THIS AMENDMENT NO.
2 TO LINCOLN ELECTRIC HOLDINGS, INC. SEVERANCE AGREEMENT (this
“Amendment”) is dated as of December ___, 2008, by and
between Lincoln Electric Holdings, Inc. (the “Company”)
and [
] (the “Executive”).
WHEREAS, the
Executive and the Company are party to a Severance Agreement dated
as of [
, ___], (as amended, the “Existing
Agreement”);
WHEREAS, the
Executive and the Company desire to amend the Existing Agreement to
make changes to comply with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended
(“Section 409A”) (the
“Code”).
NOW, THEREFORE, in
consideration of the mutual promises set forth herein and for other
good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the Executive and the Company agree
as follows:
|
1.
|
|
Section 3(b) of the Existing
Agreement is hereby replaced in its entirety with the
following:
|
|
|
|
|
|
|
|
If
the Executive terminates his employment with the Company and its
Subsidiaries for Good Reason during the Severance Period, the
Executive shall be entitled to the benefits provided by
Section 4. For purposes of this Section 3(b), Good Reason
means the occurrence of one or more of the following
events:
|
(i) A
material diminution in the Executive’s base
compensation;
(ii) A
material diminution in the Executive’s authority, duties, or
responsibilities;
(iii) A
material diminution in the authority, duties, or responsibilities
of the supervisor to whom the Executive is required to report,
including a requirement that the Executive report to a corporate
officer or employee instead of reporting directly to the
Board;
(iv) A
material diminution in the budget over which the Executive retains
authority;
(v) A
material change in the geographic location at which the Executive
must perform the services; and
(vi) Any
other action or inaction that constitutes a material breach by the
Company of the Executive’s employment agreement, if any, or
this Agreement.
|
|
|
Notwithstanding the above, a
termination of employment by the Executive for one of the reasons
set forth in clauses (i) — (vi), above, will not constitute
Good Reason unless the Executive provides, within 90 days of
the initial existence of the condition described in clauses (i)
— (vi), above, written notice to the Company of the existence
of the condition and the Company has not remedied such condition
within 30 days of the receipt of such notice.
|
|
|
|
|
|
2.
|
|
Section 4(a) of the Existing
Agreement is hereby amended by replacing the second sentence in
Section 4(a) with the following:
|
|
|
|
|
|
|
|
The
Company will pay to the Executive the amounts described in
Paragraphs (1) and (2) of Annex A within five business
days after the Termination Date or, if later, in accordance with
Section 11.
|
|
|
|
|
|
3.
|
|
Section 4(a) of the Existing
Agreement is hereby amended by adding the following proviso at the
end of the third sentence:
|
|
|
|
|
|
|
|
;
provided, however, that no payment of deferred compensation within
the meaning of Section 409A that would otherwise be made and no
benefit that constitutes deferred compensation that would otherwise
be provided upon a termination of employment shall be made or
provided, as the case may be, unless and until such termination of
employment also constitutes a separation from service (within the
meaning of Section 409A).
|
|
|
|
|
|
4.
|
|
Section 5 of the Existing
Agreement is hereby amended by adding the following additional
language as a new Section 5(h):
|
|
|
|
|
|
|
|
Any
Gross-Up Payment, as determined pursuant to this Section 5,
shall be paid by the Company as contemplated by Section 5(b);
provided that, the Gross-Up Payment shall in all events be
paid no later than the end of the Executive’s taxable year
next following the Executive’s taxable year in which the
Excise Tax (and any income or other related taxes or interest or
penalties thereon) on a Payment are remitted to the Internal
Revenue Service or any other applicable taxing authority or, in the
case of amounts relating to a claim described in Section 5(f) that
does not result in the remittance of any federal, state, local and
foreign income, excise, social security and other taxes, the
calendar year in which the claim is finally settled or otherwise
resolved. The Gross-Up Payment shall be paid to the Executive;
provided that, the Company, in its sole discretion, may
withhold and pay over to the Internal Revenue Service or any other
applicable taxing authority, for the benefit of the Executive, all
or any portion of any Gross-Up Payment, and the Executive hereby
consents to such withholding. The Company’s obligation to
make Gross-Up Payments under this Section 8 shall not be
conditioned upon the Executive’s termination of employment.
With respect to any amount o
|
|
