LINCOLN ELECTRIC HOLDINGS INC (Form: 10-K, Received: 02/24/2017 16:18:26)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2016		Commission file number 0-1402

LINCOLN ELECTRIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



Ohio		34-1860551
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22801 St. Clair Avenue, Cleveland, Ohio		44117
(Address of principal executive offices)		(Zip Code)

(216) 481-8100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Common Shares, without par value		The NASDAQ Stock Market LLC
(Title of each class)		(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



þ Large accelerated filer	¨ Accelerated filer	¨ Non-accelerated filer (Do not check if a smaller reporting company)	¨ Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the common shares held by non-affiliates as of June 30, 2016 was $3,870,351,360 (affiliates, for this purpose, have been deemed to be Directors and Executive Officers of the Company and certain significant shareholders).

The number of shares outstanding of the registrant's common shares as of January 31, 2017 was 65,702,072 .

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Annual Report on Form 10-K incorporates by reference certain information from the registrant's definitive proxy statement with respect to the registrant's 2017 Annual Meeting of Shareholders.

PART I

ITEM 1. BUSINESS

General

As used in this Annual Report on Form 10-K, the term "Company," except as otherwise indicated by the context, means Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest. The Lincoln Electric Company began operations in 1895 and was incorporated under the laws of the State of Ohio in 1906. During 1998, The Lincoln Electric Company reorganized into a holding company structure, and Lincoln Electric Holdings, Inc. became the publicly-held parent of Lincoln Electric subsidiaries worldwide, including The Lincoln Electric Company.

The Company is one of only a few worldwide broad-line manufacturers of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes computer numeric controlled ("CNC") plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.

The arc welding power sources and wire feeding systems manufactured by the Company range in technology from basic units used for light manufacturing and maintenance to highly sophisticated robotic applications for high volume production welding and fabrication. Three primary types of arc welding electrodes are produced: (1) coated manual or stick electrodes; (2) solid electrodes produced in coil, reel or drum forms for continuous feeding in mechanized welding; and (3) cored electrodes produced in coil form for continuous feeding in mechanized welding.

The Company has, through wholly-owned subsidiaries or joint ventures, manufacturing facilities located in the United States, Australia, Brazil, Canada, China, Colombia, France, Germany, India, Indonesia, Italy, Mexico, the Netherlands, Poland, Portugal, Russia, Turkey, the United Kingdom and Venezuela.

As of December 31, 2016, the Company's business units were aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company's global cutting, soldering and brazing businesses as well as the retail business in the United States. See Note 5 to the Company's consolidated financial statements for segment and geographic area information, which is incorporated herein by reference.

Customers

The Company's products are sold in both domestic and international markets. In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products. Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company's various manufacturing sites to distributors and product users.

The Company's major end-user markets include:


•	general metal fabrication,


•	power generation and process industry,


•	structural steel construction (buildings and bridges),


•	heavy equipment fabrication (farming, mining and rail),


•	shipbuilding,


•	automotive,


•	pipe mills and pipelines, and


•	offshore oil and gas exploration and extraction.

The Company is not dependent on a single customer or a few customers and no individual customer currently accounts for more than ten percent of total Net sales. However, the loss of a large customer could have an adverse effect on the Company's business. The Company's operating results are sensitive to changes in general economic conditions. The arc welding and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and is cyclical in nature. Overall demand for arc welding and cutting products is largely determined by economic cycles and the level of capital spending in manufacturing and other industrial sectors. The Company experiences some variability in reported period-to-period results as demand for the Company's products are mildly seasonal with generally higher demand in the second and third quarters. See "Item 1A. Risk Factors" for further discussion regarding risks associated with customers, general economic conditions and demand.

Competition

Conditions in the arc welding and cutting industry are highly competitive. The Company believes it is the world's largest manufacturer of consumables and equipment with relatively few major broad-line competitors worldwide, but numerous smaller competitors in specific geographic markets. The Company continues to pursue strategies to heighten its competitiveness in domestic and international markets, which includes positioning low cost manufacturing facilities in most geographical markets. Competition in the arc welding and cutting industry is based on brand preference, product quality, price, performance, warranty, delivery, service and technical support. The Company believes its performance against these factors has contributed to the Company's position as the leader in the industry.

Most of the Company's products may be classified as standard commercial articles and are manufactured for stock. The Company believes it has a competitive advantage in the marketplace because of its highly trained technical sales force and the support of its welding research and development staff to assist customers in optimizing their welding applications. This allows the Company to introduce its products to new users and to establish and maintain close relationships with its customers. This close relationship between the technical sales force and the direct customers, together with its supportive relationship with its distributors, who are particularly interested in handling the broad range of the Company's products, is an important element of the Company's market success and a valuable asset of the Company.

Raw Materials

The principal raw materials essential to the Company's business are steel, electronic components, engines, brass, copper, silver, aluminum alloys and various chemicals, all of which are normally available for purchase in the open market.

Patents and Trademarks

The Company holds many valuable patents, primarily in arc welding, and actively protects its innovations as research and development has progressed in both the United States and major international jurisdictions. The Company believes its trademarks are an important asset and aggressively pursues brand management.

Environmental Regulations

The Company's facilities are subject to environmental regulations. To date, compliance with these environmental regulations has not had a material adverse effect on the Company's earnings. The Company is ISO 14001 certified at most significant manufacturing facilities in North America and Europe and is progressing towards certification at its remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 38 facilities worldwide.

International Operations

The Company conducts a significant amount of its business and has a number of operating facilities in countries outside the United States. As a result, the Company is subject to business risks inherent to non-U.S. activities, including political uncertainty, import and export limitations, exchange controls and currency fluctuations.

Research and Development

Research activities, which the Company believes provide a competitive advantage, relate to the development of new products and the improvement of existing products. Research activities are Company-sponsored. Refer to Note 1 to the Company's consolidated financial statements with respect to total costs of research and development, which is incorporated herein by reference.

Employees

The number of persons employed by the Company worldwide at December 31, 2016 was approximately 9,000 . See "Part I, Item 1C" for information regarding the Company's executive officers, which is incorporated herein by reference.

Website Access

The Company's website, www.lincolnelectric.com, is used as a channel for routine distribution of important information, including news releases and financial information. The Company posts its filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, including annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K; proxy statements; and any amendments to those reports or statements. The Company also posts its Code of Corporate Conduct and Ethics on its website. All such postings and filings are available on the Company's website free of charge. In addition, this website allows investors and other interested persons to sign up to automatically receive e-mail alerts when news releases and financial information is posted on the website. The SEC also maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Annual Report unless expressly noted.

ITEM 1A. RISK FACTORS

From time to time, information we provide, statements by our employees or information included in our filings with the SEC may contain forward-looking statements that are not historical facts. Those statements are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "guidance" or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company's operating results. Forward-looking statements, and our future performance, operating results, financial position and liquidity, are subject to a variety of factors that could materially affect results, including those risks described below. Forward-looking statements made in this report speak only as of the date of the statement, and, except as required by law, we undertake no obligation to update those statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

In the ordinary course of our business, we face various strategic, operating, compliance and financial risks. These risks could have a material impact on our business, financial condition, operating results and cash flows. Our Enterprise Risk Management ("ERM") process seeks to identify and address significant risks. Our ERM process is a company-wide initiative that is designed with the intent of prioritizing risks and allocating appropriate resources to address such risks. We use the integrated risk framework of the Committee of Sponsoring Organizations to assess, manage and monitor risks.

Management has identified and prioritized critical risks based on the severity and likelihood of each risk and assigned an executive to address each major identified risk area and lead action plans to monitor and mitigate risks, where possible. Our Board of Directors provides oversight of the ERM process and systematically reviews identified critical risks. The Audit Committee also reviews major financial risk exposures and the steps management has taken to monitor and control them.

Our goal is to pro-actively manage risks in a structured approach and in conjunction with the strategic planning process, with the intent to preserve and enhance shareholder value. However, these and other risks and uncertainties could cause our results to vary materially from recent results or from our anticipated future results. The risk factors and uncertainties described below, together with information incorporated by reference or otherwise included elsewhere in this Annual Report on Form 10-K, should be carefully considered. Additional risks and uncertainties of which we are currently unaware or that we currently believe to be immaterial may also adversely affect our business.

General economic and market conditions may adversely affect our financial condition, results of operations and access to capital markets.

Our operating results are sensitive to changes in general economic conditions. Recessionary economic cycles, higher interest rates, inflation, higher labor costs, trade barriers in the world markets, financial turmoil related to sovereign debt and changes in tax laws or trade laws or other economic factors affecting the countries and industries in which we do business could adversely affect demand for our products. An adverse change in demand could impact our results of operations, collection of accounts receivable and our expected cash flow generation from current and acquired businesses, which may adversely impact our financial condition and access to capital markets.

Economic and supply disruptions associated with events beyond our control, such as war, acts of terror, political unrest, pandemic, labor disputes or natural disasters could adversely affect our supply chain and distribution channels or result in loss of sales and customers.

Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, political unrest, pandemic, labor disputes or natural disasters. Any such disruption could cause delays in the production and distribution of our products and the loss of sales and customers. Insurance proceeds may not adequately compensate the Company for the losses.

Availability of and volatility in energy costs or raw material prices may adversely affect our performance.

In the normal course of business, we are exposed to market risks related to the availability of and price fluctuations in the purchase of energy and commodities used in the manufacture of our products (primarily steel, brass, copper, silver, aluminum alloys, electronic components, electricity and natural gas). The availability and prices for energy costs and raw materials, including steel, nonferrous metals and chemicals, are subject to volatility and are influenced by worldwide economic conditions, speculative action, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, our competitors' production costs, anticipated or perceived shortages and other factors.

Increases in the cost of raw materials and components may adversely affect our profitability if we are unable to pass along to our customers these cost increases in the form of price increases or otherwise reduce our cost of goods sold. Although most of the raw materials and components used in our products are commercially available from a number of sources and in adequate supply, any disruption in the availability of such raw materials and components, our inability to timely or otherwise obtain substitutes for such items, or any deterioration in our relationships with or the financial viability of our suppliers could adversely affect our business.

We are a co-defendant in litigation alleging asbestos induced illness. Liabilities relating to such litigation could reduce our profitability and impair our financial condition.

As of December 31, 2016 , we were a co-defendant in cases alleging asbestos induced illness involving claims by approximately 5,954 plaintiffs. In each instance, we are one of a large number of defendants. The asbestos claimants allege that exposure to asbestos contained in welding consumables caused the plaintiffs to develop adverse pulmonary diseases, including mesothelioma and other lung cancers.

Since January 1, 1995, we have been a co-defendant in asbestos cases that have been resolved as follows: 52,281 of those claims were dismissed, 22 were tried to defense verdicts, seven were tried to plaintiff verdicts (one of which was vacated on appeal), one was resolved by agreement for an immaterial amount and 768 were decided in favor of the Company following summary judgment motions.

