Document:

EX-10.3

Exhibit 10.3

 

 

LINCOLN ELECTRIC HOLDINGS, INC.

NON-EMPLOYEE DIRECTORS’

DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2008)

 

 

 

 

THE LINCOLN ELECTRIC HOLDINGS, INC.

NON-EMPLOYEE DIRECTORS’

DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2008)

ARTICLE I

PURPOSE

     The Lincoln Electric Company Non-Employee Directors’ Compensation Plan (the “Original Plan”)
was established by The Lincoln Electric Company effective as of May 24, 1995 to allow directors of
the Corporation to defer a portion of their Directors’ Fees. As of June 2, 1998, the date of the
reorganization of The Lincoln Electric Company, the name of the Original Plan was changed to the
Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan. Effective as
of December 31, 2008, this Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred
Compensation Plan (the “Plan”) is hereby amended and restated.

     The Plan is intended to comply with Section 409A of the Code, and shall be construed and
interpreted in accordance with such intent.

     It is intended that the Plan will aid in attracting and retaining Directors of exceptional
ability by providing this benefit. The terms and conditions of the Plan are set forth below.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

     Section 2.1 Definitions. Whenever the following terms are used in this Plan they shall have
the meanings specified below unless the context clearly indicates to the contrary:

          (a) “Account”: The bookkeeping account maintained for each Director showing his or her
interest under the Plan.

          (b) “Accounting Date”: December 31 of each year and the last day of any calendar quarter in
which a Director’s Settlement Date occurs.

          (c) “Accounting Period”: The period beginning on the day immediately following an Accounting
Date and ending on the next following Accounting Date.

          (d) “Administrator”: The committee established pursuant to the provisions of Section 7.1.

          (e) “Annual Retainer”: The annual cash retainer earned by a Director for services as a
Director of the Corporation.

 

 

          (f) “Beneficiary”: The person or persons (natural or otherwise), within the meaning of
Section 6.5, who are entitled to receive distribution of the Director’s Account balance in the
event of the Director’s death.

          (g) “Board”: The Board of Directors of the Corporation.

          (h) “Code": The Internal Revenue Code of 1986, as amended from time to time, and any rules
and regulations promulgated thereunder. Any reference to a provision of the Code shall also
include any successor provision that modifies, replaces or supersedes it.

          (i) “Committee”: The Compensation & Executive Development Committee of the Board.

          (j) “Corporation”: Lincoln Electric Holdings, Inc., an Ohio corporation or any successor or
successors thereto.

          (k) “Deferral Commitment”: An agreement by a Director to have a specified percentage or
dollar amount of his or her Fees deferred under the Plan.

          (l) “Deferral Period”: The Plan Year for which a Director has elected to defer a portion of
his or her Fees.

          (m) “Director”: An individual duly elected or chosen as a director of the Corporation who is
not also an employee of the Corporation or its subsidiaries.

          (n) “Effective Date”: This Plan was originally established effective May 24, 1995. This
amended and restated Plan shall be effective as of December 31, 2008.

          (o) “Fees”: The Annual Retainer and Other Compensation.

          (p) “Investment Funds”: Has the meaning set forth in Section 5.3.

          (q) “Investment Request”: An investment preference request filed by a Director which (i)
shall apply with respect to contributions credited to the Director’s Account until the timely
filing of a subsequent Investment Request and (ii) shall determine the manner in which such
credited contributions shall be initially allocated by the Director among the various Investment
Funds within the Plan. A subsequent Investment Request may be submitted in writing (or in an
electronic format) to the Administrator by the Director. Such Investment Request will be effective
on the first business day of the next calendar month following receipt by the Administrator of such
Investment Request.

          (r) “Investment Re-Allocation Request”: An investment preference request filed by a Director
which shall re-direct the manner in which earlier credited amounts to a Director’s Account, as well
as any appreciation (or depreciation) to-date, are invested within the deemed Investment Funds
available in the Plan. An Investment Re-Allocation Request may be submitted in writing (or in an
electronic format) to the Administrator by the Director. Such Investment Re-Allocation Request
will be effective on the first business day of the next calendar

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month with respect to the balance of the Director’s Account following receipt by the
Administrator of such Investment Re-Allocation Request.

          (s) “Other Compensation”: The meeting and other cash fees earned by a Director for services
as a Director of the Corporation, other than the Annual Retainer.

          (t) “Participation Agreement”: The Agreement submitted by a Director to the Administrator
with respect to one (1) or more Deferral Commitments.

          (u) “Plan”: The Plan set forth in this instrument as it may, from time to time, be amended.

          (v) “Plan Year”: The twelve (12)-month period beginning January 1 through December 31;
provided that the first plan year began on May 24, 1995 and ended on December 31, 1995.

