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Exhibit 10(j)
EMPLOYMENT AND RETIREMENT AGREEMENT
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THIS EMPLOYMENT AND RETIREMENT AGREEMENT (this "Agreement") is
made and entered into this 12th day of December, 1996, by and between THE
LINCOLN ELECTRIC COMPANY (the "Company," a term which in this Agreement shall
include its predecessors, parents, subsidiaries, divisions, related or
affiliated companies, officers, directors, stockholders, members, employees,
heirs, successors, assigns, representatives, agents and counsel, unless the
context otherwise clearly requires), and XXXXX XXXXXX ("Executive"),
WITNESSETH:
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WHEREAS, Executive is an employee of the Company and currently
serves as Executive Vice President - Engineering/Marketing of the Company;
WHEREAS, the Company and Executive have determined that
Executive shall resign from the position of Executive Vice President -
Engineering/Marketing of the Company, effective December 31, 1996, and that
Executive shall resign and retire as an employee of the Company and its
subsidiaries and related or affiliated companies, effective June 30, 1997;
WHEREAS, the Company and Executive desire to make provision
for the payments and benefits that Executive will be entitled to receive from
the Company in consideration for Executive's obligations and actions under this
Agreement and in connection with such resignations and retirement and the
cessation of his employment with the Company; and
WHEREAS, the Company and Executive wish to resolve, settle
and/or compromise any and all matters, claims and issues between them arising
from or relating to Executive's service and employment with the Company,
including the termination thereof;
NOW THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Company and Executive agree as follows:
1. EFFECTIVE DATE OF AGREEMENT. This Agreement is effective on
the date hereof and shall continue in effect as provided herein.
2. EMPLOYMENT. Commencing on the date hereof, Executive's
employment shall continue through June 30, 1997 (the "Employment Term"), subject
to the provisions hereof.
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3. DUTIES DURING EMPLOYMENT TERM. Executive's principal duties
and authority after December 31, 1996 during the Employment Term will be to
serve as an advisor to the Company in any capacity as the Chief Executive
Officer of the Company may designate.
4. COMPENSATION DURING EMPLOYMENT TERM. In consideration of
the services of the Executive during the Employment Term, and of the promises of
Executive in this Agreement and subject to the conditions hereof, the Company
shall:
(a) During the Employment Term, continue to pay Executive his
base salary at its current rate in accordance with the Company's regular payroll
practices; PROVIDED that (i) the continuance of such payments is contingent upon
Executive's compliance with each and every requirement of this Agreement
applicable to him and (ii) if Executive dies before the completion of the
payments described in this subparagraph 4(a), the remaining payments described
in this subparagraph 4(a) following his death shall be made to his estate.
(b) During the Employment Term, continue Executive's
eligibility for a 1996 bonus, to be determined by the Board of Directors of the
Company; PROVIDED that (i) the payment of any bonus is contingent upon
Executive's compliance with each and every requirement of this Agreement
applicable to him and (ii) if Executive dies before any payment described in
this subparagraph 4(b) is made, such payment described in this subparagraph 4(b)
following his death shall be made to his estate. Executive shall not be eligible
for a 1997 bonus.
(c) Continue to permit Executive to participate in the
Company's medical and life insurance programs, and other plans, programs and
perquisites appropriate for his position and status as a senior officer of the
Company, on the same basis that Executive has participated in such plans,
programs and perquisites, until the end of the Employment Term.
5. RESIGNATION AND RETIREMENT; OTHER PAYMENTS.
(a) Effective December 31, 1996, Executive hereby (i) resigns
as Executive Vice President - Engineering/Marketing of the Company, (ii) resigns
from all offices of the Company and any entity that is a subsidiary of or is
otherwise related to or affiliated with the Company to which he has been elected
by the Board of Directors of the Company (or to which he has otherwise been
appointed), and (iii) resign from all administrative, fiduciary or other
positions he may hold with respect to arrangements or plans for, of or relating
to the Company. The Company hereby consents to and accepts said resignation, and
the Company records shall so reflect.
(b) Effective June 30, 1997, Executive shall resign and retire
from his employment with the Company and its subsidiaries and related or
affiliated companies.
(c) Following Executive's retirement, the Company shall
reimburse Executive's documented relocation expenses relating to (i) the sale of
his house in the Greater Cleveland Area in an amount not to exceed THIRTY
THOUSAND DOLLARS ($30,000), and (ii) the
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transportation of his household goods to Florida in an amount not to exceed TEN
THOUSAND SEVEN HUNDRED DOLLARS ($10,700).
(d) The Company shall pay to Executive after January 19, 1997
NINETY THOUSAND ONE HUNDRED FORTY DOLLARS ($90,140) in exchange for the
cancellation of the options granted to him as part of the settlement arising out
of the matter of XXXXX X. XXXXXX VS. THE LINCOLN ELECTRIC COMPANY, Case No.
288514 in the Common Pleas Court of Cuyahoga County, Ohio. Upon such payment,
Executive shall return the Option Agreements dated July 5, 1996, relating to
5524 Class A Common Shares at $30.00 per share and 6304 Class A Common Shares at
$34.00 per share, and such options shall be cancelled.
6. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, ETC. In
consideration of the promises of the Executive in this Agreement and subject to
the conditions hereof, including without limitation Paragraph 9 of this
Agreement, the Company shall:
(a) Pay Executive a supplemental pension of FORTY-FOUR
THOUSAND FIVE HUNDRED FORTY-THREE DOLLARS ($44,543) per year, in equal monthly
installments, payable in the form of a single life annuity, commencing with a
payment on July 1, 1997 and ending with a payment on the first day of the month
in which Executive dies (the "Pension"); PROVIDED that (i) no such payments
shall be made unless each of the conditions in the Option Agreements provided
for in Paragraph 7 and the conditions in Paragraph 9 below have been satisfied,
and (ii) each such payment is contingent upon Executive's compliance with each
and every requirement of this Agreement applicable to him; and PROVIDED FURTHER
that the Pension shall be paid through the Company's Supplemental Executive
Retirement Plan (but no other benefit shall be payable to or with respect to
Executive under such plan); and PROVIDED FURTHER that Executive may elect to
receive the Pension in the form of an actuarially equivalent joint and survivor
annuity in lieu of a straight life annuity (such actuarial equivalence being
determined in accordance with the terms of the Company's Supplemental Executive
Retirement Plan).