The long-term impact of the asbestos loss contingency, in the aggregate, on operating results, operating cash flows and access to capital markets is difficult to assess, particularly since claims are in many different stages of development and we benefit significantly from cost-sharing with co-defendants and insurance carriers. While we intend to contest these lawsuits vigorously, and believe we have applicable insurance relating to these claims, there are several risks and uncertainties that may affect our liability for personal injury claims relating to exposure to asbestos, including the future impact of changing cost sharing arrangements or a change in our overall trial experience.

Asbestos use in welding consumables in the U.S. ceased in 1981.

We may incur material losses and costs as a result of product liability claims that may be brought against us.

Our business exposes us to potential product liability risks that are inherent in the design, manufacture, sale and application of our products and the products of third-party suppliers that we utilize or resell. Our products are used in a variety of applications, including infrastructure projects such as oil and gas pipelines and platforms, buildings, bridges and power generation facilities, the manufacture of transportation and heavy equipment and machinery and various other construction projects. We face risk of exposure to product liability claims in the event that accidents or failures on these projects result, or are alleged to result, in bodily injury or property damage. Further, our products are designed for use in specific applications, and if a product is used inappropriately, personal injury or property damage may result.

The occurrence of defects in or failures of our products, or the misuse of our products in specific applications, could cause termination of customer contracts, increased costs and losses to us, our customers and other end users. We cannot be assured that we will not experience any material product liability losses in the future or that we will not incur significant costs to defend those claims. Further, we cannot be assured that our product liability insurance coverage will be adequate for any liabilities that we may ultimately incur or that product liability insurance will continue to be available on terms acceptable to us. Even if we are successful defending such claims or product liability coverage is adequate, claims of this nature could cause customers to lose confidence in our products and our company. Warranty claims are not generally covered by insurance and we may incur significant warranty costs in the future for which we would not be reimbursed.

The cyclical nature and maturity of the arc welding and cutting industry in developed markets may adversely affect our performance.

The arc welding and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and is cyclical in nature. Overall demand for arc welding and cutting products is largely determined by the level of capital spending in manufacturing and other industrial sectors, and the welding industry has historically experienced contraction during periods of slowing industrial activity. If economic, business and industry conditions deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our products, our revenues and our results of operations.

We may not be able to complete our acquisition or divestiture strategies, successfully integrate acquired businesses and in certain cases we may be required to retain liabilities for certain matters.

Part of our business strategy is to pursue targeted business acquisition opportunities, including foreign investment opportunities. We cannot be certain that we will be successful in pursuing potential acquisition candidates or that the consequences of any acquisition would be beneficial to us. Future acquisitions may expose us to unexpected liabilities and involve the expenditure of significant funds and management time. Further, we may not be able to successfully integrate an acquired business with our existing businesses or recognize the expected benefits from any completed acquisition.

Depending on the nature, size and timing of future acquisitions, we may be required to raise additional financing, which may not be available to us on acceptable terms. Our current operational cash flow is sufficient to fund our current acquisition plans, but a significant acquisition could require access to the capital markets.

Additionally, from time to time we may identify assets for strategic divestitures that would increase capital resources available for other activities and create organizational and operational efficiencies. Various factors could materially affect our ability to dispose of such assets or complete announced divestitures, including the receipt of approvals of governmental agencies or third parties and the availability of purchasers willing to acquire the interests or purchase the assets on terms and at prices acceptable to us.

Sellers typically retain certain liabilities or indemnify buyers for certain matters. The magnitude of any such retained liability or indemnification obligation may be difficult to quantify at the time of the transaction and ultimately may be material. Also, as is typical in divestitures, third parties may be unwilling to release us from guarantees or other credit support provided prior to the sale of the divested assets. As a result, after a divestiture, we may remain secondarily liable for the obligations guaranteed or supported to the extent that the buyer of the assets fails to perform these obligations.

If we cannot continue to develop, manufacture and market products that meet customer demands, continue to enforce the intellectual property rights on which our business depends or if third parties assert that we violate their intellectual property rights, our revenues, gross margins and results of operations may suffer.

Our continued success depends, in part, on our ability to continue to meet our customers' needs for welding and cutting products through the introduction of innovative new products and the enhancement of existing product design and performance characteristics. We must remain committed to product research and development and customer service in order to remain competitive. We cannot be assured that new products or product improvements, once developed, will meet with customer acceptance and contribute positively to our operating results, or that we will be able to continue our product development efforts at a pace to sustain future growth. Further, we may lose customers to our competitors if they demonstrate product design, development or manufacturing capabilities superior to ours.

We rely upon patent, trademark, copyright and trade secret laws in the United States and similar laws in foreign countries, as well as agreements with our employees, customers, suppliers and other third parties, to establish and maintain our intellectual property rights. However, any of our intellectual property rights could be challenged, invalidated or circumvented, or our intellectual property rights may not be sufficient to provide a competitive advantage. Further, the laws and their application in certain foreign countries do not protect our proprietary rights to the same extent as U.S. laws. Accordingly, in certain countries, we may be unable to protect our proprietary rights against unauthorized third-party copying or use, which could impact our competitive position.

Further, third parties may claim that we or our customers are infringing upon their intellectual property rights. Even if we believe that those claims are without merit, defending those claims and contesting the validity of patents can be time consuming and costly. Claims of intellectual property infringement also might require us to redesign affected products, enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from manufacturing, marketing or selling certain of our products.

The competitive pressures we face could harm our revenue, gross margins and prospects.

We operate in a highly competitive global environment and compete in each of our businesses with other broad-line manufacturers and numerous smaller competitors specializing in particular products. We compete primarily on the basis of brand, product quality, price, performance, warranty, delivery, service and technical support. We have previously initiated, and may in the future initiate significant rationalization activities to align our business to market conditions and improve our overall competitiveness. Such rationalization activities could fail to deliver the desired competitive cost structure and could result in disruptions in customer service. If our products, services, support and cost structure do not enable us to compete successfully based on any of the criteria listed above, our operations, results and prospects could suffer.

Further, in the past decade, the arc welding industry in the United States and other developed countries has been subject to increased levels of foreign competition as low cost imports have become more readily available. Our competitive position could also be harmed if new or emerging competitors become more active in the arc welding business. For example, while steel manufacturers traditionally have not been significant competitors in the domestic arc welding industry, some foreign integrated steel producers manufacture selected consumable arc welding products. In addition, in certain markets of the world, distributors manufacture and sell arc welding products. Our sales and results of operations, as well as our plans to expand in some foreign countries, could be adversely affected by this practice.

We conduct our sales and distribution operations on a worldwide basis and maintain manufacturing facilities in a number of foreign countries, which subjects us to risks associated with doing business outside the United States.

As a growing global enterprise, the share of sales and profits we derive from our international operations and exports from the United States is significant. This trend increases our exposure to the performance of many developing economies in addition to the developed economies outside of the United States. If international economies were to experience significant slowdowns, it could adversely affect our financial condition, results of operations and cash flows. There are a number of risks in doing business internationally, which may impede our ability to achieve our strategic objectives relating to our foreign operations, including:


•	Political and economic uncertainty and social turmoil;

•

Corporate governance and management challenges in consideration of the numerous U.S. and foreign laws and regulations, including regulations relating to import-export control, technology transfer restrictions, repatriation of earnings and funds, exchange controls, labor regulations, nationalization, tariffs, anti-boycott provisions and anti-bribery laws (such as the Foreign Corrupt Practices Act and the Organization for Economic Cooperation and Development Convention);


•	International terrorism and hostilities;


•	Changes in the global regulatory environment, including revised or newly created laws, regulations or standards relating to the Company, our products or the markets in which we operate; and


•	Significant fluctuations in relative currency values; in particular, an increase in the value of the U.S. dollar against foreign currencies could have an adverse effect on our profitability and financial condition, as well as the imposition of exchange controls, currency devaluations and hyperinflation.

Our operations depend on maintaining a skilled workforce, and any interruption in our workforce could negatively impact our results of operations and financial condition.

Our success depends in part on the efforts and abilities of our management team and key employees. Their skills, experience and industry knowledge significantly benefit our operations and performance. Our future success will also depend on our ability to identify, attract and retain highly qualified managerial and technical (including research and development) personnel. Competition for these individuals is intense, and we may not succeed in identifying, attracting or retaining qualified personnel. With our strategy to expand internationally into developing markets, we may incur additional risks as some developing economies lack a sufficiently trained labor pool.

Any interruption of our workforce, including interruptions due to unionization efforts, changes in labor relations or shortages of appropriately skilled individuals could impact our results of operations and financial condition.

Our defined benefit pension plans are subject to financial market trends, such as changes in discount rates and actual investment return on pension assets, which could adversely affect our results of operations and cash flows.

The performance of the financial markets and interest rates impact our funding obligations under our defined benefit pension plans. Significant changes in discount rates, decreases in the fair value of plan assets and investment losses on plan assets may increase our benefit obligations and adversely impact our results of operations, shareholders' equity and cash flows through our annual measurement of plan assets and liabilities. During the fourth quarter 2016, the Company made amendments to freeze all benefit accruals under the Lincoln Electric Retirement Annuity Program and the domestic Supplemental Executive Retirement Plan, effective December 31, 2016 and November 30, 2016, respectively. For further details on the plan freeze and a discussion regarding how the financial statements have been affected, refer to Note 11 to the Company's consolidated financial statements.

Changes in tax rates or exposure to additional income tax liabilities could affect profitability.

Our business is subject to income taxes in the United States and various foreign jurisdictions. Domestic and international tax liabilities are subject to the allocation of income among various tax jurisdictions. Our effective tax rate could be adversely affected by changes in the mix among earnings in countries with differing statutory tax rates, changes in the valuation allowances of deferred tax assets or changes in tax laws.

The amount of income taxes paid is subject to ongoing audits by United States federal, state and local tax authorities and by foreign tax authorities. If these audits result in assessments different from amounts reserved, future financial results may include unfavorable adjustments which could have a material adverse effect on our results of operations.

We are subject to risks relating to our information technology systems.

The conduct and management of our business relies extensively on information technology systems, which contain confidential information related to our customers, suppliers and employees and other proprietary business information. We maintain some of these systems and are also dependent on a number of critical corporate infrastructure services provided by third parties relating to, among other things, human resources, electronic communication services and finance functions. If these systems are damaged, cease to function properly or are subject to a significant cyber security breach, we may suffer an interruption in our ability to manage and operate the business and our results of operations and financial condition could be adversely affected. Furthermore, a security breach could result in unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and fines and other sanctions resulting from any related breaches of data privacy regulations. Any of these could have an adverse effect on our results of operations and financial condition.

Our global operations are subject to increasingly complex environmental regulatory requirements.