          (w) “Section 409A”: Section 409A of the Code and any proposed, temporary or final
regulations, and any notices or other guidance, promulgated with respect to Section 409A.

          (x) “Settlement Date”: The date on which a Director separates from service (within the
meaning of Section 409A) as a Director. Settlement Date will also include a date selected by the
Director pursuant to Section 6.3.

          (y) “Subsequent Deferral Rule”: Any subsequent election (other than modifications on account
of disability or death) that alters the payment form or the date of distribution designated in the
Director’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 Account at least five (5) years from the due date of the first payment under the
Director’s original Participation Agreement.

     Section 2.2 Construction. The masculine or feminine gender, where appearing in the Plan,
shall be deemed to include the opposite gender, and the singular may include the plural, unless the
context clearly indicates to the contrary. The words “hereof,” “herein,” “hereunder,” and other
similar compounds of the word “here” shall mean and refer to the entire Plan, and not to any
particular provision or Section.

ARTICLE III

PARTICIPATION AND DEFERRALS

     Section 3.1 Eligibility and Participation.

          (a) Eligibility. Eligibility to participate in the Plan for any Deferral Period is
limited to Directors.

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          (b) Participation. A Director may elect to participate in the Plan with respect to
any Deferral Period by submitting a Participation Agreement to the Administrator by the last
business day immediately preceding the applicable Deferral Period.

          (c) Initial Year of Participation. In the event that an individual first becomes a
Director during a Plan Year and wishes to elect a Deferral Commitment with respect to the Fees
earned by and payable to the individual during such Plan Year, a Participation Agreement must be
submitted to the Administrator no later than thirty (30) days following such individual’s becoming
a Director. Any Deferral Commitment elected in such Participation Agreement shall be effective
only with regard to Fees earned following the submission of the Participation Agreement to the
Administrator. 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 the Deferral Period in which the individual became a Director.

          (d) Termination of Participation. Participation in the Plan shall continue as long as
the Director is eligible to receive benefits under the Plan.

          (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 the 2006 Plan Year.

     Section 3.2 Amount of Deferral. With respect to each Plan Year, a Director may elect to defer
a specified dollar amount or percentage of his or her Fees. For the first Plan Year, a Director
may elect to defer all or any portion of his or her Fees earned or payable after the later of the
effective date of the Participation Agreement or the date of filing the Participation Agreement
with the Administrator. A Director may change the dollar amount or percentage of his or her Fees
to be deferred by filing a written notice thereof with the Administrator. Any such change shall be
effective as of the first day of the Plan Year immediately succeeding the Plan Year in which such
notice is filed with the Administrator.

ARTICLE IV

DIRECTORS’ ACCOUNTS

     Section 4.1 Establishment of Accounts. The Corporation, through its accounting records, shall
establish an Account for each Director who elects to participate in the Plan. In addition, the
Corporation may establish one (1) or more sub-accounts of a Director’s Account, if

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the Corporation determines that such sub-accounts are necessary or appropriate in administering the Plan.

     Section 4.2 Crediting of Deferred Fees. A Director’s Fees that are deferred pursuant to a
Deferral Commitment shall be credited to the Director’s Account within thirty (30) days following
the date the corresponding non-deferred portion of his or her Fees would have been paid to the
Director. Any withholding of taxes or other amounts with respect to any deferred Fees that is
required by state, federal or local laws shall be withheld from the Director’s non-deferred Fees,
or if none, then the Director’s Deferred Commitment shall be reduced by the amount of such
withholding.

     Section 4.3 Determination of Accounts.

          (a) Determination of Accounts. The amount credited to each Director’s Account as of a
particular date shall equal the deemed balance of such Account as of such date. The balance in the
Account shall equal the amount credited pursuant to Section 4.2, and shall be adjusted in the
manner provided in Section 4.4.

          (b) Accounting. The Corporation, through its accounting records, shall maintain a
separate and distinct record of the amount in each Account as adjusted to reflect income, gains,
losses, withdrawals and distributions.

     Section 4.4 Adjustments to Accounts.

          (a) Each Director’s Account shall be debited with the amount of any distributions under the
Plan to or on behalf of the Director or, in the event of his or her death, his or her Beneficiary
during the Accounting Period ending on such Accounting Date.

          (b) The Director’s Account shall next be credited or debited, as the case may be, on a daily
basis with the performance of each deemed Investment Fund based on the manner in which the balance
of such Director’s Account has been allocated among the deemed Investment Funds provided for in
Article V. The performance of each deemed Investment Fund (either positive or negative) will be
determined by the Administrator, in its sole discretion.

          (c) Earnings on any amounts deemed to have been invested in any deemed Investment Fund will be
deemed to have been reinvested as the Committee so determines.

