UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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:

MSA Safety Incorporated

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

20152017 Proxy Statement

YOUR VOTE IS IMPORTANT

Please vote by using the internet, telephone, smartphone

or by signing, dating and returning the enclosed proxy card

MSA SAFETY INCORPORATED  n∎  1000 CRANBERRY WOODS DRIVE, CRANBERRY TOWNSHIP, PENNSYLVANIA 16066  n∎  PHONE (724) 776-8600

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TOTHE HOLDERSOF COMMON STOCKOF

    MSA SAFETY INCORPORATED:

Notice is hereby given that the Annual Meeting of Shareholders of MSA Safety Incorporated will be held on Tuesday,Wednesday, May 12, 201517, 2017 at 9:00 A.M., local Pittsburgh time, at the MSA Corporate Center, 1000 Cranberry Woods Drive, Cranberry Township, Pennsylvania 16066 for the purpose of considering and acting upon the following:

(1)    Election of Directors for 2018:2020:    The election of three directors for a term of three years;

(2)2017Non-Employee Directors’ Equity Incentive Plan Approval:    Approval of Adoption of the Company’s 2017 Non-Employee Directors’ Equity Incentive Plan;

(3)    Selection of Independent Registered Public Accounting Firm:    The selection of the independent registered public accounting firm for the year ending December 31, 2015;2017;

(3)(4)    Say on PayPay::    To provide an advisory vote to approve the executive compensation of the Company’s named executive officers;

(5)    Say on Pay Frequency Vote:    To provide an advisory vote on the frequency of the advisory vote to approve executive compensation.

and such other business as may properly come before the Annual Meeting or any adjournment thereof.

Only the holders of record of Common Stock of the Company of record on the books of the Company at the close of business on February 12, 201528, 2017 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 vote by promptly submitting your proxy by mail, by the internet or by phone. 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,

DOUGLAS K. MCCLAINE

    Secretary

March 31, 2015April 7, 2017

TABLE OF CONTENTS

PROXY SUMMARY

20152017 Annual Meeting of Shareholders

Voting Matters

Ms. Diane M. Pearse, Mr. Thomas B. Hotopp, Mr. John T. Ryan III,L. Edward Shaw, Jr. and Mr. Thomas H. WitmerWilliam M. Lambert were nominated by the Board for election in the Class of 2018.2020. The table beginning on page 2 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 MeetingMeeting. We are asking shareholders to vote FOR the election of the nominees, each of whom has consented to be named as a nominee and to serve if elected.

We are asking shareholders to vote FOR the approval of the Company’s 2017 Non-Employee Directors’ Equity Incentive Plan, to ensure the Company’s continuing ability to attract and retain qualified persons to serve on the Company’s Board of Directors and to provide a flexible range of compensation options under the plan.

We are asking shareholders to approve the selection of Ernst & Young LLP as our independent registered public accounting firm for 2015.2017.

We are asking shareholders to vote FOR the Company’s compensation of the named executive officers. The Board and the Compensation Committee will take into account the outcome when considering future executive compensation arrangements. In 2014,2016, the shareholders voted in favor of the Company’s executive compensation program, with 98.9%99.1% of the votes cast by shareholders voting FOR the proposal. The Board and Compensation Committee took this vote into consideration in designing the executive compensation program for 2015.2017. Please see the Compensation Discussion and Analysis in the proxy statement for complete details about compensation for the named executive officers.

With respect to the advisory vote on the frequency of the advisory vote to approve executive compensation, we are asking shareholders to vote for a ONE YEAR period. The Company presently uses a one year period for advisory votes to approve executive compensation. The Board will take into account the outcome when considering the frequency of future advisory votes to approve executive compensation.

Your Vote is Important: Shareholders can vote using any of the following methods

BY INTERNET USING YOUR COMPUTER		BY TELEPHONE		BY INTERNET USING YOUR TABLET OR SMARTPHONE		BY MAILING YOUR PROXY CARD

Please refer to your proxy card and/or voting instruction form for internet, telephone, smartphone or mail instructions

FREQUENTLY ASKED QUESTIONS

Certain shareholder votes take place each year at the Annual Meeting of Shareholders. Since most shareholders do not attend the annual meeting in person, we request your authorization (or your “proxy”) in advance to instruct designated persons (your “proxy holders”) how to vote your shares at the meeting. A proxy statement is a document we are required to give you when requesting your voting authority and instructions. Regulations of the U.S. Securities and Exchange Commission (the “SEC”) also require that we include specific information about the Company in the proxy statement.

All shareholders of MSA Safety Incorporated as of February 12, 2015,28, 2017, the “record date” for this year’s Annual Meeting of Shareholders, are entitled to vote at the meeting. We are furnishing this proxy statement and proxy card, along with our annual report, to all shareholders of record as of the record date.

Shareholders of Record

Shareholders can own stock directly in their own name through our transfer agent, Wells Fargo Shareowner Services. Such shareholders are referred to as shareholders of record. When you are a shareholder of record, we will provide you with the proxy statement and an accompanying proxy card.

Beneficial Owners

Shareholders can also own stock indirectly, through one or more brokers or institutions. Such shareholders are referred to as beneficial owners. When you are a beneficial owner, your stock is registered in the name of your broker or other institution. We mail proxy statements for beneficial owners to the broker or other institution. It is their responsibility to forward you the proxy statement, along with instructions about how you can vote your shares. Shareholders can be both shareholders of record for some shares and beneficial owners for other shares, and may own shares through multiple brokerage or institutional accounts. In such cases, those shareholders will receive proxy materials for each account.

Important Information for MSA Employees

MSA employees may own stock a number of ways, including but not limited to: (a) as a shareholder of record, (b) as a beneficial owner through UBS Financial Services Inc., for shares earned through equity compensation plans, (c) as a beneficial owner through other brokers or institutions, and/or (d) by electing to purchase MSA stock in the MSA Stock Fund of the MSA Retirement Savings Plan (401(k)). If you hold shares in more than one of these ways, you should receive multiple sets of proxy materials.

A proxy card or other voting instructions accompany each set of proxy materials. When you are a shareholder of record, we send you a proxy card along with your proxy statement. When you are a beneficial owner, the broker or other institution that holds your shares will forward you a voting instruction form. It is important to follow the instructions on each proxy card and voting instruction form you receive, or those particular shares will not be voted.

Please follow the voting instructions for each set of materials you receive. If you own stock through more than one account, you should receive multiple sets of materials. It is necessary to cast a vote forall sets of materials you receive or some of your shares will not be voted.

If you do not complete a proxy or voting instruction form(s), then those particular shares will not be voted in director elections, or the advisory vote to approve the executive compensation of the named executive officers.officers or the advisory vote on the frequency of the advisory vote to approve executive compensation.

The Company will announce the preliminary voting results at the Annual Meeting of Shareholders. The Company will file the final voting results with the SEC and publish them on our investor relations website within four business days following the Annual Meeting of Shareholders.

MSA SAFETY INCORPORATED

PROXY STATEMENT

Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting

to be held on May 12, 201517, 2017

The 20152017 Proxy Statement and the Annual Report to Shareholders for the year ended December 31, 2014 2016

are also available at www.proxyvote.com

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of MSA Safety Incorporated (the “Company” or “MSA”) of proxies in the accompanying form to be voted at the Annual Meeting of Shareholders of the Company to be held on Tuesday,Wednesday, May 12, 2015,17, 2017, and at any and all adjournments thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. You may vote in person by attending the meeting or by completing and returning a proxy by mail, by telephone or electronically, using a smartphone, tablet or the internet. To vote your proxy by mail, mark your vote on the proxy card, and follow the mailing directions on the card. To vote your proxy by telephone or electronically using a smartphone, tablet or the internet, follow the instructions on the proxy card. The proxy holders will vote your shares according to your directions. If you sign and return your proxy card but do not mark any selections, your shares represented by that proxy will be voted as recommended by the Board.

Whether or not you plan to attend the meeting, or not, we encourage you to vote by proxy as soon as possible. A shareholder giving the accompanying proxy by mail has the power to revoke or change it at any time prior to its exercise upon written notice given to the Secretary of the Company. Please note that, in order to be effective, the revocation or change must be received by 11:59 p.m. EDT on May 11, 2015.16, 2017. The mailing address of the principal executive offices of the Company is 1000 Cranberry Woods Drive, Cranberry Township, PA 16066. A shareholder voting the proxy by telephone or by the internet has the power to revoke or change such proxy vote by voting again and following the instructions and meeting the deadlines for such vote as set forth on the proxy card.

VOTING SECURITIES AND RECORD DATE

As of February 12, 2015,28, 2017, the record date for the Annual Meeting, 37,451,90137,766,907 shares of Common Stock were issued and outstanding.

Only holders of Common Stock of the Company of record on the books of the Company at the close of business on February 12, 2015,28, 2017, 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 “Stock Ownership” on page 4753 below 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

At the Annual Meeting, three directors will be elected to serve until the Annual Meeting in 2018.2020. Ms. Diane M. Pearse, Mr. Thomas B. Hotopp, Mr. John T. Ryan III,L. Edward Shaw, Jr. and Mr. Thomas H. WitmerWilliam M. Lambert were nominated by the Board for election in the Class of 2018.2020.The Board of Directors and its Nominating and Corporate Governance Committee recommend a vote FOR the election of the nominees, each of whom has consented to be named as a nominee and to serve if elected. Properly submitted proxies that are timely received will be voted for the election of the nominees named below, unless otherwise directed thereon, or for a substitute nominee designated by the Nominating and Corporate Governance Committee 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.

Nominees for terms expiring in 20182020

Continuing Directors with terms expiring in 2016

Continuing Directors with terms expiring in 2017

Continuing Director with term expiring in 2018

Continuing Directors with terms expiring in 2019

Director Independence

The Board has determined that each of directors Bruggeworth, Garcia-Tunon, Hotopp, Pearse, Roberts, Ryan, Shaw and Witmer is an independent director. An independent director is a director who has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. The independent directors have specifically considered and determined that Mr. Ryan, who retired as CEO of the Company over sixeight years ago, is an independent director (along with his brother-in-law Mr. Shaw). One reason for this is that, given Mr. Ryan’s substantial ownership interest in MSA (see Stock Ownership, page 4753 below), he is particularly aligned in independently representing the interests of shareholders.

In making its independence determinations, the Board reviewed the director’s individual circumstances, the corporate governance standards of the New York Stock Exchange and the Board’s independence standards. These standards are available in the Corporate Governance section of the Company’s internet website at www.MSAsafety.com. They are summarized below.

Disqualifying Relationships

The following relationships are considered to be material relationships that would impair a director’s independence:

Non-Disqualifying Relationships

The following relationships are not considered to be material relationships that would impair a director’s independence:

Other Relationships

The Board will annually review commercial and charitable relationships of directors. If a relationship is not one of the non-disqualifying relationships described above, the determination of whether the relationship is material or not, and therefore whether the director is independent or not, is made by the directors who satisfy the independence guidelines set forth under the two preceding captions.

For example, if a director is the executive officer of a charitable organization, and the Company’s discretionary contributions to the organization are more than 2% of that organization’s annual revenue, the independent directors will determine, after considering all of the relevant circumstances, whether the relationship is material, and therefore whether or not the director should be considered independent. The Company will explain in its proxy statement the basis for any Board determination that a relationship is not material, despite the fact that it does not meet one of the safe-harbors under “Non-Disqualifying Relationships” above.

Independence Determinations for Compensation Committee Members

In affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board will consider all factors specifically relevant to determining whether the director has a relationship to the Company which is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director, and (ii) whether such director is affiliated with the Company, a subsidiary of the Company, or an affiliate of a subsidiary of the Company.

Corporate Governance Matters

The Board places a continued focus upon the corporate governance affairs of the Company and acknowledges that good corporate governance is an ongoing process. The Board also recognizes that good corporate governance is important to the Company’s success. Key Company governance practices are described below.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines which cover a wide range of subjects, such as the role of the Board and its responsibilities, Board composition and election, operations and committees, lead director responsibilities, director compensation, director retirement, Board and management evaluation and succession planning, director orientation and training, and shareholder communications with the Board. The Corporate Governance Guidelines, as well as the charters of the Board’s Audit, Compensation, Nominating and Corporate Governance, Finance and Law Committees and the Company’s Global Code of Business Conduct for directors, officers and employees, are available in the Corporate Governance section of the Company’s internet website at www.MSAsafety.com. Such material will also be furnished without charge to any shareholder upon written request to the Corporate Secretary at the Company’s address appearing on page one.

Board Leadership

The Board presently combines the position of Chairman of the Board and Chief Executive Officer. The current Chairman and Chief Executive Officer is Mr. Lambert, who was elected Chairman in May 2015. Prior to his election as Chairman, Mr. Lambert served as a director and Chief Executive Officer. Mr. Ryan served as Non-Executive Chairman until May 2015. The Chairman is elected annually by the Board.

The Board periodically reviews its leadership structure and did so in May 2016. The Board believes that Mr. Lambert is presently best positioned to serve as Chairman given his familiarity with the Company’s business, the safety products industry, and the oversight and execution of the Company’s corporate strategy. The Board also presently believes that this structure allows for one person to speak for and to lead the Company and the Board. The Board has separated the roles in the past and may choose to do so again in the future. The decision by the Board on whether to combine or separate the roles is based upon the needs of the Company and Board at a given time.