We are subject to increasingly complex environmental regulations affecting international manufacturers, including those related to air and water emissions, waste management and climate change. Some environmental laws impose strict, retroactive and joint and several liability for the remediation of the release of hazardous substances, even for conduct that was lawful at the time it occurred, or for the conduct of or conditions caused by prior operators, predecessors or third parties. Failure to comply with environmental laws could expose us to penalties or clean-up costs, civil or criminal liability and sanctions on certain of our activities, as well as damage to property or natural resources. These liabilities, sanctions, damages and remediation efforts related to any non-compliance with such laws and regulations could negatively impact our ability to conduct our operations and our financial condition and results of operations. In addition, there can be no assurances that we will not be adversely affected by costs, liabilities or claims with respect to existing or subsequently acquired operations or under present laws and regulations or those that may be adopted or imposed in the future.

Changes in environmental laws or regulations could result in higher expenses and payments, and uncertainty relating to environmental laws or regulations may also affect how we conduct our operations and structure our investments and could limit our ability to enforce our rights. Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could subject us to additional costs and restrictions, including increased energy and raw material costs. If environmental laws or regulations are either changed or adopted and impose significant operational restrictions and compliance requirements upon us or our products, they could negatively impact our business, capital expenditures, results of operations, financial condition and competitive position.

It is our policy to apply strict standards for environmental protection to all of our operations inside and outside of the United States, even when we are not subject to local government regulations. We may incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, liabilities resulting from third-party property damage or personal injury claims, or our products could be enjoined from entering certain jurisdictions, if we were to violate or become liable under environmental laws, if our products become non-compliant with environmental laws or if we were to undertake environmental protection actions voluntarily.

We also face increasing complexity in our products design and procurement operations as we adjust to new and future requirements relating to the design, production and labeling of our products that are sold worldwide in multiple jurisdictions. The ultimate costs under environmental laws and the timing of these costs are difficult to predict.

We may incur additional restructuring charges as we continue to contemplate rationalization actions in an effort to optimize our cost structure and may not achieve the anticipated savings and benefits of these actions.

The Company did not implement any new rationalization plans in 2016. For more information regarding prior period rationalization plans, refer to the rationalization and asset impairment related disclosure under Note 6 to the Company's consolidated financial statements. We may take additional actions in the future to further optimize our cost structure and improve the efficiency of our operations, which will reduce our profitability in the periods incurred. As a result of these actions, we will likely continue to incur charges, which may include but are not be limited to asset impairments, employee severance costs, charges for pension and other postretirement contractual benefits and pension settlements, any of which could be significant, and could adversely affect our financial condition and results of operations. In addition, we may not realize anticipated savings or benefits from past or future rationalization plans in full or in part or within the time periods we expect. Failure to realize anticipated savings or benefits from our cost reduction actions could have a material adverse effect on our business, financial condition, liquidity, results of operations and cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS OF THE REGISTRANT



Name	Age	Position
Christopher L. Mapes	55	Chairman of the Board effective December 21, 2013. President and Chief Executive Officer effective December 31, 2012; Chief Operating Officer from September 1, 2011 to December 31, 2012; Director since February 2010. Prior to his service with the Company, Mr. Mapes was an Executive Vice President of A.O. Smith Corporation (a global manufacturer with a water heating and water treatment technologies business), a position he held from 2004 through August 2011, and the President of its former Electrical Products unit, a position he held from September 2004 through August 2011.
Vincent K. Petrella	56	Executive Vice President, Chief Financial Officer and Treasurer since February 19, 2014; Senior Vice President, Chief Financial Officer and Treasurer from October 7, 2005 to February 19, 2014.
Frederick G. Stueber	63	Executive Vice President, General Counsel and Secretary since February 19, 2014; Senior Vice President, General Counsel and Secretary from 1996 to February 19, 2014.
George D. Blankenship	54	Executive Vice President, President, Americas Welding since February 18, 2016; Executive Vice President, President, Lincoln Electric North America from February 19, 2014 to February 18, 2016; Senior Vice President; President, Lincoln Electric North America from July 30, 2009 to February 19, 2014; Senior Vice President, Global Engineering from October 7, 2005 to July 30, 2009; Senior Vice President; President, Lincoln Cleveland of The Lincoln Electric Company from January 8, 2008 to July 30, 2009; Senior Vice President, U.S. Operations of The Lincoln Electric Company from October 7, 2005 to January 8, 2008.
Gabriel Bruno	49	Executive Vice President, Chief Human Resources Officer since July 1, 2016; Executive Vice President, Chief Human Resources Officer and Chief Information Officer from February 18, 2016 to July 1, 2016; Executive Vice President, Chief Information Officer and Interim Chief Human Resources Officer from March 7, 2015 to February 18, 2016; Executive Vice President, Chief Information Officer since February 19, 2014; Vice President, Chief Information Officer from May 1, 2012 to February 19, 2014; Vice President, Corporate Controller from 2005 to May 1, 2012.
Michele R. Kuhrt	50	Executive Vice President, Chief Information Officer since July 1, 2016; Senior Vice President, Tax from 2006 to July 1, 2016.
Geoffrey P. Allman	46	Senior Vice President, Corporate Controller since January 14, 2014; Corporate Controller from July 1, 2012 to January 14, 2014; Director, Regional Finance North America from October 1, 2009 to June 30, 2012.
Thomas A. Flohn	56	Senior Vice President, President, Asia Pacific Region since February 19, 2014; Vice President, Regional President, Lincoln Electric Asia Pacific Region from November 4, 2013 to January 14, 2014. Vice President; President, Lincoln Electric Europe, Middle East & Africa (EMEA) from July 1, 2010 to November 4, 2013; Vice President; President, Lincoln Asia Pacific from January 1, 2005 to June 30, 2010.
Mathias Hallmann	54	Senior Vice President, President, International Welding since February 9, 2016; Senior Vice President, President, LE Europe from February 19, 2014 to February 9, 2016; Vice President; President, Lincoln Electric Europe from November 4, 2013 to February 19, 2014. Prior to his service with the Company, Mr. Hallmann was Chief Executive Officer of Bohler Welding Holding GmbH (a leading manufacturer and provider of auxiliary materials and consumables for industrial welding and soldering applications) from December 2008 to March 2012, and its Chief Operating Officer from April 2008 to November 2008.
Steven B. Hedlund	50	Senior Vice President and President, Global Automation since January 22, 2015; Senior Vice President, Strategy & Business Development from February 19, 2014 to January 22, 2015; Vice President, Strategy and Business Development from September 15, 2008 to February 19, 2014. Prior to his service with the Company, Mr. Hedlund was the Vice President, Growth and Innovations with Master Lock, LLC (a security products company) from June 1, 2005 to July 1, 2008.
David J. Nangle	60	Senior Vice President, President, Harris Products Group since February 19, 2014; Vice President, Group President of Brazing, Cutting and Retail Subsidiaries from January 12, 2006 to February 19, 2014.

The Company has been advised that there is no arrangement or understanding among any one of the officers listed and any other persons pursuant to which he or she was elected as an officer. The executive officers are elected by the Board of Directors normally for a term of one year and/or until the election of their successors.

ITEM 2. PROPERTIES

The Company's corporate headquarters and principal United States manufacturing facilities are located in the Cleveland, Ohio area. Total Cleveland area property consists of 233 acres, of which present manufacturing facilities comprise an area of approximately 2,940,000 square feet.

The Company has 47 manufacturing facilities, including operations and joint ventures in 19 countries, the significant locations (grouped by operating segment) of which are as follows:



Americas Welding:
United States		Cleveland and Fort Loramie, Ohio; San Diego and Anaheim, California; Reno, Nevada; Ladson, South Carolina; Chattanooga, Tennessee; Detroit, Michigan; Fort Collins, Colorado; Bettendorf, Iowa.
Brazil		Guarulhos; Indaiatuba.
Canada		Toronto; Mississauga; Hamilton.
Columbia		Bogota.
Mexico		Mexico City; Torreon.
Venezuela		Maracay.
International Welding:
Australia		Newcastle.
China		Shanghai; Nanjing; Zhengzhou; Luan County.
France		Grand-Quevilly.
Germany		Essen.
India		Chennai.
Indonesia		Cikarang.
Italy		Corsalone.
Netherlands		Nijmegen.
Poland		Bielawa; Dzierzoniow.
Portugal		Lisbon.
Russia		Mtsensk.
Turkey		Istanbul.
United Kingdom		Sheffield and Chertsey, England; Port Talbot, Wales.
The Harris Products Group:
United States		Mason, Ohio; Gainesville, Georgia.
Brazil		Sao Paulo.
Poland		Dzierzoniow.

All properties relating to the Company's Cleveland, Ohio headquarters and manufacturing facilities are owned by the Company. Most of the Company's foreign subsidiaries own manufacturing facilities in the country where they are located. The Company believes that its existing properties are in good condition and are suitable for the conduct of its business.

In addition, the Company maintains operating leases for some manufacturing facilities, distribution centers and sales offices throughout the world. See Note 16 to the Company's consolidated financial statements for information regarding the Company's lease commitments.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject, from time to time, to a variety of civil and administrative proceedings arising out of its normal operations, including, without limitation, product liability claims, regulatory claims and health, safety and environmental claims. Among such proceedings are the cases described below.

As of December 31, 2016 , the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 5,954 plaintiffs, which is a net decrease of 169 claims from those previously reported. In each instance, the Company is one of a large number of defendants. The asbestos claimants seek compensatory and punitive damages, in most cases for unspecified sums. Since January 1, 1995, the Company has been a co-defendant in other similar cases that have been resolved as follows: 52,281 of those claims were dismissed, 22 were tried to defense verdicts, seven were tried to plaintiff verdicts (one of which was vacated on appeal), one was resolved by agreement for an immaterial amount and 768 were decided in favor of the Company following summary judgment motions.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common shares are traded on The NASDAQ Global Select Market under the symbol "LECO." The number of record holders of common shares at December 31, 2016 was 1,712.

The total amount of dividends paid in 2016 was $87.3 million . During 2016 , dividends were paid on January 15, April 15, July 15 and October 14.

Quarterly high and low stock prices and dividends declared per share for the last two years were:



	2016						2015
	Stock Price				Dividends Declared		Stock Price				Dividends Declared
	High		Low		Dividends Declared		High		Low		Dividends Declared
First quarter	$	60.24	$	45.54	$	0.32	$	72.50	$	63.90	$	0.29
Second quarter	64.79		56.02		0.32		71.15		60.85		0.29
Third quarter	65.33		57.40		0.32		62.94		51.74		0.29
Fourth quarter	80.57		61.04		0.35		62.95		49.71		0.32

Issuer purchases of equity securities for the fourth quarter 2016 were:



Period	Total Number of Shares Repurchased		Average Price Paid Per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs ⁽²⁾
October 1-31, 2016	500,577		$	62.92	500,577	9,220,474
November 1-30, 2016	331,263	⁽¹⁾	65.68		330,595	8,889,879
December 1-31, 2016	1,958	⁽¹⁾	78.75		1,404	8,888,475
Total	833,798		64.06		832,576


(1)	The above share repurchases include the surrender of the Company's common shares in connection with the vesting of restricted awards.