     Section 4.5 Statement of Accounts. As soon as practicable after the end of each Plan Year, a
statement shall be furnished to each Director or, in the event of his or her death, to his or her
Beneficiary showing the status of his or her Account as of the end of the Plan Year, any changes in
his or her Account since the end of the immediately preceding Plan Year, and such other information
as the Administrator shall determine.

     Section 4.6 Vesting of Accounts. Subject to Section 5.1, each Director shall at all times
have a nonforfeitable interest in his or her Account balance.

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ARTICLE V

FINANCING OF BENEFITS

     Section 5.1 Financing of Benefits. Benefits payable under the Plan to a Director or, in the
event of his or her death, to his or her Beneficiary shall be paid by the Corporation from its
general assets. The payment of benefits under the Plan represents an unfunded, unsecured
obligation of the Corporation. Notwithstanding the fact that the Directors’ Accounts may be
adjusted by an amount that is measured by reference to the performance of any deemed Investment
Funds as provided in Section 5.3, no person entitled to payment under the Plan shall have any
claim, right, security interest or other interest in any fund, trust, account, insurance contract
or asset of the Corporation which may be responsible for such payment.

     Section 5.2 Security For Benefits. Notwithstanding the provisions of Section 5.1, nothing in
this Plan shall preclude the Corporation from setting aside amounts in trust (the “Trust”) pursuant
to one (1) or more trust agreements between a trustee and the Corporation. However, no Director or
Beneficiary shall have any secured interest or claim in any assets or property of the Corporation
or the Trust and all funds contained in the Trust shall remain subject to the claims of the
Corporation’s general creditors.

     Section 5.3 Deemed Investments. The Committee may designate one (1) or more separate
investment funds or vehicles or measures for crediting earnings, including, without limitation,
certificates of deposit, mutual funds, money market accounts or funds, limited partnerships, or
debt or equity securities, including equity securities of the Corporation (measured by market
value, book value or any formula selected by the Committee), in which the amount credited to a
Director’s Account will be deemed to be invested (collectively, the “Investment Funds”). An
Investment Request or Investment Re-Allocation Request will advise the Administrator as to the
Director’s preference with respect to Investment Funds for all or some portion of the amounts
credited to a Director’s Account in specified multiples of one percent (1%).

     Section 5.4 Change of Investment Request Election.

          (a) A Director may change his or her Investment Request prospectively as of the first business
day of any calendar month by giving the Administrator prior written notice (or in an electronic
format) by filing an Investment Request, with respect to contributions subsequently credited to a
Director’s Account.

          (b) A Director may change his or her Investment Re-Allocation Request prospectively as of the
first business day of any calendar month by giving the Administrator prior written notice (or in an
electronic format) by filing an Investment Re-Allocation Request, with respect to all or a portion
of the Director’s Account.

          (c) The Administrator may, but is under no obligation to, deem the amounts credited to a
Director’s Account to be invested in accordance with the Investment Request or Investment
Re-Allocation Request made by the Director, or the Committee may, instead, in its

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sole discretion, deem such Account to be invested in any deemed Investment Funds selected by
the Committee.

          (d) Notwithstanding any provision of the Plan to the contrary:

               (i) The Administrator, in its sole and absolute discretion (but subject to the requirements of
applicable law) may temporarily suspend, in whole or in part, certain Plan transactions, including
without limitation, the right to change investment preference allocation elections and/or the right
to receive a distribution or withdrawal from a Director’s Account in the event of any conversion,
change in recordkeepers, change in Investment Funds and/or Plan merger, spin-off or similar
corporate change.

               (ii) In the event of a change in Investment Funds and/or a Plan merger, spin-off or similar
corporate change, the Administrator, in its sole and absolute discretion may decide to map
investments from a Director’s prior investment preference allocation elections to the then
available Investment Funds under the Plan. In the event that investments are mapped in this
manner, the Director will be permitted to reallocate funds among the Investment Funds (in
accordance with this Section 5.4) after the suspension period described in Section 5.4(d)(i), if
any, has ended.

ARTICLE VI

DISTRIBUTION OF BENEFITS

     Section 6.1 Settlement Date. A Director or, in the event of his or her death, his or her
Beneficiary will be entitled to distribution of the balance of his or her Account, as provided in
this Article VI, following his or her Settlement Date or Dates.

     Section 6.2 Amount to be Distributed. The amount to which a Director or, in the event of his
or her death, his or her Beneficiary is entitled in accordance with the following provisions of
this Article shall be based on the Director’s adjusted account balance determined as of the
Accounting Date coincident with or next following his or her Settlement Date or Dates.

     Section 6.3 In-Service Distribution. A Director may elect to receive an in-service
distribution of his or her deferred Fees for any Deferral Period in a single lump sum payment on a
date which is at least one (1) year after the end of such Deferral Period. A Director’s election
of an in-service distribution shall be filed in writing with the Administrator at the same time as
is filed his or her election to participate as provided in Section 3.1. Any benefits paid to the
Director as an in-service distribution shall reduce the Director’s Account. Any changes to the
foregoing election shall be subject to the Subsequent Deferral Rule.

