SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Check the appropriate box:
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COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MINE SAFETY APPLIANCES COMPANY
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MINE SAFETY APPLIANCES COMPANY
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
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Notes:
[LOGO OF MINE SAFETY APPLIANCES COMPANY]
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 26, 1995, 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 and one director for a term of one year;
(2) Selection of Auditors: The selection of independent auditors for
the year ending December 31, 1995;
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 17, 1995 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 15, 1995
[LOGO OF MINE SAFETY APPLIANCES COMPANY]
March 15, 1995
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 26, 1995, 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 17, 1995, the Company had 5,816,016 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 17, 1995 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
Three directors will be elected at the Annual Meeting. In order to equalize
classes on the Board, two directors will be elected for terms expiring at the
Annual Meeting in 1998, and one director will be elected for a term expiring at
the Annual Meeting in 1996. In each case, the terms of the directors elected
will continue until a successor has been elected and qualified.
The Board of Directors recommends a vote FOR the election of the three
nominees named below, each of whom has consented to be named as a nominee for
the class indicated below 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, all
of whom are currently members of the Board, and about the other directors whose
terms of office will continue after the Annual Meeting:
1
PRINCIPAL OCCUPATION AND ANY DIRECTOR OTHER
NAME POSITION WITH THE COMPANY AGE SINCE DIRECTORSHIPS
------ ----------------------------- --- --------- -------------
NOMINEES FOR TERMS EXPIRING IN 1998:
Helen Lee Henderson Investor; President of Chiron 56 1991 None
Productions, Ltd. (theatrical and
media productions)
John T. Ryan III President, Chairman and Chief 51 1981 None
Executive Officer of the Company
NOMINEE FOR TERM EXPIRING IN 1996:
Leo N. Short, Jr. Retired; formerly Chairman of the 68 1986 None
Board and Chief Executive Officer
of the Company
CONTINUING DIRECTOR WITH TERM EXPIRING IN 1996:
Joseph L. Calihan Managing Partner of Bradford 57 1993 None
Capital Partners (venture capital
investments and acquisitions);
Chairman of the Board and Chief
Executive Officer of Bradford
Schools, Inc. (post-secondary
business schools)
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1997:
Calvin A. Campbell, Jr. President and Chief Executive 60 1994 Champion Parts, Inc.;
Officer of Goodman Equipment Eastman Chemical Company
Corporation (manufacturer of
underground mining locomotives
and plastics blow molding
machinery)
G. Donald Gerlach Partner of Reed Smith Shaw & 61 1989 None
McClay (attorneys-at-law); Vice
Chairman of Keystone Financial
Corp. (hospital investment
manager)
John T. Ryan, Jr. Retired; formerly Chairman of the 83 1943 None
Board of Directors of the
Company; Chairman of the
Executive Committee of the Board
For at least the past five years, directors Calihan, Campbell, Gerlach and
Henderson have engaged, and for at least five years prior to his retirement
director Ryan, Jr. was engaged, in the principal occupations indicated in the
table above. Prior to becoming President, Chairman and Chief Executive Officer
in October 1991, Mr. Ryan
2
III was President of the Company since April 1990 and previously was Executive
Vice President of the Company. Mr. Short was Chairman of the Board and Chief
Executive Officer of the Company from April 1990 to October 1991 and previously
was President and Chief Executive Officer of the Company. 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 1994, 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, Henderson and Ryan, Jr., each for a term expiring at the 1995
organizational meeting of the Board of Directors.
The Compensation Committee presently consists of directors Campbell,
Gerlach, Henderson, Ryan, Jr. and Short, each for a term expiring at the 1995
organizational meeting of the Board. The Compensation Committee, which met five
times in 1994, 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 1994 compensation of the Company's
executive officers appears below. The Compensation Committee also administers
the Company's 1987 Management Share Incentive Plan, and is empowered to award
restricted shares and grant stock options thereunder, and administers the
predecessor 1980 Management Share Incentive Plan.