The Board also believes that it is in the best interests of the Company to maintain effective independent board oversight. Accordingly, the Board annually selects a lead independent director (the “lead director”) to further augment its corporate governance practices. Mr. Witmer has served as lead independent director since May 2012.

The Chairman presides at Board meetings, collaborates with the lead director to establish the annual Board calendar, set meeting objectives and agendas and preside at board meetings. The Chairman also chairs the annual meeting of shareholders, speaks for the Company to its shareholders, and carries out other responsibilities as may be set forth in the Corporate Governance Guidelines or be requested from the Board from time to time.

The lead director serves as a liaison between the independent directors and the CEO, including regular communications with directors to obtain their views and advice, to work to improve Board performance, to facilitate communications among directors, and to communicate to the CEO the concerns of the independent directors; convenes meetings of the independent directors as necessary, and presides at all executive sessions of the Board’s independent directors; presides at Board meetings at which the CEO is not present; collaborates with the CEO to prepare and approve schedules and agendas for Board

meetings, ensuring that input is received from directors and management; retains outside advisors to be engaged by the Board on board-wide matters, as needed; together with the Chair of the Compensation Committee, contributes to the annual performance evaluation summary of the CEO and participates in its communication to the CEO; collaborates with the CEO to ensure that contributions are made by all directors during meetings, that differences of opinion are freely expressed, and that discussion is driven to a timely conclusion while building consensus as appropriate; and collaborates with the CEO to ensure that meeting goals and objectives are clearly defined and met, and to ensure prioritization and appropriate follow-through on actions from meeting to meeting. The lead director will pay particular attention to assuring that the Board adequately addresses long term strategy, long term performance, risk management, and succession planning.

The Board maintains an active structure of independent director leadership. In furtherance of this, the Corporate Governance Guidelines provide that it is the Company’s practice for the independent directors to meet at each Board meeting in executive session, with no members of management present. The lead director serves as the chairman of the executive sessions. The audit, compensation, nominating and corporate governance, finance and law committees are also each comprised solely of and led by an independent director, as defined by the director independence standards of the New York Stock Exchange and the Board’s independence standards.

Board, Committee, Individual Director and Lead Director Assessments

The Nominating and Corporate Governance Committee oversees annual self-assessment processes for the Board and the audit, compensation and nominating and governance committees, along with peer assessments for each director and the lead director. The purpose of the Board and committee assessments is to continually enhance the effectiveness of the Board and its committees. The Board self-assessment gathers feedback on a range of topics such as the Board’s overall effectiveness, governance structure, board and management dynamics, meeting administration, and other topics. The committee self-assessments are tailored to the specific roles and responsibilities of each committee.

The purpose of the individual director and lead director peer assessments is to provide feedback to each director, enabling them to continually enhance their performance, and to inform the Nominating and Corporate Governance Committee as to each director’s fitness for re-nomination.

Director Tenure, Succession and Recruitment

The Board periodically considers its composition and acknowledges the significance of board refreshment. The present mix of director tenures provides the Board with the contribution of new and diverse ideas while ensuring continuity and insight developed through a deep understanding of the Company and its industry. Mr. Garcia-Tunon and Ms. Roberts have served for five or fewer years; Mr. Bruggeworth, Mr. Lambert and Ms. Pearse have served from ten to thirteen years; and Messrs. Ryan, Shaw and Witmer have served for more than fifteen years.

The Nominating and Corporate Governance Committee is responsible for identifying and reviewing potential director candidates and for recommending nominees to the Board. The Committee will consider director candidate recommendations from a variety of sources, including from a shareholder, a non-management director, the chief executive officer, any other executive officer, a third party search firm, or other appropriate sources. In evaluating all potential candidates, the Committee is guided by an executive skills matrix of the Company’s current directors to identify specific needs, and a defined list of director recruitment criteria maintained by the Committee. The fundamental criterion for selecting a prospective director is the ability to contribute to the well-being of the Company and its shareholders. Good judgment, integrity and a commitment to the mission of the Company are essential. Other criteria include independence under the Board’s independence standards, a commitment to the mission and values of the Company, applicable business experience, current chief executive officer or other “C-Suite” experience, merger and acquisition experience, additional public company board experience and other criteria. The Committee may revise and/or prioritize its director recruitment criteria depending on the current needs of the Board and the Company.

In preparing its candidate recommendations to the Board, the Committee also considers, but does not choose solely on the basis of, the distinctive experiences and perspectives of diverse candidates. In evaluating diversity, the Committee and the Board consider not only race, national origin, and gender diversity, but also the need for a Board that represents diverse

experience at policy making levels in business, past professional accomplishments, and other factors when recommending prospective directors for the Company. The director recruitment criteria described above, including diversity, are considered by the Committee each time a new candidate is reviewed for Board membership.

Director Resignation Policy

The Board has adopted a resignation policy with respect to uncontested director elections. In accordance with this resignation policy, a director nominee who does not receive a majority of the votes cast in an uncontested election of directors must promptly tender a resignation to the Board. The Board’s procedures for identifying an uncontested election of directors, determining the majority of votes cast, and responding to a tender of resignation, are specified in the Corporate Governance Guidelines, which are available in the Corporate Governance section of the Company’s website at www.MSAsafety.com.

Director Retirement

Pursuant to the Board’s existing retirement policy as set forth in the Corporate Governance Guidelines, directors are required to retire from the Board at the annual meeting of shareholders in the year of their 75th birthday. Pursuant to that policy, Mr. Witmer’s retirement from the Board was anticipated to occur at the 2017 Annual Meeting of Shareholders. The Board asked Mr. Witmer, whose current term would otherwise expire at the annual meeting of shareholders in 2018, to remain as a director while it pursues the recruitment of a new director. The Board believes that Mr. Witmer’s experience as a director and his knowledge of the Company’s business will continue to be of value to the Board while it searches for a new director. Accordingly, in February 2017 the Board approved a waiver of the terms of the retirement policy, so that Mr. Witmer may continue as a director for up to twelve months beyond his normal retirement date.

Meeting Attendance

The Board met nine times during 2016. All directors attended at least 75% of the combined total of the meetings of the Board and of all committees on which they served. Directors are expected to attend the Annual Meeting of Shareholders. All directors attended last year’s annual meeting.

Board Committees

The Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, a Finance Committee, a Law Committee and certain other committees. Each committee specified below presently consists of the directors listed. Committee appointments will expire at the 20152017 organizational meeting of the Board which takes place following the Annual Meeting of Shareholders. At the organizational meeting of the Board, committee appointments will be made for the following year.

The Audit Committee presently consists of directors Bruggeworth, Garcia-Tunon (Chair), Pearse (Chair) and Witmer. The Audit Committee, which met six times during 2014,2016, assists the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements and financial reporting process. The Committee selects and recommends annually to the Board and the shareholders the independent registered public accounting firm to audit the Company’s financial statements, approves in advance all audit and non-audit services performed by the independent registered public accounting firm, reviews the plans, findings and recommendations of the independent registered public accounting firm, and reviews and evaluates the performance of the independent registered public accounting firm, its independence and its fees. The Committee reviews and discusses with management and the independent registered public accounting firm the Company’s financial statements and reports and its internal and disclosure controls and matters relating to the Company’s internal control structure. The Committee oversees the Company’s Global Code of Business Conduct and related Company programs governing legal and regulatory compliance, which includes a periodic review with management of the implementation and effectiveness of the Company’s compliance programs. The Committee, along with the Board, also oversees the Company’s enterprise risk management program. Pursuant to this program, the Committee reviews with management the Company’s analyses of risks and contingency plans on a quarterlybi-annual basis. The Board has determined that Directoreach of directors Garcia-Tunon and Pearse is an “audit committee financial expert,” as defined by the rules of the Securities and Exchange Commission.

The Compensation Committee presently consists of directors Bruggeworth (Chair), Hotopp,Pearse, Roberts and Witmer. The Compensation Committee, which met three times in 2014,2016, reviews and recommends (to the independent directors for approval) the annual goals, performance and compensation of the Company’s chief executive officer, reviews and approves the compensation of all other executive officers and other key executives, monitors the effectiveness of all other employee benefit offerings, manages the Company’s overall compensation strategy and compensation plans, assesses any risk inherent in these plans and attempts to ensure that such risk is not excessive and is acceptable to the Company and employs, compensates and oversees the Company’s external compensation consultant and assures its independence. The Compensation Committee also administers the Company’s 2008Amended and Restated 2016 Management Equity Incentive Plan and predecessor equity plans (collectively, the “Management Equity Plans”).

The Nominating and Corporate Governance Committee presently consists of directors Hotopp (Chair),Roberts, Ryan, Shaw (Chair) and Witmer. The Committee, which met three times in 2014,2016, reviews and makes recommendations to the Board regarding the composition and structure of the Board, criteria and qualifications for Board membership, director compensation and evaluation of current directors and potential candidates for director. The Committee maintains formal processes for evaluating the performance of the Board, the lead director, and the individual directors. It is also responsible for establishing and monitoring policies and procedures concerning corporate governance. Further information concerning the Nominating and Corporate Governance Committee and its procedures appears below. The Nominating and Corporate Governance Committee and the Board continually assess the Company’s Corporate Governance Guidelines and the corporate governance practices of the Board.

The Finance Committee presently consists of directors Garcia-Tunon, Pearse (Chair), Ryan and Shaw (Chair).Shaw. The Committee, which met two times in 2014,2016, reviews and makes recommendations to the Board regarding the Company’s capital structure, dividend policy, financing activities, hedging policies and practices, funding of the Company’s employee benefit plans, liquidity management, corporate financial plans, and strategic financial analyses as requested by the Board.

The Law Committee presently consists of directors Garcia-Tunon, Pearse, Ryan and Shaw (Chair). The Committee, which met foursix times in 2014,2016, reviews legal matters that could present significant financial risk to the Company.

Corporate Governance Matters

The Board has adopted Corporate Governance Guidelines which cover a wide range of subjects, such as the role of the Board and its responsibilities, Board composition and election, operations and Committees, director compensation, director retirement, Board and management evaluation and succession planning, director orientation and training and communications with the Board. The Corporate Governance Guidelines, as well as the Charters of the Board’s Audit, Compensation, Nominating and Corporate Governance, Finance and Law Committees and the Company’s Global Code of Business Conduct for directors, officers and employees, are available in the Corporate Governance section of the Company’s internet website at www.MSAsafety.com. Such material will also be furnished without charge to any shareholder upon written request to the Corporate Secretary at the Company’s address appearing on page one.

The fundamental criterion for selecting a prospective director is the ability to contribute to the well-being of the Company and its shareholders. Good judgment, integrity and a commitment to the mission of the Company are essential. The Board also considers, but does not choose solely on the basis of, the distinctive experiences and perspectives of candidates diverse in race, gender, national origin and past professional accomplishments, when recommending prospective directors for the Company. Other criteria include business and professional experience, public service, other skills and experience needed by the Board, and any other factor considered relevant by the Nominating and Corporate Governance Committee and/or the Board. The Committee may prioritize the criteria depending on the current needs of the Board and the Company.

The Board presently separates the position of Chairman of the Board and Chief Executive Officer. The current Chairman is Mr. Ryan. Mr. Ryan was Chairman and Chief Executive Officer of the Company from October 1991 until he retired as Chief Executive Officer in May 2008.

While the Board has determined Mr. Ryan to be an independent director, given Mr. Ryan’s prior service as CEO of the Company, the Board annually selects a lead director to further augment its corporate governance practices. Mr. Witmer has served as lead director since May 2012. In such role Mr. Witmer, among other things, works with the Chief Executive Officer in setting meeting agendas and goals, oversees the conduct and administration of board meetings, facilitates communication among directors, supports the Chief Executive Officer in ensuring proper communications between the Board and management, supports the chairman of the Nominating and Corporate Governance Committee in continuing to enhance corporate governance, and acts as chairman of the executive sessions of independent directors.

The Board and its committees annually assess their own performance based on the results of performance evaluations, the results of which are reviewed with the Board. Management, and in some cases the committees’ outside advisors, participate in the assessments. The Board maintains an annual process through which directors are individually evaluated and provided feedback by other directors. The Board also annually evaluates and gives feedback to the lead director.

The Board has adopted a resignation policy with respect to uncontested director elections. In accordance with this resignation policy, a director nominee who does not receive a majority of the votes cast in an uncontested election of directors must promptly tender a resignation to the Board. The Board’s procedures for (i) identifying an uncontested election of directors, (ii) determining the majority of votes cast, and (iii) responding to a tender of resignation, are specified in the Corporate Governance Guidelines, which are available in the Corporate Governance section of the Company’s website at www.MSAsafety.com.

The Board maintains an active structure of independent director leadership. In furtherance of this, the Corporate Governance Guidelines provide that it is the Company’s practice for the independent directors to meet at each Board meeting in executive session, with no members of management present. The lead director serves as the chairman of the executive sessions. The audit, compensation, nominating and corporate governance, finance and law committees are also each comprised solely of and led by an independent director, as defined by the director independence standards of the New York Stock Exchange and the Board’s independence standards.