     Section 6.4 Form of Distribution.

          (a) As soon as practicable after the end of the Accounting Period in which a Director’s
Settlement Date occurs, but in no event later than thirty (30) days following the end of such
Accounting Period (or in the case of a Settlement Date selected by the Director pursuant to Section
6.3, no later than such specified date), the Corporation shall commence distribution or cause
distribution to be commenced, to the Director or, in the event of his or her death, to his or

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her Beneficiary, of the balance of the Director’s Account, as determined under Section 6.2,
under one (1) of the forms provided in this Section. Notwithstanding the foregoing, if elected by
the Director in his or her Participation Agreement and provided that the form of the distribution
for all prior elections is in the form of a lump sum distribution, the distribution of the
Director’s Account may commence at the beginning of the second calendar year commencing after the
Director’s separation from service as a Director.

          (b) Distribution of a Director’s Account following his or her termination as a Director shall
be made in one (1) of the following forms as elected by the Director in his or her Participation
Agreement:

               (i) by payment in cash in five (5) annual installments, with each installment being designated
a “separate payment” as described in Treasury Regulation §1.409A-2(b)(2)(iii); or

               (ii) by payment in cash in ten (10) annual installments, with each installment being
designated a “separate payment” as described in Treasury Regulation §1.409A-2(b)(2)(iii); or

               (iii) by payment in cash in fifteen (15) annual installments, with each installment being
designated a “separate payment” as described in Treasury Regulation §1.409A-2(b)(2)(iii); or

               (iv) by payment in cash in a single lump sum;

provided, however, that in the event of a Director’s death, if the balance in his
or her Account is then less than $35,000, such balance shall be distributed in a single lump sum
payment. If the Director fails to select a form of distribution with respect to any Deferral
Commitment, such amount shall be paid in a lump sum at the time of such Director’s separation from
service.

          (c) The Director’s election of the form and date of distribution shall be provided for in the
Director’s Participation Agreement. Subject to the Subsequent Deferral Rule, 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.

          (d) The amount of each installment shall be equal to the quotient obtained by dividing the
Director’s Account balance as of the date of such installment payment by the number of installment
payments remaining to be made to or in respect of such Director at the time of calculation.

     Section 6.5 Beneficiary Designation. As used in the Plan the term “Beneficiary” means:

          (a) The last person designated as Beneficiary by the Director in a written notice on a form
prescribed by the Administrator;

          (b) If there is no designated Beneficiary or if the person so designated shall not survive the
Director, such Director’s spouse; or

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          (c) If no such designated Beneficiary and no such spouse is living upon the death of a
Director, or if all such persons die prior to the full distribution of the Director’s Account
balance, then the legal representative of the last survivor of the Director and such persons, or,
if the Administrator shall not receive notice of the appointment of any such legal representative
within one (1) year after such death, the heirs-at-law of such survivor (in the proportions in
which they would inherit his or her intestate personal property) shall be the Beneficiaries to whom
the then remaining balance of the Director’s Account shall be distributed.

Prior to the Director’s death, any Beneficiary designation may be changed from time to time by like
notice similarly delivered. No notice given under this Section shall be effective unless and until
the Administrator actually receives such notice.

     Section 6.6 Facility of Payment. Whenever and as often as any Director or his or her
Beneficiary entitled to payments hereunder shall be under a legal disability or, in the sole
judgment of the Administrator, shall otherwise be unable to apply such payments to his or her own
best interests and advantage, the Administrator in the exercise of its discretion may direct all or
any portion of such payments to be made in any one (1) or more of the following ways: (i) directly
to him; (ii) to his or her legal guardian or conservator; or (iii) to his or her spouse or to any
other person, to be expended for his or her benefit; and the decision of the Administrator, shall
in each case be final and binding upon all persons in interest.

     Section 6.7 Transitional Relief for 2008. Notwithstanding anything herein to the contrary, a
Director (i) must designate the time and form of distribution to the extent not previously so
elected and/or (ii) may make a new election to change a previously filed election with respect to
the time and form of distribution, in each case, no later than December 31, 2008. Any Director who
fails to deliver a new payment election as provided in clause (ii) above shall continue to
participate in the Plan in accordance with his or her prior distribution elections, which shall be
administered in accordance with Section 409A. Any subsequent election made after December 31, 2008
will be subject to the Subsequent Deferral Rule.

