 for administering the Company's
shareholder approved 1987 Management Share Incentive Plan (the "MSIP"), which
permits the Committee to make discretionary grants of stock options and
restricted stock as incentives to executive officers and other key employees.
The Compensation Committee's policy in recommending salaries is designed to
pay executive officer salaries at competitive levels necessary to attract and
retain competent personnel while at the same time recognizing Company,
division and individual performance factors. To do this, the Company
periodically retains compensation consultants to assist in evaluating each
United States executive officer position and in determining the market level
salary range for the position based on salaries paid for executive positions
with similar duties and responsibilities by other manufacturing companies of
comparable size and sales volumes. Between these periodic evaluations, market
level salary ranges for each position are reviewed to reflect changes shown by
data provided from compensation surveys. Within the market level salary range
for each executive officer position, the salary to be paid to the individual
officer is determined based on a consideration of Company, division and
individual performance. For United States officers other than the chief
executive officer, Company performance, measured primarily by consolidated net
income for the preceding year, and compensation survey data are used to
establish the aggregate budget for salary increases. Individual salary
adjustments are then determined by allocating the aggregate budget taking into
consideration the relationship of the officer's current salary to the market
level range and an evaluation of the officer's individual performance made
initially by the chief executive officer or the officer's other immediate
supervisor. In the case of the chief executive officer, the individual
performance evaluation and the determination of the amount of the salary
adjustment are made by the Compensation Committee.
The Company has one executive officer located overseas, Werner E. Christen,
a Vice President of the Company. Mr. Christen is the Managing Director of MSA
Europe and the General Director of the Company's German subsidiary. The
determination of Mr. Christen's salary is made in a manner similar to that
used for executive officers located in the United States, except that the
market level salary range for his position is determined by reference to
salaries paid for similar executive positions in Germany and corporate
performance is measured by the income of the German subsidiary, rather than by
consolidated net income. In determining Mr. Christen's salary, the Company
also takes into account the fact that Mr. Christen does not participate in
stock option and restricted stock awards made to other executive officers
under the MSIP and also does not receive many of the insurance and other
benefits available to United States officers.
The Committee considered 1996 executive officer salaries at its meeting in
December 1995. In determining the amount of the 1996 salary of the chief
executive officer, the Committee considered a request by Mr. Ryan that he not
be granted an increase which exceeded the 3% salary increase budget which had
been established for domestic non-officer employees. The Committee also
considered that a 3% increase from Mr. Ryan's 1995 salary was necessary to
maintain Mr. Ryan's salary within the range of 80% to 120% of the median
market salary specified in the Committee's compensation policy. In deference
to Mr. Ryan's request, the Committee increased Mr. Ryan's 1996 salary by only
the 3% necessary to maintain the minimum 80% relationship to the median market
salary for his position.
The Company's annual bonus policy is designed to make a significant
percentage of an executive officer's total cash compensation dependent upon
corporate and individual performance. At targeted levels for United States
officers, this percentage is 50% of median market level salary for the chief
executive officer, and ranges between 40% and 20% of median market level
salary for other executive officers. For the chief executive officer, the
percentage of the targeted bonus earned is initially determined as the
percentage of achievement of a targeted
6
<PAGE>
level of consolidated earnings before interest and taxes (EBIT) for the year
by the Company's worldwide operations. For other United States officers, from
25% to 50% of the initial bonus determination is based on the percentage of
achievement of the consolidated EBIT target, and the remainder is determined
based on the percentage of achievement of EBIT targets established for the
Company's United States operations and, in the case of division managers, its
operating divisions. The initial percentage of the targeted bonus earned based
on EBIT performance may be adjusted upward or downward for each officer based
upon an evaluation of the individual officer's performance during the year,
which is made initially by the chief executive officer or the officer's other
immediate supervisor or, in the case of the chief executive officer, by the
Compensation Committee. Individual bonuses may not exceed 150% of targeted
levels, and no bonus is paid based on EBIT which is less than 50% of the
targeted amount. The total amount payable as bonuses in any year may not
exceed 3% of consolidated EBIT. The determination of the amount of the annual
bonus to be paid to Mr. Christen is made after taking into consideration the
income of the Company's German subsidiary and an evaluation of his individual
performance.
The Committee considered bonuses for 1996 at its meeting in February 1997.
The amount of the bonus paid to Mr. Ryan reflected the percentage of
achievement by the Company of the 1996 consolidated EBIT target, except that
since the aggregate bonuses payable under the bonus program formulas would
otherwise have exceeded the program cap of 3% of consolidated EBIT, the
bonuses payable to all bonus program participants, including Mr. Ryan, were
reduced proportionately to the extent necessary to comply with this
limitation.