(2)

On April 20, 2016, the Company announced that the Board of Directors authorized a new share repurchase program, which increased the total number of the Company’s common shares authorized to be repurchased to 55 million shares. Total shares purchased through the share repurchase program were 46.1 million shares at a cost of $1.6 billion for a weighted average cost of $35.56 per share through December 31, 2016 .

The following line graph compares the yearly percentage change in the cumulative total shareholder return on the Company's common stock against the cumulative total return of the S&P Composite 500 Stock Index ("S&P 500") and the S&P 400 MidCap Index ("S&P 400") for the five-year calendar period commencing January 1, 2012 and ending December 31, 2016 . This graph assumes that $100 was invested on December 31, 2011 in each of the Company's common shares, the S&P 500 and the S&P 400. A peer-group index for the welding industry, in general, is not readily available because the industry is comprised of a large number of privately held competitors and competitors that are smaller parts of large publicly traded companies.

ITEM 6. SELECTED FINANCIAL DATA

(Dollars in thousands, except per share amounts)



	Year Ended December 31,
	2016 ⁽¹⁾		2015 ⁽²⁾		2014 ⁽³⁾		2013 ⁽⁴⁾		2012 ⁽⁵⁾
Net sales	$	2,274,614	$	2,535,791	$	2,813,324	$	2,852,671	$	2,853,367
Net income	198,399		127,478		254,686		293,780		257,411
Basic earnings per share	2.94		1.72		3.22		3.58		3.10
Diluted earnings per share	2.91		1.70		3.18		3.54		3.06
Cash dividends declared per share	1.31		1.19		0.98		0.83		0.71
Total assets	1,943,437		1,784,171		1,939,215		2,151,867		2,089,863
Long-term debt, less current portion	703,704		350,347		2,488		3,791		1,599

(1)

Results for 2016 include a loss of $34,348 ( $33,251 after-tax) on the deconsolidation of the Company's Venezuelan subsidiary, partially offset by a $7,196 income tax valuation allowance reversal related to a legal entity change to realign the Company’s tax structure. Long-term debt includes the issuance in 2016 of additional Senior Unsecured Notes in the aggregate principal amount of $350,000 through a private placement.

(2)

Results for 2015 include $13,719 ( $11,943 after-tax) of rationalization charges and non-cash net impairment charges of $6,239 ( $6,239 after-tax). Results also include pension settlement charges of $142,738 ( $87,310 after-tax) and charges of $27,214 ( $27,214 after-tax) related to Venezuelan remeasurement losses. Long-term debt includes the issuance of Senior Unsecured Notes in 2015 in the aggregate principal amount of $350,000 through a private placement.

(3)

Results for 2014 include $32,742 ($32,706 after-tax) of non-cash asset impairment charges partially offset by gains of $3,930 ($2,754 after-tax) related to the sale of assets. Associated with the impairment of long-lived assets is an offsetting special item of $805 representing portions attributable to non-controlling interests. Results also include charges of $21,133 ($21,133 after-tax) related to Venezuelan remeasurement losses.

(4)

Results for 2013 include $3,658 ($2,965 after-tax) of rationalization charges and impairment charges net of gains on disposals of $4,805 ($4,608 after-tax). Results also include a charge of $12,198 ($12,198 after-tax) related to the devaluation of the Venezuelan currency and a loss of $705 ($705 after-tax) related to the sale of land. Associated with the impairment of long-lived assets and loss on the sale of land is an offsetting special item of $1,068 representing portions attributable to non-controlling interests.


(5)	Results for 2012 include $7,512 ($6,153 after-tax) of rationalization charges and asset disposal and impairment charges of $1,842 ($1,289 after-tax). Results also include a charge of $1,381 ($906 after-tax) related to a change in Venezuelan labor law, which provides for increased employee severance obligations.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read together with "Selected Financial Data," the Company's consolidated financial statements and other financial information included elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in the forward-looking statements. See "Item 1A. Risk Factors" for more information regarding forward-looking statements.

General

The Company is the world's largest designer and manufacturer of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products.

The Company is one of only a few worldwide broad-line manufacturers of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes CNC plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.

The Company invests in the research and development of arc welding products in order to continue its market leading product offering. The Company continues to invest in technologies that improve the quality and productivity of welding products. In addition, the Company actively protects its innovations as research and development has progressed in both the United States and other major international jurisdictions. The Company believes its significant investment in research and development and its highly trained technical sales force coupled with its extensive distributor network provide a competitive advantage in the marketplace.

The Company's major end-user markets include:


•	general metal fabrication,


•	power generation and process industry,


•	structural steel construction (buildings and bridges),


•	heavy equipment fabrication (farming, mining and rail),


•	shipbuilding,


•	automotive,


•	pipe mills and pipelines, and


•	offshore oil and gas exploration and extraction.

During the first quarter of 2016, the Company realigned its organizational and leadership structure. The new structure allows for further integration of operational and product development processes across regions and to support growth strategies. In accordance with this organizational change, beginning with quarterly reporting for the three months ended March 31, 2016, the Company reported three operating segments as follows: Americas Welding, International Welding, and The Harris Products Group. All prior period results have been revised to reflect the realigned segment structure. Refer to Note 5 to the Company's consolidated financial statements for segment and geographic area information.

As further described in Note 1 to the consolidated financial statements, effective June 30, 2016, the Company determined that it

no longer had control of its subsidiary in Venezuela as a result of restrictive exchange controls and Venezuelan operating

restrictions that have significantly impacted the ability to make key operational decisions. As a result, the Company deconsolidated its subsidiary in Venezuela effective June 30, 2016 and began reporting the results under the cost method of accounting. Beginning July 1, 2016, the Company no longer includes the results of the Venezuelan subsidiary in its consolidated financial statements.

Key Indicators

Key economic measures relevant to the Company include industrial production trends, steel consumption, purchasing manager indices, capacity utilization within durable goods manufacturers and consumer confidence indicators. Key industries which provide a relative indication of demand drivers to the Company include steel, farm machinery and equipment, construction and transportation, fabricated metals, electrical equipment, ship and boat building, defense, truck manufacturing, energy and railroad equipment. Although these measures provide key information on trends relevant to the Company, the Company does not have available a more direct correlation of leading indicators which can provide a forward-looking view of demand levels in the markets which ultimately use the Company's welding products.

Key operating measures utilized by the operating units to manage the Company include orders, sales, inventory and fill-rates, all of which provide key indicators of business trends. These measures are reported on various cycles including daily, weekly and monthly depending on the needs established by operating management.

Key financial measures utilized by the Company's executive management and operating units in order to evaluate the results of its business and in understanding key variables impacting the current and future results of the Company include: sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and taxes; earnings before interest, taxes and bonus; net income; adjusted operating income; adjusted earnings before interest and income taxes, adjusted net income; adjusted diluted earnings per share; operating cash flows; and capital expenditures, as well as applicable ratios such as return on invested capital and average operating working capital to sales. These measures are reviewed at monthly, quarterly and annual intervals and compared with historical periods, as well as objectives established by the Board of Directors of the Company.

Results of Operations

The following table shows the Company's results of operations:



	Year Ended December 31,
	2016					2015					2014					Increase (Decrease) Actual vs. Prior Year
	Amount			% of Sales		Amount			% of Sales		Amount			% of Sales		2016 vs. 2015		2015 vs. 2014
Net sales	$	2,274,614				$	2,535,791				$	2,813,324				(10.3	%)	(9.9	%)
Cost of goods sold	1,485,316					1,694,647					1,864,027					(12.4	%)	(9.1	%)
Gross profit	789,298			34.7	%	841,144			33.2	%	949,297			33.7	%	(6.2	%)	(11.4	%)
Selling, general & administrative expenses	466,676			20.5	%	496,748			19.6	%	545,497			19.4	%	(6.1	%)	(8.9	%)
Rationalization and asset impairment charges	—					19,958					30,053					(100.0	%)	(33.6	%)
Pension settlement charges	—					142,738					—					(100.0	%)	100.0	%
Loss on deconsolidation of Venezuelan subsidiary	34,348					—					—					100.0	%	—
Operating income	288,274			12.7	%	181,700			7.2	%	373,747			13.3	%	58.7	%	(51.4	%)
Interest income	2,092					2,714					3,093					(22.9	%)	(12.3	%)
Equity earnings in affiliates	2,928					3,015					5,412					(2.9	%)	(44.3	%)
Other income	3,173					4,182					3,995					(24.1	%)	4.7	%
Interest expense	(19,079		)			(21,824		)			(10,434		)			12.6	%	(109.2	%)
Income before income taxes	277,388			12.2	%	169,787			6.7	%	375,813			13.4	%	63.4	%	(54.8	%)
Income taxes	79,015					42,375					121,933					86.5	%	(65.2	%)
Effective tax rate	28.5		%			25.0		%			32.4		%
Net income including non-controlling interests	198,373					127,412					253,880					55.7	%	(49.8	%)
Non-controlling interests in subsidiaries' loss	(26		)			(66		)			(806		)			60.6	%	91.8	%
Net income	$	198,399		8.7	%	$	127,478		5.0	%	$	254,686		9.1	%	55.6	%	(49.9	%)
Diluted earnings per share	$	2.91				$	1.70				$	3.18

Net Sales:

T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2016 on a consolidated basis:



			Change in Net Sales due to:
	Net Sales 2015		Volume			Acquisitions			Price			Foreign Exchange			Net Sales 2016
Lincoln Electric Holdings, Inc.	$	2,535,791	$	(247,661	)	$	51,454		$	259,692		$	(324,662	)	$	2,274,614
Lincoln Electric Holdings, Inc. (excluding Venezuela)	2,451,129		(189,983		)	51,454			(16,386		)	(32,413		)	2,263,801

% Change
Lincoln Electric Holdings, Inc.			(9.8		%)	2.0		%	10.2		%	(12.8		%)	(10.3		%)
Lincoln Electric Holdings, Inc. (excluding Venezuela)			(7.8		%)	2.1		%	(0.7		%)	(1.3		%)	(7.6		%)

sales from acquisitions was driven by acquired companies within Americas Welding. The decrease in foreign exchange is due to a stronger U.S. dollar, as well as the highly inflationary environment in Venezuela impacting the first six months of 2016.