ARTICLE VII

ADMINISTRATION, AMENDMENT AND TERMINATION

     Section 7.1 Administration. The Plan shall be administered by an Administrator consisting of
one (1) or more persons who shall be appointed by and serve at the pleasure of the Board. The
Administrator shall have such powers as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, to construe and interpret the Plan and determine the
amount and time of payment of any benefits hereunder. The Administrator may, from time to time,
employ agents and delegate to them such administrative duties as it sees fit, and may from time to
time consult with legal counsel who may be counsel to the Corporation. The Administrator shall
have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add
to any benefits provided under the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan. No member of the Administrator shall act in respect of
his or her own Account. All decisions and determinations by the Administrator shall be final and
binding on all parties. All decisions of the Administrator shall be made by the vote of the
majority, including actions in writing taken without a meeting. All elections, notices

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and directions under the Plan by a Director shall be made on such forms as the Administrator
shall prescribe.

     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. (1) It is intended that the Plan comply with the
provisions of Section 409A, so that the income inclusion provisions of Section 409A do not apply to
the Directors. The Plan and each Participation Agreement and Deferral Commitment shall be
administered in a manner consistent with this intent.

          (2) Neither a Director nor any of a Director’s creditors or beneficiaries shall have the right
to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under
the Plan to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment. Except as permitted under Section 409A, any deferred compensation
(within the meaning of Section 409A) payable to a Director or for a Director’s benefit under the
Plan may not be reduced by, or offset against, any amount owing by a Director to the Corporation or
any of its affiliates.

          (c) Notwithstanding any provision of the Plan and Participation Agreements and Deferral
Commitments to the contrary, in light of the uncertainty with respect to the proper application of
Section 409A, the Corporation reserves the right to make amendments to the Plan and Participation
Agreements and Deferral Commitments as the Corporation deems necessary or desirable to avoid the
imposition of taxes or penalties under Section 409A. In any case, a Director shall be solely
responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a
Director or for a Director’s Account in connection with the Plan (including any taxes and penalties
under Section 409A), and neither the Corporation nor any of its affiliates shall have any
obligation to indemnify or otherwise hold a Director harmless from any or all of such taxes or
penalties.

     Section 7.3 Successors. The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially
all of the business and/or assets of the Corporation expressly to assume and to agree to perform
this Plan in the same manner and to the same extent the Corporation would be required to perform if
no such succession had taken place. This Plan shall be binding upon and inure to the benefit of
the Corporation and any successor of or to the Corporation, including without limitation any
persons acquiring directly or indirectly all or substantially all of the business and/or assets of
the Corporation whether by sale, merger, consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the “Corporation” for the purposes of this Plan), and the
heirs, beneficiaries, executors and administrators of each Director.

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     Section 7.4 Expenses. All expenses of the Plan shall be paid by the Corporation from funds
other than those deemed Investment Funds as provided in Section 5.3, except that brokerage
commissions and other transaction fees and expenses relating to the investment of deemed assets and
investment fees attributable to commingled investment of such assets shall be paid from or charged
to such assets or earnings thereon.

ARTICLE VIII

MISCELLANEOUS

     Section 8.1 No Continuing Right as Director. Neither the adoption or operation of this Plan,
nor any document describing or referring to this Plan, or any part thereof, shall confer upon any
Director any right to continue as a Director of the Corporation or any subsidiary of the
Corporation.

     Section 8.2 Applicable Law. All questions arising in respect of the Plan, including those
pertaining to its validity, interpretation and administration, shall be governed, controlled and
determined in accordance with the applicable provisions of federal law and, to the extent not
preempted by federal law, the laws of the State of Ohio.

     Section 8.3 Interests Not Transferable. No person shall have any right to commute, encumber,
pledge or dispose of any interest herein or right to receive payments hereunder, nor shall such
interests or payments be subject to seizure, attachment or garnishment for the payments of any
debts, judgments, alimony or separate maintenance obligations or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise, all payments and rights hereunder being
expressly declared to be nonassignable and nontransferable.

     Section 8.4 Severability. Each section, subsection and lesser section of this Plan
constitutes a separate and distinct undertaking, covenant and/or provision hereof. Whenever
possible, each provision of this Plan shall be interpreted in such manner as to be effective and
valid under applicable law. In the event that any provision of this Plan shall finally be
determined to be unlawful, such provision shall be deemed severed from this Plan, but every other
provision of this Plan shall remain in full force and effect, and in substitution for any such
provision held unlawful, there shall be substituted a provision of similar import reflecting the
original intention of the parties hereto to the extent permissible under law.

     Section 8.5 Withholding of Taxes. The Corporation may withhold or cause to be withheld from
any amounts payable under this Plan all federal, state, local and other taxes as shall be legally
required.

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     IN WITNESS WHEREOF, Lincoln Electric Holdings, Inc. has caused this amendment and restatement
of the Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan to be
executed in its name as of December 31, 2008.

	 	 	 	 	 
	 	LINCOLN ELECTRIC HOLDINGS, INC.