Awards under the MSIP are intended to provide executive officers with long-
term incentives in the form of stock-based compensation to remain with the
Company and to work to increase shareowner value. Under both types of awards
authorized by the MSIP, stock options and restricted stock, the value received
by the officer is a direct function of the Company's success in achieving a
long-term increase in the market value of its Common Stock. At its meeting in
February 1996, the Committee adopted changes to the Company's long-term
incentive award program under the MSIP based on recommendations resulting from
a study of the program by William M. Mercer Incorporated, a compensation
consulting firm. Under the revised program approved by the Committee, the
targeted annualized dollar value of MSIP awards for each executive officer
position is based on the market level annualized dollar value of long-term
incentive awards for similar positions, as determined from compensation survey
data. The targeted dollar amounts for each position may be adjusted upward or
downward by the Committee based on an evaluation of the officer's individual
performance made initially by the chief executive officer or the officer's
other immediate supervisor or, in the case of the chief executive officer, by
the Committee.
On an annualized basis, 50% of the adjusted dollar value of long-term
incentive awards, as so determined, is made in the form of stock options and
50% in the form of restricted stock awards. Stock option grants are made
annually, and restricted stock awards are made every other year. The number of
shares for which stock options are granted to each executive officer is
determined by dividing 50% of the adjusted dollar value by the per share value
of the options as determined under the Black-Scholes option pricing model.
Stock options are normally granted as incentive stock options within the
limits established by the Internal Revenue Code and as nonqualified options
above those limits. The option price is equal to the fair market value of the
option shares as of the date the options are granted, except that in the case
of incentive stock options granted to Mr. Ryan, the option price is 110% of
the grant date fair market value. The options become exercisable six months
from the date of grant and have a term of ten years, except that in the case
of incentive stock options granted to Mr. Ryan the term is five years. The
options generally are exercisable only while the grantee remains an employee
of the Company or a subsidiary, except that the options may be exercised for
limited periods after a termination of employment due to death, disability or
retirement or a voluntary termination with the consent of the Company.
The number of shares awarded in the form of restricted stock is determined
by dividing 50% of the adjusted dollar value of long-term incentive awards for
each executive officer by the per share market value on the date of the award,
and then doubling this amount to reflect that restricted stock awards are made
only once every two years. Under the terms of the awards, the restricted
shares granted will vest over a term of five years, with one-half of the
shares awarded vesting on March 15 of each of the fourth and fifth years
following the award date.
7
<PAGE>
Until vesting, the restricted shares are held in escrow by the Company, may
not be sold and generally will be forfeited if the officer's employment
terminates other than by death, disability or retirement under a Company
retirement plan.
In accordance with the revised long-term incentive program approved by the
Committee, both stock options and restricted stock awards under the MSIP were
granted by the Committee at its February 1996 meeting. In the case of the
chief executive officer, the numbers of shares covered by the awards reflected
the targeted values for his position.
The Company believes that stock options granted under the MSIP qualify as
"performance-based compensation" under Section 162(m) of the Internal Revenue
Code, and the Company does not anticipate that it will be affected by the cap
on deductibility of executive compensation imposed by that Section.
The foregoing report was submitted by the Compensation Committee of the
Board of Directors:
Calvin A. Campbell, Jr., Chairman
G. Donald Gerlach
Helen Lee Henderson
Leo N. Short, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no interlocking relationships, as defined in regulations of the
Securities and Exchange Commission, involving members of the Compensation
Committee.
Directors Gerlach, Campbell, Henderson and Short served as members of the
Compensation Committee during all of 1996.
Mr. Short is a former officer of the Company. Mr. Gerlach is a partner in
the law firm of Reed Smith Shaw & McClay, which provides legal services to the
Company as its outside counsel. Mr. Campbell is a majority owner, a director
and Chairman, President and Chief Executive Officer of Goodman Equipment
Corporation. During 1996, the Company and its affiliates received commissions
of approximately $103,592 for acting as sales agents with respect to sales of
certain mining locomotives and spare parts for Goodman Equipment Corporation.
RETIREMENT PLANS
The following table shows the estimated annual retirement benefits payable
upon normal retirement at age 65 under the Company's Non-Contributory Pension
Plan for Employees to participating employees, including executive officers,
in selected compensation and years-of-service classifications.
<TABLE>
<CAPTION>
5 YEAR AVERAGE COMPENSATION
-----------------------------------------------------
YEARS OF
SERVICE $100,000 $200,000 $300,000 $400,000 $500,000 $600,000
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
5 $ 6,330 $ 14,080 $ 21,830 $ 29,580 $ 37,330 $ 45,080
15 18,991 42,241 65,491 88,741 111,991 135,241
25 31,651 70,401 109,151 147,901 186,651 225,401
35 44,312 98,562 152,812 207,062 261,312 315,562
45 54,312 118,562 182,812 247,062 311,312 375,562
</TABLE>
- --------
Notes:
1. Years of service are based upon completed months of service from date of
hire to date of retirement.
