Exhibit 10.2

 

LINCOLN ELECTRIC HOLDINGS, INC.

 

Restricted Shares Agreement

 

WHEREAS, Lincoln Electric Holdings, Inc. (the “Company”) maintains the
[                  ] Plan, as may be amended from time to time (the “Plan”),
pursuant to which the Company may award Restricted Shares to officers and
certain key employees of the Company and its Subsidiaries;

 

WHEREAS, [                  ] (the “Grantee”) is an employee of the Company or
one of its Subsidiaries;

 

WHEREAS, the Grantee was awarded Restricted Shares under the Plan by the
Compensation and Executive Development Committee (the “Committee”) of the Board
of Directors (the “Board”) of the Company on [                  ] (the “Date of
Grant”) and the execution of an Evidence of Award in the form hereof (the
“Agreement”) has been authorized by a resolution of the Committee duly adopted
on such date.

 

NOW, THEREFORE, pursuant to the Plan and subject to the terms and conditions
thereof and the terms and conditions hereinafter set forth, the Company hereby
confirms the Grantee the award of [                  ] Restricted Shares.

 

1.                                      Definitions.  Unless otherwise defined
in this Agreement, terms used in this Agreement, with initial capital letters
will have the meanings assigned to them in the Plan.

 

(a)           “Change in Control” means the occurrence of any of the following
events:

 

(i)                                     any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) is
or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:

 

(1)                                 for purposes of this Section 1(a)(i), the
following acquisitions will not constitute a Change in Control: (A) any
acquisition of Voting Stock of the Company directly from the Company that is
approved by a majority of the Incumbent Directors, (B) any acquisition of Voting
Stock of the Company by the Company or any Subsidiary, (C) any acquisition of
Voting Stock of the Company by the trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, and (D) any acquisition of Voting Stock of the
Company by any Person pursuant to a Business Transaction that complies with
clauses (A), (B) and (C) of Section 1(a)(iii) below;

 

(2)                                 if any Person is or becomes the beneficial
owner of 30% or more of combined voting power of the then-outstanding Voting
Stock of the Company as a result of a transaction described in clause (A) of
Section 1(a)(i)(1) above and such Person thereafter becomes the beneficial owner
of any additional shares of Voting Stock of the

 

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Company representing 1% or more of the then-outstanding Voting Stock of the
Company, other than in an acquisition directly from the Company that is approved
by a majority of the Incumbent Directors or other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Voting Stock are treated equally, such subsequent acquisition
will be treated as a Change in Control;

 

(3)                                 a Change in Control will not be deemed to
have occurred if a Person is or becomes the beneficial owner of 30% or more of
the Voting Stock of the Company as a result of a reduction in the number of
shares of Voting Stock of the Company outstanding pursuant to a transaction or
series of transactions that is approved by a majority of the Incumbent Directors
unless and until such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Voting Stock are treated equally; and

 

(4)                                 if at least a majority of the Incumbent
Directors determine in good faith that a Person has acquired beneficial
ownership of 30% or more of the Voting Stock of the Company inadvertently, and
such Person divests as promptly as practicable but no later than the date, if
any, set by the Incumbent Board a sufficient number of shares so that such
Person beneficially owns less than 30% of the Voting Stock of the Company, then
no Change in Control will have occurred as a result of such Person’s
acquisition; or

 

(ii)                                a majority of the Board ceases to be
comprised of Incumbent Directors; or

 

(iii)                             the consummation of a reorganization, merger
or consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of the stock or assets of another
corporation, or other transaction (each, a “Business Transaction”), unless, in
each case, immediately following such Business Transaction (A) the Voting Stock
of the Company outstanding immediately prior to such Business Transaction
continues to represent (either by remaining outstanding or by being converted
into Voting Stock of the surviving entity or any parent thereof), more than 50%
of the combined voting power of the then outstanding shares of Voting Stock of
the entity resulting from such Business Transaction (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries), (B) no Person (other than the Company, such entity
resulting from such Business Transaction, or any employee benefit plan (or
related trust) sponsored or maintained by the Company, any Subsidiary or such
entity resulting from such Business Transaction) beneficially owns,

 

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directly or indirectly, 30% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Transaction, and (C) at least a majority of the members of the Board of
Directors of the entity resulting from such Business Transaction were Incumbent
Directors at the time of the execution of the initial agreement or of the action
of the Board providing for such Business Transaction; or

 

(iv)                            approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company, except pursuant to a
Business Transaction that complies with clauses (A), (B) and (C) of
Section 1(a)(iii).

 

(b)                                 Other definitions used in Section 1(a):

 

(i)                                   “Board” means the Board of Directors of
Lincoln Electric Holdings, Inc.

 

(ii)                                “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

(iii)                             “Incumbent Directors” means the individuals
who, as of the date hereof, are Directors of the Company (each, a “Director”)
and any individual becoming a Director subsequent to the date hereof whose
election, nomination for election by the Company’s shareholders, or appointment,
was approved by a vote of at least two-thirds of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection to
such nomination); provided, however, that an individual will not be an Incumbent
Director if such individual’s election or appointment to the Board occurs as a
result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.

