Exhibit 10.1
AMENDMENT NO. 2
TO
THE LINCOLN ELECTRIC HOLDINGS, INC.
NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN
     WHEREAS, Lincoln Electric Holdings, Inc. (the “Company”) adopted the
Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation
Plan (the “Plan”), originally effective as of May 24, 1995;
     WHEREAS, the Plan is classified as a “nonqualified deferred compensation
plan” under the Internal Revenue Code of 1986, as amended (the “Code”);
     WHEREAS, the American Jobs Creation Act of 2004, P.L. 108-357 (the “AJCA”)
added a new Section 409A to the Code, which significantly changed the Federal
tax law applicable to “amounts deferred” under the Plan after December 31, 2004;
     WHEREAS, pursuant to the AJCA, the Secretary of the Treasury and the
Internal Revenue Service will issue proposed, temporary or final regulations
and/or other guidance with respect to the provisions of new Section 409A of the
Code (collectively, the “AJCA Guidance”);
     WHEREAS, effective January 1, 2005, Amendment No. 1 to the Plan froze
deferrals under the Plan; and
     WHEREAS, the Company desires to unfreeze deferrals under the Plan and make
certain other modifications to the Plan.
     NOW, THEREFORE, the Company hereby adopts this Amendment No. 2 to the Plan,
which amendment is intended to unfreeze the Plan with respect to future
deferrals, to allow amounts deferred and vested prior to January 1, 2005 to
qualify for “grandfathered” status and continue to be governed by the law
applicable to nonqualified deferred compensation prior to the addition of Code
Section 409A (as specified in the Plan as in effect before the effectiveness of
Amendment No. 1), to provide that all deferrals that are not so “grandfathered”
will be administered so as to quality under Section 409A of the Code and to set
up a multiple account structure under the Plan.
     Words used herein with initial capital letters that are defined in the Plan
are used herein as so defined.
Section 1
     Article I of the Plan is hereby amended by amending the paragraph at the
end thereof, to read as follows:
American Jobs Creation Act (AJCA) — Freeze in Deferrals
          (a) All deferrals for all Deferral Periods under the Plan ceased on
December 31, 2004. Such freeze is terminated effective January 1, 2006.
Compensation earned and vested on or after January 1, 2006 may be deferred
pursuant to a Deferral Commitment.

 

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          (b) It is intended that the Plan preserve the “grandfathering”
provisions of Section 885(d) of the AJCA, and not be required to comply with the
provisions of Section 409A of the Code, as enacted by the AJCA, with respect to
the portion of Accounts earned and vested on December 31, 2004. The Plan shall
be administered in a manner that will comply with the grandfathering provision
of Section 885(d) of the AJCA, including proposed, temporary or final
regulations or any other guidance issued by the Secretary of the Treasury and
the Internal Revenue Service with respect thereto (collectively with the AJCA,
the “AJCA Guidance”).
          (c) The Administrator shall not take any action hereunder that would
cause the Plan not to comply with any provision of Section 885(d) of the AJCA.
The Administrator is authorized to adopt rules or regulations deemed necessary
or appropriate in connection therewith to anticipate and/or comply with the
requirements of the AJCA Guidance (including any transition or grandfather rules
thereunder).
          (d) The effective date of this Amendment No. 2 is January 1, 2006. The
portion of Accounts (and the earnings thereon) that are deemed to have been
deferred prior to January 1, 2005 and that qualify for “grandfathered” status
under Section 409A of the Code and Section 885(d) of the AJCA shall continue to
be governed by the law applicable to nonqualified deferred compensation prior to
the addition of Section 409A to the Code and shall be subject to the terms and
conditions specified in the Plan as in effect prior to the effective date of
Amendment No. 1. The portion of Accounts (and the earnings thereon) that are
deferred on or after January 1, 2006 shall be governed by the provisions of
Section 409A of the Code and the AJCA Guidance.
Section 2
     Section 2.1(a) of the Plan is hereby amended in its entirety to read as
follows:
     1. (a) “Account”: means bookkeeping accounts for each Director showing his
interests under the Plan. Each Account shall be divided into a sub account for
the account balance on December 31, 2004 (and the earnings hereon), and a sub
account for deferrals (and the earnings thereon) for periods commencing on or
after January 1, 2006.
Section 3
     A new Section 3.1(e) shall be added to the Plan to read as follows:
(e) Participation for 2006. Notwithstanding any other provision of the Plan to
the contrary, in the event that a Director wishes to elect a Deferral Commitment
with respect to the Fees earned by and payable to the Director during the Plan
Year beginning January 1, 2006, a Participation Agreement must be submitted to
the Administrator on or before December 31, 2005. Any Deferral Commitments
elected in such Participation Agreement shall be effective only with regard to
Fees that have not been paid or become payable at December 31, 2005. If a
Director does not submit a Participation Agreement within such period of time,
such individual will not be eligible to participate in the Plan until the first
day of a Deferral Period subsequent to 2006.

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Section 4
     Section 6.4 of the Plan is hereby amended by inserting the following
immediately prior to the paragraph beginning “The amount of each
installment...”:
With respect to the Director’s post-2004 sub account, the Director’s election of
the form and date of distribution shall be provided for in the Director’s
Participation Agreement. Any such election may be changed by the Director
without the consent of any other person by filing a later signed written
election with the Administrator; provided, however, that any subsequent election
that alters the payment form designated in the Participant’s original
Participation Agreement (i) may not take effect for at least twelve (12) months;
(ii) must be made at least twelve (12) months prior to the due date of the first
payment under the Director’s original Participation Agreement; and (iii) must
extend payment of a Director’s sub account with respect to such post-2004
deferrals at least five (5) years from the due date of the first payment under
the Director’s original Participation Agreement.
Section 5
     Section 7.2 of the Plan is hereby amended in its entirety to read as
follows:
     Section 7.2 Amendment and Termination.
(a) In General. The Plan may be amended from time to time or may be terminated
at any time by the Board. Except as provided in Section 7.2(b), no amendment or
termination of the Plan, however, may adversely affect the amount or timing of
payment of any person’s benefits accrued under the Plan to the date of amendment
or termination without such person’s written consent.
(b) Compliance with Section 409A of the Code. The Plan is intended to comply
with Section 409A of the Code and shall be construed and interpreted in
accordance with such intent. The Plan may be amended from time to time by the
Board to effect required compliance under Section 409A of the Code as additional
guidance is issued.
     EXECUTED this 30th day of November, 2005.

              LINCOLN ELECTRIC HOLDINGS, INC.
 
       
 
       
 
  By:    
 
       
 
  Title:    
 
       

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