The current members of the Nominating Committee are directors Calihan,
Gerlach, Henderson and Ryan III, each for a term expiring at the 1995
organizational meeting of the Board. The Nominating Committee, which met four
times in 1994, 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 1994. All 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
There will be separate elections at the Annual Meeting for the election of
two directors for terms expiring in 1998 and for the election of one director
for a term expiring in 1996. In the election for terms expiring in 1998, 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. In the election for a term
expiring in 1996, the candidate who receives the highest number of votes cast by
the holders of Common Stock voting in person or by proxy will be elected. 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 1995 Annual Meeting. Therefore, only
the nominees named above will be eligible for election at the meeting.
3
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 1994, 1993 and 1992 for the persons who were at the end of 1994 the
chief executive officer and the other four most highly compensated executive
officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------------- -------------------------
SHARES
UNDERLYING
OTHER STOCK
ANNUAL RESTRICTED OPTIONS
NAME AND COMPENSATION STOCK (NO. OF ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARDS ($)(2) SHARES) COMPENSATION ($)(3)
- ------------------ ---- --------- --------- ------ ------------- -------- -------------------
John T. Ryan III, 1994 $ 298,356 $ 132,431 -- -- 5,530 $ 25,198
President, 1993 298,356 62,853 -- $ 326,564 -- 23,074
Chairman and 1992 285,480 107,100 -- -- -- 28,597
Chief Executive
Officer
Werner E. Christen, 1994 $ 268,736 $ 30,320 -- -- -- --
Vice President 1993 268,736 -- -- -- -- --
(Managing 1992 270,416 23,550 -- -- -- --
Director of MSA
Europe and General
Director of German
subsidiary)
Thomas B. Hotopp, 1994 $ 192,204 $ 47,124 -- -- 2,220 $ 14,652
Senior Vice 1993 192,204 32,500 -- $ 125,995 -- 13,352
President- 1992 184,200 40,200 -- -- -- 15,376
Safety Products
Frederick Tepper, 1994 $ 150,840 $ 42,784 -- -- 1,710 $ 23,258
Vice President 1993 150,840 25,700 -- $ 89,341 -- 21,210
(General Manager, 1992 146,040 28,300 -- -- -- 23,470
Instrument Division)
James E. Herald, 1994 $ 138,900 $ 37,555 -- -- 1,330 $ 14,626
Vice President- 1993 138,900 17,600 -- $ 91,875 -- 15,444
Finance 1992 133,560 28,600 -- -- -- 17,653
- ---------
(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 January 29,
1993 of restricted shares awarded on that date. At December 31, 1994 the
number and market values of restricted shares held by the Named Officers
were as follows: Mr. Ryan, 8,482 shares ($381,690); Mr. Christen, none; Mr.
Hotopp, 2,884 shares ($129,780); Mr. Tepper, 2,635 shares ($118,575); and
Mr. Herald, 2,380 shares ($107,100). Holders of restricted shares receive
dividends at the same rate as paid on other shares of Common Stock.
(3) 1994 amounts include Company matching contributions to the Company's
Retirement Savings and Supplemental Savings Plans as follows: Mr. Ryan,
$10,836; Mr. Hotopp, $8,988; Mr. Tepper, $7,228; and Mr. Herald, $4,620.
1994 amounts also include life insurance premiums paid by the Company as
follows: Mr. Ryan, $14,362; Mr. Hotopp, $5,664; Mr. Tepper, $16,030; and
Mr. Herald, $10,006.