2. The benefits actually payable under the plan will be subject to the
limitations of Sections 415 and 401(a)(17) of the Internal Revenue Code.
These limitations have not been reflected in the table. However, the Board
of Directors has passed a resolution providing for the payment by the
Company to officers on an unfunded basis of the difference between the
amounts payable under the benefit formula of the plan and the benefit
limitations of Sections 415 and 401(a)(17) of the Internal Revenue Code.
8
<PAGE>
3. This table applies to employees born in calendar year 1937. The actual
benefits payable will vary slightly depending upon the actual year of
birth.
4. The benefits shown have been calculated using the Social Security law in
effect on January 1, 1997, with a maximum taxable wage base of $65,400
assumed until retirement.
The amounts shown in the table are straight-life annuity amounts, assuming
no election of any available survivorship option, and are not subject to any
Social Security or other offsets. Benefits under the plan are based on the
highest annual average of the participant's covered compensation for any five
consecutive years of service, with covered compensation including salary and
bonus. As of December 31, 1996, years of service under the plan for the Named
Officers were: Mr. Ryan III, 27.50 years; Mr. Hotopp, 5.42 years; Mr. Tepper,
39.28 years; and Mr. Herald, 9.33 years.
Mr. Christen does not participate in the Company's retirement plans, but
instead participates in a separate plan of the Company's German subsidiary.
Assuming normal retirement at age 65, the annual retirement benefit payable to
Mr. Christen under this plan would be approximately 45% of his final annual
salary. Based upon his 1996 salary, the amount of Mr. Christen's annual
retirement benefit is estimated to be approximately $142,400.
The Company's Executive Insurance Program was established to assist members
of senior management approved by the Board in procuring life insurance during
their working careers and to provide them with additional flexibility and
benefits upon retirement. Under the program, the Company's group term life
insurance in excess of $50,000 is replaced with individual insurance up to an
approved amount. Premiums are paid by the Company and are included under "All
Other Compensation" in the above compensation table. In lieu of insurance
after retirement, the participant may elect (i) an uninsured death benefit
from the Company in the insurance amount, which would be taxable when paid, or
(ii) to have 75% of the insurance amount paid to him by the Company in monthly
installments over 15 years. If the second uninsured alternative were selected,
the annual amount payable by the Company upon retirement would be $50,000 for
Mr. Ryan III and $30,000 for Messrs. Hotopp, Tepper and Herald. If either of
the two uninsured alternatives are selected, the death benefit on the
insurance policy would be paid to the Company. Mr. Christen does not
participate in this program.
DIRECTOR COMPENSATION
In 1996, directors who are not employees of the Company or one of its
subsidiaries were paid a quarterly retainer of $4,000 and $1,000 for each
Board meeting and $700 for each meeting of a Committee of the Board that they
attended. Directors who are employees of the Company or a subsidiary do not
receive additional compensation for service as a director. Under the
Retirement Plan for Directors, directors who retire from the Board on or after
attaining age 70 and completing at least 5 years of service as a director are
entitled to receive a lifetime quarterly retirement allowance equal to the
quarterly directors' retainer payable at the time of their retirement.
The 1990 Non-Employee Directors' Stock Option Plan (the "DSOP") was approved
by the shareholders at the 1991 Annual Meeting. Its purposes are to enhance
the mutuality of interests between the Board and the shareholders by
increasing the share ownership of non-employee directors and to assist the
Company in attracting and retaining able persons to serve as directors. Under
the DSOP, directors who are not employees of the Company or a subsidiary
receive annual stock option grants to purchase up to 500 shares of Common
Stock at an option price equal to the market value on the date the options are
granted. The options become exercisable six months from the date of grant and
expire ten years from the date of grant. Options which have not yet become
exercisable are forfeited if the grantee ceases to be a director for reasons
other than death or disability. Otherwise, unexpired options may generally be
exercised for two years following termination of service as a director. The
total number of shares which may be issued under the DSOP is limited to 50,000
shares of Common Stock. Pursuant to the terms of the DSOP, on April 26, 1996
options to purchase 500 shares of Common Stock at an exercise price of $44.50
per share were granted to directors Calihan, Campbell, Gerlach, Henderson and
Short.
9
<PAGE>
Subsequent to his retirement as an employee, Mr. Short entered into a
consulting agreement with the Company providing an annual consulting fee as
compensation for his advisory services. In 1996, the consulting fee under the
agreement was $30,000. The consulting agreement has a one-year term, renewable
from year to year. If Mr. Short were to become incapacitated or die, the fee
for the balance of the one-year term would be paid in a lump sum to him or his
estate.
