Exhibit 10.3


 


LINCOLN ELECTRIC HOLDINGS, INC.


 


Stock Option Agreement


 


WHEREAS, Lincoln
Electric Holdings, Inc. (“Holdings”) maintains the
[                      ]
Plan (the “Plan”), pursuant to which Holdings may grant stock options to
Directors of Holdings;


 


WHEREAS,
[              ]
(the “Optionee”) became a non-employee member of the Board of Directors of
Holdings on
[              ];
and


 


WHEREAS, Optionee has
been granted a stock option pursuant to the provisions of the Plan on
[              ]
(the “Date of Grant”).


 


NOW,
THEREFORE, pursuant to the Plan and subject to the terms and
conditions thereof and the terms and conditions hereinafter set forth, Holdings
hereby grants to the Optionee an option (the “Option”) to purchase
[              ]
common shares, without par value, of Holdings (the “Shares”), at the exercise
price of $[      ] per Share (the “Option Price”).


 


1.                                      Vesting of
Option.


 


(a)                                 Unless terminated earlier
under this Agreement, all the Shares subject to this Option shall be
exercisable
[                        ];
provided, however, that the Optionee shall have served continuously as a
Director for that entire period.


 


(b)                                 Notwithstanding the
provisions of Section 1(a) hereof, the entire Option shall become
immediately exercisable upon any Change in Control of Holdings that shall occur
while the Optionee is a Director.  For
the purposes of this Agreement, the term “Change in Control” shall mean the
occurrence of any of the following events:


 


(i)                                   all or
substantially all of the assets of Holdings are sold or transferred to another
corporation or entity, or Holdings is merged, consolidated or reorganized into
or with another corporation or entity, with the result that upon conclusion of
the transaction less than 51% of the outstanding securities entitled to vote
generally in the election of directors or other capital interests of the
acquiring corporation or entity is owned, directly or indirectly, by the
shareholders of Holdings generally prior to the transaction; or


 


(ii)                                there is a
report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form
or report thereto), as promulgated pursuant to the Securities Exchange Act of
1934 (the “Exchange Act”), disclosing that any person (as the term “person” is
used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term “beneficial owner”
is defined under Rule 13d-3 or any successor rule or regulation
thereto under the Exchange Act) of securities representing 30% or more of the
combined voting power of the then-


 

















 


outstanding
voting securities of Holdings, excluding (A) any person or group of
persons who are officers, directors or employees of Holdings or any Affiliate
as of the date hereof or who are related by blood or marriage to the descendants
of James F. or John C. Lincoln, including any trusts or similar arrangements
for any of the foregoing and any foundations established by any of the
foregoing and (B) any underwriter or syndicate of underwriters acting on
behalf of Holdings in a public offering of Holdings’ securities and any of
their transferees; or


 


(iii)                             Holdings shall
file a report or proxy statement with the Securities and Exchange Commission
(the “SEC”) pursuant to the Exchange Act, disclosing in response to Item 5.01
of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder
(or any successor schedule, form, report or item thereto) that a Change in
Control of Holdings has or may have occurred, or will or may occur in the
future, pursuant to any then-existing contract or transaction; or


 


(iv)                            the individuals
who constituted the Board at the beginning of any period of two consecutive
calendar years cease for any reason to constitute at least a majority thereof,
unless the nomination for election by Holdings’ shareholders of each new member
of the Board was approved by a vote of at least two-thirds of the members of
the Board still in office who were members of the Board at the beginning of any
such period.


 


In
the event that any person described in Section 1(b)(ii) hereof files
an amendment to any report referred to in Section 1(b)(ii) hereof
that shows the beneficial ownership described in Section 1(b)(ii) hereof
has decreased to less than 30%, or in the event that any anticipated Change in
Control referred to in Section 1(b)(ii) hereof does not occur
following the filing with the SEC of any report or proxy statement described in
Section 1(b)(ii) hereof because any contract or transaction referred
to in Section 1(b)(ii) hereof is cancelled or abandoned, the
Committee may nullify the effect of Section 1(b)(ii) or 1(b)(iii) hereof
as the case may be, and reinstate the provisions of Section 1(a) hereof
by giving notice thereof to the Optionee; provided, however, that any such
action by the Committee shall not prejudice any exercise of the Option that may
have occurred prior to the nullification and reinstatement.  The provisions of Section 1(b)(ii) hereof
shall again become automatically effective following any such nullification of
the provisions thereof and reinstatement of the provisions of Section 1(a) hereof
in the event that any person described in Section 1(b)(ii) hereof
files a further amendment to any report referred to in Section 1(b)(ii) hereof
that shows the beneficial ownership described in Section 1(b)(ii) hereof
has again increased to 30% or more.