 	 
	 	By:  	/s/ Gretchen A. Farrell
 	 
	 	 	Its: Vice President, Human ResourcesEX-10.4

Exhibit 10.4

Lincoln Electric Holdings, Inc.

2007 Management Incentive Compensation Plan

(as amended and restated as of December 31, 2008)

     1. Purpose. The purpose of the Lincoln Electric Holdings, Inc. 2007 Management
Incentive Compensation Plan is to reinforce corporate, organizational and business-development
goals, to promote the achievement of year-to-year financial and other business objectives and to
reward the performance of eligible employees in fulfilling their personal responsibilities.

     2. Definitions. The following terms, as used herein, shall have the following
meanings:

     (a) “Affiliate” shall mean, with respect to the Company or any of its subsidiaries, any
other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.

     (b) “Award” shall mean an incentive compensation award, granted pursuant to the Plan,
that is contingent upon the attainment of Performance Goals with respect to a Performance
Period. An Award shall be designated as either an “Annual Award” or a “Long-Term Award.”

     (c) “Board” shall mean the Board of Directors of the Company.

     (d) “Change in Control” shall mean (i) for the purposes of vesting of any Award, the
occurrence of a Change in Control as defined in the Company’s 2006 Equity and Performance
Incentive Plan (or as set forth in the applicable award agreement under such plan); and (ii)
for purposes of payment of any Award that would be deferred compensation within the meaning
of Section 409A of the Code, a change in the ownership or effective control of the Company,
or in the ownership of a substantial portion of the Company’s assets, within the meaning of
Section 409A of the Code.

     (e) “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

     (f) “Committee” shall mean the Compensation and Executive Development Committee of the
Board of Directors, the composition of which shall at all times consist solely of two or
more “outside directors” within the meaning of Section 162(m) of the Code.

     (g) “Company” shall mean Lincoln Electric Holdings, Inc. and its successors.

     (h) “Covered Employee” shall have the meaning set forth in Section 162(m)(3) of the
Code.

     (i) “Disability” means a disability covered under the Company’s long-term disability
program.

 

 

     (j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (k) “Negative Discretion” shall mean discretion exercised by the Committee to cancel or
reduce the amount of payment under an Award; provided that the exercise of such discretion
shall not cause the affected Award to fail to qualify as “performance-based compensation”
under Section 162(m) of the Code.

     (l) “Participant” shall mean any employee of the Company or an Affiliate who is,
pursuant to Section 4 of the Plan, selected to participate in the Plan.

     (m) “Performance Goals” shall mean performance goals based on one or more of the
following criteria, where applicable: (i) pre-tax income or after-tax income, adjusted or
pro forma net income; (ii) earnings including operating income, earnings before or after
taxes, earnings before or after interest, and/or earnings before or after bonus,
depreciation, amortization, and/or extraordinary or special items or earnings before
interest, taxes and bonus or regional basis earnings before interest, taxes and bonus; (iii)
net income excluding amortization of intangible assets, depreciation and impairment of
goodwill and intangible assets; (iv) operating income; (v) earnings or book value per share
(basic or diluted); (vi) return on assets (gross or net), return on investment, return on
capital, or return on equity; (vii) return on revenues; (viii) net tangible assets (working
capital plus property, plants and equipment) or return on net tangible assets (operating
income divided by average net tangible assets) or working capital or average operating
working capital or average operating working capital to sales (average operating working
capital divided by sales); (ix) operating cash flow (operating income plus or minus changes
in working capital less capital expenditures); (x) cash flow, free cash flow, cash flow
return on investment (discounted or otherwise), net cash provided by operations, or cash
flow in excess of cost of capital; (xi) sales or sales growth; (xii) operating margin or
profit margin; (xiii) share price or total shareholder return; (xiv) earnings from
continuing operations; (xv) cost targets, reductions or savings, productivity or
efficiencies; (xvi) economic value added; and (xvii) strategic business criteria, consisting
of one or more objectives based on meeting specified market penetration or market share,
geographic business expansion, customer satisfaction, employee satisfaction, human resources
management, financial management, project management, supervision of litigation, information
technology, or goals relating to divestitures, joint ventures or similar transactions.
Where applicable, the Performance Goals may be expressed in terms of attaining a specified
level of the particular criterion or the attainment of a percentage increase or decrease in
the particular criterion, and may be applied to one or more of the Company or a subsidiary
of the Company, or a division or strategic business unit of the Company, all as determined
by the Committee. The Performance Goals may include a threshold level of performance below
which no payment will be made (or no vesting will occur), levels of performance at which
specified payments will be paid (or specified vesting will occur) and a maximum level of
performance above which no additional payment will be made (or at which full vesting will
occur).