 

(iv)                            “Subsidiary” means an entity in which the
Company directly or indirectly beneficially owns 50% or more of the outstanding
Voting Stock.

 

(v)                               “Voting Stock” means securities entitled to
vote generally in the election of directors.

 

(c)                                  “Retirement” shall mean normal retirement,
as determined under The Lincoln Electric Retirement Annuity Program, whether or
not the Grantee participates in that program.

 

2.                                      Issuance of Restricted Shares.  The
Restricted Shares covered by this Agreement shall be issued to the Grantee
effective upon the Date of Grant.  The Common Shares subject to this grant of
Restricted Shares shall be fully paid and nonassessable and shall be represented
by a certificate or certificates registered in the Grantee’s name, endorsed with
an appropriate legend referring to the restrictions hereinafter set forth.  The
Grantee shall have all the rights of a shareholder with respect to such
Restricted Shares, including the right to vote the Restricted Shares and to
receive all dividends paid thereon (subject to Section 9 hereof), provided that
such Restricted Shares, together with any additional Restricted Shares which

 

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the Grantee may become entitled to receive by virtue of a share dividend, a
merger or reorganization in which the Company is the surviving corporation or
any other change in capital structure, shall be subject to the restrictions
hereinafter set forth.

 

3.                                      Restrictions on Transfer of Shares.  The
Common Shares subject to this grant of Restricted Shares may not be sold,
exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of
by the Grantee, except to the Company, until the Restricted Shares have become
nonforfeitable as provided in Section 4, 5 or 6 hereof; provided, however, that
the Grantee’s rights with respect to such Common Shares may be transferred by
will or pursuant to the laws of descent and distribution.  Any purported
transfer or encumbrance in violation of the provisions of this Section 3 shall
be void, and the other party to any such purported transaction shall not obtain
any rights to or interest in such Common Shares.  The Company in its sole
discretion, when and as permitted by the Plan, may waive the restrictions on
transferability with respect to all or a portion of the Common Shares subject to
this grant of Restricted Shares.

 

4.                                      Vesting of Restricted Shares.  Subject
to the terms and conditions of Sections 5, 6 and 7 hereof, all of the Restricted
Shares covered by this Agreement shall become nonforfeitable upon
[                  ].

 

5.                                      Effect of Change in Control.  The
Restricted Shares subject to this Agreement shall become immediately
nonforfeitable upon any Change in Control of the Company that shall occur while
the Grantee is an employee of the Company or a Subsidiary if the Grantee’s
employment is terminated prior to the vesting provided in Section 4 hereof or if
any successor to the business of the Company resulting from a Change in Control
should fail to honor the terms of this Agreement.

 

6.                                      Effect of Death, Disability or
Retirement.  If the Grantee’s employment with the Company or one of its
Affiliates should terminate because of the Grantee’s death, disability or
Retirement on or after the Grantee’s normal retirement date (as determined under
The Lincoln Electric Company Retirement Annuity Program), prior to the vesting
provided in Section 4 hereof, the Restricted Shares granted hereby shall
immediately become nonforfeitable.

 

7.                                      Effect of Termination of Employment and
Effect of Competitive Conduct.

 

(a)                                 In the event that the Grantee’s employment
shall terminate in a manner other than any specified in Section 5 or Section 6
hereof, the Grantee shall forfeit any Restricted Shares that have not become
nonforfeitable by such Grantee at the time of such termination; provided,
however, that the Board upon recommendation of the Committee may order that such
part or all of such Restricted Shares become nonforfeitable.

 

(b)                                 Notwithstanding anything in this Agreement
to the contrary, if the Grantee, either during employment by the Company or a
Subsidiary or within two (2) years after termination of such employment,
(i) shall become an employee of a competitor of the Company or a Subsidiary or
(ii) shall engage in any other conduct that is competitive with the Company or a
Subsidiary the Grantee shall forfeit Restricted

 

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Shares that have not become nonforfeitable; in addition, if the Board or the
Committee shall so determine, the Grantee shall, forthwith upon notice of such
determination, (x) return to the Company, all the Common Shares that the Grantee
has not disposed of that became nonforfeitable pursuant to this Agreement within
a period of one (1) year prior to the date of the commencement of such
employment or other competitive conduct if the Grantee is an employee of the
Company or a Subsidiary, or within a period of one (1) year prior to termination
of employment with the Company or a Subsidiary if the Grantee is no longer an
employee, and (y) with respect to any Common Shares so granted that the Grantee
has disposed of, pay to the Company in cash the Fair Market Value of the Common
Shares on the date such Common Shares became nonforfeitable.  To the extent that
such amounts are not paid to the Company, the Company may set off the amounts so
payable to it against any amounts that may be owing from time to time by the
Company or a Subsidiary to the Grantee, whether as wages, deferred compensation
or vacation pay or in the form of any other benefit or for any other reason.

 

8.                                      Retention of Stock Certificate(s) by the
Corporation.  The certificate(s) representing the Restricted Shares covered by
this Agreement shall be held in custody by the Company, together with a stock
power endorsed in blank by the Grantee with respect thereto, until those shares
have become nonforfeitable in accordance with Section 4, 5 or 6 hereof.