4
STOCK OPTION GRANTS IN 1994
The following table sets forth information concerning stock options granted
to the Named Officers in 1994 under the Company's Management Share Incentive
Plan (the "MSIP"):
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------
NUMBER OF PERCENT OF
SHARES TOTAL OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED(NO.) IN 1994 ($/SH) (1) DATE VALUE (2)
- ---- ------------- ------------ ---------- ---------- ---------
John T. Ryan III 5,530 33.2% $ 48.40 2/25/1999 $ 39,374
Werner E. Christen -- -- -- -- --
Thomas B. Hotopp 2,220 13.3% $ 44.00 2/25/2004 $ 30,791
Frederick Tepper 1,710 10.3% $ 44.00 2/25/2004 $ 23,718
James E. Herald 1,330 8.0% $ 44.00 2/25/2004 $ 18,447
- ---------
(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 Mr. Ryan III it is 110% of
such value. The option granted to Mr. Ryan III became exercisable as to
1,371 shares on August 25, 1994 and 2,272 shares on January 1, 1995 and
will become exercisable as to the remaining 1,887 shares on January 1,
1996, subject to possible acceleration in certain events involving an
actual or threatened change of control of the Company. The other options
became exercisable in full on August 25, 1994. 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: five-year stock price volatility of .160; expected
dividend yield of 2.06%, expected option term of five years for Mr. Ryan
III 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 held by the Named Officers at December 31, 1994. No stock options were
exercised by the Named Officers in 1994.
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
NAME 12/31/94 12/31/94 (3)
- ---- ----------- ------------
John T. Ryan III 7,631(1) $ 3,225
4,159(2) $ 0
Werner E. Christen 0 --
Thomas B. Hotopp 3,720(1) $ 3,158
Frederick Tepper 7,970(1) $ 41,333
James E. Herald 3,930(1) $ 2,330
- ---------
(1) Options exercisable at December 31, 1994.
(2) Options not exercisable at December 31, 1994.
(3) Represents the amount by which the December 31, 1994 market value of the
shares subject to certain unexercised options exceeded the option price of
those options as follows: Mr. Ryan, 860 shares; Mr. Hotopp, 3,720 shares;
Mr. Tepper, 6,470 shares; and Mr. Herald, 2,930 shares. At December 31,
1994, the option price of all other unexercised options exceeded the market
value of the option shares.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on 1994 executive compensation:
5
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
is also responsible 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 and
individual performance factors. To do this, the Company periodically retains
compensation consultants to assist in evaluating each United States domestic
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 and individual performance. For domestic
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 adjustments.
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 is 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 domestic executive officers 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 domestic officers.
The Committee considered 1994 executive officer salaries at its meeting in
February 1994. The 1994 salaries of all executive officers remained at the same
levels as in 1993. The Committee granted no increases in executive officer
salaries for 1994 because at the time a Company-wide wage freeze was in effect
for all Company personnel.
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 domestic officers,
this percentage is 40% of median market level salary for the chief executive
officer, 30% for vice presidents and 22% or 13% for other officers. The
percentage of the targeted bonus earned is initially determined as the
percentage of achievement by the Company of a targeted level of consolidated
earnings before interest and taxes for the year. The initial percentage
determined by corporate performance may then 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. The total amount payable as bonuses in any year may not
exceed the sum of (1) 2% of consolidated net income before bonuses and income
taxes plus (2) 2% of the excess (if any) of (a) consolidated net income before
bonuses and income taxes over (b) 16% of the consolidated shareholder's equity
of the Company (excluding cumulative translation adjustments) at the end of the
preceding year. 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.
6
The Committee considered bonuses for 1994 at its meeting in February 1995.
The amount of the 1994 bonus awarded to John T. Ryan III, the Chairman and Chief
Executive Officer, reflected the percentage of achievement by the Company of the
1994 earnings target.
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. Historically, the
Committee has considered the grant of stock option awards every second year and
the grant of restricted stock awards every third year. In accordance with this
practice, in February 1994 the Committee considered and granted awards under the
MSIP in the form of incentive stock options. The stock options granted become
exercisable six months after the date of grant and have a term of ten years,
except that in the case of Mr. Ryan III the term is five years and the option
becomes exercisable over three years in the annual amounts permissible for
incentive stock options under the Internal Revenue Code. The option price is
equal to fair market value on the date of grant, except that in the case of Mr.