CERTAIN TRANSACTIONS
In February 1996, the Company repurchased 7,500 shares of Common Stock from
the estate of John T. Ryan, Jr. at a price of $47.50 per share. The purchase
price was determined by reference to market prices at the time of purchase.
John T. Ryan, Jr. was a director of the Company until his death in July 1995
and was the father of John T. Ryan III, the Chairman and Chief Executive
Officer of the Company. John T. Ryan III and his mother, Mary Irene Ryan, a
beneficial owner of 12.44% of the outstanding Common Stock, are co-executors
and beneficiaries of the estate of John T. Ryan, Jr.
In January 1997, the Company repurchased 2,428 shares of Common Stock from
Leo N. Short, Jr., a director of the Company, at a price of $55.44 per share.
In February 1997, the Company repurchased 2,604 shares of Common Stock from
Frederick Tepper, a retired former executive officer of the Company, at a
price of $58.25 per share. The purchase price in both transactions was
determined by reference to market prices at the time of purchase.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Among S&P 500 Index, Russell 2000 Index and Mine Safety Appliances Company
Set forth below is a line graph comparing the cumulative total returns
(assuming reinvestment of dividends) for the five years ended December 31,
1996 of $100 invested on December 31, 1991 in each of the Company's Common
Stock, the Standard & Poor's 500 Composite Index and the Russell 2000 Index.
Because its competitors are principally privately held concerns or
subsidiaries or divisions of corporations engaged in multiple lines of
business, the Company does not believe it feasible to construct a peer group
comparison on an industry or line-of-business basis. The Russell 2000 Index,
while including corporations both larger and smaller than the Company in terms
of market capitalization, is composed of corporations with an average market
capitalization similar to that of the Company.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG MINE SAFETY APPLIANCES CO., S&P 500 INDEX AND RUSSELL 2000 INDEX
<CAPTION>
Measurement period MINE SAFETY
(Fiscal year covered) APPLIANCES CO. S&P 500 RUSSELL 2000
- --------------------- -------------- ------- ------------
<S> <C> <C> <C>
Measurement PT -
12/31/91 $100 $100 $100
FYE 12/31/92 $ 83 $140 $173
FYE 12/31/93 $ 90 $155 $206
FYE 12/31/94 $ 98 $157 $202
FYE 12/31/95 $106 $215 $259
FYE 12/31/96 $121 $266 $302
</TABLE>
10
<PAGE>
STOCK OWNERSHIP
Under regulations of the Securities and Exchange Commission, a person is
considered the "beneficial owner" of a security if the person has or shares
with others the power to vote the security (voting power) or the power to
dispose of the security (investment power). In the tables which follow,
"beneficial ownership" of the Company's stock is determined in accordance with
these regulations and does not necessarily indicate that the person listed as
a "beneficial owner" has an economic interest in the shares indicated as
"beneficially owned."
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the amount and nature
of beneficial ownership of the Company's Common Stock as of February 21, 1997
and 4 1/2% Cumulative Preferred Stock as of February 14, 1997 by each director
and Named Officer and by all directors and executive officers as a group.
Except as otherwise indicated in the footnotes to the table, the person named
or a member of the group has sole voting and investment power with respect to
the shares listed.
<TABLE>
<CAPTION>
4 1/2% CUMULATIVE
COMMON STOCK PREFERRED STOCK
--------------------------- -------------------
AMOUNT AND AMOUNT AND
NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF BENEFICIAL OF
OWNERSHIP (1) CLASS (1) OWNERSHIP CLASS
------------- --------- ---------- -------
<S> <C> <C> <C> <C>
John T. Ryan III 662,083(2) 12.71% 446(2) 2.02%
Joseph L. Calihan 5,250 0.10% -- --
Calvin A. Campbell, Jr. 1,500 0.03% -- --
G. Donald Gerlach 272,128(3) 5.24% 93(3) 0.42%
Helen Lee Henderson 293,076(4) 5.64% 579(4) 2.62%
Leo N. Short, Jr. 9,900(5) 0.19% -- --
Werner E. Christen 400 0.01% -- --
Thomas B. Hotopp 60,250(6)(7) 1.16% -- --
Frederick Tepper 49,753(6)(8) 0.96% -- --
James E. Herald 56,157(6) 1.08% -- --
All executive officers and
directors
as a group (14 persons) 1,306,821(9) 24.93% 1,118 5.07%
</TABLE>
- --------
(1) The number of shares of Common Stock beneficially owned and the number of
shares of Common Stock outstanding used in calculating the percent of
class include the following shares of Common Stock which may be acquired
within 60 days upon the exercise of stock options held under the MSIP or
the DSOP: Mr. Ryan, 13,912 shares; Mr. Calihan, 1,700 shares; Mr.