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     (n) “Performance Period” shall mean, unless the Committee determines otherwise, a
period of no longer than (i) 12 months with respect to an Annual Award and (ii) 36 months
with respect to a Long-Term Award.

     (o) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof.

     (p) “Plan” shall mean Lincoln Electric Holdings, Inc. 2007 Management Incentive
Compensation Plan, as amended from time to time.

     (q) “Retirement” means a Participant’s retirement from active employment with the
Company and each of its Affiliates pursuant to which the Participant is entitled to receive
a normal retirement pension under The Lincoln Electric Company Retirement Annuity Program.

     3. Administration. The Plan shall be administered by the Committee. The Committee
shall have the authority in its sole discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or advisable in the administration of
the Plan, including, without limitation, the authority to grant Awards; to determine the persons to
whom and the time or times at which Awards shall be granted; to determine the terms, conditions,
restrictions and performance criteria, including Performance Goals, relating to any Award; to
determine whether, to what extent, and under what circumstances an Award may be settled, cancelled,
forfeited, or surrendered; to construe and interpret the Plan and any Award; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms and provisions of
Awards; and to make all other determinations deemed necessary or advisable for the administration
of the Plan. The Committee shall have the authority to make equitable adjustments to the
Performance Goals in recognition of unusual or non-recurring events affecting the Company or any
parent or subsidiary of the Company or the financial statements of the Company or any parent or
subsidiary of the Company, in response to changes in applicable laws or regulations or to account
for items of gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of a business or related to a
change in accounting principles.

     All decisions, determinations and interpretations of the Committee shall be final and binding
on all persons, including the Company and the Participant (or any person claiming any rights under
the Plan from or through any Participant).

     Subject to Section 162(m) of the Code or as otherwise required for compliance with other
applicable law, the Committee may delegate all or any part of its authority under the Plan to any
officer or officers of the Company.

     4. Eligibility. Awards may be granted to Participants in the sole discretion of the
Committee. In determining the persons to whom Awards shall be granted and the Performance Goals
relating to each Award, the Committee shall take into account such factors as the Committee shall
deem relevant in connection with accomplishing the purposes of the Plan.

3

 

     5. Terms of Awards. Awards granted pursuant to the Plan shall be communicated to
Participants in such form as the Committee shall from time to time approve and the terms and
conditions of such Awards shall be set forth therein.

     (a) In General. On or prior to the earlier of the 90th day after the commencement of a
Performance Period or the date on which 25% of a Performance Period has elapsed, the
Committee shall specify in writing, by resolution of the Committee or other appropriate
action, the Participants for such Performance Period and the Performance Goals applicable to
each Award for each Participant with respect to such Performance Period. Unless otherwise
provided by the Committee in connection with specified terminations of employment, payment
in respect of Awards shall be made only if and to the extent the Performance Goals with
respect to such Performance Period are attained.

     (b) Special Provisions Regarding Awards. Notwithstanding anything to the contrary
contained in this Section 5, the maximum amount that may be paid to a Covered Employee under
the Plan with respect to an Annual Award is $4 million and the maximum amount that may be
paid to a Covered Employee under the Plan with respect to a Long-Term Award is $4 million.
Notwithstanding anything to the contrary herein, in determining the amount of payment under
an Award in respect of a Performance Period, the Committee may cancel an Award or reduce the
amount payable under an Award that was otherwise earned during a Performance Period through
the use of Negative Discretion if, in the Committee’s sole discretion, such cancellation or
reduction is appropriate. In no event shall any discretionary authority granted to the
Committee by the Plan including, but not limited to, Negative Discretion, be used to (i)
grant or provide payment in respect of Awards for a Performance Period if the Performance
Goals for such Performance Period have not been attained or (b) increase an Award above the
maximum amount payable under this Section 5(b).

     (c) Time and Form of Payment. All payments in respect of Awards granted under this
Plan shall be made in cash on March 14th of the year following the year in which
the Performance Period ends.

     6. Section 409A of the Code. Awards under the Plan are intended to comply with
Section 409A of the Code and all Awards shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the
effective date of the Plan. Notwithstanding any provision of the Plan or any Award to the
contrary, in the event that the Committee determines that any Award may or does not comply with
Section 409A of the Code, the Company may adopt such amendments to the Plan and the affected Award
(without Participant consent) or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions, that the Committee
determines are necessary or appropriate to (i) exempt the Plan and any Award from the application
of Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to Award, or (ii) comply with the requirements of Section 409A of the Code.

4

 

     Notwithstanding any provisions of this Plan to the contrary, if a Participant is a “specified
employee” (within the meaning of Section 409A of the Code and determined pursuant to policies
adopted by the Company) on his date of separation from service and if any portion of an Award to be
received by the Participant upon his or her separation from service would be considered deferred
compensation under Section 409A of the Code, amounts of deferred compensation that would otherwise
be payable pursuant to this Plan during the six-month period immediately following the
Participant’s separation from service will instead be paid or made available on the earlier of (i)
the first day of the seventh month following the date of the Participant’s separation from service
and (ii) the Participant’s death.