(b) Permit Executive to participate in the Company's medical
program through which retirees, at their cost (as determined by the Company),
may elect to have coverage under the Company's medical program that is secondary
to Medicare.
7. OPTION. The Company shall grant Executive an option to
purchase 4,000 Common Shares of the Company at a price of $30.00 per share and
an option to purchase 4,000 Class A Common Shares of the Company at a price of
$27.25 per share, in accordance with the terms of the Option Agreements attached
hereto as Exhibits A-1 and A-2 and made a part hereof.
8. CONSIDERATION FOR RELEASES. Executive acknowledges and
agrees that the consideration provided by the Company to Executive under this
Agreement, including, without limitation, the payments and benefits to be made
or provided by the Company to Executive pursuant to this Agreement and the
Option Agreements, is greater than and in addition to anything of value to which
he otherwise would be entitled from the Company and that the releases by
Executive set forth in Paragraph 9 of this Agreement and the obligations of and
actions taken by Executive under this Agreement are given and undertaken in
consideration of,
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and adequately supported by, the payments and benefits to be made or provided to
Executive by the Company under and pursuant to this Agreement and the Option
Agreements.
9. RELEASES BY EXECUTIVE.
(a) In consideration of the payments made and to be made and
the benefits to be received by Executive pursuant to Paragraphs 5, 6 and 7 of
this Agreement, Executive, for himself and his dependents, successors, assigns,
heirs, executors and administrators (and his and their legal representatives of
every kind), hereby releases, dismisses, remises and forever discharges the
Company from any and all arbitrations, claims, including claims for attorney's
fees, demands, damages, suits, proceedings, actions and/or causes of action of
any kind and every description, whether known or unknown, which Executive now
has or may have had for, upon, or by reason of any cause whatsoever (except that
this release shall not apply to the obligations of the Company arising under
this Agreement) ("claims"), against the Company, including but not limited to:
(i) any and all claims arising out of or relating to
Executive's employment by or service with the Company through
the date hereof;
(ii) any and all claims arising out of or relating to
the matter of XXXXX X. XXXXXX VS. THE LINCOLN ELECTRIC
COMPANY, Case No. 288514 in the Common Pleas Court of Cuyahoga
County, Ohio;
(iii) any and all claims of discrimination, including
but not limited to claims of discrimination on the basis of
sex, race, age, national origin, marital status, religion or
handicap, including, specifically, but without limiting the
generality of the foregoing, any claims under the Age
Discrimination in Employment Act, as amended, Title VII of the
Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, Ohio Revised Code Section 4101.17 and Ohio
Revised Code Chapter 4112, including Sections 4112.02 and
4112.99 thereof; and
(iv) any and all claims of breach of any contract or
promise, express or implied.
(b) Executive understands and acknowledges that the Company
does not admit any violation of law, liability or invasion of any of his rights
and that any such violation, liability or invasion is expressly denied. The
consideration provided under this Agreement is made for the purpose of settling
and extinguishing all claims and rights (and every other similar or dissimilar
matter) that Executive ever had or now may have against the Company to the
extent provided in this Paragraph 9. Executive further agrees and acknowledges
that no representations, promises or inducements have been made by the Company
other than as appear in this Agreement.
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(c) Executive further agrees and acknowledges that:
(i) The release provided for in this Paragraph 9
releases claims to and including the date of this Agreement;
(ii) He has been advised by the Company to consult
with legal counsel prior to executing this Agreement and the
release provided for in this Paragraph 9, has had an
opportunity to consult with and to be advised by legal counsel
of his choice, fully understands the terms of this Agreement,
and enters into this Agreement freely, voluntarily and
intending to be bound;
(iii) He has been given a period of twenty-one (21)
days to review and consider the terms of this Agreement, and
the release contained herein, prior to its execution and that
he may use as much of the twenty-one (21) day period as he
desires; and
(iv) He may, within seven (7) days after execution,
revoke this Agreement. Revocation shall be made by delivering
a written notice of revocation to the Vice President of Human
Resources at the Company. For such revocation to be effective,
written notice must be actually received by the Vice President
of Human Resources at the Company no later than the close of
business on the seventh (7th) day after Executive executes
this Agreement. If Executive does exercise his right to revoke
this Agreement, all of the terms and conditions of the
Agreement shall be of no force and effect and the Company
shall not have any obligation to make payments or provide
benefits or option to Executive as set forth in Paragraphs 6
and 7 of this Agreement, except as may be required under
COBRA.
(d) Executive agrees that he will never file a lawsuit or
other complaint asserting any claim that is released in this Paragraph 9.
(e) It is understood and agreed that Executive's resignation
and retirement are by mutual agreement between the Company and Executive, and
that Executive waives and releases any claim that he has or may have to
reemployment after June 30, 1997.
(f) As a condition of the Company's obligation to make
payments or provide benefits to Executive that are not otherwise vested as set
forth in Paragraphs 5 and 6 of this Agreement, and as a condition to any
exercise of the options granted pursuant to the Option Agreements provided for
in Paragraph 7 of this Agreement, Executive shall, at the time of his retirement
as an employee of the Company pursuant to Paragraph 5 of this Agreement
(6/30/97), execute and deliver the Release attached hereto as Exhibit B and made
a part hereof.