Campbell, 500 shares; Mr. Gerlach, 2,100 shares; Ms. Henderson, 2,100
shares; Mr. Short, 1,900 shares; Mr. Christen, none; Mr. Hotopp, 7,483
shares; Mr. Tepper, 3,600 shares; Mr. Herald, 5,900 shares; and all
directors and executive officers as a group, 46,155 shares. The number of
shares of Common Stock beneficially owned also includes the following
restricted shares awarded under the MSIP, as to which such persons have
voting power only: Mr. Ryan, 9,734 shares; Mr. Hotopp, 4,153 shares; Mr.
Herald, 2,572 shares; and all directors and executive officers as a group,
22,281 shares.
(2) Does not include 94,462 shares of Common Stock held by Mr. Ryan's wife.
Includes 450,355 shares of Common Stock and 259 shares of 4 1/2%
Cumulative Preferred Stock held by Mr. Ryan as co-trustee of various
trusts and co-executor of an estate, as to which voting and investment
power is shared with other co-fiduciaries. Of such shares, voting and
investment power over 260,000 shares of Common Stock is shared with G.
Donald Gerlach, and voting and investment power over 432,855 shares of
Common Stock and 259 shares of 4 1/2% Cumulative Preferred Stock is shared
with Mary Irene Ryan. See the following discussion of the beneficial
ownership of Mary Irene Ryan.
11
<PAGE>
(3) Includes 260,000 shares of Common Stock held by Mr. Gerlach as co-trustee
of various trusts, as to which voting and investment power is shared with
other co-fiduciaries. Of such shares, voting and investment power over
260,000 shares of Common Stock is shared with John T. Ryan III, and voting
and investment power over 242,500 shares of Common Stock is shared with
Mary Irene Ryan. See the following discussion of the beneficial ownership
of Mary Irene Ryan.
(4) Includes 219,036 shares of Common Stock held in trusts, as to which Ms.
Henderson shares voting and investment power with co-trustees. See the
following discussion of the beneficial ownership of PNC Bank Corp.
(5) Includes 1,500 shares of Common Stock as to which Mr. Short shares voting
and investment power with his wife.
(6) The Company has established a Stock Compensation Trust which holds 600,000
shares of Common Stock which are available to satisfy obligations of the
Company under its stock incentive plans. Under the terms of the Trust
Agreement, the trustee, PNC Bank, must follow the directions of the
holders of stock options under the plans, excluding members of the Board
of Directors, in voting the shares held by the Trust and in determining
whether such shares should be tendered in the event of a tender or
exchange offer for the Common Stock. Each such option holder has the power
to direct the trustee with respect to a number of shares of Common Stock
equal to the shares held by the Trust divided by the number of option
holders. Included in the table are 46,153 shares of Common Stock each for
Messrs. Hotopp, Tepper and Herald, and 276,918 shares of Common Stock for
all directors and executive officers as a group, as to which such persons
and other executive officers of the Company have such voting and
investment power. See the following discussion of the beneficial ownership
of PNC Bank Corp.
(7) Includes 1,500 shares of Common Stock as to which Mr. Hotopp shares voting
and investment power with his wife.
(8) Does not include 6,082 shares of Common Stock owned by Mr. Tepper's wife.
Mr. Tepper retired as an executive officer of the Company effective
February 1, 1997. Accordingly, shares beneficially owned by Mr. Tepper are
not included in the totals for all directors and executive officers as a
group.
(9) See the other footnotes above. Also includes 2,300 shares of Common Stock
as to which executive officers not named in the table share voting and
investment power with their wives.
5% BENEFICIAL OWNERS
As of February 21, 1997, to the best of the Company's knowledge, six persons
or entities beneficially owned more than 5% of the Company's Common Stock. The
beneficial ownership of John T. Ryan III, G. Donald Gerlach and Helen Lee
Henderson appears in the immediately preceding table. The following table sets
forth the beneficial ownership of the other 5% beneficial owners, based upon
information provided by such persons:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- ---------- -------
<S> <C> <C>
Mary Irene Ryan 646,268(1)(2)(3) 12.44%
20 West Woodland Road
Pittsburgh, Pennsylvania 15232
PNC Bank Corp. 938,145(4)(5)(6)(7) 18.06%
PNC Bank Building
Pittsburgh, Pennsylvania 15265
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- ---------- -------
<S> <C> <C>
Helen Ruth Henderson 407,026(7)(8) 7.83%
728 Fairview Road
Pittsburgh, Pennsylvania 15238
</TABLE>
- --------
(1) Mary Irene Ryan has sole voting and investment power with respect to
213,413 and 117,413 shares, respectively, and shares voting and investment
power with respect to 432,855 and 528,855 shares, respectively.