Ryan III the exercise price is 110% of the grant date fair market value. 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.
In determining the level of the incentive to be provided to an individual
executive officer in the form of stock options, the Committee considers the
opportunity for the officer to contribute to the achievement of the Company's
financial and/or strategic goals. This is done first by fixing a targeted value
for the officer's position equal to a percentage of the officer's cash
compensation paid in the prior year which is 60% for the chief executive
officer, 35% for vice presidents, and 35% or 20% for other executive officers.
For the stock options granted in 1994, the prior year cash compensation included
in the calculation was the sum of the officer's 1993 salary and the 1992 bonus.
The targeted value for the position may then be adjusted upward or downward by
up to 50% based on an assessment of the individual officer's performance. The
number of shares covered by the options granted to each officer is computed by
dividing the value as so determined by the per share market price of the
Company's Common Stock on the date of the Committee's action. The amount of the
incentive stock option granted to Mr. Ryan III in 1994 reflected the targeted
value for the chief executive officer position.
The Company believes that stock options granted under the MSIP qualify as
"performance-based compensation" under new 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:
G. Donald Gerlach, Chairman
Calvin A. Campbell, Jr.
Helen Lee Henderson
John T. Ryan, Jr.
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, Henderson, Ryan, Jr. and Short served as members of the
Compensation Committee during all of 1994, and director Campbell became a member
of the Committee following his election as a director in April 1994. Former
directors John P. Roche and John M. Arthur also served as members of the
Compensation Committee in 1994 prior to their respective retirements as
directors in April and August 1994.
Mr. Ryan, Jr. and Mr. Short are each former officers of the Company, and
Mr. Ryan, Jr. is the father of Mr. Ryan III. 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
President and Chief Executive Officer of Goodman Equipment Corporation. During
1994, the Company and its affiliates received
7
commissions of approximately $115,552 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.
5 YEAR AVERAGE COMPENSATION
YEARS OF --------------------------------------------------------------------
SERVICE $100,000 $200,000 $300,000 $400,000 $500,000 $600,000
-------- -------- -------- -------- -------- -------- --------
5 $ 6,476 $ 14,226 $ 21,976 $ 29,726 $ 37,476 $ 45,226
15 19,428 42,678 65,928 89,178 112,428 135,678
25 32,380 71,130 109,880 148,630 187,380 226,130
35 45,332 99,582 153,832 208,082 262,332 316,582
45 55,332 119,582 183,832 248,082 312,332 376,582
- ---------
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.
3. This table applies to employees born in calendar year 1935. 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, 1995, with a maximum taxable wage base of $61,200
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, 1994, years of service under the plan for the Named
Officers were: Mr. Ryan III, 25.50 years; Mr. Hotopp, 3.42 years; Mr. Tepper,
37.28 years; and Mr. Herald, 7.33 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 1994 salary, the amount of Mr. Christen's
annual retirement benefit is estimated to be approximately $120,000.
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 permanent 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.
8
DIRECTOR COMPENSATION
In the first quarter of 1994, directors who are not employees of the
Company or one of its subsidiaries were paid a quarterly retainer of $3,500 and
$700 for each Board meeting and each meeting of a Committee of the Board that
they attended. Commencing April 1, 1994, non-employee directors receive a
quarterly retainer of $4,000 and $1,000 per Board meeting attended. The fee for
Committee meetings remains at $700 per meeting 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 May 2, 1994 options to purchase 500 shares
of Common Stock at an exercise price of $40.027 per share were granted to
directors Calihan, Campbell, Gerlach, Henderson, Ryan, Jr. and Short.
