|LINCOLN ELECTRIC HOLDINGS INC filed this Form 8-K on 11/21/2017|
On November 16, 2017, Lincoln Electric Holdings, Inc. (the Company) entered into new Change in Control Severance Agreements (the Severance Agreements) with certain Company officers including Christopher L. Mapes, the Companys Chief Executive Officer, Vincent K. Petrella, the Companys Chief Financial Officer, and George D. Blankenship, President, Americas Welding (each, a Named Executive Officer). The form Severance Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. Currently existing severance agreements for the Named Executive Officers will be replaced and superseded by the Severance Agreements, as reflected in the form Severance Agreement. Below is a brief summary of the material terms of the form Severance Agreement.
In general, the Severance Agreements are subject to an initial term ending on December 31, 2018, but subject to one-year evergreen renewal periods absent timely notice by either party to a Severance Agreement that it does not wish to so extend the term. The Severance Agreement will also terminate at the end of the severance period described below, or generally if the officer terminates employment or is no longer serving in a tier of executives eligible to enter into the Severance Agreements. In the event of a change in control, as described below, and, unless otherwise indicated below, if the Named Executive Officers employment with the Company is terminated without cause (as defined in the Severance Agreements) or the Named Executive Officer terminates employment with the Company for good reason (as defined in the Severance Agreements) during the two-year period following the change in control (or for certain other employment terminations related to the change in control, as described in the Severance Agreements), the Company will make certain severance payments and provide certain benefits generally as follows (subject to change depending on the tier of benefits to which the officer is entitled immediately prior to the change in control):
Additionally, under the Severance Agreements, a Named Executive Officers severance payments and benefits will be paid, or may be reduced, in a manner to provide the best net after-tax position under Section 4999 and 280G of the Internal Revenue Code of 1986, as amended, and a Named Executive Officer will be required to abide by certain restrictive covenants and execute a release of claims in order to receive certain severance payments and benefits under the Severance Agreements. The Company will also maintain certain indemnification insurance with respect to the Named Executive Officer for up to five years under the Severance Agreements, and Severance Agreement amounts will be subject to the Companys clawback policies as in effect from time to time.
Under the Severance Agreements, in general, a change in control is deemed to occur upon the occurrence of any of the following events during the term of the Severance Agreement:
The Severance Agreements are not employment agreements. The Company may terminate any Named Executive Officers employment at any time, with or without cause. Similarly, a Named Executive Officer may resign at any time, with or without good reason.