The Board met five times during 2014. All directors attended at least 75% of the combined total of the meetings of the Board and of all committees on which they served. Directors are expected to attend the Annual Meeting of Shareholders. All directors attended last year’s annual meeting.

Risk Oversight

The Board as a whole exercises oversight of the Company’s strategic risks and other risks identified through the Company’s enterprise risk management program. Strategic risks are identified in the course of the Board’s review and approval of the Company’s plans and there is regular monitoring of the Company’s performance against the strategic objectives including customer satisfaction metrics as well as periodic review of the activities of competitors. The Board, directly and through its Audit Committee, also has oversight of the enterprise risk management program which is managed by the chief financial officer.Chief Financial Officer. The enterprise risk management program is designed to enable effective and efficient identification and management of critical enterprise risks and to facilitate the incorporation of risk considerations into decision making. The Director of Internal AuditFinancial Planning and Analysis is responsible for leading the formal risk assessment and reporting process within the Company. The Director of Internal Audit,Financial Planning and Analysis, through consultation with the Company’s senior management,executive leadership, periodically assesses the major risks facing the Company and works with the executive leadership team and others responsible for managing each risk to identify and consider appropriate mitigation elements to each risk, and develop risk contingency plans as appropriate. This analysis is reviewed two times each year with the Audit Committee and annually with the full Board, and input from the Board is considered in the analysis. Emerging risks are discussed as needed.

In addition to the Board oversight described above, each committee has various risks that it oversees. For example, the Audit Committee is responsible for reviewing the Company’s risk management policies and procedures, as well as its major financial risk exposures, and the processes management has established to monitor and control such exposures. The Compensation Committee monitors risk inherent in the Company’s compensation policies, andcompensation practices, and thosesimilar matters related to the recruitment and retention of employees. The Nominating and Corporate Governance Committee monitors risks related to Board performance and the Company’s governance practices.

The Compensation Committee has evaluated the risks arising from the Company’s compensation policies and practices for its employees, includingemployees. This included a review of examinations by Pay Governance, LLC, the Compensation Committee’s

compensation consultant, of the compensation philosophy, design, governance and administration of compensation policies and practices provided to MSA’s executives, andexecutives. The review also considered information developed by management regarding programs provided to other non-executive employees. Based on this, the Committee concluded again in 20142016 that the risks arising from the Company’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on the Company.

Compensation of Directors

The following table shows the compensation earned by the Company’s non-employee directors for services during 2014:2016:

For 2014,2016, the Company paid non-employee directors a base retainer on a quarterly basis which totaled $75,000 for the year.year (“Annual Base Retainer”). The Company paid the lead director an additional retainer of $30,000. The additional annual retainer for the Audit Committee chairmanchair was $12,500, for the Compensation Committee chairmanchair was $10,000, and for all other committee chairmenchairs was $5,000.

Non-employee directors are required to meet a share ownership guideline, equivalent to five times their annual retainer.the Annual Base Retainer. Presently, all directors except Mr. Garcia-Tunon and Ms. Roberts (who were both recently elected to the Board) exceed the ownership guidelines.

Under the 2008 Non-Employee Directors’ Equity Incentive Plan and its predecessor the 1990 Non-Employee Directors’ Stock Option Plan (together, 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 2008 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 2008 plan is limited to 400,000 shares of Common Stock. The shareholders are being asked to approve a new 2017 Non-Employee Directors’ Equity Incentive Plan to replace the 2008 plan.

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. 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 third annual meeting following the grant date. Unvested shares are forfeited if the director terminates service for reasons other than death, disability or retirement.

On May 9, 201413, 2016 each non-employee director was granted 1,6172,094 shares of restricted stock. Stock options were not granted to non-employee directors in 2014.2016.

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. Pay Governance, LLC was engaged as the Committee’s consultant in 20142016 to evaluate director compensation. In December 2014, followingFollowing the Committee’s review of director compensation, the Board determined that starting in 20152017, cash retainers will remain at 20142016 levels, thatBoard committee chairpersons’ annual retainers for some of the committees would be increased by $2,500, and annual grants of equity under the Director Equity Plans will be $100,000, and that such grants will consist entirelymade in restricted stock with a value of restricted stock.$120,000. In 2014,2016 Pay Governance LLC also provided executive compensation consulting services to the Compensation Committee.Committee with respect to executive compensation.

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 director’s retirement. Payment began when the sum of the director’s 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 director’s 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 director’s age and years of service equaled 75.

Other than the amounts earned by Messrs. Hotopp and Ryan while they were employees 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.

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 Bruggeworth (Chair), Hotopp (retired May 2016), Pearse (appointed August 2016), Roberts and Witmer served as members of the Compensation Committee during 2014.2016. The Board has determined that each of these directors is independent in accordance with the listing standards of the New York Stock Exchange.

Review and Approval or Ratification of Related Party Transactions

The Company has a policy on related party transactions which operates along with the conflicts of interest section of the Company’s Global Code of Business Conduct. Copies of the policy on related party transactions and the Code are available in the Corporate Governance section of the Company’s internet website at www.MSAsafety.com.

The Company’s directors, officers and other employees must be free from any personal influence, interest or relationship, or appearance thereof, in situations that might conflict with the best interests of the Company. Directors, officers and employees must fully disclose in advance any circumstance that may create a conflict of interest, including a related party transaction, so that an appropriate determination can be made as to whether it would violate the policy on related party transactions or the Code.

In general, the related party transactions policy covers any transaction, arrangement or relationship in which the Company is a participant and the amount involved exceeds $120,000, and in which any “related person” had or would have a direct or indirect material interest. A related person is any executive officer, director or nominee, any owner of 5% or more of the Company’s voting securities or an immediate family member of any of the foregoing. The policy covers indirect material interests, but excludes certain relationships and pre-approved transactions.

Any officer, director or employee of the Company who is aware of a proposed transaction that may violate the related party policy must bring such transaction to the notice of the General CounselChief Legal Officer and Chief Financial Officer of the Company. If the General CounselChief Legal Officer or Chief Financial Officer determines that the proposed transaction could be a related party transaction, the matter will be submitted to the Nominating and Corporate Governance Committee to consider all material facts of the transaction. The Committee is charged with taking a number of items into account as set forth in the policy and determining

whether the transaction is indeed a related party transaction and if so, whether it should be approved in any particular case. The types of matters which the Committee will take into account are:

The chairman of the Committee will report on any decision at the next meeting of the Board.

Nominating and Corporate Governance Committee Procedures

The current members of the Nominating and Corporate Governance Committee are directors HotoppShaw (Chair), Roberts, Ryan Shaw and Witmer, whose terms as Committee members will expire at the 20152017 organizational meeting of the Board to be held on the date of the Annual Meeting of Shareholders. The Board has determined that each of the current members of the Committee is independent in accordance with the listing standards of the New York Stock Exchange.

The Committee has a written charter which is available in the Corporate Governance section of the Company’s internet website at www.MSAsafety.com.

The Committee will consider nominees brought to the attentiondirector candidate recommendations from a variety of the Board bysources, including from a shareholder, a non-management director, the chief executive officer, any other executive officer, a third-partythird party search firm, or other appropriate sources. Any shareholder who desires to have an individual considered for nomination by the Committee must submit a recommendation in writing to the Corporate Secretary, at the Company’s address appearing on page one, not later than 90 days in advance of the annual meeting at which the election is to be held. The recommendation should include the name and address of both the shareholder and the candidate and the qualifications of the candidate recommended.

The Committee determines a process for identifying and evaluating nominees for director on a case by case basis, considering the context in which such nomination is being made. It is not anticipated that the process for evaluating a nominee would differ based on whether the nominee is recommended by a shareholder.

BOARD RECOMMENDATION AND REQUIRED VOTE

PROPOSAL NO. 1: ELECTION OF DIRECTORS

In the election of directors for terms expiring in 2018,2020, the three 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, subject to the resignation policy described above.

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. Shares for which neither a vote “for” or “withheld” is selected (e.g., broker non-votes) will not be counted in determining the total votes cast for this matter.

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 20152017 Annual Meeting. Therefore, only the nominees named above will be eligible for election at the meeting.

The Board of Directors and its Nominating and Corporate Governance Committee recommend a vote FOR the election of the nominees, each of whom has consented to be named as a nominee and to serve if elected.Properly submitted proxies which are timely received will be voted for the election of the nominees named below, unless otherwise directed thereon, or for a substitute nominee designated by the Nominating and Corporate Governance Committee in the event a nominee named becomes unavailable for election.

PROPOSAL NO. 2

APPROVAL OF ADOPTION OF THE MSA SAFETY INCORPORATED

2017 NON-EMPLOYEE DIRECTORS’ EQUITY INCENTIVE PLAN

The Company’s 2017 Non-Employee Directors’ Equity Incentive Plan (the “DEIP”) was adopted by the Company’s Board of Directors on March 9, 2017, contingent upon approval by the Company’s shareholders. The DEIP replaces the Company’s predecessor plan, the 2008Non-Employee Directors’ Equity Incentive Plan, and upon approval of the DEIP no further awards will be granted under that plan. The affirmative vote of the shareholders on or prior to March 8, 2018 is required for approval of the DEIP. If the shareholders of the Company do not approve the DEIP as proposed in this Proxy Statement, the DEIP will not be used by the Company.

The principal features of the DEIP are summarized below. The summary is qualified in its entirety by the full text of the DEIP, which is set forth as Appendix A to this Proxy Statement.

The Board of Directors recommends that the shareholders vote “FOR” approval of the adoption of the DEIP. Such approval will ensure the Company’s continuing ability to attract and retain qualified persons to serve on the Company’s Board of Directors and to provide a flexible range of compensation options under the DEIP. Unless otherwise specified thereon, proxies received in the accompanying form will be voted in favor of approval of the DEIP.

General

The purposes of the DEIP are to promote the long-term success of the Company by:

Each person who is a member of the Board of Directors of the Company and who is not an employee of the Company or any subsidiary is eligible to receive automatic awards under the DEIP. It is expected that approximately eight non-employee directors will be eligible to participate in the DEIP.

The maximum aggregate number of shares for which awards may be granted under the DEIP is limited to 150,000 shares of the Company’s common stock, without par value (the “Common Stock”), subject to adjustment for stock splits, dividends and similar events. Common Stock which is subject to any unexercised, terminated, or expired award will become available for grant pursuant to new awards. The Common Stock which may be issued pursuant to an award under the DEIP may be treasury shares or authorized but unissued shares, or any combination of such shares.

Administration

The DEIP will be administered by the Board. A majority of the members of the Board will constitute a quorum. The vote of a majority of a quorum (or the unanimous written consent of the Board members) will constitute action by the Board. The Board has the power to interpret and administer the DEIP. All questions of interpretation with respect to the DEIP, and application of the DEIP, or as to stock options, restricted stock or restricted stock unit awards granted under the DEIP will be determined by the Board, and its determination will be final and binding.

The DEIP provides for the grant of stock options, restricted stock and restricted stock units. All of the foregoing grants are sometimes referred to herein as “awards,” and the recipient of any award or grant is sometimes referred to herein as a “grantee.”

Awards

The DEIP provides that on the third business day following each Annual Meeting of Shareholders, each director who is not an employee of the Company or a subsidiary will automatically be granted an award with a total value of $120,000, with the composition of the award to be determined by the Board in its discretion. The award may consist of all or any portion of nonstatutory stock options, shares of restricted stock or restricted stock units. For purposes of valuing an award, the value is determined by the Company as of the date of grant based on the accounting grant date value of the award. The amount and

mix of awards may be adjusted by the Board in its discretion, provided that the value of an annual award under the DEIP may not exceed $350,000.

On March 15, 2017, the fair market value of a share of the Company’s Common Stock was $69.52.

The number of shares available under the DEIP and any outstanding awards are automatically adjusted in the event of stock dividends and similar events. In the event the shares of Common Stock have been affected in such a way that an adjustment of outstanding awards is appropriate in order to prevent the dilution or enlargement of rights under the awards (including, without limitation, any extraordinary dividend or other distribution (whether in cash or in kind), recapitalization, stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event), the Board will make appropriate equitable adjustments, which may include, without limitation, adjustments to any or all of the number and kind of shares of stock (or other securities ) which may thereafter be issued in connection with such outstanding awards and adjustments to any exercise price specified in the outstanding awards and will also make appropriate equitable adjustments to the number and kind of shares of stock (or other securities) authorized by, or to be granted under, the DEIP.

Stock Options

Stock options granted under the DEIP expire ten years from the date of grant. Options which have not yet become exercisable are forfeited if the director resigns. All stock options are forfeited if the director is removed for cause. Otherwise, unexpired options may be exercised for five years following termination of service as a director (90 days in the case of resignation).

Stock options granted under the DEIP may be exercised by paying the option price to the Company in cash, by delivering to the Company shares of Common Stock having a market value on the date of exercise equal to the option price of the shares being purchased and/or through such other means as the Board determines are consistent with the Plan’s purpose and applicable law, including through withholding shares to be acquired upon exercise.