(2) Includes 432,655 shares of Common Stock and an option for an additional
200 shares as to which Mary Irene Ryan and John T. Ryan III share voting
and investment power as co-fiduciaries. Mary Irene Ryan is the mother of
John T. Ryan III.
(3) Includes 242,500 shares of Common Stock as to which Mary Irene Ryan and G.
Donald Gerlach share voting and investment power as co-fiduciaries.
(4) All shares are held by subsidiary banks of PNC Bank Corp. ("PNC") in
various fiduciary capacities. The banks have sole voting and investment
power with respect to 66,769 and 7,500 shares, respectively, and share
voting and investment power with respect to 271,376 and 874,745 shares,
respectively.
(5) Includes 219,036 shares as to which PNC and Helen Lee Henderson share
voting and investment power as co-trustees. The trustees have delegated
the authority to vote these shares to Helen Lee Henderson.
(6) Includes 600,000 shares of Common Stock held by the Company's Stock
Compensation Trust, as to which investment power is shared with certain
executive officers of the Company and other holders of stock options under
Company plans. See footnote (6) to the immediately preceding table.
(7) Includes 52,340 shares as to which PNC and Helen Ruth Henderson share
voting and investment power.
(8) Helen Ruth Henderson has sole voting and investment power with respect to
309,134 shares and shares voting and investment power with respect to
97,892 and 52,340 shares, respectively. Does not include 6,240 shares of
Common Stock held by Helen Ruth Henderson's husband. Helen Ruth Henderson
is the mother of Helen Lee Henderson.
BENEFICIAL OWNERSHIP OF RYAN AND HENDERSON FAMILIES
The preceding tables disclose in accordance with Securities and Exchange
Commission requirements only a portion of the aggregate beneficial ownership
of the Company's Common Stock by the Ryan and Henderson families. As of
February 21, 1997, members of the extended family of John T. Ryan III and Mary
Irene Ryan, including trusts for their benefit, beneficially owned to the
knowledge of the Company an aggregate of 1,724,201 shares of Common Stock,
representing 33.10% of the outstanding shares. As of the same date, members of
the extended family of Helen Lee Henderson and Helen Ruth Henderson, including
trusts for their benefit, beneficially owned to the knowledge of the Company
an aggregate of 773,879 shares of Common Stock, representing 14.89% of the
outstanding shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that directors
and officers of the Company and beneficial owners of more than 10% of its
Common Stock file reports with the Securities and Exchange Commission with
respect to changes in their beneficial ownership of equity securities of the
Company. Based solely upon a review of the copies of such reports furnished to
the Company and written representations by
13
<PAGE>
certain persons that reports on Form 5 were not required, the Company believes
that all 1996 Section 16(a) filing requirements applicable to its directors,
officers and greater-than-10% beneficial owners were complied with.
SHAREHOLDER RIGHTS PLAN
On February 10, 1997, the Board of Directors approved the adoption of a
shareholder rights plan for the Company. The plan is intended to promote
continuity and stability, deter coercive or partial offers and other unfair
takeover tactics which will not provide fair value to all shareholders, and
enhance the Board's ability to represent all shareholders and thereby maximize
shareholder values.
Pursuant to a Rights Agreement entered into between the Company and Norwest
Bank, Minnesota, N.A., as Rights Agent, each share of Common Stock outstanding
on February 21, 1997 or which is issued thereafter prior to the Distribution
Date (defined below) is granted one right (a "Right"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share
(a "Unit") of Series A Junior Participating Preferred Stock of the Company
(the "Preferred Shares") at a price of $225.00 per Unit, subject to adjustment
in the event of stock dividends and similar events occurring prior to the
Distribution Date. While the Rights have no voting power or dividend or
liquidation rights, each Unit of Preferred Shares would have voting, dividend
and liquidation rights which are the approximate equivalent of one share of
Common Stock.
The Rights are not exercisable until the Distribution Date, which is the
earlier to occur of (i) 10 days following a public announcement that a person
(an "Acquiring Person") has acquired beneficial ownership, as defined in the
Rights Agreement, of 15% or more of the outstanding Common Stock or (ii) 10
business days (unless extended by the Board of Directors) following the
commencement of a tender offer or exchange offer which would result in the
beneficial ownership by a person of 15% or more of the outstanding Common
Stock. Until the Distribution Date, the Rights will be transferred with and
only with Common Stock, and the transfer of a share of Common Stock will also
constitute the transfer of the associated Right. Following the Distribution
Date, separate certificates evidencing the Rights will be mailed to holders of
record of Common Stock on the Distribution Date, and the Rights will then
become separately tradable.