Subsequent to their retirement as employees Messrs. Ryan, Jr. and Short
each entered into a consulting agreement with the Company, providing an annual
consulting fee as compensation for his advisory services. Mr. Ryan Jr.'s
agreement provides for an annual consulting fee of $65,000, and the current term
of the agreement expires in 1996. Mr. Short's consulting agreement has a
one-year term, renewable from year to year. In 1994, the consulting fee under
the agreement was $32,308. If Mr. Ryan, Jr. or Mr. Short were to become
incapacitated or die prior to the end of the term, the balance of the fees for
the term would be paid in a lump sum to him or his estate.
9
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, 1994
of $100 invested on December 31, 1989 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.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG MSA, S&P 500 INDEX AND RUSSELL 2000 INDEX
Measurement period MSA S&P 500 RUSSELL 2000
(Fiscal year Covered) Index Index
Measurement PT -
12/31/89 $100 $100 $100
FYE 12/31/90 $ 90 $ 97 $ 81
FYE 12/31/91 $ 81 $126 $118
FYE 12/31/92 $ 75 $136 $139
FYE 12/31/93 $ 81 $150 $166
FYE 12/31/94 $ 88 $152 $163
SECURITY 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 either 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."
The following table sets forth information regarding the amount and nature
of beneficial ownership of the Company's Common Stock as of February 17, 1995
and 4-1/2% Cumulative Preferred Stock as of February 10, 1995 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.
10
4-1/2% CUMULATIVE
COMMON STOCK PREFERRED STOCK
-------------------------- ---------------------
AMOUNT AND AMOUNT AND
NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF BENEFICIAL OF
NAME OWNERSHIP (1) CLASS (1) OWNERSHIP CLASS
- ---- ------------- ---------- ------------ -------
John T. Ryan III 233,013(2) 4.00% 187 .79%
Joseph L. Calihan 4,250 .07% -- --
Calvin A. Campbell, Jr. 500 .01% -- --
G. Donald Gerlach 19,600(3) .34% -- --
Helen Lee Henderson 614,755(4) 10.57% 897(4) 3.80%
John T. Ryan, Jr. 554,843(5) 9.54% 352(5) 1.49%
Leo N. Short, Jr. 16,730(6) .29% -- --
Werner E. Christen 400 .01% -- --
Thomas B. Hotopp 7,604 .13% -- --
Frederick Tepper 11,195(7) .19% -- --
James E. Herald 6,864 .12% -- --
All executive officers and directors
as a group (17 persons) 1,475,830(8) 25.20% 1,436 6.09%
- ---------
(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 III, 9,903 shares; Mr. Calihan, 700 shares; Mr. Campbell, none;
Mr. Short, 900 shares; each other director, 1,100 shares; Mr. Hotopp, 3,720
shares; Mr. Tepper, 7,970 shares; Mr. Herald, 3,930 shares; and all
directors and executive officers as a group, 40,903 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 III, 8,482 shares; Mr. Hotopp, 2,884 shares;
Mr. Tepper, 2,045 shares; Mr. Herald, 2,380 shares; and all directors and
executive officers as a group, 23,746 shares.
(2) Does not include 88,675 shares of Common Stock held by Mr. Ryan III's wife.
Includes 17,500 shares of Common Stock held in a trust as to which Mr. Ryan
III and Mr. Gerlach share voting and investment power as co-trustees.
(3) Does not include 100 shares of Common Stock owned by Mr. Gerlach's wife.
Includes 17,500 shares of Common Stock held in a trust as to which Mr.
Gerlach and Mr. Ryan III share voting and investment power as co-trustees.
(4) Includes 541,715 shares of Common Stock and 318 shares of 4-1/2% Cumulative
Preferred 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. and Carl E. Glock, Jr.
(5) Includes 8,928 shares of Common Stock and 93 shares of 4-1/2% Cumulative
Preferred Stock held in a testamentary trust under which Mr. Ryan, Jr.
shares voting power with a co-trustee. Does not include 139,456 shares of
Common Stock owned by Mr. Ryan, Jr.'s wife and 96,000 shares of Common
Stock and 1,000 shares of 4-1/2% Cumulative Preferred Stock held in an
irrevocable inter vivos trust under which Mr. Ryan, Jr.'s wife has voting
power.