     7. General Provisions.

     (a) Compliance with Legal Requirements. The Plan and the granting and payment of
Awards, and the other obligations of the Company under the Plan shall be subject to all
applicable federal and state laws, rules and regulations, and to such approvals by any
regulatory or governmental agency as may be required.

     (b) Nontransferability. Awards shall not be transferable by a Participant except upon
the Participant’s death following the end of the Performance Period but prior to the date
payment is made, in which case the Award shall be transferable in accordance with any
beneficiary designation made by the Participant in accordance with Section 7(l) below or, in
the absence thereof, by will or the laws of descent and distribution.

     (c) No Right To Continued Employment. Nothing in the Plan or in any Award granted
pursuant hereto shall confer upon any Participant the right to continue in the employ of the
Company or to be entitled to any remuneration or benefits not set forth in the Plan or to
interfere with or limit in any way whatever rights otherwise exist of the Company to
terminate such Participant’s employment or change such Participant’s remuneration.

     (d) Withholding Taxes. Where a Participant or other person is entitled to receive a
payment pursuant to an Award hereunder, the Company shall have the right either to deduct
from the payment, or to require the Participant or such other person to pay to the Company
prior to delivery of such payment, an amount sufficient to satisfy any federal, state, local
or other withholding tax requirements related thereto.

     (e) Amendment, Termination and Duration of the Plan. The Board or the Committee may at
any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in
part; provided that, no amendment that requires shareholder approval in order for the Plan
to continue to comply with Section 162(m) of the Code shall be effective unless the same
shall be approved by the requisite vote of the shareholders of the Company. Notwithstanding
the foregoing, no amendment shall affect adversely any of the rights of any Participant
under any Award following the end of the Performance Period to which such Award relates,
provided that the exercise of the Committee’s discretion pursuant to Section 5(b) to reduce
the amount of an Award shall not be deemed an amendment of the Plan.

5

 

     (f) Participant Rights. No Participant shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment for Participants.

     (g) Termination of Employment.

     (i) Unless otherwise provided by the Committee, and except as set forth in
subparagraph (ii) of this Section 7(g), a Participant must be actively employed by
the Company or one of its Affiliates at the end of the Performance Period in order
to be eligible to receive payment in respect of such Award.

     (ii) Unless otherwise provided by the Committee, if a Participant’s employment
is terminated as result of death, Disability or Retirement prior to the end of the
Performance Period, the Participant’s Award shall be cancelled and in respect of his
or her cancelled Award the Participant shall receive a pro rata portion of the Award
as determined by the Committee.

     (h) Change in Control. If any Award which a Participant earned under the Plan during
any Performance Period which ended prior to a Change in Control has neither been paid to the
Participant nor credited to such Participant under a deferred compensation plan maintained
or sponsored by the Company or an Affiliate prior to the Change in Control, such Award shall
be paid to the Participant within thirty (30) days following such Change in Control and in
no event later than the date specified in Section 5(c).

     (i) Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan
for incentive and deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any
such Participant any rights that are greater than those of a general creditor of the
Company.

     (j) Governing Law. The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Ohio without giving effect to the
conflict of laws principles thereof.

     (k) Effective Date. The Plan shall take effect upon its adoption by the Board;
provided, however, that the Plan shall be subject to the requisite approval of the
shareholders of the Company in order to comply with Section 162(m) of the Code. In the
absence of such approval, the Plan (and any Awards made pursuant to the Plan prior to the
date of such approval) shall be null and void.

     (l) Beneficiary. A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from time to time,
amend or revoke such designation; provided, that, in the event the Participant does not
designate a beneficiary with respect to a particular Award, the Participant’s most recent
beneficiary designation form on file with the Company shall control. If no designated
beneficiary survives the Participant and an Award is payable to

6

 

the Participant’s beneficiary pursuant to Section 7(b), the Participant’s estate shall
be deemed to be the grantee’s beneficiary.

     (m) Interpretation. The Plan is designed and intended to comply, to the extent
applicable, with Section 162(m) of the Code, and all provisions hereof shall be construed in
a manner to so comply.

     IN WITNESS WHEREOF, Lincoln Electric Holdings, Inc. has caused this Lincoln Electric Holdings,
Inc. 2007 Management Incentive Compensation Plan to be executed in its name as of December 31,
2008.

	 	 	 	 	 
	 	LINCOLN ELECTRIC HOLDINGS, INC.:

 	 
	 	By:  	/s/ Gretchen A. Farrell
 	 
	 	 	Vice President, Human Resources 	 
	 	 	 	 

Date: December 31, 2008

7

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