In the event that any person becomes an Acquiring Person (other than
pursuant to certain qualifying tender or exchange offers approved by the
Board) and after expiration of the period during which the Rights may be
redeemed, each Right, other than Rights beneficially owned by the Acquiring
Person or its associates or affiliates (which will become void), will
thereafter entitle its holder to receive, upon exercise, shares of Common
Stock (or in certain circumstances, cash, property or other securities of the
Company) having a market value of two times the exercise price of the Right.
In the event that after the first public announcement that any person has
become an Acquiring Person, the Company engages in a merger or other business
combination transaction in which the Company does not survive (other than a
merger pursuant to certain qualifying tender or exchange offers) or in which
the Company survives and the Common Stock of the Company is changed or
exchanged or more than 50% of its assets or earning power are transferred,
each Right, other than Rights beneficially owned by the Acquiring Person or
its associates or affiliates (which will be void), will entitle its holder to
receive, upon exercise of the Right, shares of common stock of the acquiring
company having a market value of two times the exercise price of the Right.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person of 50% or more of the outstanding Common Stock, the
Board of Directors may exchange the Rights (other than Rights which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one Unit of Preferred Shares (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges) per Right, subject to adjustment. In determining whether an
individual or a qualifying nonbusiness entity has become an Acquiring Person,
shares of Common Stock held continuously on and after February 10, 1997, or
acquired by gift or inheritance from another individual or qualifying entity
which held them on that date, are excluded from the 15% beneficial ownership
calculation.
14
<PAGE>
At any time prior to 10 days after the public announcement of an Acquiring
Person, the Board of Directors may redeem the Rights in whole, but not in
part, at a redemption price of $.01 per Right. Prior to the Distribution Date,
the terms of the Rights may be amended by the Board of Directors in any
respect whatever, without the consent of the holders of the Rights, except
that the redemption price, the expiration date of the Rights, the exercise
price or the number of Units for which a Right is exercisable may not be
amended. After the Distribution Date, the Board may amend certain time periods
and certain other provisions relating to the Rights, subject to certain
limitations and so long as such amendments do not adversely affect the holders
of the Rights, except that the time period for redemption of the Rights may
not be amended after the Rights have become nonredeemable. The Rights will
expire on February 21, 2007, unless the Rights are earlier redeemed or
exchanged by the Company as described above.
The foregoing is a summary of the provisions of the Rights Agreement, and
does not purport to be complete. It is qualified in its entirety by reference
to the Rights Agreement, which has been filed by the Company with the
Securities and Exchange Commission. Further, a letter and a Summary of the
Rights were mailed to all shareholders.
PROPOSAL NO. 2 SELECTION OF AUDITORS
Because of the importance to the shareholders of having the Company's
accounts reviewed by independent accountants, it is the opinion of the Board
of Directors that the selection of auditors should be submitted to the
shareholders. The firm of Price Waterhouse LLP has been the independent
auditors for the Company since 1959. Price Waterhouse LLP has advised the
Company that neither the firm nor any of its partners has any direct or
material indirect financial interest in the Company or any of its
subsidiaries.
As independent accountants for the fiscal year ended December 31, 1996 Price
Waterhouse LLP provided auditing services in connection with their examination
of the consolidated financial statements of the Company, the separate
financial statements of its subsidiaries and periodic filings made by the
Company with the Securities and Exchange Commission.
The Board of Directors recommends a vote for the selection of Price
Waterhouse LLP as independent auditors, and proxies received in the
accompanying form will be so voted, unless a contrary specification is made.
It is expected that one or more representatives of Price Waterhouse LLP will
be present at the Annual Meeting with the opportunity to make a statement, if
they desire to do so, and to respond to appropriate questions. See "Election
of Directors" for information concerning the Audit Committee of the Board of
Directors.
Approval of this proposal requires the affirmative vote of a majority of the
votes cast on the proposal at the Annual Meeting by the holders of Common
Stock voting in person or by proxy. Under the Pennsylvania Business
Corporation Law, an abstention is not a vote cast and will not be counted in
determining the number of votes required for approval, though it will be
counted in determining the presence of a quorum. In the event the proposal is
not approved, the Board will treat this as a recommendation to consider other
auditors for 1998.
OTHER MATTERS
The Board of Directors does not know of any matters, other than those
referred to herein, which will be presented for action at the meeting.
However, in the event of a vote on any other matter that should properly come
before the meeting, it is intended that proxies received in the accompanying
form will be voted thereon in accordance with the discretion and judgment of
the persons named in the proxies.
