Exhibit 10.4


 


LINCOLN ELECTRIC HOLDINGS, INC.


 


Stock Option 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 grant Options to officers and certain key employees of the Company
and its Subsidiaries (as defined in the Plan);


 


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


 


WHEREAS, the Optionee
was granted an Option 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
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 to the Optionee the grant of an Option to purchase
[                ]
Common Shares, without par value, of the Company, at the exercise price of $[      ]
per Common Share, the closing price of a Common Share on the NASDAQ Global
Market on the Date of Grant (as reported in The Wall Street Journal)
(the “Option Price”).


 


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 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 


 


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resulting from such Business
Transaction) beneficially owns, 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)                                  “Cause” means a
felony conviction of the Optionee or the failure of the Optionee to contest
prosecution for a felony, or Optionee’s willful misconduct or dishonesty, any
of which is directly or materially harmful to the business or reputation of the
Company or any Subsidiary.


 


2.                                      Grant of
Options.  The Company hereby grants to
the Optionee an Option, which represents a right in the Optionee to purchase
the number of Common Shares specified above, without par value, of the Company,
at the Option Price and which shall become exercisable in accordance with Section 4,
Section 5, or Section 6 hereof.


 


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3.                                      Form of
Option.  The Option granted under this
Agreement is intended to be a nonqualified stock option and shall not be
treated as an “incentive stock option” within the meaning of that term under Section 422
of the Internal Revenue Code of 1986.


 


4.                                      Vesting of
Option.  Subject to the terms and
conditions of Sections 5, 6 and 8 hereof, the Option shall become vested and
exercisable as follows: 
[                ]


 


5.                                      Effect of
Change in Control.  The entire
Option subject to this Agreement shall become immediately exercisable upon any
Change in Control of the Company that shall occur while the Optionee is an
employee of the Company or a Subsidiary if the Optionee’s employment is
terminated or if any successor to the business of the Company resulting from a
Change in Control should fail to replace this Option with an option for its own
publicly-traded securities of at least equal value.


 


6.                                      Effect of
Death, Disability or Retirement.  The entire Option subject to this Agreement
shall become immediately exercisable in full (a) upon the death of the
Optionee while in the employment of the Company or any Subsidiary, or (b) if
the Optionee’s employment with the Company or any Subsidiary should terminate
as a result of his or her disability or on or after the Optionee’s normal
retirement date (as determined under The Lincoln Electric Company Retirement
Annuity Program).


 


7.                                      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 written notice to the Company, specifying the
number of Common 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 the Company.


 


(c)                                  The Option
Price shall be payable upon exercise:


 


(i)                                     by certified or
bank check or other cash equivalent acceptable to the Company;


 


(ii)                                  by transfer to
the Company of nonforfeitable, unrestricted Common Shares of the Company that
have been owned by the Optionee for at least six (6) months prior to the
date of exercise; or


 


(iii)                               by any
combination of these methods.


 


Nonforfeitable,
unrestricted Common 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
Market Value Per Share on the date of exercise.


 


8.                                      Termination of
Option.  Both the vested and unvested
portions of the Option shall terminate on the earliest of the following dates
as provided below:


 


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(a)                                 automatically
and without further notice three (3) months after the date upon which the
Optionee ceases to be an employee of the Company or a Subsidiary, unless the
cessation of employment (i) is a result of the death, permanent disability
or normal retirement of the Optionee (as determined under a retirement program
sponsored by the Company or the Subsidiary) or (ii) occurs in a manner
described in (d) or (e) below;


 


(b)                                 automatically
and without further notice three (3) years after the date of the death or
permanent disability of the Optionee while an employee of the Company or a
Subsidiary or three (3) years after the date of normal retirement of the
Optionee (as determined under a retirement program sponsored by the Company or
the Subsidiary);


 


(c)                                  automatically
and without further notice one (1) year after death of the Optionee, if
the Optionee dies after the termination of employment with the Company or a
Subsidiary and prior to the termination of the Option;


