MSA Safety Inc 10-K

Item 9A. Controls and Procedures (a) Evaluation of disclosure controls and procedures . Based on their evaluation as of the end of the period covered by this Form 10-K, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the principal executive officer and principle financial officer, as appropriate to allow timely decisions regarding required disclosure. (b) Changes in internal control . There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. See Item 8. Financial Statements and Supplementary Data—“Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm.” Item 9B. Other Information None. 77 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Services With respect to this Part III, incorporated by reference herein pursuant to Rule 12b—23 are (1) “Election of Directors,” (2) “Executive Compensation,” (3) “Other Information Concerning the Board of Directors,” (4) “Stock Ownership,” and (5) “Selection of Independent Registered Public Accounting Firm,” appearing in the Proxy Statement filed pursuant to Regulation 14A in connection with the registrant’s Annual Meeting of Shareholders to be held on May 19, 2021. The information appearing in such Proxy Statement under the caption “Audit Committee Report” and the other information appearing in such Proxy Statement and not specifically incorporated by reference herein is not incorporated herein. As to Item 10 above, also see the information reported in Part I of this Form 10-K, under the caption “Information about our Executive Officers,” which is incorporated herein by reference. As to Item 10 above, the Company has adopted a Code of Ethics applicable to its principal executive officer, principal financial officer and principal accounting officer and other Company officials. The text of the Code of Ethics is available on the Company’s website at www.MSAsafety.com . Any amendment to, or waiver of, a required provision of the Code of Ethics that applies to the Company’s principal executive, financial or accounting officer will also be posted on the Company’s Internet site at that address. As to Item 12 above, the following table sets forth information as of December 31, 2020 concerning common stock issuable under the Company’s equity compensation plans. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 283,998 $ 46.23 896,459 * Equity compensation plans not approved by security holders None — None Total 283,998 46.23 896,459 * Includes 802,439 shares available for issuance under the Amended and Restated 2016 Management Equity Incentive Plan and 94,020 shares available for issuance under the 2017 Non-Employee Directors’ Equity Incentive Plan. 78 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements and Report of Independent Registered Public Accounting Firm (see Part II, Item 8 of this Form 10-K). The following information is filed as part of this Form 10-K. Page Management's Report on Responsibility for Financial Reporting and Management's Report on Internal Control Over Financial Reporting 32 Report of Independent Registered Public Accounting Firm 33 Consolidated Statements of Income—three years ended December 31, 2020 36 Consolidated Statements of Comprehensive Income—three years ended December 31, 2020 37 Consolidated Balance Sheets—December 31, 2020 and 2019 38 Consolidated Statements of Cash Flows—three years ended December 31, 2020 39 Consolidated Statements of Changes in Retained Earnings and Accumulated Other Comprehensive Income—three years ended December 31, 2020 40 Notes to Consolidated Financial Statements 41 (a) 2. The following additional financial information for the three years ended December 31, 2020 is filed with the report and should be read in conjunction with the above financial statements: Schedule II—Valuation and Qualifying Accounts All other schedules are omitted because they are not applicable, not material or the required information is shown in the consolidated financial statements and consolidated notes to the financial statements listed above. (a) 3. Exhibits Several of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities Exchange Act of 1934, as amended, as indicated next to the name of the exhibit. Several other instruments, which would otherwise be required to be listed below, have not been so listed because those instruments do not authorize securities in an amount that exceeds 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees to furnish a copy of any instrument that was so omitted on that basis to the Commission upon request. 3(i) Amended and restated Articles of Incorporation, filed as Exhibit 3.1 to Form 8-K on March 7, 2014, is incorporated herein by reference. 3(ii) Amended and restated By-laws of the registrant, filed as Exhibit 3.2 to Form 8-K on March 7, 2014, is incorporated herein by reference. 4(a) First Amendment dated September 7, 2018 to the Second Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement dated January 22, 2016 by and among MSA Safety Incorporated, various Company subsidiaries, as guarantors, and the noteholders named therein, including forms of Note Guarantee and Intercompany Subordination Agreement, filed as Exhibit 4.1 to Form 8-K on September 10, 2018, is incorporated herein by reference. 4(b) Form of Amended and Restated Guarantee Agreement entered into as of March 7, 2014 by each of General Monitors, Inc., General Monitors Transnational, LLC and MSA International, Inc., in favor of the Note Purchasers under the Amended and Restated Note Purchase and Private Shelf Agreement dated as of March 7, 2014 (as confirmed and reaffirmed by such guarantors as of September 7, 2018), filed as Exhibit 4(b) to Form 10-K on February 25, 2015, is incorporated herein by reference. 