T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2015 on a consolidated basis:



			Change in Net Sales due to:
	Net Sales 2014		Volume			Acquisitions			Price			Foreign Exchange			Net Sales 2015
Lincoln Electric Holdings, Inc.	$	2,813,324	$	(224,009	)	$	62,628		$	111,167		$	(227,319	)	$	2,535,791
Lincoln Electric Holdings, Inc. (excluding Venezuela)	2,741,531		(211,098		)	62,628			(2,598		)	(139,334		)	2,451,129

% Change
Lincoln Electric Holdings, Inc.			(8.0		%)	2.2		%	4.0		%	(8.1		%)	(9.9		%)
Lincoln Electric Holdings, Inc. (excluding Venezuela)			(7.7		%)	2.3		%	(0.1		%)	(5.1		%)	(10.6		%)

Sales volumes decreased as a result of softer demand associated with the current economic environment and weakness in oil & gas and U.S. export markets. Product pricing increased from prior year levels, reflecting the highly inflationary environment in Venezuela partially offset by pricing declines in The Harris Products Group due to decreases in the costs of silver and copper. Net sales for 2015 include $84,662 in sales from the Company's Venezuelan operations compared with $71,793 in sales from the Company's Venezuelan operations in 2014. The increase in acquisitions was primarily driven by acquired companies within Americas Welding. The decrease in foreign exchange is due to a stronger U.S. dollar, as well as the highly inflationary environment in Venezuela.

Gross Profit:

Gross profit for 2016 increased, as a percent of sales, compared to the prior year due to lower material costs, cost control efforts and strong price management. The year ended December 31, 2016 includes a last-in, first-out ("LIFO") charge of $1,564 compared with a credit of $11,545 in the prior year period.

Gross profit for 2015 decreased, as a percent of sales, compared to the prior period as 2015 included inventory charges reflecting remeasurement losses in Venezuela related to the adoption of a new foreign exchange mechanism and higher warranty costs. The year ended December 31, 2015 also includes a LIFO credit of $11,545 compared with a charge of $429 in the prior year.

Selling, General & Administrative ("SG&A") Expenses:

The decrease in SG&A expense in 2016 as compared to 2015 was due to lower bonus expense of $16,374 and lower foreign exchange transaction losses of $11,662 , partially offset by higher legal fees of $5,285 and incremental SG&A expenses from acquisitions of $10,497 . Foreign currency exchange rates had an $11,544 favorable translation impact on SG&A expenses in 2016 .

The decrease in SG&A expense in 2015 as compared to 2014 was due to lower bonus expense of $28,705 and lower foreign exchange transaction losses of $17,030 , partially offset by higher general and administrative spending of $24,720 and incremental SG&A expenses from acquisitions of $8,780 . Foreign exchange transaction losses in 2015 include a charge of $4,334 , compared with a charge of $17,665 in 2014, relating to Venezuelan foreign exchange remeasurement losses as a result of the adoption of a new foreign exchange mechanism. Foreign currency exchange rates had a $33,229 favorable translation impact on SG&A expenses in 2015 .

Rationalization and Asset Impairment Charges:

In 2015, the Company recorded $19,958 in charges primarily related to employee severance and other related costs and non-cash goodwill and asset impairment charges. Comparatively, in 2014, the Company recorded $30,053 in charges primarily related to non-cash long-lived asset impairment charges partially offset by gains on the sale of assets. Refer to Note 6 for additional details.

Pension Settlement Charges:

In 2015, the Company recorded non-cash pension settlement charges of $142,738, $87,310 after-tax, primarily related to the purchase of a group annuity contract. Refer to Note 11 for additional details.

Loss on Deconsolidation of Venezuela:

In 2016, the Company recorded a loss of $34,348, $33,251 after-tax, related to the deconsolidation of its Venezuelan subsidiary. Refer to Note 1 for additional details.

Equity Earnings in Affiliates:

Equity earnings in affiliates has remained relatively flat in the comparable periods.

Interest Expense:

The decrease in 2016 as compared to 2015 was due to prior year charges related to an adjustment to the consideration expected to be paid to acquire additional ownership interests of a majority-owned subsidiary, offset by interest accrued on higher borrowings in 2016.

The increase in 2015 as compared to 2014 was due to an adjustment to the consideration expected to be paid to acquire additional ownership interests of a majority-owned subsidiary and interest accrued on higher borrowings.

Income Taxes:

The effective income tax rate is higher in 2016 as compared to 2015 primarily due to higher U.S. tax credits in 2015 and changes in the mix of earnings between tax rate jurisdictions, offset by the reversal of an income tax valuation allowance as a result of a legal entity change.

The effective income tax rate is lower in 2015 as compared to 2014 primarily due to higher U.S. tax credits in 2015 and changes in the mix of earnings between tax rate jurisdictions.

Net Income:

As compared to the prior year, reported Net income for 2016 includes a loss related to the deconsolidation of the Company's Venezuelan subsidiary of $33,251, partially offset by reduced income taxes due to a benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure.

As compared to the prior year, reported Net income for 2015 includes non-cash pension settlement charges of $87,310 , non-cash Venezuelan remeasurement losses of $27,214 related to the adoption of a new foreign exchange mechanism and net rationalization and asset impairment charges of $18,182 .

Segment Results

Net Sales:

The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2016 :



			Change in Net Sales due to:
	Net Sales 2015		Volume ⁽¹⁾			Acquisitions ⁽²⁾			Price ⁽³⁾			Foreign Exchange ⁽⁴⁾			Net Sales 2016
Operating Segments
Americas Welding	$	1,741,350	$	(248,715	)	$	42,832		$	268,205		$	(308,690	)	$	1,494,982
International Welding	530,460		(8,629		)	8,622			(8,428		)	(14,736		)	507,289
The Harris Products Group	263,981		9,683			—			(85		)	(1,236		)	272,343

% Change
Americas Welding			(14.3		%)	2.5		%	15.4		%	(17.7		%)	(14.1		%)
International Welding			(1.6		%)	1.6		%	(1.6		%)	(2.8		%)	(4.4		%)
The Harris Products Group			3.7		%	—			—			(0.5		%)	3.2		%

(1) Decrease for Americas Welding and International Welding due to softer demand associated with the current economic environment, weakness in oil & gas and U.S. export markets. The increase for The Harris Products Group was driven by the retail market.

(2) Increase primarily due to the acquisition of Vizient Manufacturing Solutions and Rimrock Holdings Corporation within Americas Welding (refer to Note 3 to the consolidated financial statements for a discussion of the Company's recent acquisitions).

(3) Increase driven by Americas Welding, which reflects the highly inflationary environment in Venezuela impacting results in the first six months of 2016.

(4) The decrease in all segments is due to a stronger U.S. dollar. Additionally, Americas Welding reflects the highly inflationary environment in Venezuela impacting the first six months of 2016.

The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2015 :



			Change in Net Sales due to:
	Net Sales 2014		Volume ⁽¹⁾			Acquisitions ⁽²⁾			Price ⁽³⁾			Foreign Exchange ⁽⁴⁾			Net Sales 2015
Operating Segments
Americas Welding	$	1,837,670	$	(150,755	)	$	57,334		$	131,708		$	(134,607	)	$	1,741,350
International Welding	681,424		(71,086		)	5,294			(4,795		)	(80,377		)	530,460
The Harris Products Group	294,230		(2,168		)	—			(15,746		)	(12,335		)	263,981

% Change
Americas Welding			(8.2		%)	3.1		%	7.2		%	(7.3		%)	(5.2		%)
International Welding			(10.4		%)	0.8		%	(0.7		%)	(11.8		%)	(22.2		%)
The Harris Products Group			(0.7		%)	—			(5.4		%)	(4.2		%)	(10.3		%)

(1) Decrease for all operating segments due to softer demand associated with the current economic environment and weakness in oil & gas and U.S. export markets. Additionally, the decrease within the International segment is due to continued strategic repositioning in the Asia Pacific region.

(2) Increase primarily due to the acquisition of Rimrock Holdings Corporation and Easom Automation Systems, Inc. within Americas Welding (refer to Note 3 to the consolidated financial statements for a discussion of the Company's recent acquisitions).

(3) Increase in the Americas segment reflects a highly inflationary environment, particularly in Venezuela. The decrease for The Harris Products Group is due to decreases in the costs of silver and copper as compared to the prior year period.

(4) The decrease in all segments is due to a stronger U.S. dollar. Additionally, Americas Welding reflects the highly inflationary environment in Venezuela.

Adjusted Earnings Before Interest and Income Taxes (“Adjusted EBIT”):

Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being Adjusted EBIT. EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The following table presents Adjusted EBIT by segment:



	December 31,									Increase (Decrease) 2016 vs. 2015				Increase (Decrease) 2015 vs. 2014
	December 31,									Increase (Decrease) 2016 vs. 2015				Increase (Decrease) 2015 vs. 2014
	2016			2015			2014			$		%		$		%
Americas Welding:
Net sales	$	1,494,982		$	1,741,350		$	1,837,670		(246,368	)	(14.1	%)	(96,320	)	(5.2	%)
Inter-segment sales	93,612			92,538			110,524			1,074		1.2	%	(17,986	)	(16.3	%)
Total Sales	$	1,588,594		$	1,833,888		$	1,948,194		(245,294	)	(13.4	%)	(114,306	)	(5.9	%)

Adjusted EBIT ⁽⁴⁾	$	266,633		$	316,689		$	353,255		(50,056	)	(15.8	%)	(36,566	)	(10.4	%)
As a percent of total sales ⁽¹⁾	16.8		%	17.3		%	18.1		%			(0.5	%)			(0.8	%)

International Welding:
Net sales	$	507,289		$	530,460		$	681,424		(23,171	)	(4.4	%)	(150,964	)	(22.2	%)
Inter-segment sales	15,975			18,747			21,608			(2,772	)	(14.8	%)	(2,861	)	(13.2	%)
Total Sales	$	523,264		$	549,207		$	703,032		(25,943	)	(4.7	%)	(153,825	)	(21.9	%)

Adjusted EBIT ⁽⁵⁾	$	29,146		$	34,511		$	48,720		(5,365	)	(15.5	%)	(14,209	)	(29.2	%)
As a percent of total sales ⁽²⁾	5.6		%	6.3		%	6.9		%			(0.7	%)			(0.6	%)

The Harris Products Group:
Net sales	$	272,343		$	263,981		$	294,230		8,362		3.2	%	(30,249	)	(10.3	%)
Inter-segment sales	8,709			9,312			8,210			(603	)	(6.5	%)	1,102		13.4	%
Total Sales	$	281,052		$	273,293		$	302,440		7,759		2.8	%	(29,147	)	(9.6	%)

Adjusted EBIT	$	32,380		$	27,882		$	28,563		4,498		16.1	%	(681	)	(2.4	%)
As a percent of total sales ⁽³⁾	11.5		%	10.2		%	9.4		%			1.3	%			0.8	%

Corporate / Eliminations:
Inter-segment sales	$	(118,296	)	$	(120,597	)	$	(140,342	)	2,301		(1.9	%)	19,745		14.1	%
Adjusted EBIT ⁽⁶⁾	564			(275		)	3,802			839		305.1	%	(4,077	)	(107.2	%)

Consolidated:
Net sales	$	2,274,614		$	2,535,791		$	2,813,324		(261,177	)	(10.3	%)	(277,533	)	(9.9	%)
Adjusted EBIT	$	328,723		$	378,807		$	434,340		(50,084	)	(13.2	%)	(55,533	)	(12.8	%)
As a percent of total sales	14.5		%	14.9		%	15.4		%			(0.4	%)			(0.5	%)


(1)	2016 decrease as compared to 2015 driven by sales volume declines and higher SG&A costs as a percent of sales, partially offset by improved margins on lower input costs. SG&A costs included increased legal and professional fees.

