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EXHIBIT 10(G)
February 22, 1995
Frederick G. Stueber, Esq.
2253 Delamere Drive
Cleveland Heights, Ohio 44106
Dear Fred:
It is with pleasure that we extend to you an offer to join The Lincoln
Electric Company. Your position would be Vice President, General Counsel and
Secretary and you would report to me.
Your compensation will include an annual base salary of $200,000, payable
according to our standard payroll schedule. Such salary will be subject to our
normal area wage index, except for any periods during which the then current
indexed salary would be reduced. For such periods, the salary paid will be
unchanged until the multiplier causes the indexed salary to exceed the salary
being paid.
The monthly premiums for basic medical insurance as offered to Lincoln
employees generally will be paid by the Company. All employees of the Company,
unless they are on a spousal waiver, may select from one of the following plans:
(Super Blue) Blue Cross/Blue Shield, QualChoice, HMO Health Ohio, or Kaiser. At
the present time, the monthly premiums for family plans vary from $367.84 to
$462.24 depending on the plan selected.
The Lincoln Electric Company will provide you with $10,000 of term life
insurance. You may optionally subscribe to an additional $40,000 of term life at
your expense and at a rate available to other Lincoln Electric employees. Our
employees pay the accidental death and dismemberment provision of the
company-paid life insurance, as well as any contributory insurance. In your case
this would amount to $18.50 per month in the form of a payroll deduction. You
will also be included in a $750,000 accidental death insurance program, with
lesser payments for other consequences as a result of an accident.
You will participate in the Lincoln Electric retirement annuity program in
the same manner as other employees of the Company. Additionally, you will
participate in a non-qualified, non-funded Supplemental Executive Retirement
Plan (SERP), which includes an accrual opportunity for forty years of service
with the Company and normal retirement at age 65 or later. In this regard, we
will credit you with seventeen years at your starting date. The plan is designed
to provide at age 65, 65 percent of the average income of the three best years
out of the previous seven. The 65 percent will be made up of: our qualified
plan, social security and retirement benefits under any retirement or annuity
program provided by previous employers (but not including self-employment) and
our non-qualified plan. The applicable terms and conditions of the Plan, as
approved by the Board of Directors in September 1994, will be made available to
you.
We will also credit you with the same seventeen year period referenced
above for purposes of the Company's vacation program. Normally, we provide two
weeks of paid vacation after one year of full time employment, three weeks after
thirteen years, four weeks after twenty years, and five weeks after twenty-five
years. Thus, you will be entitled to three weeks of vacation during your first
year. The seventeen years' credit relating to the Supplemental Executive
Retirement Plan and vacation schedule will also be credited to all other
applicable benefit programs (excluding Quarter Century Club membership and
service pin entitlements).
You will be eligible to participate in the Company Employee Stock Purchase
Plan and ESOP in the same manner as other qualified Lincoln Electric employees,
i.e., any service and eligibility requirements shall be deemed satisfied from
the first day of employment. You will also be eligible to participate in the
recently adopted 401(k) plan and top-hat deferred compensation plan each in
accordance with its terms.
You have indicated that the ability to participate meaningfully in equity
ownership plans is an important term of your employment, and you will receive an
initial award of 2,500 shares of Restricted Stock under the Company's 1988
Incentive Equity Plan. The award will vest in installments of 25 percent each on
the third
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through sixth anniversaries of your employment date and will be on the other
terms contained in the form of award agreement attached as Appendix A.
Although the Company will not be obligated to continue your employment for
any period, you will be entitled to severance pay if the Company terminates your
employment without cause. "Cause" for purposes of this paragraph means
commission of an act that constitutes a felony. The amount of severance pay will
be equal to three times your base salary as in effect at the time of termination
(increased by any bonus paid in the preceding year) if that termination occurs
before the Restricted Stock is fully vested. Thereafter, through your tenth
anniversary, the amount of severance pay will be equal to your base salary as in
effect at the time of termination (increased by any bonus paid in the preceding
year). However, any amount payable will be subject to reduction as necessary so
that no amount you receive from the Company will be subject to the excise tax
imposed on "parachute payments" by Section 4999 of the Internal Revenue Code.
This severance pay arrangement will also apply if there is a Change in Control
(as defined in the attached form of Restricted Stock Agreement) of the Company
and your employment is terminated before the tenth anniversary of your
employment date, but only if your employment is terminated by the Company or its
successor without cause (as defined above) or if you decide to terminate your
employment because of a significant reduction in your compensation, position or
duties or because the principal location of your work is moved more than 25
miles from Cleveland.