 


(d)                                 automatically
and without further notice upon the termination of the Optionee’s employment
for Cause;


 


(e)                                  if the Board or
the Committee shall so determine, if the Optionee, either during employment by
the Company or a Subsidiary or within two (2) years after termination of
such employment, shall become an employee of a competitor of the Company or a
Subsidiary or shall engage in any other conduct that is competitive with the
Company or a Subsidiary; in addition if the Board or the Committee shall so
determine, the Optionee shall, forthwith upon notice of such determination, (i) return
to the Company, in exchange for payment by the Company of the Option Price paid
therefor, all the Common Shares that the Optionee has not disposed of that were
purchased 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,
and (ii) with respect to any Common Shares so purchased that the Optionee
has disposed of, pay to the Company in cash the difference between (1) the
Option Price and (2) the Market Value Per Share of the Common Shares on
the date of exercise.  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 Optionee, whether as wages, deferred
compensation or vacation pay or in the form of any other benefit or for any
other reason; or


 


(f)                                   ten years after
the Date of Grant.


 


9.                                      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.  The Company will make reasonable efforts to
comply with all applicable federal and state securities laws.


 


10.                               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 


 


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representative acting on
behalf of the Optionee in a fiduciary capacity under state law and court
supervision.


 


11.                               Adjustments.  The Committee shall make such adjustments in
the number of Common Shares covered by the Option, in the Option Price and in
the kind of shares covered thereby as is equitably required to prevent any
dilution or enlargement of the Optionee’s rights under this Agreement that
would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company; or (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 the
foregoing.  However, such adjustments
shall be made automatically, without the necessity of Committee action, on the
customary arithmetical basis in the case of any stock split, including a stock
split effected by means of a stock dividend, and in the case of any other
dividend paid in shares of the Company. 
Moreover, in the event of any transaction or event, the Committee, in
its discretion, may provide in substitution for any or all of the Optionee’s
rights under this Agreement such alternative consideration (including cash) as
it, in good faith, may determine to be equitable under the circumstances and
may require in connection therewith the surrender of all grants so replaced.


 


12.                               Withholding
Taxes.  No later than the date as of
which an amount first becomes includible in the gross income of the Optionee
for applicable income tax purposes with respect to the Option granted under
this Agreement, the Optionee 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 withholding obligations may be settled
with vested Common Shares.  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 Optionee.


 


13.                               No Right to
Employment.  This Option
award 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 Option 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 Optionee 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 Optionee at
any time.  For purposes of this
Agreement, the continuous employ of the Optionee with the Company or a Subsidiary
shall not be deemed interrupted, and the Optionee 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 Subsidiaries or (B) an
approved leave of absence.


 


14.                               Relation to the
Other Benefits.  Any
economic or other benefit to the Optionee under this Agreement or the Plan will
not be taken into account in determining any benefits to which the Optionee may
be entitled under any profit-sharing, retirement or other benefit 


 


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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.


 


15.                               Agreement
Subject to Plan.  The Option
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.


 


16.                               Data Privacy.  Information about the Optionee and the
Optionee’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 Optionee understands that such processing
of this information may need to be carried out by the Company and its
Subsidiaries and by third party administrators whether such persons are located
within the Optionee’s country or elsewhere, including the United States of
America.  The Optionee consents to the
processing of information relating to the Optionee and the Optionee’s
participation in the Plan in any one or more of the ways referred to above.


 


17.                               Amendments.  Any amendment to the Plan will be deemed to
be an amendment to this Agreement to the extent that the amendment is
applicable hereto; provided, however, that no amendment will
adversely affect the rights of the Optionee with respect to the Option without
the Optionee’s consent.


 


18.                               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.


 


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


 


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The
undersigned Optionee hereby acknowledges receipt of an executed original of
this 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 the Company on this
       day of
                ,
20    .


 


	
   

  	
  LINCOLN
  ELECTRIC HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


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