(6) Includes 4,600 shares of Common Stock as to which Mr. Short shares voting
and investment power with his wife.
(7) Does not include 3,665 shares of Common Stock owned by Mr. Tepper's wife.
(8) See the other footnotes above. Also includes 300 shares of Common Stock as
to which an executive officer shares voting and investment power with his
wife.
As of February 17, 1995, 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 Helen Lee Henderson and John T.
11
Ryan, Jr. 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:
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- ---------- -------
PNC Bank Corp. 663,579(1)(2)(3) 11.41%
PNC Bank Building (4)(5)
Pittsburgh, Pennsylvania 15265
Helen Ruth Henderson 407,026(3)(6) 7.00%
728 Fairview Road
Pittsburgh, Pennsylvania 15238
Carl E. Glock, Jr. 397,004(5) 6.83%
2150 South Ocean Boulevard
Delray Beach, Florida 33483
State Farm Mutual Automobile 375,422(7) 6.45%
Insurance Company
One State Farm Plaza
Bloomington, Illinois 61710
- ---------
(1) 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 60,504 and 3,000 shares, respectively, and share
voting and investment power with respect to 602,983 and 598,351 shares,
respectively.
(2) Includes 8,928 shares as to which PNC and Mr. Ryan, Jr. share voting power.
(3) Includes 52,340 shares as to which PNC and Helen Ruth Henderson share
voting and investment power.
(4) Includes 144,711 shares as to which PNC and Helen Lee Henderson share
voting and investment power with a third person as co-trustees. The
trustees have delegated the authority to vote these shares to Helen Lee
Henderson.
(5) Includes 397,004 shares as to which PNC, Helen Lee Henderson and Mr. Glock
share voting and investment power as co-trustees. The trustees have
delegated the authority to vote these shares to Helen Lee Henderson.
(6) 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.
(7) Based upon their Schedule 13G filed with Securities and Exchange
Commission, as of December 31, 1994 State Farm Mutual Automobile Insurance
Company and related entities had sole voting and investment power over
375,422 shares of Common Stock, of which 169,622 shares were held by State
Farm Growth Fund, Inc. and 205,800 shares were held by the State Farm
Employees Savings and Thrift Plan.
Section 16(a) of the Securities and 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. During 1994, a report of director Henderson with respect to one
transaction by a trust was filed eight days late. Based solely upon a review of
the copies of such reports furnished to the Company and written representations
by certain persons that reports on Form 5 were not required, the Company
believes that all other 1994 Section 16(a) filing requirements applicable to its
directors, officers and greater-than-10% beneficial owners were complied with.
12
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, 1994
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 1996.
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 1994 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.
1996 SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy statement for the 1996
Annual Meeting, any shareholder's proposal(s) must be received by the Company at
its principal executive offices not later than November 16, 1995.
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
13
(Logo) logo of Mine Safety Appliances Company
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 26, 1995, 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 and one director for a term of one year;
(2) Selection of Auditors: The selection of independent auditors for
the year ending December 31, 1995;
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 17, 1995 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 15, 1995
PROXY--MINE SAFETY APPLIANCES COMPANY--1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints JOHN T. RYAN, JR., JOHN T. RYAN III 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 1995 Annual Meeting of Shareholders and any adjournment
thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 BELOW:
1. (A) Election of two Directors for terms expiring in 1998.
Nominees: Helen Lee Henderson and John T. Ryan III
(B) Election of one Director for a term expiring in 1996.
Nominee: Leo N. Short, Jr.
FOR all nominees listed (except as WITHHOLD AUTHORITY to
marked to the contrary below) [ ] vote for all nominees listed [ ]
(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.
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.................................., 1995
...................................... (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.