Should the Board of Directors decide in the future that other change in
control provisions are necessary in certain employment agreements to ensure
continuity of management, you will be considered a key officer for possible
inclusion in lieu of the foregoing arrangement if you so desire. You will also
be entitled to the benefits of the Company's standard Indemnification Agreement
for officers in the form attached as Appendix B.
On or before your second anniversary with Lincoln, we will review with you
the terms of your employment for the purpose of developing a new base salary and
incentive compensation package that is consistent with the incentive policies
applicable to Lincoln Electric officers and employees generally. At that time,
it will be determined whether it would be appropriate for you to join in the
Lincoln cash bonus program that is available to other employees or participate
in some other incentive compensation arrangement. Our expectation is that we
would work out a new overall compensation package, but that your total expected
cash compensation at that point will be at least equal to your then existing
base salary. If you join the bonus program at that time, medical insurance will
cease to be paid by the Company; rather, the cost will be deducted from your
bonus, as is the case with our employees who receive a bonus who are not
otherwise covered by a spousal waiver.
You have indicated that your ability to perform as an effective General
Counsel will be facilitated by the availability of various support services that
are itemized on Appendix C. The Company agrees with your assessment and
authorizes you, effective upon your employment, to arrange for such services.
Naturally, this offer of employment is subject to approval of its terms by
the Compensation Committee and to action by the Board of Directors electing you
to the offices specified above. It is contemplated that your employment would
begin upon receipt of these approvals in February and that the award of
Restricted Stock and Indemnification Agreement would thereupon be immediately
effective.
We look forward to a long and productive relationship.
Sincerely,
Chairman and Chief Executive Officer
ACCEPTED:
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Date
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APPENDIX C
LEGAL SUPPORT SERVICES
1. The employment of a legal secretary who meets both the standards of the
General Counsel as well as prevailing Company standards. Approximate base
salary of $30,000, with two weeks paid vacation.
2. Adequate LAN word processing and computer systems for in-house lawyers,
compatible with existing Company systems and reasonably priced.
3. The employment, at a competitive rate, of at least one additional part-time
lawyer, experienced in private practice, to facilitate efficient in-house
services.
4. Funds to provide basic in-house reference materials, as determined by the
General Counsel.
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APPENDIX A
THE LINCOLN ELECTRIC COMPANY
RESTRICTED STOCK AGREEMENT
WHEREAS, Frederick G. Stueber (hereinafter called the "Grantee") is a key
employee of The Lincoln Electric Company, (hereinafter called the "Company");
and
WHEREAS, this award of Restricted Stock to the Grantee pursuant to the
Company's 1988 Incentive Equity Plan (the "Plan") and the execution of a
Restricted Stock Agreement (hereinafter called the "Agreement") substantially in
the form hereof were authorized previously by the Compensation Committee of the
Company's Board of Directors, effective on the date of execution (the "Date of
Grant").
NOW, THEREFORE, the Company, pursuant to its 1988 Incentive Equity Plan
(the "Plan"), has this day granted (the "Date of Grant") to the Grantee, a total
of Two Thousand Five Hundred (2,500) shares of Common Stock, without par value
("Common Stock"), of the Company subject to the terms and conditions of the Plan
and the following terms, conditions, limitations and restrictions:
1. The Common Stock subject to this grant shall be fully paid and
nonassessable and shall be represented by a certificate or certificates
registered in the Grantee's name, endorsed with an appropriate legend referring
to the restrictions hereinafter set forth. The Grantee shall have all the rights
of a stockholder with respect to such stock, including the right to vote the
stock and to receive all dividends paid thereon, provided that such stock,
together with any additional stock which the Grantee may become entitled to
receive by virtue of a stock dividend, a merger or reorganization in which the
Company is the surviving company or any other change in the capital structure
shall be subject to the restrictions hereinafter set forth. As long as any of
the shares of Common Stock subject to this grant are subject to the risk of
forfeiture referred to in Section 2 hereof, the Company may, at its option,
require the Grantee to exchange any of the shares received pursuant to this
Agreement (together with any such additional shares) for shares of any other
class of common equity of the Company having the same aggregate fair market
value.
2. The Common Stock subject to this grant shall be subject to forfeiture in
the event of the termination of the Grantee's employment with the Company. Such
risk of forfeiture shall lapse as to one fourth of the Shares of Common Stock
covered hereby upon the third, fourth, fifth and sixth anniversaries of the Date
of Grant. Shares of Common Stock that are subject to such risk of forfeiture may
not be sold, exchanged, assigned, transferred, pledged or otherwise disposed of
by the Grantee except to the Company. Any purported transfer in violation of the
provisions of this section shall be void, and the purported transferee shall
obtain no rights with respect to such stock.