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10. CONFIDENTIAL INFORMATION; STATEMENTS TO THIRD PARTIES.
(a) Executive acknowledges and agrees that in the performance
of his duties as an officer and employee of the Company, he was and may be
brought into frequent contact with, had or may have had access to, and/or became
or may become informed of confidential and proprietary information of the
Company and/or information which is a trade secret of the Company (collectively,
"Confidential Information"), as more fully described in subparagraph (b) of this
Paragraph 10. Executive acknowledges and agrees that the Confidential
Information of the Company gained by Executive during his association with the
Company was or will be developed by and/or for the Company through substantial
expenditure of time, effort and money and constitutes valuable and unique
property of the Company.
(b) Executive will keep in strict confidence, and will not,
directly or indirectly, at any time, disclose, furnish, disseminate, make
available, use or suffer to be used in any manner any Confidential Information
of the Company (except as may be necessary in connection with the discharge of
Executive's obligations pursuant to Paragraphs 3 and 14 of this Agreement)
without limitation as to when or how Executive may have acquired such
Confidential Information. Executive specifically acknowledges that Confidential
Information includes any and all information, whether reduced to writing (or in
a form from which information can be obtained, translated, or derived into
reasonably usable form), or maintained in the mind or memory of Executive and
whether compiled or created by the Company, which derives independent economic
value from not being readily known to or ascertainable by proper means by others
who can obtain economic value from the disclosure or use of such information,
that reasonable efforts have been put forth by the Company to maintain the
secrecy of Confidential Information, that such Confidential Information is and
will remain the sole property of the Company, and that any retention or use by
Executive of Confidential Information after the termination of Executive's
employment with and services for the Company shall constitute a misappropriation
of the Company's Confidential Information.
(c) Executive further agrees that he shall return (to the
extent he has not already returned), within ten (10) days of the effective date
of his retirement as an employee of the Company, in good condition, all property
of the Company, including, without limitation, (i) property, documents and/or
all other materials (including copies, reproductions, summaries and/or analyses)
which constitute, refer or relate to Confidential Information of the Company,
(ii) keys to Company property, (iii) files and (iv) blueprints or other
drawings.
(d) Executive further acknowledges and agrees that his
obligation of confidentiality shall survive, regardless of any other breach of
this Agreement or any other agreement, by any party hereto, until and unless
such Confidential Information of the Company shall have become, through no fault
of Executive, generally known to the public or Executive is required by law
(after providing the Company with notice and opportunity to contest such
requirement) to make disclosure. Executive's obligations under this Paragraph 10
are in addition to, and not in limitation or preemption of, all other
obligations of confidentiality which Executive may have to the Company under
general legal or equitable principles or statutes.
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(e) Because the purpose of this Agreement is to settle
amicably any and all potential disputes or claims among the parties, neither
Executive nor the Company shall, directly or indirectly, make or cause to be
made any statements to any third parties criticizing or disparaging the other or
commenting on the character or business reputation of the other. Executive
further hereby agrees that, without the prior written consent of the Chief
Executive Officer of the Company, unless otherwise required by law, he will not
(1) comment to others concerning the status, plans or prospects of the business
of the Company, (2) comment to others concerning the status, plans or prospects
of any existing, threatened or potential claims or litigation involving the
Company, or (3) engage in any act or omission that would be detrimental,
financially or otherwise, to the Company, or that would subject the Company to
public disrespect, scandal or ridicule.
11. NON-COMPETITION; CERTAIN ACTIONS.
(a) Executive agrees that for a period commencing on the date
of this Agreement through June 30, 1999 within the Territory (as described in
subparagraph (b)(i) of this Paragraph 11) (and, as to subparagraph (a)(iii) of
this Paragraph 11, any place), he shall not, directly or indirectly, do or
suffer any of the following:
(i) Own, manage, control or participate in the
ownership, management, or control of, or be employed or
engaged by or otherwise affiliated or associated as a
consultant, independent contractor or otherwise with, any
other corporation, partnership, proprietorship, firm,
association, or other business entity, or otherwise engage in
any business, which is in competition with the Company's
business (as described in subparagraph (b)(ii) of this
Paragraph 11); PROVIDED, however, that the ownership of not
more than one percent (1%) of any class of publicly-traded
securities of any entity shall not be deemed a violation of
this Agreement.
(ii) Employ, assist in employing, or otherwise
associate in business with any person who presently or at the
end of the Employment Term is an employee, officer or agent of
the Company, or any of its affiliated, related or subsidiary
entities.
(iii) Induce any person who is an employee, officer
or agent of the Company, or any of its affiliated, related, or
subsidiary entities to terminate such relationship.
(b) For purposes of this Agreement:
(i) "Territory" shall mean the countries identified
in Exhibit C hereto.
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(ii) The Company's business shall mean the design,
manufacture, distribution and sale of the products identified
in Exhibit D hereto.
(c) Executive agrees that for a period commencing on the date
of this Agreement through June 30, 1999, except within the terms of a specific
request from the Company, Executive shall not as a principal, or agent of
another person, propose or publicly announce or otherwise disclose an intent to
propose, or enter into or agree to enter into, singly or with any other person
or directly or indirectly, (i) any form of business combination, acquisition, or
other transaction relating to the Company or any majority-owned affiliate
thereof, (ii) any form of restructuring, recapitalization or similar transaction
with respect to the Company or any such affiliate, or (iii) any demand, request
or proposal to amend, waive or terminate any provision of this subparagraph
11(c) of this Agreement, nor except as aforesaid during such period will
Executive, except with respect to the exercise of options granted pursuant to
the Option Agreements provided for in Paragraph 7 of this Agreement, as a
principal, or agent of another person, (1) acquire, or offer, propose or agree
to acquire, by purchase or otherwise, any securities entitled to vote generally
in the election of directors of the Company or any direct or indirect options or
other rights to acquire any such securities ("Voting Securities"), (2) make, or
in any way participate in, any solicitation of proxies with respect to any
Voting Securities (including by the execution of action by written consent),
become a participant in any election contest with respect to the Company, seek
to influence any person with respect to any Voting Securities or demand a copy
of the Company's list of its stockholders or other books and records, (3)
participate in or encourage the formation of any partnership, syndicate, or
other group which owns or seeks or offers to acquire beneficial ownership of any
Voting Securities or which seeks to affect control of the Company or for the
purpose of circumventing any provision of this Agreement, or (4) otherwise act,
alone or in concert with others (including by providing financing for another
person), to seek or to offer to control or influence, in any manner, the
management, Board of Directors, or policies of the Company.