 

9.                                      Dividends and Voting Rights.

 

(a)                                 The Grantee shall have all of the rights of
a shareholder with respect to the Restricted Shares covered by this Agreement,
including the right to vote such Restricted Shares and receive any dividends
that may be paid thereon; provided, however, that any additional Common Shares
or other securities that the Grantee may become entitled to receive pursuant to
a stock dividend, stock split, combination of shares, recapitalization, merger,
consolidation, separation or reorganization or any other change in the capital
structure of the Company shall be subject to the same restrictions as the
Restricted Shares covered by this Agreement.

 

(b)                                 Cash dividends on the Restricted Shares
covered by this Agreement shall be sequestered by the Company from and after the
Date of Grant until such time as any of such Restricted Shares become
nonforfeitable in accordance with Sections 4, 5 or 6 hereof, whereupon such
dividends shall be paid to the Grantee in Common Shares to the extent such
dividends are attributable to Restricted Shares that have become
nonforfeitable.  To the extent that Restricted Shares covered by this Agreement
are forfeited pursuant to Section 7 hereof, all the dividends sequestered with
respect to such Restricted Shares shall also be forfeited.  No interest shall be
payable with respect to any such dividends.

 

10.                               Withholding Taxes.  No later than the date as
of which an amount first becomes includible in the gross income of the Grantee
for applicable income tax purposes with respect to the Restricted Shares awarded
under this Agreement, the Grantee shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any Federal, state local
or foreign taxes of any kind required by law to be withheld with respect to such
amount.  Unless otherwise determined by the Committee, the minimum required

 

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withholding obligations may be settled with Common Shares, including vested
Common Shares that are part of this award.  The obligations of the Company under
this Agreement shall be conditional on such payment or arrangements and the
Company shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to the Grantee.

 

11.                               No Right to Employment.  This award of
Restricted Shares is a voluntary, discretionary bonus being made on a one-time
basis and it does not constitute a commitment to make any future awards.  This
award and any payments made hereunder will not be considered salary or other
compensation for purposes of any severance pay or similar allowance, except as
otherwise required by law.  The Plan and this Agreement will not confer upon the
Grantee any right with respect to the continuance of employment or other service
with the Company or any Subsidiary and will not interfere in any way with any
right that the Company or any Subsidiary would otherwise have to terminate any
employment or other service of the Grantee at any time.  For purposes of this
Agreement, the continuous employ of the Grantee with the Company or a Subsidiary
shall not be deemed interrupted, and the Grantee shall not be deemed to have
ceased to be an employee of the Company or any Subsidiary, by reason of (A) the
transfer of his or her employment among the Company and its Subsidiary or (B) an
approved leave of absence.

 

12.                               Relation to Other Benefits.  Any economic or
other benefit to the Grantee under this Agreement or the Plan will not be taken
into account in determining any benefits to which the Grantee may be entitled
under any profit-sharing, retirement or other benefit or compensation plan
maintained by the Company or a Subsidiary and will not affect the amount of any
life insurance coverage available to any beneficiary under any life insurance
plan covering employees of the Company or a Subsidiary.

 

13.                               Agreement Subject to the Plan.  The Restricted
Shares granted under this Agreement and all of the terms and conditions hereof
are subject to all of the terms and conditions of the Plan.  In the event of any
inconsistency between this Agreement and the Plan, the terms of the Plan will
govern.

 

14.                               Data Privacy.  Information about the Grantee
and the Grantee’s participation in the Plan may be collected, recorded and held,
used and disclosed for any purpose related to the administration of the Plan. 
The Grantee understands that such processing of this information may need to be
carried out by the Company and its Subsidiary and by third party administrators
whether such persons are located within the Grantee’s country or elsewhere,
including the United States of America.  The Grantee consents to the processing
of information relating to the Grantee and the Grantee’s participation in the
Plan in any one or more of the ways referred to above.

 

15.                               Amendments.  Any amendment to the Plan shall
be deemed to be an amendment to this Agreement to the extent that the amendment
is applicable hereto; provided, however, that no amendment shall adversely
affect the rights of the Grantee with respect to Restricted Shares without the
Grantee’s consent.

 

16.                               Severability.  In the event that one or more
of the provisions of this Agreement shall be invalidated for any reason by a
court of competent jurisdiction, any provision so invalidated

 

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will be deemed to be separable from the other provisions hereof, and the
remaining provisions hereof will continue to be valid and fully enforceable.

 

17.                               Governing Law.  This Agreement is made under,
and will be construed in accordance with, the internal substantive laws of the
State of Ohio.

 

The undersigned Grantee hereby acknowledges receipt of an executed original of
this Restricted Shares Agreement and accepts the right to receive the Restricted
Shares granted hereunder subject to the terms and conditions of the Plan and the
terms and conditions herein above set forth.

 

 

Date:

 

 

 

 

 

 

«Name»

 

 

THIS AGREEMENT is executed by the Company on this        day of
                , 20    .

 

 

LINCOLN ELECTRIC HOLDINGS, INC.

 

 

 

 

 

 

 

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