Repricing Prohibited

The DEIP prohibits repricing of options without further shareholder approval. Repricing means the grant of a new option in return for the cancellation, exchange or forfeiture of an award that has a higher grant price than the new award, the amendment of an outstanding award to reduce the grant price, the cancellation or repurchase of an option at a time when the grant price is greater than the fair market value of the Common Stock or any action that would be treated, for accounting purposes, as a repricing. The grant of a substitute award under the anti-dilution and adjustment provisions explained under “Awards,” above, is not a repricing.

Restricted Stock

Restricted stock is Common Stock that is issued to a director and is subject to restrictions, which include restrictions upon the sale, assignment, transfer or other disposition of the restricted stock and the requirement of forfeiture of the restricted stock upon termination of service under certain specified conditions. The restriction period applicable to restricted stock is determined by the Board upon grant in its discretion. If a director’s service terminates for any reason other than the director’s death, disability or retirement, as disability and retirement are defined in the DEIP, prior to vesting, the shares of restricted stock are forfeited. The director will have, with respect to awards of restricted stock, all of the rights of a shareholder of the Company, including the right to vote the restricted stock and the right to receive any dividends on such stock, provided that dividends may be held in escrow and if so would be subject to the same restrictions as applied to the restricted stock.

Restricted Stock Units

Restricted stock units are units issued to a director that are subject to restrictions and, upon vesting, are satisfied through the delivery of Common Stock. The restrictions include restrictions upon the sale, assignment, transfer or other disposition of the restricted stock units and the requirement of forfeiture of the restricted stock units upon termination of service under certain specified conditions. The restriction period applicable to restricted stock units is determined by the Board upon grant in its discretion. If a director’s service terminates for any reason other than the director’s death, disability or

retirement, as disability and retirement are defined in the DEIP, prior to vesting, the restricted stock units are forfeited. The director is not a shareholder until shares are delivered in satisfaction of the restricted stock units. Dividend equivalents are paid on the restricted stock units, provided that such amounts may be held in escrow and if so would be subject to the same restrictions as applied to the restricted stock.

Effect of Change in Control

Notwithstanding any other provision of the DEIP to the contrary, immediately prior to any Change in Control of the Company (as defined in Section 11 of the DEIP), all options and restricted stock units which are then outstanding will become fully vested and, if applicable, exercisable, and all restrictions with respect to shares of restricted stock which are then outstanding will lapse, and such shares will be fully vested and nonforfeitable.

Possible Anti-Takeover Effect

The provisions of the DEIP providing for the acceleration of the exercise date of stock options, the vesting of restricted stock units and the lapse of restrictions applicable to restricted stock upon the occurrence of a Change in Control may be considered as having ananti-takeover effect.

New Plan Benefits

The actual amount of awards to be received by or allocated to non-employee directors, the only category of participants under the Plan, is not determinable in advance. However, under the predecessor plan, the non-employee directors each received 2,094 shares of restricted stock in 2016.

Amendment and Termination

The Board may at any time amend or terminate the DEIP. However, no such action by the Board may terminate any outstanding stock options or restricted stock units granted under the DEIP. Further, the Board may not amend the DEIP without the approval of the Company’s shareholders to the extent such approval is required by the rules of any exchange upon which the Common Stock is listed or if approval of the amendment is required to qualify for the exemption provided by Rule 16b-3 of the Securities Exchange Act of 1934.

Equity Compensation Plans

The following table provides information about grants under the Company’s equity compensation plans as of December 31, 2016.

Federal Income Tax Consequences

The following is a summary of certain material federal income tax consequences with respect to awards that may be granted under to the DEIP under current federal tax laws and certain other tax considerations associated with awards under the DEIP. The summary does not address tax rates or non-U.S., state or local tax consequences, nor does it address employment tax or other federal tax consequences except as noted.

Stock Options. Stock options granted under the DEIP will be non-statutory options (i.e., stock options that are not eligible for incentive stock option treatment under the Internal Revenue Code, referred to herein as the “Code”). In general, a director will not be taxed at the time a stock option is granted, but will recognize ordinary income in connection with the exercise of the stock option equal to the excess (at the time of exercise) of the fair market value of the shares acquired upon exercise over the exercise price. A corresponding deduction will generally be available to the Company. Upon a subsequent disposition of the shares purchased, any recognized gain or loss is treated as a capital gain or loss, depending on the director’s holding period with respect to the shares purchased.

Restricted Stock. In general, a director who has received restricted stock subject to a substantial risk of forfeiture will not recognize income until the risk of forfeiture lapses. When the risk of forfeiture lapses, the director will recognize ordinary income in an amount equal to the excess of the fair market value of the shares at that time over any purchase price paid. However, a director may make an election under Section 83(b) of the Code to be taxed on restricted stock award when it is acquired rather than when the substantial risk of forfeiture lapses. A director who makes an effective 83(b) election will realize ordinary income in an amount equal to the fair market value of the shares as of the time of acquisition less any price paid for the shares. If a director makes an effective 83(b) election, no additional income results by reason of the lapsing of the restrictions. The Company is generally entitled to a deduction at the time that the director is required to recognize ordinary income.

For purposes of determining capital gain or loss on a sale of shares awarded under the DEIP, the holding period in the shares begins when the director realizes taxable income with respect to the transfer of the shares. The director’s tax basis in the shares equals the amount paid for the shares plus any income realized with respect to the transfer. If a director makes an effective 83(b) election and later forfeits the shares, the tax loss realized as a result of the forfeiture is limited to the excess of what the director paid for the shares (if anything) over the amount (if any) realized in connection with the forfeiture.

Restricted Stock Units. In general, a director who is awarded restricted stock units will not recognize income, and the Company will not be allowed a deduction, at the time the award is made. Instead, the director will generally recognize ordinary income at the time the restricted stock units vest and are settled by delivery of shares of Common Stock, and a corresponding deduction is generally available to the Company.

Section 409A. Section 409A of the Code imposes an additional 20% income tax, plus, in some cases, a further income tax in the nature of interest, on nonqualified deferred compensation that does not comply with deferral, payment-timing and other formal and operational requirements specified in Section 409A of the Code and related regulations and that is not exempt from those requirements. Stock options and restricted stock granted under the DEIP are intended to be exempt from Section 409A of the Code. The DEIP gives the Board the flexibility to prescribe terms for awards that are consistent with the requirements of, or an exemption from, Section 409A of the Code.

Certain Change of Control Payments. Under Section 280G of the Code, the vesting or accelerated exercisability of stock options or the vesting and payment of other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments contingent on the change in control in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards, may be subject to an additional 20% federal tax and may be non-deductible to the Company.

BOARD RECOMMENDATION AND REQUIRED VOTE

PROPOSAL NO. 2: APPROVAL OF THE ADOPTION OF THE MSA SAFETY INCORPORATED

2017 NON-EMPLOYEE DIRECTORS’ EQUITY INCENTIVE PLAN

The Board of Directors recommends a vote FOR approval of the 2017 Non-Employee Directors’ Equity Incentive Plan. Properly executed proxies timely received in the accompanying form will be so voted, unless otherwise directed thereon. Approval of this proposal requires the affirmative vote of a majority of the votes cast (which excludes abstentions and failures to vote (e.g., broker non-votes)) by the holders of Common Stock present and voting in person or by proxy, with a quorum of a majority of the outstanding shares of Common Stock being present or represented at the Annual Meeting.

EXECUTIVE COMPENSATION   COMPENSATION DISCUSSION AND ANALYSIS

In this section, we will describe the material components of our executive compensation program for our “Named Executive Officers,” referred to herein as “Named Officers,” whose compensation is set forth in the 20142017 Summary Compensation Table and other compensation tables contained in this proxy statement:Proxy Statement:

We will also provide an overview of our executive compensation philosophy and our executive compensation program. In addition, we explain how and why the Compensation Committee of the Board (the “Committee”) arrives at specific compensation policies and decisions involving the Named Officers. These programs and processes are driven by the Committee’s desire to continually increase shareholder value while assuring sound corporate governance, transparency and alignment with MSA’s Vision and Values.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

EXECUTIVE SUMMARY

Our Business

We are a global manufacturing business with approximately $1.133$1.150 billion of revenues from continuing operations in 2014,2016, with operations in North America, South America, Asia, Europe, Middle East, Australia and South Africa. We manufacture and market a wide array of personal protective equipment, including respiratory protection, head, eye, face and hearing protection, fall protection,self-contained breathing apparatus (“SCBA”), fixed gas and flame detection systems, portable gas detection instruments, industrial head protection, fire and rescue helmets, fall protection devices and various other safety related products.

The primary goal of the Company is to increase shareholder value over the long-term. We believe that this is best accomplished by achieving our vision “to be the world’s leading provider of safety solutions that protect workers when life is on the line;” continually improving our financial performance; and maintaining a productive, diverse, and motivated work force. The role of our management and Board is to develop and implement effective long-range strategic plans and annual operating plans to achieve these goals. Compensation programs and performance-based incentives are designed to target the median market compensation for executives when these plans are met, above median compensation when they are exceeded, and below median compensation when they are not met.

For fiscal year 2014,2016, reported revenues were up slightly at $1.133$1.150 billion, increasing 2% from 2015 on a reported basis and netincreasing 4% in constant currency, reflecting a 2% foreign currency translation headwind related to the stronger U.S. dollar. Constant currency revenue from the Company’s core product lines increased 6%, driven largely by Latchways products. Net income from continuing operations was up 0.7% to $87$92.7 million compared to $85.9$69.6 million in 2013.2015.

20142016 Executive Compensation Overview

The Committee has developed executive compensation programs comprised of three primary components: salary, performance-related annual incentives, and equity grants which are also largely performance related. In establishing the performance metrics for the 20142016 annual incentive, the Committee recognized that MSA would have to continue navigating a challenging economic environment with significant cost reductions, investments in restructuring worldwide, and investments in select strategic initiatives and new product development. The 20142016 business plan was designed to position the Company to grow and enter 20152017 in a stronger strategic andcost competitive position for the years ahead. Most, but not all, results in 2014 were very close to or above the target goals in that business plan.

The Company had several key areas of focus in 20142016 including:

The above areas of focus correlate with the Named Officers’ performance metrics within the cash incentive plan and contribute to driving cash flow,working capital, operating profits and consolidated net income. Demonstrating the strong correlation between the Company’s performance incentive plans and actual results, our Named Officers earned cash incentive awards pursuant to our annual incentive program, ranging between 105%123% and 125%135% of target.

To emphasize the importance of “pay-for-performance” in our compensation philosophy and our Company’s culture, the Company’s incentive arrangements are based on the achievement of specific performance goals that support our business strategy. Our annual incentive program focuses on achieving key performance metrics such as those mentioned above. Our long-term incentive program includes stock options, time-vesting restricted stock, time-vesting restricted stock units and performance stock units. Stock options reward for increases in our share price. Our performance stock unit program metric is Total Shareholder Returnmetrics are operating margin percentage and revenue growth modified by total shareholder return (“TSR”) compared to our peer group. Time-vesting restricted sharesstock and restricted stock units vest after three years of continued employment, providing the

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Company with a valuable retention incentive and alignment with shareholders’ rewards for increases in stock price. Grants made in 20132015 and 20142016 have increased in value butand remain unvested, thereby providing the Company with important retention benefits.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

During 2014,2016, the Committee reviewed the design and administration of all executive compensation programs to ensure that those programs continue to meet our performance requirements, deliver on our “Core Principles,” and do not promote unnecessary risk-taking. The Committee also reviewed policies such as stock ownership and retention requirements, and compensation recoupment. In addition, long-term incentive vesting provisions, capped incentive awards, and an emphasis on team-based metrics serve to mitigate risk. As a result, the Committee concluded that the Company’s compensation programs effectively accomplish their intended goals, and do not promote unwanted risk taking that could be detrimental to the Company.

At the annual shareholders’ meeting in May 2014,2016, the executive compensation of the Company’s Named Officers was approved by our shareholders, with 98.9%99.1% of the votes cast voting in favor of the proposal. The Committee considered this vote in connection with its determination of compensation policies and decisions and has concluded that the Company will maintain its existing compensation philosophy for 2015.2017.

Philosophy and Objectives of the Executive Compensation Program

The objectives of MSA’s executive compensation programs, which cover not only the five Named Officers in the Summary Compensation Table, but all officers of the Company, are to improve shareholder value over the long-term by attracting, retaining and motivating superior executive talent who will drive robust financial and operational performance and enable the Company to achieve its goals. Our program is guided by a philosophy that strives to align target compensation at the middle (50^th percentile) of the market for total direct compensation. Elements of total direct compensation include salary, performance-based cash, equity incentives and benefits. Our program is designed to provide an above-market compensation opportunity for performance exceeding annual budget and peer group norms. We believe that this philosophy enables the Company to attract and retain superior executive talent by providing the opportunity to work in a highly ethical, growing and team-oriented Company.company.

The design of our compensation programs is driven by the following “Core Principles” which support our objectives:

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Components of Executive Compensation Program

Building on these core principles, our executive compensation program contains both cash and stock-based components designed to meet specific objectives of the Committee. The Committee considers both annual and long-term Company goals and strives to develop incentives that motivate executives to achieve these goals. Cash payments are provided through an executive’s base salary and a performance-based annual incentive. Company stock is provided through the use of stock

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

options, time-vesting restricted stock and restricted stock units and performance based stock units. The Committee has chosen to align its cash incentive programs with the achievement of annual internal financial and strategic goals, and its performance based stock units with long-term internal goals based on operating margin percentage and revenue growth modified by total shareholder return (TSR) performance relative to peers.