(d) In the event Executive shall violate any provision of this
Paragraph 11 as to which there is a specific time period during which he is
prohibited from taking certain actions or from engaging in certain activities,
as set forth in such provision, then, in such event, such violation shall toll
the running of such time period from the date of such violation until such
violation shall cease.
(e) Executive has carefully considered the nature and extent
of the restrictions upon him and the rights and remedies conferred upon the
Company under this Paragraph 11 and this Agreement, and hereby acknowledges and
agrees that the same are reasonable in time and territory, are designed to
eliminate competition which otherwise would be unfair to the Company, do not
stifle the inherent skill and experience of Executive, would not operate as a
bar to Executive's sole means of support, are fully required to protect the
legitimate interests of the Company and do not confer a benefit upon the Company
disproportionate to the detriment to Executive.
12. DISCLOSURE. Executive, for a period commencing on the date
of this Agreement through June 30, 1999, agrees to communicate the contents of
Paragraphs 10, 11,
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13(b), 14 and 16 of this Agreement to any person, firm, association, or
corporation which he intends to be employed by, associated in business with, or
represent.
13. BREACH.
(a) If Executive breaches any of the provisions of this
Agreement, then the Company may, at its sole option, (1) immediately terminate
all remaining payments and benefits described in Paragraphs 4 and 6 of this
Agreement that did not prior to the date hereof constitute vested benefits, (2)
cancel the outstanding options granted pursuant to the Option Agreements
provided for in Paragraph 7 of this Agreement, and (3) obtain reimbursement from
Executive of all non-vested payments and benefits, options and related Common
Shares and Class A Common Shares of the Company already provided pursuant to
Paragraphs 4, 6 and 7 of this Agreement, plus any expenses and damages incurred
as a result of the breach, with the remainder of this Agreement, and all
promises and covenants herein, remaining in full force and effect.
(b) Executive acknowledges and agrees that the remedy at law
available to the Company for breach by Executive of any of his obligations under
Paragraphs 10 and 11 of this Agreement would be inadequate and that damages
flowing from such a breach would not readily be susceptible to being measured in
monetary terms. Accordingly, Executive acknowledges, consents and agrees that,
in addition to any other rights or remedies which the Company may have at law,
in equity or under this Agreement, upon adequate proof of Executive's violation
of any provision of Paragraph 10 or 11 of this Agreement, the Company shall be
entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach, without the necessity of proof of
actual damage.
14. CONTINUED AVAILABILITY AND COOPERATION.
(a) Executive shall cooperate fully with the Company and with
the Company's counsel in connection with any present and future actual or
threatened litigation or administrative proceeding involving the Company that
relates to events, occurrences or conduct occurring (or claimed to have
occurred) during the period of Executive's employment by the Company. This
cooperation by Executive shall include, but not be limited to:
(i) making himself reasonably available for interviews and
discussions with the Company's counsel as well as for depositions and
trial testimony;
(ii) if depositions or trial testimony are to occur, making
himself reasonably available and cooperating in the preparation
therefor as and to the extent that the Company or the Company's counsel
reasonably requests;
(iii) refraining from impeding in any way the Company's
prosecution or defense of such litigation or administrative proceeding;
and
(iv) cooperating fully in the development and presentation of
the Company's prosecution or defense of such litigation or
administrative proceeding.
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(b) From and after the end of the Employment Term, Executive
shall continue to provide cooperation to the Company with respect to projects
undertaken by the Company where Executive's prior knowledge with respect to, or
prior involvement in, such or similar projects would be relevant to the
advancement of such projects; PROVIDED that such cooperation shall not require
more than twenty (20) days of Executive's time per calendar year and a
reasonable per diem fee can be agreed upon.
(c) After the end of the Employment Term, Executive shall be
reimbursed by the Company for reasonable travel, lodging, telephone and similar
expenses incurred in connection with such cooperation, which the Company shall
reasonably endeavor to schedule at times not conflicting with the reasonable
requirements of any future employer of Executive, or with the requirements of
any third party with whom Executive has a business relationship that provides
remuneration to Executive. Executive shall not unreasonably withhold his
availability for such cooperation.
15. SUCCESSORS AND BINDING AGREEMENT. (a) This Agreement
shall be binding upon and inure to the benefit of the Company and any successor
of or to the Company, including, without limitation, any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of
the Company whether by purchase, merger, consolidation, reorganization or
otherwise (and such successor shall thereafter be deemed included in the
definition of "the Company" for purposes of this Agreement), but shall not
otherwise be assignable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and none of the
parties hereto shall, without the consent of the other parties, assign, transfer
or delegate this Agreement or any rights or obligations hereunder except as
expressly provided in subparagraphs (a) and (b) of this Paragraph 15.
(d) This Agreement is intended to be for the exclusive benefit
of the parties hereto, and except as provided in subparagraphs (a) and (b) of
this Paragraph 15, no third party shall have any rights hereunder.
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16. NON-DISCLOSURE.