2015 decrease as compared to 2014 driven by Net sales volume declines, lower margins in Venezuela and unfavorable foreign exchange translation.


(2)	2016 decrease as compared to 2015 driven by Net sales volume declines and higher SG&A costs as a percent of sales. SG&A costs included increased salaries and wages and professional fees.

2015 decrease as compared to 2014 due to unfavorable foreign exchange translation and Net sales volume declines, partially offset by improved margins on lower raw material costs and operational efficiencies.


(3)	2016 increase as compared to 2015 due to favorable sales mix associated with Net sales volume increases in the retail market.


(4)	2015 excludes net charges of $3,298 related to employee severance and other related costs, Venezuelan foreign exchange remeasurement losses of $27,214 related to the adoption of a new foreign exchange mechanism and $142,728 of non-cash pension settlement charges related to the purchase of a group annuity contract.

2014 excludes net charges primarily related to employee severance and other costs associated with the consolidation of manufacturing operations, as well as Venezuelan foreign exchange remeasurement losses of $21,133 related to the adoption of a new foreign exchange mechanism.


(5)	2015 excludes special items reflecting net charges of $6,939 primarily related to employee severance and other costs and adjustments to reclassify a potential divestiture that was previously held-for-sale, as well as special items including non-cash charges of $6,315 related to the impairment of goodwill and $3,417 related to the impairment of long-lived assets.

2014 excludes net charges primarily related to employee severance and other costs associated with the consolidation of manufacturing operations, as well as charges of $32,742 related to impairment of long-lived assets and a gain of $3,930 related to the sale of assets.


(6)	2016 excludes a loss of $34,348 related to the deconsolidation of the Company's Venezuelan subsidiary.

Non-GAAP Financial Measures

The Company reviews Adjusted operating income, Adjusted net income, Adjusted diluted earnings per share and Return on invested capital, all non-GAAP financial measures, in assessing and evaluating the Company's underlying operating performance. These non-GAAP financial measures exclude the impact of special items on the Company's reported financial results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United States ("GAAP") financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. From time to time management evaluates and discloses to investors the non-GAAP measure Free cash flow ("FCF"). FCF is defined as Net cash provided by operating activities less Capital expenditures. The Company considers FCF to be a liquidity measure that provides useful information to management and investors about how the amount of cash generated by our business, after the purchase of property and equipment, can be used for debt service, acquisitions, paying dividends and repurchasing our common shares.

The following table presents a reconciliation of Operating income as reported to Adjusted operating income:



	Year Ended December 31,
	2016		2015		2014
Operating income as reported	$	288,274	$	181,700	$	373,747
Special items (pre-tax):
Rationalization and asset impairment charges ⁽¹⁾	—		19,958		30,053
Loss on deconsolidation of Venezuelan subsidiary ⁽²⁾	34,348		—		—
Venezuela remeasurement losses ⁽³⁾	—		27,214		21,133
Pension settlement charges ⁽⁴⁾	—		142,738		—
Adjusted operating income	$	322,622	$	371,610	$	424,933

(1) Charges consist of the following:


•	In 2015, employee severance and other related costs of $13,719, a non-cash goodwill impairment charge of $6,315 and net non-cash asset impairment charges;


•	In 2014, primarily includes non-cash asset impairment charges of $32,742 offset by gains of $3,930 related to the sale of assets.

(2) Loss on deconsolidation of the Venezuelan subsidiary as of June 30, 2016.

(3) Charges in 2015 and 2014 relate to the adoption of a new foreign exchange mechanism in the period.

(4) Related to the purchase of a group annuity contract that settled a portion of the Company's pension obligation in 2015.

The following table presents reconciliations of Net income and Diluted earnings per share as reported to Adjusted net income and Adjusted diluted earnings per share:



	Year Ended December 31,
	2016			2015		2014
Net income as reported	$	198,399		$	127,478	$	254,686
Special items (after-tax):
Rationalization and asset impairment charges ⁽¹⁾	—			18,182		30,914
Loss on deconsolidation of Venezuelan subsidiary ⁽²⁾	33,251			—		—
Venezuela remeasurement losses ⁽³⁾	—			27,214		21,133
Pension settlement charges ⁽⁴⁾	—			87,310		—
Income tax valuation reversal ⁽⁵⁾	(7,196		)	—		—
Special items attributable to non-controlling interests ⁽⁶⁾	—			—		(805		)
Adjusted net income	$	224,454		$	260,184	$	305,928
Diluted earnings per share as reported	$	2.91		$	1.70	$	3.18
Special items per share	0.38			1.78		0.64
Adjusted diluted earnings per share	$	3.29		$	3.48	$	3.82

(1) Charges consist of the following:


•	In 2015, employee severance and other related costs of $11,943, a non-cash goodwill impairment charge of $6,315 and net non-cash asset impairment charges;


•	In 2014, primarily includes non-cash asset impairment charges of $32,706 partially offset by gains of $2,754 related to the sale of assets.

(2) Loss on deconsolidation of the Venezuelan subsidiary as of June 30, 2016.

(3) Charges in 2015 and 2014 relate to the adoption of a new foreign exchange mechanism in the period.

(4) Related to the purchase of a group annuity contract that settled a portion of the Company's pension obligation in 2015.

(5) Tax benefit related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure.

(6) Related to the impairment of long-lived assets in 2014 that were attributable to non-controlling interests.

Liquidity and Capital Resources

The Company's cash flow from operations can be cyclical. Operational cash flow is a key driver of liquidity, providing cash and access to capital markets. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement. Management anticipates the Company will be able to satisfy cash requirements for its ongoing businesses for the foreseeable future primarily with cash generated by operations, existing cash balances, borrowings under its existing credit facilities and raising debt in capital markets.

The Company continues to expand globally and periodically looks at transactions that would involve significant investments. The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding. Where possible, the Company utilizes operational cash flows and raises capital in the most efficient market, usually the United States, and then lends funds to the specific subsidiary that requires funding. If additional acquisitions providing appropriate financial benefits become available, additional expenditures may be made.

The following table reflects changes in key cash flow measures:



	Year Ended December 31,									$ Change
	2016			2015			2014			2016 vs. 2015			2015 vs. 2014
Cash provided by operating activities	$	303,403		$	310,858		$	401,702		$	(7,455	)	$	(90,844	)
Cash used by investing activities:	(159,946		)	(85,352		)	(78,985		)	(74,594		)	(6,367		)
Capital expenditures	(49,877		)	(50,507		)	(72,990		)	630			22,483
Acquisition of businesses, net of cash acquired	(71,567		)	(37,076		)	(24,230		)	(34,491		)	(12,846		)
Purchase of marketable securities	(38,920		)	—			—			(38,920		)	—
Cash used by financing activities:	(62,854		)	(169,908		)	(314,355		)	107,054			144,447
Proceeds from (payments on) short-term borrowings, net	1,539			(34,229		)	47,876			35,768			(82,105		)
Proceeds from (payments on) long-term borrowings, net	349,780			350,835			5,455			(1,055		)	345,380
Purchase of shares for treasury	(342,003		)	(399,494		)	(307,178		)	57,491			(92,316		)
Cash dividends paid to shareholders	(87,330		)	(86,968		)	(73,261		)	(362		)	(13,707		)
Increase (decrease) in Cash and cash equivalents	74,996			25,804			(21,446		)

Cash and cash equivalents increased 24.7% , or $74,996 , to $379,179 during the twelve months ended December 31, 2016 , from $304,183 as of December 31, 2015 . This increase was predominantly due to the cash provided from operating activities and proceeds from the issuance of $350,000 aggregate principal amount of Senior Unsecured Notes (the "2016 Notes") (refer to Note 8 for additional information), offset by cash used in the acquisition of a business, purchases of common shares for treasury and cash dividends paid to shareholders. At December 31, 2016 , $261,547 of Cash and cash equivalents was held by international subsidiaries and may be subject to U.S. income taxes and foreign withholding taxes if repatriated to the U.S.

Cash provided by operating activities decreased $7,455 for the twelve months ended December 31, 2016 compared with the twelve months ended December 31, 2015 .

Cash used by investing activities increased by $74,594 in the twelve months ended December 31, 2016 compared with the twelve months ended December 31, 2015 . The increase was predominantly due to an increase in cash paid for the acquisition of a business and the purchase of marketable securities. The Company anticipates capital expenditures of $65,000 to $75,000 in 2017 . Anticipated capital expenditures reflect investments for capital maintenance to improve operational effectiveness. Management critically evaluates all proposed capital expenditures and expects each project to increase efficiency, reduce costs, promote business growth or improve the overall safety and environmental conditions of the Company's facilities.

Cash used by financing activities decreased $107,054 in the twelve months ended December 31, 2016 compared with the twelve months ended December 31, 2015 . The decrease was predominantly due to higher net payments in 2015 and lower purchases of common shares for treasury in 2016.

The Company's debt levels increased from $354,625 at December 31, 2015 to $705,593 at December 31, 2016 due to the issuance of the 2016 Notes. Total debt to total invested capital increased to 49.8% at December 31, 2016 from 27.6% at December 31, 2015 .

The Company paid $87,330 and $86,968 in cash dividends to its shareholders in the twelve months ended December 31, 2016 and 2015 , respectively, reflecting a 10.3% increase in the dividend rate. In January 2017, the Company paid a cash dividend of $0.35 per share, or $22,986 to shareholders of record on December 31, 2016.

The Company has a share repurchase program for up to 55 million of the Company's common shares. At management's discretion, the Company repurchases its common shares from time to time in the open market, depending on market conditions, stock price and other factors. During the twelve months ended December 31, 2016 , the Company purchased a total of 5.9 million shares at a cost of $342,003 . As of December 31, 2016 , 8.9 million shares remained available for repurchase under the share repurchase program.

The Company made voluntary contributions to its U.S. defined benefit plans of $20,086 , $47,124 and $21,175 in 2016 , 2015 and 2014 , respectively. The Company does not expect to contribute to the defined benefit plans in the United States in 2017.

Canada - Notice of Reassessment

In July 2012, the Company received a Notice of Reassessment (the "Reassessments") from the Canada Revenue Agency in respect to its 2004 to 2010 taxation years to disallow the deductibility of inter-company dividends. The Company appealed the Reassessments to the Tax Court of Canada. In September 2014, the Department of Justice Canada consented to a judgment, wholly in the Company's favor. In vacating the reassessment, this tax litigation is concluded. The Company received a partial refund of a cash deposit in December 2014, with substantially all of the remaining cash deposit received in the first quarter of 2015, including interest.

