For 2020, the Company paid non-employee directors
a base retainer on a quarterly basis which totaled $80,000 for the year (Annual Base Retainer). The Company paid the lead director an additional retainer of $30,000 and paid the Non-Executive
Chairman an additional retainer of $60,000. The additional annual retainer for the Audit Committee chair was $15,000, for the Compensation Committee chair was $12,500, and for the Nominating and Corporate Governance, Law and Finance committee chairs
was $7,500. Cash and/or equity compensation set forth in the above table has been prorated for directors who have joined or left the Board or have assumed or left board leadership positions or committee chairs, during the course of 2020.
Non-employee directors
are required to meet a share ownership guideline, equivalent to five times the Annual Base Retainer. Presently, all directors exceed the ownership guidelines.
Under the 2017 Non-Employee Directors Equity Incentive Plan and its predecessors (collectively,
the Director Equity Plans), the Company grants stock options, restricted stock, or a mix of each, to each non-employee director on the third business day following each annual meeting. Pro rata
awards are authorized under the 2017 plan for directors who join the Board during the period between annual awards. The purposes of the Director Equity Plans are to enhance the mutuality of interests between the Board and the shareholders by
increasing the share ownership of the non-employee directors and to assist the Company in attracting and retaining able persons to serve as directors. The total number of shares that may be issued under the
2017 plan is limited to 150,000 shares of Common Stock.
Stock option grants, if awarded, are made using a Black-Scholes option pricing model. The exercise price of the options is equal to the market value on the grant date. The options become exercisable three
years from the grant date and expire ten years from the grant date. If a director resigns or is removed from office for cause, options which have not yet become exercisable are forfeited and exercisable options remain exercisable for 90 days.
However, under the 2017 plan, if a director is removed from office for cause, any outstanding option held by the director is forfeited on the date of removal. Otherwise, unexpired options may generally be exercised for five years following
termination of service as a director, but not later than the option expiration date. Restricted shares vest on the date of the annual meeting in the year following the grant date. Unvested shares are forfeited if the director terminates service for
reasons other than death, disability or retirement.
It is the practice of the Nominating and Corporate Governance Committee to periodically engage an independent compensation consultant to
review the compensation of the non-employee directors. A consultant was engaged in 2020. Following the Committees review of director compensation and in consideration of the current economic climate, the
Board determined that director compensation would not change in 2021.
In 2019, the Board adopted the MSA Safety Incorporated Deferred Compensation Program for Non-Employee Directors (the Program). Pursuant to the Program,
beginning with equity grants made in 2020, non-employee directors have the option to defer the receipt of vested equity compensation until after their departure from the Board.
On May 15, 2020 each
non-employee director who did not elect to defer the receipt of their equity compensation was granted 1,132 shares of restricted stock, and each non-employee director
who elected to defer the receipt of their equity compensation was granted 1,132 restricted stock units. Restricted stock units are counted for purposes of determining whether directors meet their stock ownership guideline, but directors do not
receive voting rights in restricted stock units. Stock options were not granted to non-employee directors in 2020.
Prior to April 1, 2001, a director who retired from the Board after completing at least five years of service as a director was entitled
to receive a lifetime quarterly retirement allowance under the Retirement Plan for Directors. The amount of the allowance was equal to the quarterly directors retainer payable at the time of the directors retirement. Payment began when
the sum of the directors age and years of service equaled or exceeded 75. Effective April 1, 2001, plan benefits were frozen so that the quarterly retirement allowance, if any, payable to future retirees will be limited to $5,000 (the
quarterly retainer amount in April 2001), multiplied by a fraction, of which the numerator is the directors years of service as of April 1, 2001 and the denominator is the years of service the director would have had at the date the sum
of the directors age and years of service equaled 75.
Other than the amounts earned by Mr. Ryan while he was an employee of the Company prior to the Retirement Plan for Directors being frozen as described above, directors who are employees of the Company
or a subsidiary do not receive other additional compensation for service as a director.
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