Except to the extent that this Agreement or the terms hereof
become publicly known or available because of legally mandated disclosure and
filing requirements of the Securities and Exchange Commission, or because of any
other legal requirement that this Agreement or the terms hereof be disclosed or
filed with a governmental instrumentality or agency, all provisions of this
Agreement and the circumstances giving rise hereto are and shall remain
confidential and shall not be disclosed to any person not a party hereto (other
than (i) Executive's spouse, (ii) each party's attorney, financial advisor
and/or tax advisor to the extent necessary for such advisor to render
appropriate legal, financial and tax advice, and (iii) persons or entities that
fall within the scope of Paragraph 12 of this Agreement, but only to the extent
required thereby), except as necessary to carry out the provisions of this
Agreement, and except as may be required by law; PROVIDED, HOWEVER, that
Executive may disclose to prospective employers the circumstances of his
retirement from the Company so long as all such disclosures are made in a manner
not injurious to the reputation or business of the Company.
17. NOTICES. For all purposes of this Agreement, all
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered, addressed to the Company (to the attention
of the Vice President of Human Resources) at its principal executive offices and
to Executive at his principal residence, 0000 Xxxxxxxxxxx Xx. (0-000), Xx.
Xxxxx, XX, 00000 or to such other address as any party may have furnished to the
other in writing and in accordance herewith. Notices of change of address shall
be effective only upon receipt.
18. PROFESSIONAL FEES. The Company and Executive acknowledge
and agree that each shall be responsible for the payment of their respective
professional fees and costs (and related disbursements) incurred in connection
with Executive's termination and resignation and all matters relating to the
negotiation and execution of this Agreement.
19. TAXES, PAYMENTS, ETC..
(a) Executive acknowledges and agrees that he shall be
responsible for his share of any and all Federal, State and/or local taxes
applicable to the payments made, and benefits provided or made available, to
Executive pursuant to this Agreement and further agrees to indemnify the Company
against any liability as a result of those taxes.
(b) The payments to Executive pursuant to Paragraphs 4, 5 and
6 of this Agreement shall be made by check or direct deposit to an account
designated by Executive, and shall be reduced by any applicable Federal, State
and local tax or other required withholding. The payments to Executive pursuant
to subparagraph 4(b) of this Agreement shall be reduced by any applicable
deductions resulting from Executive's election to participate in the Company's
medical and/or life insurance programs as described in subparagraph 4(c) of this
Agreement.
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20. MISCELLANEOUS. The death or disability of Executive
following the execution of this Agreement shall not affect or revoke this
Agreement or any of the obligations of the parties hereto. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by Executive and the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, expressed or implied with
respect to the subject matter hereof have been made by any of the parties that
are not set forth expressly in this Agreement and every one of them (if, in
fact, there have been any) is hereby terminated without liability or any other
legal effect whatsoever.
21. ENTIRE AGREEMENT. This Agreement shall constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and shall supersede all prior verbal or written agreements, covenants,
communications, understandings, commitments, representations or warranties,
whether oral or written, by any party hereto or any of its representatives
pertaining to such subject matter.
22. GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the substantive laws of
the State of Ohio, without giving effect to the principles of conflict of laws
of such state.
23. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement which shall nevertheless remain in full
force and effect.
24. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same Agreement.
25. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph
headings used herein are for convenience and are not part of this Agreement and
shall not be used in construing it.
26. FURTHER ASSURANCES. Each party hereto shall execute such
additional documents, and do such additional things, as may reasonably be
requested by the other party to effectuate the purposes and provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement on the date set forth above.
THE LINCOLN ELECTRIC COMPANY
By: /s/ XXXXXXX X. XXXXXXX
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Its: President and Chief Operating
-------------------------------
Officer, Chief Executive Officer
---------------------------------
Witness: /s/ XXXXXXX X. XXXX /s/ XXXXX XXXXXX
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Xxxxxxx X. Xxxx Xxxxx Xxxxxx
Date: December 12, 1996
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[Common Shares]
EXHIBIT A-1
THE LINCOLN ELECTRIC COMPANY
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
WHEREAS, Xxxxx Xxxxxx (the "Optionee") is an employee of The
Lincoln Electric Company (the "Company");
WHEREAS, the execution of a stock option agreement in the form
hereof has been authorized by a resolution of the Compensation Committee (the
"Committee") of the Board of Directors (the "Board") of the Company that was
duly adopted on September 24, 1996, with an effective date of October 1, 1996
(the "Date of Grant"), and is incorporated herein by this reference; and
WHEREAS, the option granted hereby is intended to be a
non-qualified 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;
NOW, THEREFORE, pursuant to the Company's 1988 Incentive
Equity Plan (the "Plan") and subject to the terms and conditions thereof and the
terms and conditions hereinafter set forth, the Company hereby grants to the
Optionee a non-qualified stock option (the "Option") to purchase 4,000 Common
Shares, without par value, of the Company (the "Common Shares"), at the exercise
price of thirty dollars ($30.00) per Common Share (the "Exercise Price").
1. VESTING OF OPTION. (a) Unless terminated as hereinafter
provided, the Option shall be exercisable after the Optionee shall have been in
the continuous employ of the Company or a Subsidiary (as defined in the Plan)
from the Date of Grant to June 30, 1997.
(b) Notwithstanding the provisions of Section 1(a)
hereof, the Option shall become immediately exercisable in full upon any change
in control of the Company that shall
15
occur while the Optionee is an employee of the Company or a Subsidiary. 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 the
Company are sold or transferred to another corporation or entity, or
the Company is merged, consolidated or reorganized into or with another
corporation or entity, with the result that upon conclusion of the
transaction less than 51 percent 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 the Company 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 percent or more of the
combined voting power of the then-outstanding voting securities of the
Company, excluding (A) any person or group of persons who are officers,
directors or employees of the Company or any Subsidiary as of the date
hereof or are related by blood or marriage to the descendants of Xxxxx
X. or Xxxx X. Xxxxxxx, 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 the Company in a public offering of the Company's
securities and any of their transferees; or
(iii) the Company 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 1 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 the
16
Company 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 the Company's 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 to have decreased to
less than 30 percent, or in the event that any anticipated change in control
referred to in Section 1(b)(iii) hereof does not occur following the filing with
the SEC of any report or proxy statement described in Section 1(b)(iii) hereof
because any contract or transaction referred to in Section 1(b)(iii) 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 to have again increased to 30 percent or more.