4(c) Form of Guarantee Agreement entered into as of March 7, 2014 by each of Mine Safety Appliances Company, LLC, MSA Worldwide, LLC, MSA Advanced Detection, LLC, MSA Safety Development, LLC, MSA Technology, LLC, and MSA Innovation, LLC, in favor of the Note Purchasers under the Amended and Restated Note Purchase and Private Shelf Agreement dated as of March 7, 2014 (as confirmed and reaffirmed by certain of such guarantors as of September 7, 2018), filed as Exhibit 4(c) to Form 10-K on February 25, 2015, is incorporated herein by reference. 79 Table of Contents 4(d) Description of MSA Safety Incorporated Securities Registered under Section 12 of the Securities Exchange Act of 1934, as amended, filed as Exhibit 4(d) to Form 10-K on February 20, 2020, is incorporated herein by reference. 10(a)* MSA Safety Incorporated Amended and Restated 2016 Management Equity Incentive Plan, filed as Appendix A to the registrant’s definitive proxy statement dated March 31, 2016, is incorporated herein by reference. 10(b)* Retirement Plan for Directors, as amended effective April 1, 2001, filed as Exhibit 10(a) to Form 10-Q on May 10, 2006, is incorporated herein by reference. 10(c)* Supplemental Pension Plan as of May 5, 1998, filed as Exhibit 10(d) to Form 10-Q on August 12, 2003, is incorporated herein by reference. 10(d)* Supplemental Pension Plan as amended and restated effective January 1, 2005, filed as Exhibit 10.3 to Form 10-Q on April 30, 2009, is incorporated herein by reference. 10(e)* 2017 Non-Employee Directors’ Equity Incentive Plan, filed as Exhibit A to the registrant's definitive proxy statement dated April 7, 2017, is incorporated herein by reference. 10(f)* Executive Insurance Program as Amended and Restated as of January 1, 2006, filed as Exhibit 10(a) to Form 10-Q on August 7, 2007, is incorporated herein by reference. 10(g)* Annual Incentive Bonus Plan as of May 5, 1998, filed as Exhibit 10(g) to Form 10-Q on August 12, 2003, is incorporated herein by reference. 10(h)* Supplemental Executive Retirement Plan, effective January 1, 2008, filed as Exhibit 10.2 to Form 10-Q on April 30, 2009, is incorporated herein by reference. 10(i)* Form of Change-in-Control Severance Agreement between the registrant and its executive officers, filed as Exhibit 10.1 to Form 10-Q on April 30, 2009, is incorporated herein by reference. 10(j)* 2003 Supplemental Savings Plan, effective January 1, 2003, filed as Exhibit 10(k) to Form 10-K on February 24, 2014, is incorporated herein by reference. 10(k)* 2005 Supplemental Savings Plan, effective January 1, 2005, filed as Exhibit 10.4 to Form 10-Q on April 30, 2009, is incorporated herein by reference. 10(l)* Amended and Restated CEO Annual Incentive Award Plan filed as Appendix B to the registrant’s definitive proxy statement dated March 31, 2016, is incorporated herein by reference. 10(m) Third Amended and Restated Credit Agreement dated September 7, 2018 by and among MSA Safety Incorporated, MSA UK Holdings, Limited and MSA International Holdings, B.V., as borrowers, various Company subsidiaries, as guarantors, various financial institutions, as lenders, and PNC Bank, National Association, as administrative agent, including forms of Guaranty and Suretyship Agreement and Intercompany Subordination Agreement, filed as Exhibit 10.1 to Form 8‑K on September 10, 2018, is incorporated herein by reference. 21 Affiliates of the registrant is filed herewith. 23 Consent of Ernst & Young LLP, independent registered public accounting firm is filed herewith. 31.1 Certification of Nishan J. Vartanian pursuant to Rule 13a-14(a) is filed herewith. 31.2 Certification of Kenneth D. Krause pursuant to Rule 13a-14(a) is filed herewith. 32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.§1350 is filed herewith. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * The exhibits marked by an asterisk are management contracts or compensatory plans or arrangements. 80 Table of Contents Item 16. Form 10-K Summary None. 81 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MSA SAFETY INCORPORATED February 19, 2021 By /s/ NISHAN J. VARTANIAN (Date) Nishan J. Vartanian Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date / S / N ISHAN J. V ARTANIAN Nishan J. Vartanian Chairman, President and Chief Executive Officer (Principal Executive Officer) February 19, 2021 / S / K ENNETH D. K RAUSE Kenneth D. Krause Sr. Vice President, Chief Financial Officer and Treasurer February 19, 2021 / S / JONATHAN D. BUCK Jonathan D. Buck Chief Accounting Officer and Controller (Principal Accounting Officer) February 19, 2021 / S / R OBERT A. B RUGGEWORTH Robert A. Bruggeworth Director February 19, 2021 / S / G REGORY B. J ORDAN Gregory B. Jordan Director February 19, 2021 / S / W ILLIAM M. L AMBERT William M. Lambert Director February 19, 2021 / S / D IANE M. P EARSE Diane M. Pearse Director February 19, 2021 / S / R EBECCA B. R OBERTS Rebecca B. Roberts Director February 19, 2021 / S / S ANDRA P HILLIPS R OGERS Sandra Phillips Rogers Director February 19, 2021 / S / J OHN T. R YAN III John T. Ryan III Director February 19, 2021 / S / W ILLIAM R. S PERRY William R. Sperry Director February 19, 2021 82 Table of Contents SCHEDULE II MSA SAFETY INCORPORATED VALUATION AND QUALIFYING ACCOUNTS THREE YEARS ENDED DECEMBER 31, 2020 2020 2019 2018 (In thousands) Allowance for doubtful accounts: Balance at beginning of year $ 4,860 $ 5,369 $ 5,540 Additions— Charged to costs and expenses 1,172 2,015 375 Deductions— Deductions from reserves, net (1)(2) 688 2,524 546 Balance at end of year $ 5,344 $ 4,860 $ 5,369 Income tax valuation allowance: Balance at beginning of year $ 5,936 $ 5,039 $ 4,559 Additions— Charged to costs and expenses (3) 2,854 1,138 859 Deductions— Deductions from reserves (3) 1,602 241 379 Balance at end of year $ 7,188 $ 5,936 $ 5,039 (1) Bad debts written off, net of recoveries. (2) Activity for 2020, 2019 and 2018 includes currency translation losses of $( 107 ), $( 1,058 ) and $( 291 ), respectively. (3) Activity for 2020, 2019 and 2018 includes currency translation (losses) gains of $( 41 ), $ 104 and $( 367 ), respectively. 83