 


(c)                                  Notwithstanding the
provisions of Section 1(a) hereof, the Option shall become
immediately exercisable in full if an Optionee ceases to be a Director by
reason of death, Disability (as defined in the Plan) or Retirement (as defined
in the Plan).


 


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2.                                      Exercise of
Option.


 


(a)                                 To the extent that the
Option shall have become exercisable in accordance with the terms of this
Agreement, it may be exercised in whole or in part from time to time
thereafter.


 


(b)                                 To exercise an Option, the
Optionee shall give notice to Holdings in either written or electronic form,
specifying the number of Shares to be exercised and the date of exercise, and
shall provide payment of the Option Price and any applicable taxes, along with
any other documentation that may be required by Holdings.


 


(c)                                  The Option Price shall be
payable upon exercise (i) by certified or bank check or other cash
equivalent acceptable to Holdings, (ii) by transfer to Holdings of
nonforfeitable, unrestricted Shares of Holdings that have been owned by the
Optionee for at least six months prior to the date of exercise, or (iii) by
any combination of these methods. 
Nonforfeitable, unrestricted Shares that are transferred by the Optionee
in payment of all or any part of the Option Price shall be valued on the basis
of their Fair Market Value on the date of exercise.


 


3.                                      Termination of
Option.  Both the vested and unvested
portions of the Option shall terminate automatically and without further notice
on the earliest of the following dates:


 


(a)                                 the date on which the
Optionee ceases to be a Director, unless the Optionee ceases to be a Director
after the completion of one year of continuous service as a Director, on
account of his or her death, Disability or Retirement, or following a Change in
Control of Holdings;


 


(b)                                 one year after the date of
the death of the Optionee;


 


(c)                                  three years after the
Optionee’s Termination of Service (as defined in the Plan) becomes effective;
provided, however, that this Section 3(c) shall apply only where (i) the
Termination of Service occurs after the Optionee has served continuously as a
Director for less than six years and (ii) the Termination of Service does
not occur following a Change in Control of Holdings; or


 


(d)                                 ten years after the Date of
Grant.


 


4.                                      Compliance with
Law.  Notwithstanding any other
provision of this Agreement, the Option shall not be exercisable if the
exercise or issuance thereof would result in a violation of any law.  To the extent that the Ohio Securities Act
shall be applicable to the Option, the Option shall not be exercisable unless
the Shares or other securities covered by the Option are (a) exempt from
registration thereunder, (b) the subject of a transaction that is exempt
from compliance therewith, (c) registered by description or qualification
thereunder, or (d) the subject of a transaction that shall have been
registered by description thereunder.


 


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5.                                      Transferability
and Exercisability.  The Option,
including any interest therein, shall not be transferable by the Optionee
except by will or the laws of descent and distribution, and the Option shall be
exercisable during the lifetime of the Optionee only by him or her or, in the
event of his or her legal incapacity to do so, by his or her guardian or legal
representative acting on behalf of the Optionee in a fiduciary capacity under
state law and court supervision.


 


6.                                      Adjustments.  The Committee shall make any adjustments in
the Option Price and the number or kind of shares of stock or other securities
covered by the Option that the Committee may determine to be equitably required
to prevent any dilution or expansion of the Optionee’s rights under this
Agreement that otherwise would result from (a) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of Holdings, (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar
to any of those referred to in this Section. 
Furthermore, in the event that any transaction or event described or
referred to in the immediately preceding sentence shall occur, the Committee
may provide in substitution of any or all of the Optionee’s rights under this
Agreement such alternative consideration as the Committee may determine in good
faith to be equitable under the circumstances and may require in connection
therewith the surrender of all options so replaced.


 


7.                                      No Additional
Rights.  No provision of this Agreement
shall confer upon any Director any right to continue in service of the Company.


 


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8.                                      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 Optionee with respect to the Option without the
Optionee’s consent.


 


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


 


10.                               Defined Terms.  Unless otherwise defined in this Agreement,
words used in this Agreement with initial capital letters shall have the
meanings assigned to them in the Plan.


 


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


 


The
undersigned Optionee hereby acknowledges receipt of an executed original of
this Option Agreement and accepts the Option granted hereunder, subject to the
terms and conditions of the Plan and the terms and conditions hereinabove set
forth.


 


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  «Name»

  



 


 


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


 


	
   

  	
  LINCOLN
  ELECTRIC HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


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