(c) Notwithstanding the provisions of Section 1(a)
hereof, the Option shall become immediately exercisable in full upon the death
or disability (as defined in the Plan) of the Optionee while in the employment
of the Company or any Subsidiary, or the Retirement (as defined in the Plan) of
the Optionee with the consent of the Board of Directors.
17
(d) 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.
2. TERMINATION OF OPTION. The Option shall terminate
automatically and without further notice on the earliest of the following dates:
(a) Three months after the date upon which the
Optionee ceases to be an employee of the Company or a Subsidiary, unless the
cessation of his employment (i) is a result of his or her death, Disability (as
defined in the Plan) or Retirement or (ii) occurs in a manner described in (d)
or (e) below;
(b) Three years after the date of the death or
Disability of the Optionee while an employee of the Company or a Subsidiary or
three years after the date of Retirement of the Optionee;
(c) One year after the date of the death of the
Optionee, if the Optionee dies after the termination of his 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 Optionee's employment for Cause;
(e) If the Optionee, either during employment by the
Company or after termination of such employment, does not comply with each and
every provision of the Employment and Retirement Agreement dated December 12,
1996 between the Optionee and the Company (the "ERC Agreement") applicable to
the Optionee, including, without limitation Paragraphs 9, 10, 11, 12 and 14 of
the ERC Agreement and the Board of Directors or the Compensation Committee shall
so find, the Optionee shall, forthwith upon notice of such finding, (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 prior to the date of such noncompliance or
the commencement of such noncompliance with the ERC Agreement, and (ii) with
respect to any shares so purchased that the
18
Optionee has disposed of, pay to the Company in cash the difference between (A)
the option price paid therefor by the Optionee pursuant to this Agreement, and
(B) the closing price of the Common Shares on the NASDAQ National Market on the
date of such purchase (or on the last trading day prior to such purchase, if
there was no trading on the purchase date). 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 under the ERC Agreement or for any other
reason.
(f) ten years after the Date of Grant.
For purposes of this agreement, the following term shall be
defined as set forth below:
(i) "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
and materially harmful to the business or reputation of the Company or
any Subsidiary.
3. PAYMENT OF EXERCISE PRICE. The Exercise Price shall be
payable upon exercise (a) in cash in the form of certified or bank check or
other cash equivalent acceptable to the Company, (b) by transfer to the Company
of nonforfeitable, unrestricted Common Shares or Class A Common Shares, without
par value, of the Company ("Class A Shares") that have been owned by the
Optionee for at least six months prior to the date of exercise, or (c) by any
combination of the methods of payment described in Sections 3(a) and 3(b)
hereof. Nonforfeitable, unrestricted Common Shares or Class A Shares that are
transferred by the Optionee in payment of all or any part of the Exercise Price
shall be valued on the basis of their fair market value as determined by the
Committee from time to time.
19
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 Common 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.
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, in the event of his legal
incapacity to do so, by his 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 Exercise 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 any (a) stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, (b) merger, consolidation, separation, reorganization or partial
or complete liquidation involving the Company, or (c) other transaction or event
having an effect similar to any of those referred to in Section 6(a) or 6(b)
hereof. 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.
20
7. WITHHOLDING TAXES. If the Company shall be required to
withhold any federal, state, local or foreign tax in connection with any
exercise of the Option, the Optionee shall pay the tax or make provisions that
are satisfactory to the Company for the payment thereof.
8. CONTINUOUS EMPLOYMENT. 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 the transfer of his
employment among the Company and its Subsidiaries.
9. RIGHT TO TERMINATE EMPLOYMENT. No provision of this
agreement shall limit in any way whatsoever any right that the Company or a
subsidiary may otherwise have to terminate the employment of the Optionee at any
time.
10. RELATION TO OTHER BENEFITS. Any economic or other benefit
to the Optionee under this agreement or the Plan shall not be taken into account
in determining any benefits to which the Optionee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Company or a subsidiary and shall 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.
11. 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.
12. 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.
21
13. GOVERNING LAW. This agreement is made under, and shall be
construed in accordance with, the internal substantive laws of the State of
Ohio.
This agreement is executed by the Company on this 12th day
of December, 1996.
THE LINCOLN ELECTRIC COMPANY
By /s/ XXXXXXX X. XXXXXXX
---------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Operating
Officer, Chief Executive Officer
22
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.
/s/ XXXXX XXXXXX
----------------------
Xxxxx Xxxxxx
Date: December 12, 1996
23
[Class A Shares]
EXHIBIT A-2
THE LINCOLN ELECTRIC COMPANY
Non-Qualified Stock Option Agreement
------------------------------------
WHEREAS, Xxxxx Xxxxxx (the "Optionee") is an employee of The
Lincoln Electric Company (the "Company");
WHEREAS, the execution of a stock option agreement in the form
hereof has been authorized by a resolution of the Compensation Committee (the
"Committee") of the Board of Directors (the "Board") of the Company that was
duly adopted on September 24, 1996, with an effective date of October 1, 1996
(the "Date of Grant"), and is incorporated herein by this reference; and
WHEREAS, the option granted hereby is intended to be a
non-qualified 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;
NOW, THEREFORE, pursuant to the Company's 1988 Incentive
Equity Plan (the "Plan") and subject to the terms and conditions thereof and the
terms and conditions hereinafter set forth, the Company hereby grants to the
Optionee a non-qualified stock option (the "Option") to purchase 4,000 Class A
Common Shares, without par value, of the Company (the "Class A Shares"), at the
exercise price of twenty-seven dollars and twenty-five cents ($27.25) per Class
A Share (the "Exercise Price").
1. VESTING OF OPTION. (a) Unless terminated as hereinafter
provided, the Option shall be exercisable after the Optionee shall have been in
the continuous employ of the Company or a Subsidiary (as defined in the Plan)
from the Date of Grant to June 30, 1997.
(b) Notwithstanding the provisions of Section 1(a)
hereof, the Option shall become immediately exercisable in full upon any change
in control of the Company that shall
24
occur while the Optionee is an employee of the Company or a Subsidiary. 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 the
Company are sold or transferred to another corporation or entity, or
the Company is merged, consolidated or reorganized into or with another
corporation or entity, with the result that upon conclusion of the
transaction less than 51 percent 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 the Company 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 percent or more of the
combined voting power of the then-outstanding voting securities of the
Company, excluding (A) any person or group of persons who are officers,
directors or employees of the Company or any Subsidiary as of the date
hereof or are related by blood or marriage to the descendants of Xxxxx
X. or Xxxx X. Xxxxxxx, 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 the Company in a public offering of the Company's
securities and any of their transferees; or
(iii) the Company 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 1 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 the
25
Company 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 the Company's 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 to have decreased to
less than 30 percent, or in the event that any anticipated change in control
referred to in Section 1(b)(iii) hereof does not occur following the filing with
the SEC of any report or proxy statement described in Section 1(b)(iii) hereof
because any contract or transaction referred to in Section 1(b)(iii) 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 to have again increased to 30 percent or more.
(c) Notwithstanding the provisions of Section 1(a)
hereof, the Option shall become immediately exercisable in full upon the death
or disability (as defined in the Plan) of the Optionee while in the employment
of the Company or any Subsidiary, or the Retirement (as defined in the Plan) of
the Optionee with the consent of the Board of Directors.
26
(d) 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.
2. TERMINATION OF OPTION. The Option shall terminate
automatically and without further notice on the earliest of the following dates:
(a) Three months after the date upon which the
Optionee ceases to be an employee of the Company or a Subsidiary, unless the
cessation of his employment (i) is a result of his or her death, Disability (as
defined in the Plan) or Retirement or (ii) occurs in a manner described in (d)
or (e) below;
(b) Three years after the date of the death or
Disability of the Optionee while an employee of the Company or a Subsidiary or
three years after the date of Retirement of the Optionee;
(c) One year after the date of the death of the
Optionee, if the Optionee dies after the termination of his 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 Optionee's employment for Cause;
(e) If the Optionee, either during employment by the
Company or after termination of such employment, does not comply with each and
every provision of the Employment and Retirement Agreement dated December 12,
1996 between the Optionee and the Company (the "ERC Agreement") applicable to
the Optionee, including, without limitation Paragraphs 9, 10, 11, 12 and 14 of
the ERC Agreement and the Board of Directors or the Compensation Committee shall
so find, the Optionee shall, forthwith upon notice of such finding, (i) return
to the Company, in exchange for payment by the Company of the option price paid
therefor, all the Class A Shares that the Optionee has not disposed of that were
purchased pursuant to this Agreement prior to the date of such noncompliance or
the commencement of such noncompliance with the ERC Agreement, and (ii) with
respect to any shares so purchased that the
27
Optionee has disposed of, pay to the Company in cash the difference between (A)
the option price paid therefor by the Optionee pursuant to this Agreement, and
(B) the closing price of the Class A Shares on the NASDAQ National Market on the
date of such purchase (or on the last trading day prior to such purchase, if
there was no trading on the purchase date). 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 under the ERC Agreement or for any other
reason.
(f) ten years after the Date of Grant.
For purposes of this agreement, the following term shall be
defined as set forth below:
(i) "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
and materially harmful to the business or reputation of the Company or
any Subsidiary.
3. PAYMENT OF EXERCISE PRICE. The Exercise Price shall be
payable upon exercise (a) in cash in the form of certified or bank check or
other cash equivalent acceptable to the Company, (b) by transfer to the Company
of nonforfeitable, unrestricted Common Shares, without par value, of the Company
("Common Shares") or Class A Shares that have been owned by the Optionee for at
least six months prior to the date of exercise, or (c) by any combination of the
methods of payment described in Sections 3(a) and 3(b) hereof. Nonforfeitable,
unrestricted Common Shares or Class A Shares that are transferred by the
Optionee in payment of all or any part of the Exercise Price shall be valued on
the basis of their fair market value as determined by the Committee from time to
time.
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
28
shall not be exercisable unless the Class A 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.
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, in the event of his legal
incapacity to do so, by his 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 Exercise 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 any (a) stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, (b) merger, consolidation, separation, reorganization or partial
or complete liquidation involving the Company, or (c) other transaction or event
having an effect similar to any of those referred to in Section 6(a) or 6(b)
hereof. 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.
7. WITHHOLDING TAXES. If the Company shall be required to
withhold any federal, state, local or foreign tax in connection with any
exercise of the Option, the Optionee shall pay the tax or make provisions that
are satisfactory to the Company for the payment thereof.
8. CONTINUOUS EMPLOYMENT. For purposes of this Agreement, the
continuous employ of the Optionee with the Company or a Subsidiary shall not be
deemed interrupted, and
29
the Optionee shall not be deemed to have ceased to be an employee of the Company
or any Subsidiary, by reason of the transfer of his employment among the Company
and its Subsidiaries.
9. RIGHT TO TERMINATE EMPLOYMENT. No provision of this
agreement shall limit in any way whatsoever any right that the Company or a
subsidiary may otherwise have to terminate the employment of the Optionee at any
time.
10. RELATION TO OTHER BENEFITS. Any economic or other benefit
to the Optionee under this agreement or the Plan shall not be taken into account
in determining any benefits to which the Optionee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Company or a subsidiary and shall 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.
11. 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.
12. 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.
30
13. GOVERNING LAW. This agreement is made under, and shall be
construed in accordance with, the internal substantive laws of the State of
Ohio.
This agreement is executed by the Company on this 12th day
of December, 1996.
THE LINCOLN ELECTRIC COMPANY
By /s/ XXXXXXX X. XXXXXXX
----------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Operating
Officer, Chief Executive Officer
31
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.
/s/ XXXXX XXXXXX
----------------------------
Xxxxx Xxxxxx
Date: December 12, 1996
32
EXHIBIT B
---------
RELEASE
-------
(a) In consideration of the payments made and to be made and
the benefits to be received by the undersigned (the "Executive") pursuant to
Paragraphs 5, 6 and 7 of the Employment, Retirement and Consulting Agreement
between The Lincoln Electric Company and the Executive made the 12th day of
December, 1996, the Executive, for himself and his dependents, successors,
assigns, heirs, executors and administrators (and his and their legal
representatives of every kind), hereby releases, dismisses, remises and forever
discharges The Lincoln Electric Company, its predecessors, parents,
subsidiaries, divisions, related or affiliated companies, officers, directors,
stockholders, members, employees, heirs, successors, assigns, representatives,
agents and counsel (the "Company") from any and all arbitrations, claims,
including claims for attorney's fees, demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known
or unknown, which Executive now has or may have had for, upon, or by reason of
any cause whatsoever (except that this release shall not apply to the
obligations of the Company arising under this Agreement) ("claims"), against the
Company, including but not limited to:
(i) any and all claims arising out of or relating to
Executive's employment by or service with the Company and his
termination from the Company;
(ii) any and all claims of discrimination, including
but not limited to claims of discrimination on the basis of
sex, race, age, national origin, marital status, religion or
handicap, including, specifically, but without limiting the
generality of the foregoing, any claims under the Age
Discrimination in Employment Act, as amended, Title VII of the
Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, Ohio Revised Code Section 4101.17 and Ohio
Revised Code Chapter 4112, including Sections 4112.02 and
4112.99 thereof; and
(iii) any and all claims of wrongful or unjust
discharge or breach of any contract or promise, express or
implied.
(b) Executive understands and acknowledges that the Company
does not admit any violation of law, liability or invasion of any of his rights
and that any such violation, liability or invasion is expressly denied. The
consideration provided for this Release is made for the purpose of settling and
extinguishing all claims and rights (and every other similar or dissimilar
matter) that Executive ever had or now may have against the Company to the
extent provided in this Release. Executive further agrees and acknowledges that
no representations, promises or inducements have been made by the Company other
than as appear in this Agreement.
(c) Executive further agrees and acknowledges that:
33
(i) The release provided for herein releases claims
to and including the date of this Release;
(ii) He has been advised by the Company to consult
with legal counsel prior to executing this Release, has had an
opportunity to consult with and to be advised by legal counsel
of his choice, fully understands the terms of this Release,
and enters into this Release freely, voluntarily and intending
to be bound;
(iii) He has been given a period of twenty-one (21)
days to review and consider the terms of this Release, prior
to its execution and that he may use as much of the twenty-one
(21) day period as he desires; and
(iv) He may, within seven (7) days after execution,
revoke this Release. Revocation shall be made by delivering a
written notice of revocation to the Vice President of Human
Resources at the Company. For such revocation to be effective,
written notice must be actually received by the Vice President
of Human Resources at the Company no later than the close of
business on the seventh (7th) day after Executive executes
this Release. If Executive does exercise his right to revoke
this Release, all of the terms and conditions of the Release
shall be of no force and effect and the Company shall not have
any obligation to make payments or provide benefits to
Executive as set forth in Paragraph 6 of the Employment,
Retirement and Consulting Agreement between the Company and
the Executive made the 12 day of December, 1996.
(d) Executive agrees that he will never file a lawsuit or
other complaint asserting any claim that is released in this Release.
(e) It is understood and agreed that Executive's resignation
and retirement are by mutual agreement between the Company and Executive, and
that Executive waives and releases any claim that he has or may have to
reemployment after June 30, 1997.
34
IN WITNESS WHEREOF, the Executive has executed and delivered
this Release on the date set forth below.
XXXXX XXXXXX
Witness:
-------------------------- ---------------------
Date: Date:
------------------- --------------------
35
EXHIBIT C
---------
Argentina
Australia
Brazil
Canada
Chile
China
Columbia
Czech Republic
England
France
Germany
Greece
Hungary
India
Indonesia
Ireland
Italy
Japan
Korea
Malaysia
Mexico
Netherlands
Norway
Peru
Poland
Russia
South Africa
Spain
Sweden
Taiwan
Thailand
United States
Venezuela
Vietnam
36
EXHIBIT D
---------
I. Arc Welding Machines ranging from light duty models for light
industrial and farm use to heavy duty models for commercial and
industrial use in manual, semi-automatic, automatic and robotic
welding.
II. Arc Welding Consumables: Welding rods, fluxes and wires used in light
to heavy manufacturing of mild steel, alloy and hard surface
applications; coated manual or stick electrodes; solid electrodes
produced in coil form for continuous feeding in mechanized welding;
cored electrodes produced in coil form for continuous feeding in
mechanized welding; submerged arc electrodes and fluxes; self-shielded
cored electrodes; gas-shielded solid and cored electrodes.
III. Arc Welding Power Sources and Automated Wire Feeding Systems.
IV. Integral horsepower electric motors ranging principally from 1/3 to 250
horsepower, but including cast iron motors of 1,250 horsepower.
