| | Appointment of Christopher L. Mapes as Chief Operating Officer On July 29, 2011, the Board of Directors of Lincoln Electric Holdings, Inc. (the “Company”) appointed Christopher L. Mapes as its Chief Operating Officer, effective September 1, 2011. Mr. Mapes is currently a member of the Company’s Board of Directors and will retain his seat on the Board. He will join the Company’s Management Committee. As Chief Operating Officer, Mr. Mapes will have responsibility for all of the Company’s businesses, including North American, International and Harris Products Group, with presidents of those units reporting to him. He will also take on responsibility for the Company’s global product development initiatives. Mr. Mapes is currently Executive Vice President of the A.O. Smith Corporation, a global manufacturer of water heating and water treatment technologies and electric motor and motor solutions, and President of its Electrical Products unit, a position he has held since 2004. He holds a Bachelor of Science degree from Ball State University, a law degree from The University of Toledo and an MBA from Northwestern University’s Kellogg Graduate School of Management. Mr. Mapes is 49. Under the terms of his appointment, Mr. Mapes will have a base salary of $510,000 and his annual bonus target under the Company’s Management Incentive Plan (“MIP”) is $500,000. For the three-year cycle covering the years 2011-2013, the combined value of his long-term compensation will be $855,000, composed of one-third stock options (valued at approximately $285,000), one-third restricted stock units (valued at approximately $285,000) and one-third cash ($285,000) under the 2011-2013 Cash Long-Term Incentive Plan (“Cash LTIP”). The stock options vest over a three-year period. The restricted stock units vest over a five-year period, subject to accelerated vesting in three years if the Company meets certain performance targets under the 2011-2013 Cash LTIP. Mr. Mapes will also receive pro-rata portions of a full award for long-term compensation for the 2009-2011 and 2010-2012 three-year cycles. These awards are estimated to be valued at approximately $475,000 and will be composed of one-third stock options, one-third restricted stock units and one-third cash under the Cash LTIP, with vesting of the equity awards similar to the terms as outlined above. Mr. Mapes will also receive, upon his start date, a special retirement replacement award of restricted stock units valued at $1,650,000, which will vest at a rate of 20% per year for each of the next five years. These awards will not be eligible for accelerated vesting upon the achievement of financial targets under the Cash LTIP. Mr. Mapes will be eligible to elect to defer all or a portion of his restricted stock units under the Company’s 2005 Deferred Compensation Plan for Executives, as further detailed below. Mr. Mapes will enter into a standard change in control agreement for officers, entitling him to 24 months of total cash compensation in the event of a qualifying termination of employment following a change in control event. A copy of the Company’s press release announcing the appointment of Mr. Mapes as Chief Operating Officer is attached to this report as Exhibit 99.1 and is incorporated herein by reference and made a part hereof. |
