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EXHIBIT 10(k)
March 7, 2000
Mr. Anthony A. Massaro
1030 Hillcreek Lane
Gates Mills, OH 44040
Re: Supplemental Retirement, Retention and Termination Benefits
Dear Tony:
This letter supercedes in its entirety the letter of
employment dated July 14, 1993, as amended May 26, 1998, by and between The
Lincoln Electric Company ("LEI") and you, which specified the terms of your
employment with LEI. This letter sets forth the supplemental retirement,
retention and termination benefits that the Compensation and Executive
Development Committee of the Board of Directors of Lincoln Electric Holdings,
Inc. (the "Company"), the parent of LEI, have determined will be provided to
you. All other terms and conditions of your employment with the Company,
including base salary, annual bonus and long-term compensation shall be
determined by the Company, through its Compensation and Executive Development
Committee.
You will participate in The Lincoln Electric Company
Retirement Annuity Program in the same manner as other employees of the
Company. Additionally, you will participate in The Lincoln Electric Company
Supplemental Executive Retirement Plan (the "SERP"), which provides a full
benefit after forty-five years of service with the Company and a normal
retirement age of 60. In this regard, the Company has credited you with
twenty-nine years of service under the SERP at your employment starting date of
August 1, 1993. Your "participation factor" under the SERP is 1.0, and the
annual benefit limit under the SERP will not apply in your case. The SERP will
become payable if the Company terminates your employment for reasons other than
Termination for Cause (as defined in the SERP), in which case the payment
amount, if paid prior to age 65 will be at 61% through 1999, rising one
percentage point each following year until it reaches 65%, with a reduction for
service short of forty-five years based upon multiplying the payable amount by
the ratio of qualified service to forty-five years, and actuarially reduced
based on age; provided, however, that the payment amount will instead be
determined under the provisions of the SERP (with the standard reductions
provided under the SERP) if such determination results in a higher payment. It
is understood that should you voluntarily leave the Company prior to age 60
without the approval of the Compensation and Executive Development Committee,
no entitlement to the SERP exists. In the event of your voluntary retirement
prior to age 60, approval of the Compensation and Executive Development
Committee will not be unreasonably withheld. Except as otherwise modified
above, the terms of the SERP will govern your benefits under the SERP.
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Mr. Anthony A. Massaro
March 7, 2000
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The Company agrees to pay to you (as provided below) the following
Retention Benefit amounts, provided that you are employed by the Company as of
the vesting date set forth next to such amount, (unless pro rating of payments
is applied as noted below, in which case the vesting date is the termination
date) and provided, further, that the Company does not terminate your
employment in a Termination for Cause:
RETENTION BENEFIT CUMULATIVE VESTED
VESTING DATE VESTING LEVELS RETENTION BENEFIT
- ------------ -------------- -----------------
December 31, 2000 $ 400,000 $ 400,000
December 31, 2001 400,000 800,000
December 31, 2002 400,000 1,200,000
December 31, 2003 400,000 1,600,000
December 31, 2004 400,000 2,000,000
Notwithstanding anything to the contrary in the SERP, the Retention Benefits
provided in this paragraph shall not be included in your Final Average Pay (as
determined in the SERP) for the purposes of determining your benefits under the
SERP.
At the end of each calendar quarter, an amount of $100,000
shall be credited to your account under the Company's Deferred Compensation
Plan as an "Employment Agreement Contribution" (as defined in the Deferred
Compensation Plan). Such account shall be credited at the end of each quarter
with interest at the prime rate as in effect from time to time. The Retention
Benefits credited pursuant to Employment Agreement Contributions shall be paid
in accordance with the terms of the Deferred Compensation Plan. In the event
that your employment with the Company is terminated for any reason before
December 31, 2004, you will forfeit all Retention Benefits that are not vested
in accordance with the foregoing schedule.
If the Company terminates your employment for reason other
than Termination for Cause, or if you terminate your employment with the
Company for Good Reason, or upon your retirement, disability or death, you (or
your beneficiaries or estate, as the case may be) will receive a pro rata
payment of the Retention Benefit attributable to the year of such termination.
Such pro rata payment will be determined by multiplying the Retention Benefit
for the year of termination by a fraction, the numerator of which is the number
of full completed days in such year through the effective date of termination,
and the denominator of which is 365.
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Mr. Anthony A. Massaro
March 7, 2000
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If the Company terminates your employment for any reason
other than Termination for Cause, or if you terminate for Good Reason, you will
receive a lump sum severance payment equal to two years' then base salary plus
annual bonus at target.
For purposes of this letter, "Termination for Cause" shall
have the same meaning as provided in the SERP, and "Good Reason" means, without
your prior written consent, a significant adverse change in the nature or scope
of your duties with the Company, including failure to re-elect you as Chief
Executive Officer.
Very truly yours,
/s/ Edward E. Hood, Jr.
Edward E. Hood, Jr.
Chairman, Compensation and
Executive Development Committee
ACCEPTED:
/s/ Anthony A. Massaro
Anthony A. Massaro
March 8, 2000
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