Working Capital Ratios



	December 31,
	2016		2015		2014
Average operating working capital to net sales ⁽¹⁾	15.6	%	17.1	%	17.1	%
Days sales in Inventories	92.1		89.2		94.7
Days sales in Accounts receivable	47.7		46.9		47.8
Average days in Trade accounts payable	48.9		38.7		46.6

(1) Average operating working capital to net sales is defined as the sum of Accounts receivable and Inventories less Trade accounts payable as of period end divided by annualized rolling three months of Net sales.

Rationalization and Asset Impairments

Refer to Note 6 to the consolidated financial statements for a discussion of the Company's various rationalization plans whose costs were substantially recognized in the prior year. No charges were recorded in the twelve months ended December 31, 2016. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital.

Acquisitions

Refer to Note 3 to the consolidated financial statements for a discussion of the Company's recent acquisitions.

Debt

At December 31, 2016 and 2015 , the fair value of long-term debt, including the current portion, was approximately $669,209 and $342,602 , respectively, which was determined using available market information and methodologies requiring judgment. Since considerable judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a current market exchange.

Senior Unsecured Notes

On April 1, 2015, the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2015 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds were used for general corporate purposes. The 2015 Notes, as shown in the table below, have original maturities ranging from 10 to 30 years with a weighted average effective interest rate of 3.5% , excluding accretion of original issuance costs, and an initial average tenure of 19 years. Interest is payable semi-annually. The 2015 Notes contain certain affirmative and negative covenants. As of December 31, 2016 , the Company was in compliance with all of its debt covenants.

On October 20, 2016 the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2016 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds are being used for general corporate purposes. The 2016 Notes, as shown in the table below, have original maturities ranging from 12 to 25 years with a weighted average effective interest rate of 3.1% , excluding accretion of original issuance costs, and an initial average tenure of 18 years. Interest is payable semi-annually. The 2016 Notes contain certain affirmative and negative covenants. As of December 31, 2016 , the Company was in compliance with all of its debt covenants.

The Company's total weighted average effective interest rate and weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 18 years, respectively.

Revolving Credit Agreement

had no outstanding borrowings under the Credit Agreement. The Credit Agreement has a five -year term and may be increased, subject to certain conditions, by an additional amount up to $100,000 . The interest rate on borrowings is based on either the London Inter-Bank Offered Rate ("LIBOR") or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election.

Short-term Borrowings

The Company had short-term borrowings of $1,758 included in Amounts due banks in 2016 and had a balance of $2,822 at December 31, 2015. Amounts due banks the borrowings of subsidiaries at weighted average interest rates of 29.0% and 24.1% at December 31, 2016 and 2015 , respectively.

Return on Invested Capital

The Company reviews return on invested capital ("ROIC") in assessing and evaluating the Company's underlying operating performance. ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company’s financial performance and may be different than the method used by other companies to calculate ROIC. ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which includes Amounts due banks, Current portion of long-term debt and Long-term debt, less current portions, plus Total equity.

ROIC for the years ended December 31, 2016 , 2015 and 2014 were as follows:



Return on Invested Capital	2016			2015			2014
Adjusted net income ⁽¹⁾	$	224,454		$	260,184		$	305,928
Plus: Interest expense (after-tax)	11,775			13,469			6,439
Less: Interest income (after-tax)	1,291			1,675			1,909
Net operating profit after taxes	234,938			271,978			310,458
Invested capital	1,417,799			1,287,073			1,356,435
Return on invested capital	16.6		%	21.1		%	22.9		%


(1)	See “Non-GAAP Financial Measures” section for a tabular reconciliation of Net income to Adjusted net income.

Contractual Obligations and Commercial Commitments

The Company's contractual obligations and commercial commitments as of December 31, 2016 are as follows:



	Payments Due By Period
	Total		2017		2018 to 2019		2020 to 2021		2022 and Beyond
Long-term debt, including current portion	$	711,208	$	95	$	196	$	204	$	710,713
Interest on long-term debt	421,422		23,299		46,591		46,584		304,948
Capital lease obligations	47		36		11		—		—
Short-term debt	1,758		1,758		—		—		—
Interest on short-term debt	465		465		—		—		—
Operating leases	43,685		12,267		17,494		9,036		4,888
Purchase commitments ⁽¹⁾	157,727		157,384		332		11		—
Total	$	1,336,312	$	195,304	$	64,624	$	55,835	$	1,020,549


(1)	Purchase commitments include contractual obligations for raw materials and services.

As of December 31, 2016 , there were $14,186 of tax liabilities related to unrecognized tax benefits and a $25,244 liability for deferred compensation. Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, the Company is unable to estimate the years in which settlement will occur. Additionally, in connection with prior acquisitions, there were liabilities with fair values as of December 31, 2016 of $8,154 for a contingent consideration arrangement and $15,272 for a forward contract to acquire an additional ownership interest in a majority owned subsidiary. The amount of future cash flows associated with these liabilities will be contingent upon actual results of the acquired entities. See Notes 12 and 14 of the Company’s consolidated financial statements for further discussion.

Stock-Based Compensation

On April 23, 2015, the shareholders of the Company approved the 2015 Equity and Incentive Compensation Plan ("Employee Plan"), which replaced the 2006 Equity and Performance Incentive Plan, as amended ("EPI Plan"). The Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and performance-based awards up to an additional 5,400,000 of the Company's common shares. In addition, on April 23, 2015, the shareholders of the Company approved the 2015 Stock Plan for Non-Employee Directors ("2015 Director Plan"), which replaced the 2006 Stock Plan for Non-Employee Directors ("2006 Director Plan"). The 2015 Director Plan provides for the granting of options, restricted shares and restricted stock units up to an additional 300,000 of the Company's common shares. At December 31, 2016 , there were 4,862,288 common shares available for future grant under all plans.

Under these plans, options, restricted shares and restricted stock units granted were 449,415 in 2016 , 411,406 in 2015 and 22,909 in 2014 . The Company issued common shares from treasury upon all exercises of stock options, vesting of restricted stock units and the granting of restricted stock awards in 2016 , 2015 and 2014 .

Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares or restricted stock units ultimately forfeited because recipients fail to meet vesting requirements. Total stock-based compensation expense recognized in the Consolidated Statements of Income for 2016 , 2015 and 2014 was $10,332 , $7,932 and $8,416 , respectively, with a related tax benefit of $3,955 , $3,037 and $3,222 , respectively. As of December 31, 2016 , total unrecognized stock-based compensation expense related to non-vested stock options, restricted shares and restricted stock units was $18,839 , which is expected to be recognized over a weighted average period of approximately 2.3 years .

The aggregate intrinsic value of options outstanding and exercisable which would have been received by the optionees had all awards been exercised at December 31, 2016 was $40,803 and $34,666 , respectively. The total intrinsic value of options exercised during 2016 , 2015 and 2014 was $30,967 , $6,879 and $14,647 respectively.

Product Liability Costs

Product liability costs incurred can be volatile and are largely related to trial activity. The costs associated with these claims are predominantly defense costs which are recognized in the periods incurred.

The long-term impact of product liability contingencies, in the aggregate, on operating results, operating cash flows and access to capital markets is difficult to assess, particularly since claims are in many different stages of development and the Company benefits significantly from cost sharing with co-defendants and insurance carriers. Moreover, the Company has been largely successful to date in its defense of these claims.

Off-Balance Sheet Arrangements

The Company utilizes letters of credit to back certain payment and performance obligations. Letters of credit are subject to limits based on amounts outstanding under the Company's Credit Agreement.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.

Critical Accounting Policies and Estimates

The Company's consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make estimates and assumptions. These estimates and assumptions are reviewed periodically by management and compared to historical trends to determine the accuracy of estimates and assumptions used. If warranted, these estimates and assumptions may be changed as current trends are assessed and updated. Historically, the Company's estimates have been determined to be reasonable. No material changes to the Company's accounting policies were made during 2016 . The Company believes the following accounting policies are some of the more critical judgment areas affecting its financial condition and results of operations.

Legal and Tax Contingencies

The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims, regulatory claims and health, safety and environmental claims, some of which relate to cases alleging asbestos induced illnesses. The costs associated with these claims are predominantly defense costs, which are recognized in the periods incurred. Insurance reimbursements mitigate these costs and, where reimbursements are probable, they are recognized in the applicable period. With respect to costs other than defense costs (i.e., for liability and/or settlement or other resolution), reserves are recorded when it is probable that the contingencies will have an unfavorable outcome. The Company accrues its best estimate of the probable costs after a review of the facts with management and counsel and taking into account past experience. If an unfavorable outcome is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure would be provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves.

The Company is subject to taxation from U.S. federal, state, municipal and international jurisdictions. The calculation of current income tax expense is based on the best information available and involves significant management judgment. The actual income tax liability for each jurisdiction in any year can in some instances be ultimately determined several years after the financial statements are published.

The Company maintains liabilities for uncertain income tax positions for many jurisdictions. Liabilities are settled primarily through the completion of audits within each individual tax jurisdiction or the closing of a statute of limitation. Liabilities can also be affected by changes in applicable tax law or other factors, which may cause management to believe a revision of past estimates is appropriate. Management believes that an appropriate liability has been established for uncertain income tax positions; however, actual results may materially differ from these estimates. See Note 12 to the Company's consolidated financial statements for further discussion of uncertain income tax positions.

Translation of Foreign Currencies

Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the dates of the Consolidated Balance Sheets; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments are reflected as a component of Total equity. For subsidiaries operating in highly inflationary economies, both historical and current exchange rates are used in translating balance sheet accounts and translation adjustments are included in Net income.

The translation of assets and liabilities originally denominated in foreign currencies into U.S. dollars is for consolidation purposes, and does not necessarily indicate that the Company could realize or settle the reported value of those assets and liabilities in U.S. dollars. Additionally, such a translation does not necessarily indicate that the Company could return or distribute the reported U.S. dollar value of the net equity of its foreign operations to shareholders.

Foreign currency transaction gains and losses are included in Selling, general & administrative expenses and were gains of $3,741 in 2016 and losses of $6,023 and $22,351 in 2015 and 2014 , respectively.

Venezuela – Highly Inflationary Economy

The Company deconsolidated its subsidiary in Venezuela effective June 30, 2016 and began reporting the results under the cost method of accounting. Beginning July 1, 2016, the Company no longer includes the results of the Venezuelan subsidiary in its consolidated financial statements. Refer to Note 1 for additional information.

Deferred Income Taxes

Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. The Company does not provide deferred income taxes on unremitted earnings of certain non-U.S. subsidiaries, which are deemed indefinitely reinvested. It is not practicable to calculate the deferred taxes associated with the remittance of these earnings. Deferred income taxes associated with earnings that are not expected to be indefinitely reinvested were not significant. At December 31, 2016 , the Company had approximately $101,655 of gross deferred tax assets related to deductible temporary differences and tax loss and credit carry-forwards which may reduce taxable income in future years.

more likely than not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company's assessment of future taxable income or tax planning strategies changes.