Executives participate in a retirement plan that provides for post-employment financial security, and some executives are provided with a limited number of perquisites (company car, financial counseling, and limited club memberships for business use) that the Committee believes serve a business purpose, are common in the market and are of modest cost to the Company. Executives also participate in a severance plan that provides certain benefits to executives should their jobs be terminated following a change in control of the Company. The specific rationale for why the Committee has chosen to provide each element of compensation is as follows:

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

The Committee believes that these components, taken as a whole, provide an attractive compensation package that aligns with the Company’s annual and long-term goals and enables the Company to attract, retain and motivate superior executive talent. As a means of mitigating risk, the Committee has adopted policies such as share ownership and retention guidelines, which require executives to maintain a certain level of ownership of MSA stock, and a compensation recoupment policy that provides the Committee with the ability to recoup certain awards previously paid or earned based on financial results that were later restated downward, and discretionary authority held by the Committee that allows modification of any payouts from any plan, in the event of any other misconduct that causes financial harm to MSA.the Company.

Performance-Based Incentives. The Committee believes that a significant portion of a Named Officer’s compensation should be delivered through performance-based incentive compensation components. The Committee has identified meaningful financial and shareholder performance objectives that align with the business, are measurable, and are used by management on a day-to-day basis to pursue its business strategy. The Committee has chosen the following measures for use in the Company’s incentive arrangements that support and align with the Company’s business strategy:

In summary, the Committee believes that the best way to reward executives is to combine a program of cash incentives (based on annual financial performance goals) with stock incentives (based on increases in the Company’s stock price and, in part, on performance versus long-term financial performance metrics).

The Company’s incentive plans (annual and long-term) are targeted to reward executives at the middle (50^th percentile) of the market for achieving expected or targeted performance levels. For example, our annual incentive plan is designed to pay above the targeted level and, therefore, above the middle of the market if the Company’s performance exceeds our goals and expectations, up to a cap upon maximum performance. If the Company’s performance falls below our goals and expectations, the annual incentive plan is designed to pay below the targeted level. If actual performance falls below a certain threshold level, our annual incentive plan is designed to pay nothing. This variable aspect of our annual incentive arrangement is also present in our long-term stock plans.incentive plan. For instance, we use stock options in our long-term incentive plan such that if the stock price falls below the exercise price they are of no value to the executive. Grants made in 2012, 2013,2014, 2015, and 2014 have now2016 were made at grant prices that until recently were above the Company’s Common Stock price, and thus such stock options had no value absent an increase in the price of the Company’s Common Stock. The Company’s stock value has increased, creating value in value.such grants. The 20132015 and 20142016 grants remain unvested, thereby providing the Company with important retention benefits. Our performance based stock units incorporate a performance threshold below which no payments are made.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

The following table shows the allocation of performance-based versus fixed compensation components for our Named Officers at targeted levels in 2014:as of the end of 2016:

PERCENT OF COMPENSATION AT RISK

COMPENSATION OVERSIGHT PROCESS

Role of the Committee. The Committee has responsibility for the oversight and decision-making regarding executive compensation except for CEOChief Executive Officer (“CEO”) compensation, which is recommended by the Committee but approved by the independent directors as described below. The Committee has engaged an outside compensation consultant, Pay Governance, LLC to provide assistance and guidance on compensation issues. The consultant provides management and the Committee with relevant information pertaining to market compensation levels, alternative compensation plan designs, market trends and best practices. Pay Governance is considered to be independent by the Committee. During 20142016 the consultant provided only executive compensation consulting services to the Committee and director compensation consulting services to the Nominating and Corporate Governance Committee.Committee with respect to director compensation. Further, the Committee has not discovered any conflicts of interest that were raised by the work of the consultant involved in determining or recommending executive compensation.

At its meetings, the Committee regularly holds executive sessions, which exclude management and, subject to the Committee’s desire, may include its independent consultant. Management assists in the coordination and preparation of the meeting agenda and materials for each meeting, which are reviewed and approved by the Committee Chairman. Meeting materials are mailed to Committee members for review approximately one week in advance of each meeting. The Committee met three times in 20142016 and held an executive session, which excluded members of management, at all of the meetings.

For the Chief Executive Officer’sCEO’s compensation, the Committee develops proposals and presents them to the full Board’s independent directors for their approval. Compensation decisions regarding all other officers are approved by the Committee. The Committee considers the recommendations of the Chief Executive OfficerCEO when making compensation decisions regarding all other officers.

Role of the Compensation Consultant. The Committee has retained Pay Governance, LLC as its executive compensation consultant. The compensation consultant reports directly to the Committee and the Committee may replace the compensation consultant or hire additional consultants at any time. The compensation consultant attends meetings of the Committee, as requested, and communicates with the Committee Chairman between meetings; however, the Committee makes all decisions regarding the compensation of our officers.

The compensation consultant provides various executive compensation services to the Committee pursuant to a written consulting agreement approved by the Committee Chairman. Generally, these services include advising the Committee on

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

the principal aspects of our executive compensation program and evolving industry practices, and providing market information and analysis regarding the competitiveness of our program design and our award values in relationship to performance.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

During 2014,2016, the compensation consultant performed the following specific services for the Committee:

In addition, the compensation consultant attended meetings of the Committee during 20142016 as requested by the Committee Chairman.

The Committee retains sole authority to hire the compensation consultant, approve its annual fees, determine the nature and scope of its services, evaluate its performance, approve all invoices for payment of services and terminate its engagement.

Use of Competitive Data. The Committee reviews data related to compensation levels and programs of other companies prior to making its decisions. The Committee engages its consultant to perform a comprehensive assessment of compensation levels provided to executives among a peer group of companies. These companies are selected based on the following criteria:

For 2014,2016, the peer group consisted of the following 2022 companies:

The Committee re-assesses the peer group composition annually and may periodically make changes, usually by adding companies that may better meet our selection criteria or by removing companies that may have experienced change, such as acquisition, or no longer fit our selection criteria. In 2014,2016, the Committee, through its consultant, conducted a review of the peer companies which resulted in the conclusion that, for 2015,2017, the peer group set forth above was well aligned and should not be rebalanced by removingchanged, other than the two largest peer companies, Mettler-Toledo International,removal of Checkpoint Systems, Inc. and Donaldson Company, because their revenues were not reflective of those of MSA, and by adding Graco, Inc., Littelfuse, Inc., MKS Instruments, Inc. and Masimo Corporation to the 2015 peer group. This will realign MSA to the median offrom the peer group both in revenue and market capitalization. Alldue to the acquisition of the companies added meet the Company’s chosen selection criteria.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Checkpoint Systems by CCL Industries, and the removal of CLARCOR Inc. from the peer group due to the acquisition of CLARCOR by Parker Hannifin Corporation.

The consultant conducts an annual analysis of the most recent proxy disclosures for the peer group companies in order to understand the compensation ranges for base salary, and the annual and long-term incentives provided to the peer group

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

named executive officers. In addition, regression analysis is applied to data from compensation surveys conducted by Willis Towers Watson representing nearly 1,000 general industry companies. The Committee believes that the combination of these comprehensive data sources allows it to understand the market compensation ranges for both the Named Officers and positions below the Named Officers based on the duties and responsibilities of each position and to determine the level of compensation needed to target the middle (50^th percentile) of the market.

The market compensation data is further used to develop a market compensation structure which includes salary grades with midpoints. Each executive is assigned to a salary grade where the midpoint of the grade approximates the median (50^th percentile) of the market salary level for that position. Each salary grade has a salary range around the midpoint and has corresponding annual and long-term incentive award opportunities that are percentages of the midpoint, and which also align to market based values. In assigning an executive to a salary grade, the Committee also considers internal factors that may, in a limited number of instances, impact the grade assignment of an executive.

In addition to the market data, the Committee considers the following factors when making compensation decisions:

An assessment of these factors could result in actual compensation being positioned modestly above or below the desired middle (50^th percentile) of the market positioning. The Committee does not consider amounts earned from prior performance-based compensation, such as prior bonus awards or realized or unrealized stock option gains, in its decisions to increase or decrease compensation for the following year. The Committee believes that this would not be in the best interest of retaining and motivating executives.

In order to assess the impact of its executive compensation decisions, the Committee reviews a summary report – or “tally sheet” – of total compensation prepared for each officer.the CEO. The tally sheet includes the total dollar value of annual compensation, including salary, annual and long-term incentive awards, annual increase in retirement accruals and the value of other benefits and perquisites. The tally sheet also provides the Committee information pertaining to equity ownership, future retirement benefits, and benefits the Company is required to provide to each executivethe CEO under various termination scenarios. The Committee’s review of the tally sheet information is an integral part of its decision making process each year.

DETERMINATION OF EXECUTIVE COMPENSATION AMOUNTS

Fixed Cash Base Salary. The Company provides executives with a base salary in order to attract and retain executive talent. Base salary is designed to be competitive with other organizations and is sensitive to the skill level, responsibility and experience of the executive. Base salary for each executive is determined through our external benchmarking process and an internal comparison to other executives at the Company to ensure internal equity. Base salary levels are targeted to the middle (50^th percentile) of the market, although the Committee considers base salary levels that fall within plus or minus 10% of the market median to be competitive.

Base salary adjustments are considered and are affected by each executive’s individual performance assessment based on a rigorous Performance Management Process (“PMP”).performance review process. This individual process details an executive’s annual accomplishments compared to performance expectations established at the outset of each year, and also assesses the individual’s behaviors used to achieve the performance level. The CEO develops and recommends to the Committee annual base salary adjustments for each executive primarily by evaluating individualthe value and impact that each executive has had on the Company’s performance usingduring the PMP process.year.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

The Committee performs a similar comprehensive evaluation of the CEO’s performance against pre-determined annual operational and strategic goals previously approved by the independent directors of the Board, and determines his recommended annual base salary increase based on the outcome of this evaluation. This salary recommendation is then also

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

approved by the independent directors. At its February 20142016 meeting, the Committee approved salary increases ranging from 2%2.25% to 4%3.5% for the Named Officers. Following these adjustments, salary levels were positioned as follows relative to the market median targeted level: Mr. Lambert 3.8% above median, Mr. Krause, 28.0% below median, Ms. McMahan 7.3%Mr. Vartanian 3.0% below median, Mr. Herring 6.5% above median and Mr. Bove 2.4%McClaine 6.2% above median. Mr. Bigler’sKrause is new in his role and had additional salary adjustments in December 2016 as part of Vice President and Chief Customer Officer was not a benchmark position.multi-year plan to bring his salary to market median. As a result, Mr. Krause is now 10% below median.

Performance-Based Annual Cash Incentive. The Company provides executives with an annual cash incentive based on (a) the MSA Non-CEO Executive Incentive Plan (NCEIP), which directly rewards the accomplishment of key corporate and/or geographical or business unit performance goals, and (b) the CEO Annual Incentive Award Plan (AIAP) which has been approved by shareholders and is administered within the requirements necessary to attempt to retain the tax deductibility of the CEO’s annual incentive award under Section 162(m) of the Internal Revenue Code. Additionally, each executive, including the CEO, is eligible for a program known as the “Enhanced Bonus” that rewards participants only when the Company’s budgetedactual consolidated net income exceeds pre-set board-approved targets. Under the Enhanced Bonus feature, annual incentive awards earned under the NCEIP or AIAP, which are each limited to a maximum payout of 150% of target, may be increased from 0% to 50% if the Company’s consolidated net income exceeds the target. The enhancement is interpolated at performance levels between target and 125% of target. For each 1% increase in actual consolidated net income above target, earned awards under the NCEIP and AIAP are increased by 2%. For example, at performance of 105% of net income target, the incentive is increased by 10%. The incentive is increased by 50% if the Company exceeds the net income target by 25% or more, resulting in a total bonus opportunity which is capped at 200% of target should performance achieve or exceed maximum levels. The Committee believes that the increased performance leverage that the Enhanced Bonus is designed to provide is in the best interests of our shareholders by motivating our senior management to exceed bottom line profitability targets in addition to important Company and business unit performance metrics.

The following chart illustrates how the enhanced bonus feature rewards performance that exceeds targets under the NCEIP and AIAP, thereby assuring that executive reward is aligned to shareholder value. The “Example of Highly Leveraged Plan” in the chart is based upon Pay Governance, LLC researchresearch. The Committee limits the total possible payout to 200% of the target for 2015.2017.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Under the NCEIP and AIAP, the target incentive opportunity (paid for achieving target performance) for each Named Officer is aligned with the executive’s salary grade midpoint which approximates the middle (50^th percentile) of the market as determined through our external benchmarking process, although the Committee generally considers target incentive opportunities between plus or minus 10 percentage points of the market median to be competitive. If actual performance drops below 70% of the performance target, payout drops to zero.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

The following table shows the percent of salary midpoint and dollar amount of incentive that would be earned if actual performance for 20142016 was equal to targeted performance.

20142016 TARGET CASH INCENTIVE AWARD

Actual NCEIP award payments are based primarily on the achievement of a variety of Company financial and non-financial goals, but also have a discretionary personal performance factormultiplier applied based on the accomplishment of an executive’s individual goals. An executive’s individualvalue and impact that each executive has had on the Company’s performance goals are a mix of objective, subjective and strategically-oriented goals withinduring the executive’s control or to which he or she contributes in a meaningful way.

year. When making his recommendations for the 2016 discretionary personal performance multiplier, the CEO rates each executive’s accomplishments relative to these goals and may increase or decrease the calculated NCEIP bonus amount by up to 20%.10% based on performance relative to the pre-established individual goals that fall within the responsibility of each individual executive.

Actual AIAP award payments for the CEO for 20142016 were based 25%20% on achievement of adjusted consolidated net income, as approved by the Committee at the beginning of 2014, 25%2016, 20% on achievement of consolidated operating margin percentage, 25%20% on achievement of consolidated CSPI (Customer Satisfaction Performance Index) and 25%, 20% on achievement of consolidated free cash flow,working capital as a percentage of sales, and 20% on achievement of consolidated net sales of Latchways products, all relative to the pre-determined goals established and approved by the Committee. The Committee also recommends for Board approval annual operational and strategic goals for the CEO. The independent directors of the Committee may use their discretion to reduce the size of the CEO’s calculated award based on his performance relative to his individual goals, but may not increase it. This is necessary to retain deductibility under Internal Revenue Code Section 162(m).

If performance is below minimum threshold level the payout goes to zero. In addition to these opportunities, the Enhanced Bonus feature may add up to 50% to the calculated NCEIP or AIAP award depending on the level of consolidated net income performance above target. The maximum award opportunity under all plans combined is 200% of target for each executive including the CEO. Actual awards paid for 20142016 performance are included in theSummary Compensation Table on page 3339 under the columnNon-Equity Incentive Plan Compensation. Award opportunities for each Named Officer under the combined plans for 20142016 at threshold, target and maximum are included in theGrants of Plan-Based Awards table on page 3440 under the columnsEstimated Possible Payouts Under Non-Equity Incentive Plan Awards.

Beginning in 2016, “Consolidated Working Capital as a Percentage of Sales” was introduced as a new metric to replace free cash flow. This revised metric eliminates accounting related transactions such as accruals and prepaid items, with respect to which management can exercise little control, yet retains accountability for balance sheet items such as inventories, accounts

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

receivable and accounts payable. All officers also have an additional metric based on sales from the Company’s recent acquisition of Latchways plc. The successful integration of Latchways into the Company’s fall protection business was an important business objective for 2016. In 2017 the Latchways revenue metric will be expanded to include all of the fall protection product line. This is being done to increase emphasis on the product line in which the Company sees the most opportunity for organic growth.

In 2014,2016, performance measures and goals were approved by the Committee at its FebruaryMarch meeting. For the Chief Executive OfficerCEO and the other Named Officers, the Committee and, in the case of the CEO, independent directors of the full Board, approved the following performance targets:

PERFORMANCE TARGETS FOR ANNUAL CASH INCENTIVE

Chairman, President and Chief Executive Officer – William M. Lambert

(Dollars in millions)

Note: As a result of 20142016 performance, 105%123% of target incentive was earned for 2014.2016.

Senior Vice President, Chief Financial Officer and Treasurer – Stacy McMahanKenneth D. Krause

(Dollars in millions)

Note: As a result of 20142016 performance, 110%135% of target incentive was earned for 2014.

Vice President2016 which included a 10% personal performance factor due to exceeding milestone expectations of transition to CFO, driving improved and President, MSA Europe – Ronald N. Herring, Jr.

(Dollars in millions)

				2014 Actual Performance		Pre-Established 2014 Annual Incentive Goals
Performance Measure		Weighting				Threshold		Target		Maximum
Consolidated Net Income1		25%		$88.7		$65.7		$93.9		$122.1
Operating Margin % – MSA Europe3		25%		18.6%		14.5%		18.1%		21.7%
Consolidated CSPI		25%		58.2		50.4		56		61.6
Free Cash Flow from Operations2 – MSA Europe3		25%		$34.7		$20.0		$28.5		$37.1

Note: As a result of 2014 performance, 125% of target incentive was earned for 2014.

expanded investor relations outreach, and implementing improved decision analytics and stronger cost structure realignment.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Senior Vice President and Chief Customer OfficerPresident, MSA Americas – Joseph A. BiglerNishan J. Vartanian

(Dollars in millions)

				2014 Actual Performance		Pre-Established 2014 Annual Incentive Goals								2016 Actual Performance		Pre-Established 2016 Annual Incentive Goals
Performance Measure		Weighting				Threshold		Target		Maximum		Weighting				Threshold		Target		Maximum
Consolidated Net Income1		25%		$88.7		$65.7		$93.9		$122.1		20.00%		$94.2		$65.0		$92.8		$120.6
Operating Margin % – Americas Segment2												20.00%		29.3%		23.2%		29.0%		34.8%
Consolidated CSPI		50%		58.2		50.4		56		61.6		20.00%		67.3		53.3		59.2		65.1
Consolidated Gross Profit %		25%		45.2%		40.9%		45.4%		49.9%
Consolidated Working Capital as a % of Sales												20.00%		22.2%		38.5%		29.6%		20.7%
Net Sales – Latchways – Americas Segment2												20.00%		$10.9		$10.6		$13.3		$16.0

Note: As a result of 20142016 performance, 107%125% of target incentive was earned for 2014.2016 which included a 10% personal performance factor due to exceeding business unit financial plan and targets, and restructuring geographic operations to facilitate cost efficiencies and driving strong market share gains in key markets.

 

Senior Vice President and President, MSA International – Kerry M. BoveRonald N. Herring, Jr.

(Dollars in millions)

				2014 Actual Performance		Pre-Established 2014 Annual Incentive Goals								2016 Actual Performance		Pre-Established 2016 Annual Incentive Goals
Performance Measure		Weighting				Threshold		Target		Maximum		Weighting				Threshold		Target		Maximum
Consolidated Net Income1		25%		$88.7		$65.7		$93.9		$122.1		20.00%		$94.2		$65.0		$92.8		$120.6
Operating Margin% – MSA International3		25%		16.0%		14.5%		18.1%		21.7%
Operating Margin % – International Segment2												20.00%		16.4%		13.0%		16.2%		19.4%
Consolidated CSPI		25%		58.2		50.4		56		61.6		20.00%		67.3		53.3		59.2		65.1
Free Cash Flow International2,3		25%		$31.6		$17.7		$25.3		$32.9
Consolidated Working Capital as a % of Sales												20.00%		22.2%		38.5%		29.6%		20.7%
Net Sales – Latchways – International Segment2												20.00%		$53.3		$42.7		$53.4		$64.1

Note: As a result of 20142016 performance, 109%135% of target incentive was earned for 2014.2016 which included a 10% personal performance factor due to responsiveness in addressing changes in the oil and gas markets, particularly in the Middle East, exceeding planned performance of the Principal Operating Company in Europe, and developing and executing restructuring within MSA Japan, India and South Africa operations.

Senior Vice President, Secretary and Chief Legal Officer – Douglas K. McClaine

(Dollars in millions)

				2016 Actual Performance		Pre-Established 2016 Annual Incentive Goals
Performance Measure		Weighting				Threshold		Target		Maximum
Consolidated Net Income1		20.00%		$94.2		$65.0		$92.8		$120.6
Consolidated Operating Margin %		20.00%		15.1%		11.5%		14.4%		17.3%
Consolidated CSPI		20.00%		67.3		53.3		59.2		65.1
Consolidated Working Capital as a % of Sales		20.00%		22.2%		38.5%		29.6%		20.7%
Consolidated Net Sales – Latchways2		20.00%		$64.3		$53.4		$66.8		$80.2

Note: As a result of 2016 performance, 135% of target incentive was earned for 2016 which included a 10% personal performance factor due to exceeding expectations within insurance receivable recovery efforts, successful outcomes of various litigation activities and challenges, and efficient and below budget external litigation costs.

 

¹ Consolidated Net Income from continuing operations of $87.4$92.7 million plus $1.2$2.2 million in costs for unplanned acquisitions and divestitures, restructuring, unplanned pension expense and asset sales not made in the ordinary course of business added back to Net Income and $0.07$3.6 million for removal of translational foreign currency adjustment, per terms approved by the Compensation Committee at the beginning of the year.

 

² Net cash flow from operations minus capital expenditures.

³For geographic business metrics and certain consolidated Latchways metrics, a currency-adjusted actual results will be used to compute the annual incentive payment.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

The Committee chose consolidated net income as the primary corporate performance goal for 20142016 for all Named Officers. Certain of the Named Officers are also measured by other performance goals appropriate to their job duties. The Committee believes that these measures are the best indicators of performance produced as a result of our executives’ efforts and is reflective of their individual areas of responsibility.

 

Long-Term Incentive Compensation. Our long-term incentive program represents a significant portion of an executive’s total compensation package. Awards under this program are considered “at risk,” which means they can increase or decrease in value based on fluctuations in our stock price. In selecting the appropriate long-term incentive vehicles, the Committee made its decisions based on its desire to reward for long-term stock price appreciation, to promote loyalty and tenure with the Company and to increase executives’ alignment with shareholders. Stock options, time-vesting restricted stock units and performance stock units were chosen to meet these attributes. These awards are granted under the shareholder-approved 2008 Management Equity Incentive Plan (MEIP).Plan. In 20142016 the mix is 45%was 50% stock options 45%and 50% performance stock units and 10% time vested restricted stock awards for officers who hadhave reached retirement eligibility and had achieved their ownership and retention guidelines. This particular mix of awards positions these retirement-eligible officers to have more equity “at risk” and provides better alignment to performance. For officers who have achieved their ownership and retention guidelines but who have not yet reached retirement eligibility, and for officers who have reached retirement eligibility but have not yet reached their ownership guidelines, the mix is 40% stock options, 40% performance stock units and 20% time vestedtime-vesting restricted stock awards.units. For other officers, the mix is one-third stock options, one-third time-vesting restricted stock awardsunits and one-third performance stock units. This allocation recognizes the decreased importance of the retention value of equity and the increased emphasis on performance related equity awards for those who have reached retirement eligibility. The mix for new officers like Stacy McMahan, which is one third stock options, one third performance stock units, and one third time vested restricted stock awards, recognizesrecognizing the need to have a greater portion of equity compensation delivered in restricted stock awards. Effective in 2015, for all officers who have reached retirement eligibility and have achieved their ownership and retention guideline, the equity mix will be 50% performance stock units and 50% options. This positions officers’ equity to have more “at risk” and provides better alignment to performance.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)units.

The following table illustrates the calculation and allocation of the long-term incentive compensation. This table and the table of Grants of Plan-Based Awards use the amounts computed in accordance with FASB ASC Topic 718.

 

LONG-TERM INCENTIVE COMPENSATION

 

		Allocated to
		1/1/2014 Salary Midpoint1 (1)		2014 Stock Multiplier2 (2)		Stock Options (3)		Restricted Stock (4)		Performance Stock Units (5)		Option Award Value3 (1) x (3)		Restricted Stock Award Value4 (1) x (4)		Performance Stock Units Award Value5 (1) x (5)
William M. Lambert		$759,500		235%		105.75%		23.50%		105.75%		$803,171		$178,483		$803,171
Stacy McMahan		$389,750		110%		36.67%		36.67%		36.66%		$142,908		$142,908		$142,908
Ronald N. Herring, Jr.		$354,450		95%		38.00%		19.00%		38.00%		$134,691		$67,346		$134,691
Joseph A. Bigler		$354,450		110%		49.50%		11.00%		49.50%		$175,453		$38,989		$175,453
Kerry M. Bove		$354,450		95%		42.75%		9.50%		42.750%		$151,527		$33,673		$151,527

		Allocated to
		1/1/2016 Salary Midpoint1 (1)		2016 Stock Multiplier2 (2)		Stock Options (3)		Restricted Stock Units (4)		Performance Stock Units (5)		Option Award Value3 (1) x (3)		Restricted Stock Units Award Value4 (1) x (4)		Performance Stock Units Award Value5 (1) x (5)
William M. Lambert		$798,000		240%		120.00%		0.00%		120.00%		$957,600		$0		$957,600
Kenneth D. Krause		$372,450		100%		33.33%		33.33%		33.33%		$124,150		$124,150		$124,150
Kenneth D. Krause6		—		—		—		—		—		—		$750,000		—
Nishan J. Vartanian		$372,450		100%		40.00%		20.00%		40.00%		$148,980		$74,491		$148,980
Ronald N. Herring, Jr.		$372,450		100%		50.00%		0.00%		50.00%		$186,225		$0		$186,225
Douglas K. McClaine		$372,450		90%		45.00%		0.00%		45.00%		$167,603		$0		$167,603

¹ Reflects salary midpoint at the time of the award in February 2014.March 2016.

² Stock multiplier is the plan percentage effective as of January 1, 2014.in March 2016. Columns 3, 4 and 5 percentages reflect the split of the stock multiplier into options, restricted stock units and performance stock units in accordance with the discussion above.

³ Actual ShareStock Options awarded = Option Award Value divided by the Black-Scholes option value on the date of the award. Actual amount may vary due to rounding to nearest share value.