3. If the Grantee's employment with the Company is terminated before the
sixth anniversary of the Date of Grant other than as a result of the Grantee's
death or disability, the shares of Common Stock subject to this grant with
respect to which the restrictions referred to in Section 2 hereof remain in
effect shall be forfeited to the Company. If the Grantee's employment with the
Company is terminated before the sixth anniversary of the Date of Grant as a
result of the Grantee's death or Disability, the restrictions referred to in
Section 2 hereof shall immediately thereupon lapse and terminate.
4. During the period in which the transferability and forfeiture
restrictions provided in Section 2 hereof are in effect, the certificates
representing the Common Stock covered by this grant shall be retained by the
Company, together with the accompanying stock power signed by the Grantee and
endorsed in blank.
5. In the event of a "Change in Control" as hereinafter defined, the
restrictions on the Common Stock subject to this grant provided in Section 2
hereof shall thereupon lapse and terminate. For the purposes of this section, a
Change in Control shall occur upon the happening of any of the following events:
(a) The Company is merged or consolidated or reorganized into or with
another company or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the
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combined voting power of the then-outstanding securities of such company or
person immediately after such transaction is held in the aggregate by the
holders of the then outstanding securities entitled to vote generally in
election of the directors of the Company ("Voting Stock") of the Company
immediately prior to such transaction;
(b) The Company sells or otherwise transfers all or substantially all
of its assets to any other company or other legal person, and as a result
of such sale or transfer less than a majority of the combined voting power
of the then-outstanding securities of such company or person immediately
after such sale or transfer is held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such sale or transfer; or
(c) Any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding capital stock of the Company having voting power in the
general election of directors, excluding (i) 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 James F. or John C. Lincoln, including any trusts or similar
arrangements for any of the foregoing and any foundations established by
any of the foregoing and (ii) 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.
6. The Grantee hereby acknowledges that federal and state income, payroll
or other applicable taxes may apply with respect to this grant. If the Company
determines, in its sole discretion, that withholding is required, the Grantee
agrees by the acceptance of this grant that such withholding may be accomplished
through withholding from the cash compensation due to the Grantee from the
Company an amount sufficient to satisfy the full withholding obligation. If
withholding pursuant to the foregoing sentence is insufficient (in the sole
judgment of the Company) to satisfy the full withholding obligation, the Grantee
agrees that either (a) the Grantee will pay over to the Company the amount of
cash necessary to satisfy such remaining withholding obligation by the time
thereafter specified in writing by the Company, or (b) the Company may retain
such number of shares of Common Stock covered by this grant as shall be equal in
value to the amount of the remaining withholding obligation. Upon due notice
from the Grantee, the Company may (in its discretion) satisfy the entire
withholding obligation by retaining stock as provided in (b) above in lieu of
withholding from the Grantee's cash compensation.
7. For purposes of this Agreement, the employment of the Grantee with the
Company shall not be deemed interrupted, and the Grantee shall not be deemed to
have ceased to be an employee of the Company, by reason of the transfer of his
or her employment among the Company and its Subsidiaries.
8. Nothing contained in this Agreement shall limit whatever right the
Company or a Subsidiary might otherwise have to terminate the employment of the
Grantee.
9. Any economic or other benefit to the Grantee under this Agreement or the
Plan shall not be taken into account in determining any benefits to which the
Grantee 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.
10. 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 Grantee with
respect to the shares of Common Stock or other securities covered by this
Agreement without the Grantee's consent.
11. 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.
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12. This Agreement is made under, and shall be construed in accordance
with, the internal substantive laws of the State of Ohio.
13. This Agreement is subject to the terms and conditions of the Plan.
Capitalized terms used herein without definition shall have the meanings
assigned to them in the Plan.
EXECUTED as of the 22nd day of February, 1995.
THE LINCOLN ELECTRIC COMPANY
By: ________________________
Title:
The undersigned Grantee hereby acknowledges receipt of an executed original
of this Restricted Stock Agreement and accepts the Restricted Stock granted
thereunder.
Dated: __________________________ ____________________________
(Grantee)
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EXHIBIT B TO THIS AGREEMENT IS THE FORM OF INDEMNIFICATION AGREEMENT SUBMITTED
HEREWITH AS EXHIBIT 10(B) AND HAS NOT BEEN REFILED WITH THIS AGREEMENT.
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