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST TO THE UNDERSIGNED SECRETARY OF THE COMPANY (AT THE
ADDRESS SPECIFIED ON PAGE 1) BY ANY SHAREHOLDER WHOSE PROXY IS SOLICITED
HEREBY, THE COMPANY WILL FURNISH A COPY OF ITS 1996 ANNUAL REPORT ON FORM 10-K
TO THE SECURITIES AND EXCHANGE COMMISSION, TOGETHER WITH FINANCIAL STATEMENTS
AND SCHEDULES THERETO, WITHOUT CHARGE TO THE SHAREHOLDER REQUESTING SAME.
15
<PAGE>
1998 SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy statement for the 1998
Annual Meeting, any shareholder's proposal(s) must be received by the Company
at its principal executive offices not later than November 14, 1997.
EXPENSES OF SOLICITATION
All expenses incident to the solicitation of proxies by the Board of
Directors will be paid by the Company. The Company will, upon request,
reimburse brokerage houses and other custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred in forwarding copies of
solicitation material to beneficial owners of Common Stock held in the names
of such persons. In addition to solicitation by mail, in a limited number of
instances, regular employees of the Company may solicit proxies in person or
by telegraph or telephone. Employees will receive no additional compensation
for any such solicitation.
By Order of the Board of
Directors,
DONALD H. CUOZZO
Secretary
16
<PAGE>
[LOGO OF MINE SAFETY APPLIANCES CO.]
MINE SAFETY APPLIANCES COMPANY . P.O. BOX 426, PITTSBURGH, PENNSYLVANIA
15230 . PHONE (412) 967-3000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Holders of 4 1/2% Cumulative Preferred Stock of Mine Safety Appliances
Company:
Notice is hereby given that the Annual Meeting of Shareholders of Mine
Safety Appliances Company will be held on Wednesday, April 23, 1997, at 10:00
A.M., local Pittsburgh time, at the Company's headquarters, 121 Gamma Drive,
RIDC Industrial Park, O'Hara Township, Pittsburgh, Pennsylvania for the
purpose of considering and acting upon the following:
(1) Election of Directors: The election of two directors for a term of
three years;
(2) Selection of Auditors: The selection of independent auditors for the
year ending December 31, 1997;
and such other business as may properly come before the Annual Meeting or any
adjournment thereof.
Only the holders of Common Stock of the Company of record on the books of
the Company at the close of business on February 21, 1997 are entitled to
notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting even though as a holder of 4
1/2% Cumulative Preferred Stock you have no voting rights.
By Order of the Board of
Directors,
Donald H. Cuozzo
Secretary
March 14, 1997
<PAGE>
PROXY--MINE SAFETY APPLIANCES COMPANY--1997 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints John T. Ryan III, Thomas B. Hotopp and
Donald H. Cuozzo, or any of them, as proxies, with power of substitution, to
vote all shares of MINE SAFETY APPLIANCES COMPANY which the undersigned is
entitled to vote at the 1997 Annual Meeting of Shareholders and any
adjournment thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 BELOW:
1.Election of two Directors for terms expiring in 2000. Nominees: Calvin A.
Campbell, Jr. and G. Donald Gerlach.
FOR all nominees listed WITHHOLD AUTHORITY to vote for
(except as marked to the all nominees listed [_]
contrary below) [_]
(Instructions: To withhold authority to vote for any nominee, write that
nominee's name on the line provided below.)
-----------------------------------------------------------------------------
2.Selection of Price Waterhouse LLP as independent auditors.
FOR [_] AGAINST [_] ABSTAIN [_]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS GIVEN, FOR
ITEMS 1 AND 2 ABOVE. A VOTE FOR ITEM 1 INCLUDES DISCRETIONARY AUTHORITY TO
VOTE FOR A SUBSTITUTE IF ANY NOMINEE LISTED BECOMES UNABLE OR UNWILLING TO
SERVE. The proxies named are authorized to vote in their discretion upon such
other matters as may properly come before the meeting or any adjournment
thereof.
The undersigned hereby revokes all previous proxies for such Annual Meeting,
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement, and
ratifies all that said proxies may do by virtue hereof.
Dated ................ , 1997
...................... (SEAL)
...................... (SEAL)
(Signature)
Please sign exactly as your
name appears hereon. FOR
JOINT ACCOUNTS, EACH JOINT
OWNER SHOULD SIGN. When
signing as attorney,
executor, administrator,
trustee, etc., please give
your full title as such. If
a corporation, please sign
full corporate name by
President or other
authorized officer and give
full title. If a
partnership, please sign in
partnership name by
authorized person and give
full title.
PLEASE MARK, DATE, EXECUTE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