⁴ Actual Restricted SharesStock Units awarded = Restricted Stock Units Award Value divided by the closing stock price on the date of the award. Actual amount may vary due to rounding to nearest share value.

⁵ Actual Performance Stock Units awarded = Performance Stock Units Award Value divided by the closing stock price on the date of the award. Actual amount may vary due to rounding to nearest share value. Amounts shown in this column may differ from amounts shown in the compensation tables contained in this proxy statement due to differences in the method of calculating fair market value in such compensation tables in accordance with FASB ASC Topic 718.

⁶ The amount shown for Kenneth D. Krause represents a Restricted Stock Award that he received in December 2016 in the form of a retention grant, in addition to the Long Term Incentive Compensation indicated in the line above.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

NOTE: A stock multiplier is the percentage of the Named Officer’s salary midpoint that is awarded in annual equity grants as long term incentives. Stock multipliers are market based and determined with the assistance of the Committee’s outside compensation consultant.

 

Long-term incentive opportunities are developed for each executive salary grade based on the middle (50^th percentile) of the market. While the Committee reviews these long-term incentive opportunities annually, it typically only adjusts the individual opportunities periodically as market median long-term incentive data tends to be volatile, increasing or decreasing for certain positions more frequently than salary or annual incentive data. As a result, each Named Officer’s long-term incentive opportunity has been the same for the last several years even though the market has moved up and down over this time frame.

 

Stock Option Awards. Stock options are a performance motivator for executives to increase shareholder value. The Committee has chosen to use stock options because of the alignment they provide with our shareholders and because the value realized by the executive is equal to the increase in our stock price in excess of the option’s exercise price. The closing stock price on the date of grant is determined by the later of the date of the Compensation Committee meeting at which the grant was made, or the third business day after the Company’s year-end earnings release. Once vested and when exercised, if the stock price is lower than the exercise price set on the original grant date, the option provides no value to the executive.

 

The Company computes the fair value of each stock option in accordance with FASB ASC Topic 718, and expenses this amount over the vesting period.

 

The valuation methodology used to calculate the share grants and to calculate the accounting expense is the same. Each option has vesting provisions that require continued employment of the executive thereby promoting the retention of the executive. Stock options vest 100% three years following grant. The options are exercisable after they vest and until they expire, which is generally on the tenth anniversary following the grant date.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

In order to deliverOnly non-qualified stock options were granted in the most tax efficient means to our executives, incentive stock options have been provided, to the extent IRS limits permit, along with non-qualified stock options. The benefit of receiving incentive stock options is that realized gains are taxed at the lower capital gains rate instead of at an executive’s higher normal income tax rate, if certain holding period requirements are met.2016. The exercise price is 100% of the fair market value on the grant date. In 2015, we plan to only issue non-qualifiedThe Company no longer issues incentive stock options which hasas, due to the effectUnited States alternative minimum tax rules, the benefit of reducing our corporatethe tax liability.deduction that the Company receives at the time of exercise typically exceeds the tax benefits to the participant that the incentive stock options would provide.

 

Performance Stock Units. The Company uses this type of equity grant to incentivize the achievement of one or more specific goals promoting long-term shareholder value. At the date of grant, a target number of shares is established based on the share value at the time of the award and present dollar value of the compensation intended to be delivered. Ultimately the number of shares awarded at the end of the performance period varies based on the achievement of corporate goals.

 

The target number of shares will vest if the target performance goals are met. If “excellence” goals are met, the number of shares vested will be doubled. If only the minimum “threshold” performance is achieved, one half of the target number of shares will vest. If performance is below “threshold,” the entire award will be forfeited. At performance levels between threshold, target and excellence, awards will be interpolated. There are no shares issued until the performance goals have been met. Therefore, there are no dividend rights or voting rights associated with this form of long-term incentive until the shares are actually issued upon performance goals being met.

 

For the grants made in 2012, 20132014 and 2014,2015, the performance metric for grants of performance stock units is Total Shareholder Return (TSR) compared to the peer group. The performance period is three years. At the end of the first year of the performance period, if the TSR is at or above the 50^th percentile of the peer group TSR, one fourth of the target number of shares will be issued as time-vesting restricted stock, subject only to forfeiture in the event of termination of employment prior to the end of the three-year performance period. At the end of the second year of the performance period, if the two year cumulative shareholder return is at or above the 50^th percentile of the peer group, one half of the target shares less any shares earned at the end of the first year will be issued as time-vesting restricted stock, subject only to forfeiture in the event

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

of termination of employment prior to the end of the three-year performance period. At the end of the third year of the performance period, if the three year cumulative TSR is at the 50^th percentile of the peer group, the target number of shares will be earned less any shares earned in the previous two years. If the TSR is at or above the 75^th percentile of the peer group at the end of the third year, two times the target number of shares will be earned less any shares earned during the first two years of the performance period. If the TSR is below the 25^th percentile of the peer group at the end of the third year, no shares will be earned for that period. Also, if the TSR is at or above the 25^th percentile but is a negative number, then the maximum number of shares earned is limited to one half of the target shares. However, time-vesting restricted shares that were issued during the first two years of the performance period will not be forfeited and will become vested at the end of the three years based upon the officer’s continued employment. For performance between the 25^th percentile and the 75^th percentile interpolation will be used to determine the actual numbers of shares earned. Effective for the grants made in 2015, the Company substituted time-vesting restricted stock units for time-vesting restricted stock for issuance upon meeting performance tests in the first or second year. The 20122014 grant three year cumulativehad performance was atabove the 58.450^th percentile of the peer groupin year one and therefore 133.6%thus 25% of the target will be paidshares were earned, but the two year cumulative performance was below the 50^th percentile and therefore no additional shares were earned in 2015.year two. At the end of the three year period the 2014 grant had performance at the 72.3 percentile which results in a total payout of 189.2% of target. The 20132015 grant had performance below the 50^th percentile in year one and year two; therefore none ofno shares were earned, but the shares have been earned. The 2014 grant hadtwo-year cumulative performance was above the 50^th percentile in year one;and therefore 25%50% of the target shares have beenwere earned.

Effective with the 2016 annual equity grants, the long-term performance stock unit incentive award was redesigned. Two new internal financial metrics were used to measure performance and the final results will be modified based on TSR as compared to a peer group. The internal financial goals were based on Operating Margin percentage (weighted at 60%) and Revenue Growth (weighted at 40%). The use of the TSR modifier will align the executives’ rewards with changing shareholder value. Operating Margin percentage and Revenue Growth will be adjusted based on pre-determined items. There will be no interim shares earned. The performance for the entire grant will be determined at the end of the performance period on December 31, 2018.

At target performance, 100% of the target number of shares will be awarded. At threshold performance, 50% of the target number of shares will be awarded. At the excellence level of performance, 200% of the target number of shares will be awarded. Results between threshold and target; and between target and excellence will be interpolated. Any amount of shares which are determined to be awarded will be further adjusted by the TSR modifier described below.

If MSA’s percentile ranking for TSR versus our peer group is at the 40^th percentile to the 60^th percentile, the TSR modifier will be 1.0. The TSR modifier for a ranking greater than the 60^th percentile but less than the 75^th percentile will be 1.10. The TSR modifier for a ranking at the 75^th percentile or above will be 1.20. The TSR modifier for a ranking greater than the 25^th percentile but less than the 40^th percentile will be 0.90. The TSR modifier for a ranking at the 25^th percentile or below will be 0.80.

The shares related to the 2016 annual equity grants will vest on March 8, 2019 and subject to determination by the Compensation Committee of the actual performance achieved.

 

Time-Vesting Restricted Stock.Stock Units. The Committee selected time-vesting restricted sharesstock units in order to create and encourage an ownership culture and to serve as a retention tool. Restricted sharesstock units vest 100% on or about the third anniversary following the date of grant. The fair value ofassigned to restricted sharesstock units is the fair market value of the shares of Common Stock to which such restricted stock units relate on the date of grant, and the recipient is charged with income for Federal income tax purposes in the year of vesting and at the market value as of the date that vestingthe restrictions lapse. The restricted sharesunits do not include voting rights andor the right to dividends or dividend equivalents during the vesting period.

Effective in 2015, instead of using time vested restricted stock we have transitioned to issuing time vested restricted stock units, which carry no dividend or voting rights until vested. This change will create more global consistency, reduce administrative cost and improve corporate cash flow.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

ADDITIONAL CONSIDERATIONS RELATING TO THE CEO

 

Mr. Lambert’s compensation has increased each of the six years since he was elected CEO.

When Mr. Lambert was appointed CEO in 2008, the board adopted a plan to gradually bring his pay into alignment with the market median for the position of CEO. This plan was completed in 2012, and hence in 2013 and 2014,In 2016, Mr. Lambert’s base pay was adjusted by amounts which conform to the Corporation’sCompany’s merit increase guidelines for U.S. payroll. In 2014The increase for 2016 in Mr. Lambert’s salary was increased by 2%2.5%.

 

CEO Pay For Performance.During 2014,2016, the Committee, with the assistance of its compensation consultant Pay Governance, conducted several analyses to assess the alignment of the CEO’s pay relative to the performance of the Company. Company performance was defined as either our total shareholder return (TSR) or a composite of performance metrics. This composite consists of the average ranking relative to our peers of our TSR, Net Income Growth, RONA and Operating Income Margin. These analyses considered the CEO’s total direct compensation (TDC) which includes: base salary, actual cash bonus earned and value of equity incentives. Equity incentives were considered using two separate methodologies:

 

1.

Expected value method: this method considered the grant date fair value of equity awards and is the same value as stated in our proxy statement summary compensation table.

 

2.

Realizable compensation method: this method examines the aggregate value of previously granted equity awards at a point in time, including:

a.

the in-the-money intrinsic value of stock option grants made during the period,

b.

the end of period value of restricted stock grants made during the period, and

c.

for performance awards, the actual payouts for awards beginning and ending during the three-year performance period and the end of period estimated payout for unvested awards granted during the three-year performance period ended December 31, 2013.2015.

 

During 2014,2016, the Committee reviewed and discussed the results of the following independent analyses and was satisfied that the executive compensation program was aligned with the performance of the Company.

 

20132015 Relative CEO Pay Ranking versus 20132015 Relative TSR Ranking

 

This analysis compares our CEO’s 20132015 TDC compensation using his actual bonusannual cash incentive earned in 20132015 (and paid in early 2014)2016) and theexpected value methodology (described above) for equity awards granted in 2013,2015, all relative to our peer group CEOs’ TDC compensation valued on the same basis. Our TSR performance for 20132015 was also evaluated relative to our peers. The Committee concluded that compensation granted in 20132015 to our CEO was reasonably aligned to our 20132015 TSR when considered on a relative basis to our peers.

 

MSA CEO 20132015 TDC		MSA 20132015 RELATIVE TSR		ALIGNMENT
5023thrd Percentile		7912th Percentile		Reasonable

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

20132015 CEO Actual BonusAnnual Cash Incentive Earned Relative to Peers versus 20132015 Composite Performance Relative to Peers

This analysis compares our CEO’s 20132015 actual bonus earned (and paid in early 2014)2016) to the composite performance metrics, which are a collection of metrics used in our incentive arrangements. Both the CEO’s bonus information and the composite performance results were compared to the same data of our peers and considered on a percentile rank basis. The Committee concluded that the CEO’s annual incentive payment, when evaluated in terms of absolute dollar value, was reasonably aligned with the relative performance of the Company.

 

20132015 CEO ACTUAL BONUS PAYMENT		BONUS RELATIVE TO PEERS		PERFORMANCE RELATIVE TO PEERS		ALIGNMENT OF BONUS AND PERFORMANCE
Bonus Earned (Dollar Value)		6141st Percentile		5625th Percentile		Reasonable

 

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

20132015 CEO Realizable Compensation Relative to Peers versus 20132015 Composite Performance Relative to Peers

This analysis compares our CEO’s realizable compensation(realizable compensation method, described above) over the three-year period 20102013 through 20132015 relative to the composite performance metrics, which are a collection of metrics used in our incentive arrangements. Both the CEO’s realizable compensation information and the composite performance results were compared to the same data of our peers and considered on a percentile rank basis. The Committee concluded that the CEO’s three-year realizable compensation, when evaluated in terms of absolute dollar value, was reasonably aligned with the relative performance of the Company.

 

		REALIZABLE COMPENSATION RELATIVE TO PEERS		PERFORMANCE RELATIVE TO PEERS		ALIGNMENT OF  REALIZABLE COMPENSATION AND PERFORMANCE
CEO Realizable Compensation (Value)		5619th Percentile		6932thnd Percentile		Reasonable

 

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

CEO Realizable Compensation as a Percent of Expected Value Relative to Company TSR Performance

This analysis examines the percent difference in compensation granted to our CEO in a particular year expressed on an expected value basis (note 1 below) versus the same compensation expressed on a realizable value basis (note 2 below) at the end of 2014.2016. This percent difference is compared to the change in actual Company TSR for the same time periods to understand if the difference in expected value pay and realizable pay is directionally similar to our TSR performance. For example, if our stock price falls over a period of time we would expect our CEO’s realizable compensation to be less than the expected value at the time the compensation was granted. In evaluating this analysis, the Committee was satisfied that the CEO’s realizable compensation was directionally similar to changes in our TSR.