Pensions

The Company maintains a number of defined benefit ("Pension") and defined contribution plans to provide retirement benefits for employees. These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board of Directors. The plans generally provide benefits based upon years of service and compensation. Pension plans are funded except for a domestic non-qualified pension plan for certain key employees and certain foreign plan. In October 2016, the Company amended the Lincoln Electric Retirement Annuity Program ("RAP") and the Supplemental Executive Retirement Plan ("SERP") to freeze all benefit accruals for participants under the plans effective as of December 31, 2016. and November 30, 2016, respectively. Refer to Note 11 to the Consolidated Financial Statements for additional information.

A substantial portion of the Company's pension amounts relate to its defined benefit plan in the United States. The fair value of plan assets is determined at December 31 of each year.

A significant element in determining the Company's pension expense is the expected return on plan assets. At the end of each year, the expected return on plan assets is determined based on the weighted average expected return of the various asset classes in the plan's portfolio and the targeted allocation of plan assets. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance. The Company determined this rate to be 6.1% and 6.3% at December 31, 2016 and 2015 , respectively. The assumed long-term rate of return on assets is applied to the market value of plan assets. This produces the expected return on plan assets included in pension expense. The difference between this expected return and the actual return on plan assets is deferred and, for frozen plans, is amortized over the average remaining life expectancy of plan participants expected to receive benefits under the plan. During 2016 , investment returns were 6.6% compared with a return of 0.9% in 2015 . A 25 basis point change in the expected return on plan assets would increase or decrease pension expense by approximately $1,200 .

Another significant element in determining the Company's pension expense is the discount rate for plan liabilities. To develop the discount rate assumption, the Company refers to the yield derived from matching projected pension payments with maturities of a portfolio of available non-callable bonds rated AA or an equivalent quality. The Company determined this rate to be 4.1% at December 31, 2016 and 4.5% at December 31, 2015 . A 10 basis point change in the discount rate would increase or decrease pension expense by approximately $800 .

The Company's defined benefit plan expense was $13,988 , $162,815 and $12,395 in 2016 , 2015 and 2014 , respectively. Pension expense in 2016 includes net curtailment gains of $1,062, 2015 includes $142,738 in settlement charges and 2014 includes $1,773 in settlement charges. The Company's defined contribution plan expense was $8,361 , $10,082 and $11,088 in 2016 , 2015 and 2014 , respectively. Excluding the net curtailment gains in 2016, the Company expects total 2017 expense related to retirement plans to decrease by a range of approximately $6,000 to $8,000. The decrease is the result of lower amortization of deferred losses related to the defined benefit plan freeze, partially offset by higher defined contribution plan expense because of the new defined contribution plan. Refer to Note 11 for additional information.

The Accumulated other comprehensive loss, excluding tax effects, recognized on the Consolidated Balance Sheet was $146,604 as of December 31, 2016 and $154,756 as of December 31, 2015 . The decrease is primarily the result of the amortization of net losses and curtailments in 2016.

Inventories

Inventories are valued at the lower of cost or net realizable value. Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost for a substantial portion of U.S. inventories is determined on a LIFO basis. LIFO was used for 40% of total inventories at both December 31, 2016 and 2015. Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. The valuation of LIFO inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs. Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. The excess of current cost over LIFO cost was $61,329 at December 31, 2016 and $59,765 at December 31, 2015 .

The Company reviews the net realizable value of inventory on an on-going basis, with consideration given to deterioration, obsolescence and other factors. If actual market conditions differ from those projected by management, and the Company's estimates prove to be inaccurate, write-downs of inventory values and adjustments to Cost of goods sold may be required. Historically, the Company's reserves have approximated actual experience.

Accounts Receivable

The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company's reserves have approximated actual experience.

Long-Lived Assets

The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

Goodwill and Intangibles

The Company performs an annual impairment test of goodwill and indefinite-lived intangible assets in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.

The fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The quantitative goodwill impairment analysis is a two-step process. Goodwill is tested by first comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the implied value of goodwill is compared to its carrying value and impairment is recognized to the extent that the carrying value exceeds the implied fair value.

Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and the applicable discount rates to value estimated cash flows. Changes in economic and operating conditions impacting these assumptions could result in asset impairments in future periods.

The fair value of goodwill for all of the Company's reporting units exceeded its carrying value by at least 10% as of the testing date during the fourth quarter of 2016. Key assumptions in estimating the reporting unit's fair value include assumed market participant assumptions of revenue growth, operating margins and the rate used to discount future cash flows. Actual revenue growth and operating margins below the assumed market participant assumptions or an increase in the discount rate would have a negative impact on the fair value of the reporting unit that could result in a goodwill impairment charge in a future period.

Revenue Recognition

Substantially all of the Company's revenues are recognized when the risks and rewards of ownership and title to the product have transferred to the customer, which generally occurs at point of shipment. The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded.

For contracts accounted for under the percentage of completion method, revenue recognition is based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses.

Stock-Based Compensation

The Company uses the Black-Scholes option pricing model for estimating fair values of options. The Black-Scholes model requires assumptions regarding the volatility of the Company's common shares, the expected life of the stock award and the

Company's dividend yield. The Company utilizes historical data in determining these assumptions. An increase or decrease in the assumptions or economic events outside of management's control could have an impact on the Black-Scholes model.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary financial market risks include fluctuations in currency exchange rates, commodity prices and interest rates. The Company manages these risks by using derivative financial instruments in accordance with established policies and procedures. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes.

Included below is a sensitivity analysis based upon a hypothetical 10% weakening or strengthening in the U.S. dollar compared to foreign currency exchange rates at December 31, 2016 and a 100 basis point increase in effective interest rates at December 31, 2016 . The derivative, borrowing and investment arrangements in effect at December 31, 2016 were compared to the hypothetical foreign exchange or interest rates in the sensitivity analysis to determine the effect on the Company's current period consolidated financial statements.

Foreign Currency Exchange Risk

The Company enters into forward foreign exchange contracts principally to hedge the currency fluctuations in transactions denominated in foreign currencies, thereby limiting the Company's risk that would otherwise result from changes in exchange rates.

At December 31, 2016 , the Company hedged certain third-party and inter-company purchases and sales. The gross notional amount of these foreign exchange contracts at December 31, 2016 was $36,385 . At December 31, 2016 , a hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $1,601.

In addition, the Company enters into forward foreign exchange contracts to hedge transaction exposures or significant cross-border intercompany loans by either purchasing or selling specified amounts of foreign currency at a specified date. The gross notional amount of these foreign exchange contracts at December 31, 2016 was $261,168 . A hypothetical 10% change in the year-end exchange rates would have resulted in an increase or decrease to Income before income taxes of $19,556 related to these positions. However, any loss (or gain) resulting from a hypothetical 10% change would be offset by the associated gain (or loss) on the underlying balance sheet exposure and would ultimately not materially affect the Company’s financial statements.

Commodity Price Risk

From time to time, the Company uses various hedging arrangements to manage exposures to price risk from commodity purchases. These hedging arrangements have the effect of fixing for specified periods the prices the Company will pay for the volume to which the hedge relates. The Company had no commodity contracts outstanding during 2016 .

Interest Rate Risk

At December 31, 2016 , the Company had various floating interest rate swaps used to convert $100,000 of its outstanding fixed-rate, long-term borrowings into short-term variable interest rates. The fixed-rate nature of the remaining long-term borrowings limits the Company's exposure to changes in near-term interest rates. An increase in interest expense resulting from a hypothetical increase of 100 basis points in the December 31, 2016 floating rate, would not materially affect the Company’s financial statements. A hypothetical 100 basis point increase to effective interest rates would also impact the fair value of interest rate swap. However, any loss resulting from this hypothetical scenario would be offset by the associated gain on the underlying debt and have no impact on the Company’s consolidated financial statements.

The fair value of the Company's cash and cash equivalents and marketable securities at December 31, 2016 approximated cost due to their short-term duration. These financial instruments are subject to concentrations of credit risk. The Company has minimized this risk by entering into investments with a number of major banks and financial institutions and investing in high-quality instruments. The Company does not expect any counter-parties to fail to meet their obligations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted in a separate section of this Annual Report on Form 10-K following the signature page.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Exchange Act. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting as of December 31, 2016 based on the 2013 framework in "Internal Control – Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the Company's evaluation under such framework, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2016 .

The effectiveness of the Company's internal control over financial reporting as of December 31, 2016 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included elsewhere in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the fourth quarter of 2016 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Company is expected to file its 2017 proxy statement pursuant to Regulation 14A of the Exchange Act within 120 days after December 31, 2016 .

Except for the information set forth within Part I, Item 1C section of this Annual Report on Form 10-K concerning our Executive Officers, the information required by this item is incorporated by reference from the 2017 proxy statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the 2017 proxy statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference from the 2017 proxy statement.

For further information on the Company's equity compensation plans, see Note 1 and Note 9 to the Company's consolidated financial statements.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference from the 2017 proxy statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference from the 2017 proxy statement.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The following consolidated financial statements of the Company are included in a separate section of this report following the signature page and certifications:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Consolidated Balance Sheets – December 31, 2016 and 2015

Consolidated Statements of Income – Years ended December 31, 2016 , 2015 and 2014

Consolidated Statements of Comprehensive Income – Years ended December 31, 2016 , 2015 and 2014

Consolidated Statements of Equity – Years ended December 31, 2016 , 2015 and 2014

Consolidated Statements of Cash Flows – Years ended December 31, 2016 , 2015 and 2014

Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedules

The following consolidated financial statement schedule of the Company is included in a separate section of this report

following the signature page:

Schedule II – Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange

Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.

(a)(3) Exhibits



Exhibit No.		Description
3.1		Amended and Restated Code of Regulations of Lincoln Electric Holdings, Inc. (filed as Exhibit 3.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on April 29, 2014, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
3.2		Amended and Restated Articles of Incorporation of Lincoln Electric Holdings, Inc. (filed as Exhibit 3.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on September 27, 2011, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
10.1		Amended and Restated Credit Agreement, dated as of July 26, 2012, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc., Techalloy, Inc., Wayne Trail Technologies, Inc., Lincoln Global, Inc., the Lenders and KeyBank National Association, as Letter of Credit Issuer and Administrative Agent (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on July 31, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.2		First Amendment to Amended and Restated Credit Agreement, dated as of September 12, 2014, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc., Techalloy, Inc., Wayne Trail Technologies, Inc., Lincoln Global, Inc., the Lenders and KeyBank National Association (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on September 17, 2014, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.3		Note Purchase Agreement, dated as of April 1, 2015, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc., Lincoln Global, Inc., Techalloy, Inc., