EXHIBIT 10.2
MINE SAFETY APPLIANCES
COMPANY
2008 NON-EMPLOYEE
DIRECTORS’ EQUITY INCENTIVE PLAN
The purposes of the 2008
Non-Employee Directors’ Equity Incentive Plan (the
“Plan”) are to promote the long-term success of Mine
Safety Appliances Company (the “Company”) by creating a
long-term mutuality of interests between the non-employee Directors
and shareholders of the Company, to provide an additional
inducement for such Directors to remain with the Company and to
provide a means through which the Company may attract able persons
to serve as Directors of the Company.
SECTION 1
Administration
The Plan shall be administered by
the Board of Directors of the Company (the “Board”),
which may delegate some or all of its duties to a committee of the
Board. The Board shall keep records of action taken at its
meetings. A majority of the Board shall constitute a quorum at any
meeting, and the acts of a majority of the members present at any
meeting at which a quorum is present, or the unanimous consent in
writing of the Board, shall be the acts of the Board.
The Board shall interpret the Plan
and prescribe such rules, regulations and procedures in connection
with the operations of the Plan as it shall deem to be necessary
and advisable for the administration of the Plan consistent with
the purposes of the Plan. All questions of interpretation and
application of the Plan, or as to stock options or restricted stock
awards granted under the Plan, shall be subject to the
determination of the Board, which shall be final and
binding.
Notwithstanding the above, the
selection of the Directors to whom stock options and restricted
stock awards are to be granted and the exercise price of any stock
option shall be as hereinafter provided, and the Board shall have
no discretion as to such matters.
SECTION 2
Shares Available under the
Plan
The aggregate number of shares which
may be issued and as to which grants of stock options and
restricted stock awards may be made under the Plan is 400,000
shares of the Common Stock, without par value, of the Company (the
“Common Stock”), subject to adjustment and substitution
as set forth in Section 6. If any stock option granted under
the Plan is cancelled by mutual consent or terminates or expires
for any reason without having been exercised in full, the number of
shares subject thereto shall again be available for purposes of the
Plan. If shares of Common Stock are forfeited to the Corporation
pursuant to the restrictions applicable to restricted stock, the
shares so forfeited shall again be available for purposes of the
Plan. The shares which may be issued under the Plan may be either
authorized but unissued shares or treasury shares or partly each,
as shall be determined from time to time by the Board.
SECTION 3
Grant of Stock Options and
Restricted Stock
On the third business day following
the day of each annual meeting of the shareholders of the Company
(the “Grant Date”), each person who is then a member of
the Board and who is not then an employee of the Company or any of
its subsidiaries (a “non-employee Director”) shall
automatically and without further action by the Board be
granted:
(1) a “nonstatutory stock
option” ( i.e. , a stock option which does not qualify
under Section 422 of the Internal Revenue Code of 1986 (the
“Code”)) to purchase a number of shares of Common Stock
determined by dividing 75% of the amount of the annual
Director’s retainer then in effect by the Grant Date per
share value of the option as determined by the Company under the
Black-Scholes option pricing model; and
(2) a number of restricted shares of
Common Stock (“restricted stock”) determined by
dividing 125% of the amount of the annual Director’s retainer
then in effect by the Fair Market Value of a share of Common Stock
on the Grant Date.
The numbers of shares determined
under the above formulas shall be rounded to the nearest whole
share. If on any Grant Date the number of shares remaining
available under the Plan is not sufficient for each non-employee
Director to be granted the full number of options and shares of
restricted stock provided in this Section, then the available
shares shall be allocated among the options and shares of
restricted stock to be granted to each non-employee Director in
proportion to the amounts determined under the above formulas,
disregarding any fractions of a share.
Notwithstanding the foregoing, the
amounts and/or mix of awards set forth above may be adjusted by the
Board in its discretion.
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SECTION 4
Terms and Conditions of Stock
Options
Stock options granted under the Plan
shall be subject to the following terms and conditions:
(A) The purchase price at which each
stock option may be exercised (the “option price”)
shall be one hundred percent (100%) of the Fair Market Value
per share of the Common Stock covered by the stock option on the
Grant Date.
(B) At the discretion of, and in
accordance with rules established by the Board, the option price of
each stock option may be paid (i) by one or any combination of
the following: in cash or the tender of Common Stock already owned
by the Participant for more than six months (or such other period
of time as the Board deems appropriate) having a Fair Market Value
on the date of exercise equal to the option price for the shares
being purchased or (ii) by providing cash forwarded through a
broker or other agent-sponsored exercise or financing program or
(iii) through such other means as the Board determines are
consistent with the Plan’s purpose and applicable law. No
fractional shares will be issued or accepted.
(C) Subject to the terms of
Section 4(E) providing for earlier termination of a stock
option, no stock option shall be exercisable after the expiration
of ten years from the Grant Date. A stock option to the extent
exercisable at any time may be exercised in whole or in
part.
(D) No stock option shall be
transferable by the grantee otherwise than by Will, or if the
grantee dies intestate, by the laws of descent and distribution of
the state of domicile of the grantee at the time of death. All
stock options shall be exercisable during the lifetime of the
grantee only by the grantee or the grantee’s guardian or
legal representative.
(E) Subject to Section 4(C),
unless the Board determines otherwise, if a grantee ceases to be a
Director of the Company for any reason, any outstanding stock
options held by the grantee shall be exercisable and shall
terminate according to the following provisions:
(i) If a grantee ceases to be a
Director of the Company for Retirement or for any reason other than
resignation, removal for cause, death or Disability, any then
outstanding stock option held by such grantee shall be exercisable
by the grantee (whether or not exercisable by the grantee
immediately prior to ceasing to be a Director) at any time prior to
the expiration date of such stock option or within five years after
the date the grantee ceases to be a Director, whichever is the
shorter period;
(ii) If during his term of office as
a Director a grantee resigns from the Board (other than by
Retirement) or is removed from office for cause, any outstanding
stock option held by the grantee which is not exercisable by the
grantee immediately prior to resignation or removal shall terminate
as of the date of resignation or removal, and any outstanding stock
option held by the grantee which is exercisable by the grantee
immediately prior to resignation or removal shall be exercisable by
the grantee at any time prior to the expiration date of such stock
option or within 90 days after the date of resignation or
removal, whichever is the shorter period;
(iii) Following the death or
Disability of a grantee during service as a Director of the
Company, any outstanding stock option held by the grantee at the
time of death or termination of service by reason of Disability
(whether or not exercisable by the grantee immediately prior to
death or termination of service) shall be exercisable by the
grantee or person entitled to do so under the Will of the grantee,
as the case may be, or, if the grantee shall fail to make
testamentary disposition of the stock option or shall die
intestate, by the legal representative of the grantee at any time
prior to the expiration date of such stock option or within five
years after the date of death or termination of service by reason
of Disability, whichever is the shorter period;
(iv) Following the death of a
grantee after ceasing to be a Director and during a period when a
stock option is exercisable, any outstanding stock option held by
the grantee at the time of death shall be exercisable by such
person entitled to do so under the Will of the grantee or by such
legal representative (but only to the extent the stock option was
exercisable by the grantee immediately prior to the death of the
grantee) within five years after the date of death or, if
applicable, within the period provided in Section 4(E)(i),
whichever is the longer period, but not later than the expiration
date of such stock option.
A stock option held by a grantee who
has ceased to be a Director of the Company shall terminate upon the
expiration of the applicable exercise period, if any, specified in
this Section 4(E).
(F) All stock options shall be
confirmed by an agreement, or an amendment thereto, which shall be
executed on behalf of the Company by the Chief Executive Officer
(if other than the President), the President or any Vice President
and by the grantee.
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(G) The obligation of the Company to
issue shares of the Common Stock under the Plan shall be subject to
(i) the effectiveness of a registration statement under the
Securities Act of 1933, as amended, with respect to such shares, if
deemed necessary or appropriate by counsel for the Company,
(ii) the condition that the shares shall have been listed (or
authorized for listing upon official notice of issuance) upon each
stock exchange, if any, on which the Common Stock shares may then
be listed and (iii) all other applicable laws, regulations,
rules and orders which may then be in effect.
Subject to the foregoing provisions
of this Section 4 and the other provisions of the Plan, any
stock option granted under the Plan may be subject to such
restrictions and other terms and conditions, if any, as shall be
determined, in its discretion, by the Board and set forth in the
agreement referred to in Section 4(F), or an amendment
thereto.
SECTION 5
Terms and Conditions of
Restricted Stock
Unless the Board determines
otherwise, restricted stock awards granted under the Plan shall be
subject to the following terms and conditions:
(A) As of the Grant Date of the
restricted stock award, certificates representing the shares of
restricted stock shall be issued in the name of the Director and
held by the Company in escrow until the earlier of the forfeiture
of the shares of restricted stock to the Company or the lapse of
the service restriction with respect to such shares. The Director
shall execute and deliver to the Company a blank stock power in
form acceptable to the Company with respect to each of the
certificates representing the shares of restricted stock. Such
stock power shall be returned to the Director if the service
restriction lapses with respect to the shares to which the stock
power relates.
(B) The Director shall not sell,
exchange, assign, alienate, pledge, hypothecate, encumber, charge,
give, transfer or otherwise dispose of, either voluntarily or by
operation of law, any shares of restricted stock, or any rights or
interests appertaining thereto, prior to the lapse of the service
restriction imposed thereon and the issuance or transfer to the
Director of certificates with respect to such shares.
(C) As of the Grant Date, the
Director shall be a shareholder of the Company with respect to the
restricted stock and shall have all the rights of a shareholder
with respect to the restricted stock, including the right to vote
the restricted stock and to receive all dividends and other
distributions paid with respect to such restricted stock, subject
to the restrictions of the Plan and the restricted stock agreement,
including without limitation the restriction that, with the
exception of dividends and distributions payable in cash, all
dividends and distributions on the restricted stock, whether paid
in Common Stock or other securities or property will be held in
escrow subject to the same restrictions as the restricted
stock.
(D) If the Director’s service
as a Director of the Company terminates for any reason, other than
as a result of the Director’s death, Disability or
Retirement, prior to the date of th