 

Year		MSA CEO Target TDC at Grant (1)				MSA CEO Realizable Value (2)				Measurement Period				Change in Pay Value (3)				Change in MSA TSR (4)				Alignment				MSA CEO Target TDC at Grant  (1)				MSA CEO Realizable Value (2)				Measurement Period				Change in Pay Value (3)				Change in MSA TSR (4)				Alignment
2012		$	3,150,138			$	4,364,896				2012 - 2014				39	%			74	%			Reasonable
2013		$	3,317,924			$	2,595,108				2013 - 2014				-22	%			30	%			Reasonable
2014		$	3,318,528			$	2,550,604				2014				-23	%			6	%			Reasonable			$	3,318,528			$	4,066,131				2014 - 2016				23	%			46	%			Reasonable
2015																										$	3,276,665			$	4,038,440				2015 - 2016				23	%			38	%			Reasonable
2016																										$	3,507,177			$	5,315,972				2016				52	%			64	%			Reasonable
Total		$	9,786,590			$	9,510,609				2012 - 2014				-3	%			74	%			Reasonable			$	10,102,370			$	13,420,543				2014 - 2016				33	%			46	%			Reasonable

(1)

Target TDC at Grant includes for each particular year the CEO’s base salary, target bonus and the grant date fair value of equity awards granted.

(2)

Realizable value includes for each particular year the CEO’s base salary, actual bonus earned and the realizable value of equity awards granted during that particular year using our December 31, 20142016 closing stock price. See page 2632 for a more detailed description of realizable value for long-term incentive awards.

(3)

Change in Pay Value is the change in the CEO’s compensation from the time it was granted to December 31, 20142016 considering the impact of actual performance relative to performance goals and changes in companyCompany stock price.

(4)

MSA TSR is calculated on a point-to-point basis using the final trading day of each year.

 

OTHER COMPENSATION AND RETIREMENT POLICIES

 

In addition to the other components of our executive compensation program, we maintain the compensation policies described below. These policies are consistent with evolving best practices and help ensure that our executive compensation program does not encourage our officers to engage in risk taking beyond our ability to effectively identify and manage.

 

Post Employment Retirement Benefits. Retirement related compensation is designed to provide financial security following retirement from the Company and to reward for loyalty and tenure. Retirement benefits fall into three major elements which include pension, 401(k) and non-qualified retirement plans. All of these programs exist to help attract, retain, and motivate key executives. The programs listed below are designed to be competitive and are compared periodically to representative peer companies. Retirement-related compensation programs do not have a direct linkage to performance but rather a link to a long term commitment to MSA, as do all other welfare benefits.

 

Pension – offered as part of a retirement package that helps the Company recruit employees and provides security and peace of mind for future retirement, enabling executives and other employees to exit the workforce at retirement age. Pension amounts are based on final average pay, years of service, age, and a pre-determined plan formula.

 

401(k) – offered as part of our benefits package to encourage employees to save for their own retirement and future financial security. MSA matches 100% of the first 1% of employee contributions and 50% of the next 6% for a total match of 4% on 7% of compensation. Plan design and provisions are reviewed periodically to determine if the total retirement package is competitive.

 

Non-qualified retirement plans – provide additional retirement benefits for executives whose accumulations and contributions in the qualified plans are limited by the Internal Revenue Code. MSA maintains three such plans. The MSA 2005 Supplemental Retirement Savings Plan provides benefits beyond the limitations imposed on 401(k) plans. The MSA Supplemental Pension Plan provides benefits beyond the limitations imposed on defined benefit pension plans. The Company ceased providing benefits under the Supplemental Pension Plan for any employees who are newly hired or promoted into the eligible class of Key Executives after December 31, 2012. The MSA Supplemental Executive Retirement Plan provides additional retirement benefits only for officers who retire from the Company at age 55 or later. The Company ceased providing benefits under the MSA Supplemental Executive Retirement Plan to any new executives who joined the Company after January 1, 2008.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

promoted into the eligible class of Key Executives after December 31, 2012. The MSA Supplemental Executive Retirement Plan provides additional retirement benefits only for officers who retire from the Company at age 55 or later. The Company ceased providing benefits under the MSA Supplemental Executive Retirement Plan to any new executives who joined the Company after January 1, 2008.

Stock Ownership Guidelines and Retention Policy. The Committee has adopted stock ownership guidelines and a retention policy for all Company officers as well as other key executives. The Company believes that significant ownership levels provide additional motivation to executives to perform in accordance with the interests of the Company’s shareholders. All officers are expected to hold a number of shares equal in value to their salary grade midpoint multiplied by a stock multiplier ranging from 2.25 up to 5.5 for the CEO. All officers have a five-year period from the time they become an officer to accumulate the specified shares. That specified ownership amount is expected to be retained thereafter as long as an executive remains an active employee.

 

The Company has a stock retention policy in addition to the stock ownership guidelines. Prior to achieving the stock ownership guidelines mentioned above, the executive must retain 100% of all equity awards through the Company’s compensation program (net of exercise costs and taxes). Once the ownership threshold requirement is met, each executive is required to retain at least 20% of the dollar value of additional shares (net of exercise costs and taxes) realized through the exercise of stock options, the vesting of restricted stock or restricted stock units, and the vesting of performance-based stock units until age 62. Upon attaining age 62, the executive may begin divesting the additional retention shares, but must continue to abide by the basic stock ownership guidelines. The fifth column in the table below sets forth the accumulated retention requirements for each Named Officer based upon past option exercises and share and unit vestings.

 

The Named Officers all exceeded their stock ownership guidelines requirements and total ownership requirements as of December 31, 2014, except for Stacy McMahan who was appointed to the CFO position in August 2013.2016.

 

The stock ownership and retention requirements for each Named Officer are as follows:

 

STOCK OWNERSHIP AND RETENTION REQUIREMENTS

 

Name		Salary Midpoint as of 12/31/2014								2014 Stock Multiplier as of 12/31/2014								Stock Ownership Guidelines Requirement				Accumulated Retention Requirement				Total Ownership Requirement
William M. Lambert		$	759,500				x				5.50				=			$	4,177,250			$	993,521			$	5,170,771
Stacy McMahan1		$	389,750				x				3.50				=			$	1,364,125				N/A			$	1,364,125
Ronald N. Herring, Jr.		$	354,450				x				2.25				=			$	797,513			$	204,078			$	1,001,591
Joseph A. Bigler2		$	354,450				x				2.25				=			$	797,513				N/A			$	797,513
Kerry M. Bove		$	354,450				x				2.25				=			$	797,513			$	276,182			$	1,073,695

¹Ms. McMahan has not yet met her stock ownership guidelines requirement, and therefore, in accordance with the retention policy, has no accumulated retention requirement.

²Mr. Bigler has attained age 62 and therefore has no accumulated retention requirement.

Name		Title		Salary Midpoint as of 12/31/2016								2016 Stock Multiplier								Basic Ownership Requirement				Accumulated Retention Requirement				Total Ownership Requirement
William M. Lambert		Chairman, President and Chief Executive Officer		$	798,000				x				5.50				=			$	4,389,000			$	1,336,423			$	5,725,423
Kenneth D. Krause1		Vice President, Chief Financial Officer and Treasurer		$	372,450				x				2.25				=			$	838,013			$	—			$	838,013
Nishan J. Vartanian		Senior Vice President, & President, MSA Americas		$	372,450				x				3.50				=			$	1,303,575			$	39,192			$	1,342,767
Ronald N. Herring, Jr.		Senior Vice President, & President, MSA International		$	372,450				x				3.50				=			$	1,303,575			$	294,125			$	1,597,700
Douglas K. McClaine		Senior Vice President, Secretary and Chief Legal Officer		$	372,450				x				3.50				=			$	1,303,575			$	191,137			$	1,494,712

(1)

Mr. Krause is subject to the accumulated retention requirement, however as of December 31, 2016 he has not yet incurred a transaction that would establish or otherwise increase that amount.

 

The following forms of share ownership apply toward the stock ownership requirements: shares purchased; vested and unvested restricted stock; vested and unvested restricted stock units; shares retained following the exercise of stock options; and other shares acquired through any other lawful means. Performance based restricted stock or stock units that have not yet met the performance tests are not applied toward the stock ownership requirements. The Company currently does not have a formal penalty should an executive fail to meet the expected ownership level in the allotted timeframe, but all

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

executives understand these requirements, and the Committee may use its discretion to reduce or eliminate future long-term incentive grants, or take such other actions as it deems appropriate if ownership guidelines continued to not be met. These ownership guidelines help drive a culture of ownership and accountability among the executive team.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

In addition toHedging and Pledging. The Company maintains an insider trading policy that restricts officers and directors in the foregoing, thetrading of their Company has astock. That policy prohibitingspecifically prohibits officers and directors from hedging or pledging their Company stock.

 

Recoupment Policy. The Company has a recoupment policy applicable to officers and other Company employees. In the event of a restatement of MSA’s financial results or a determination of other misconduct that causes financial harm to the Company, the Board will review the circumstances that caused the restatement and consider issues of accountability for those who bore responsibility for the events. As part of that review, consideration would also be given to any appropriate action regarding compensation that may have been awarded to such persons. In particular, it would be appropriate to consider whether any compensation was awarded on the basis of having achieved specified performance targets, whether a person engaged in misconduct that contributed to the restatement and whether such compensation would have been reduced had the financial results been properly reported. Depending on the outcome of that review, appropriate action could include reducing compensation in the year the restatement was made, seeking repayment of any incentives received for the period restated or any gains realized as a result of exercising an option awarded for the period restated, or canceling any unvested equity compensation awarded for the period restated.

 

Perquisites.The Company provides executives with a limited number of perquisites in order to strengthen business relationships and maximize the use of our executives’ time. Our perquisites have been benchmarked to the market and are considered ordinary, customary, and minimal for each executive’s position. The following are available to the Named Officers:

 

Automobile – each Named Officer is provided a Company leased vehicle to facilitate travel among MSA’s various locations.locations and for other business travel. Personal use of this automobile is calculated and imputed as income for each executive.

 

Club memberships – a country club membership is provided to our Chief Executive OfficerCEO to facilitate customer contact and a business club is provided to our Chief Executive Officer and Chief Financial OfficerCEO to afford a downtown Pittsburgh location for business meetings.

 

Financial planning and tax return assistance – provides advice and guidance to executives on investment and income tax issues in order to maximize the use and understanding of our executive compensation program and minimize time otherwise required for taxation issues.

 

The Company does not own or lease an aircraft, nor does the Company have fractional ownership in any aircraft, nor does it pay for executives’ personal travel.

 

Severance Policy. The Company has a severance pay policy that applies to the Named Officers as well as all other eligible salaried employees. The policy applies to a permanent termination of the employment relationship when initiated by the Company and when other conditions are satisfied. A schedule of benefits determines the separation benefit ranging from four weeks to a maximum of fifty-two weeks of severance pay based on final salary.

 

Change in Control. The Company has entered into change in control employment agreements with each of the Named Officers. These agreements provide Named Officers up to three years income and benefits following a change in control of the Company. These agreements are intended to retain executives, provide continuity of management in the event of an actual or threatened change in control and enable executives to remain financially indifferent when evaluating opportunities that may be beneficial to shareholders yet could negatively impact the continued employment of the executive. Cash severance payments are payable and accelerated vesting of unvested equity awards occurs only in the event of both a change in control and termination of employment other than for cause, death or disability (commonly known as a “double trigger”). There are no tax gross-up provisions in the change in control agreements.

 

Stock Option and Other Equity Granting Process. The Company grants stock options and all other equity grants for executives and all other eligible associates at the first regularly scheduled Compensation Committee meeting of each calendar year. The

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Committee makes its grants effective on the later of the date of the Compensation Committee meeting at which the grant was made or the third business day after the Company’s year-end earnings release. UnderThe 2016 annual grants were made under the 2008 MEIP,Management Equity Incentive Plan. The 2017 grants will be made under the Amended and Restated 2016 Management Equity Incentive Plan, which was approved by shareholders thein May 2016. The stock option exercise price will be set as the closing price on the grant date, as permitted by generally accepted accounting principles. Option dating practices are consistent, regular and unbiased. The Company does not “backdate” options or grants of any kind.

COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Adjustments or Recovery of Prior Compensation. The Company does not have employment agreements with any Named Officer. As described above under “Recoupment Policy,” the Company maintains a recoupment policy to facilitate the recovery or adjustment of amounts previously awarded or paid to a Named Officer, in the event of a restatement of MSA’s financial results or a determination of other misconduct that causes financial harm to the Company. Additionally, the Sarbanes-Oxley Act of 2002 provides that if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements as a result of misconduct, the Chief Executive Officer and the Chief Financial Officer must reimburse the Company for any bonus, incentive or equity-based compensation received, and any profits realized from the sale of Company securities, during the twelve months following the issuance or filing of the noncompliant results.

Summary Compensation Table

The following table shows the compensation for 2014, 20132016, 2015 and 20122014 of the Company’s principal executive officer, the Company’s three principal financial officerofficers during the year, and the other three executive officers of the Company with the highest total compensation for 20142016 (the “Named Officers”):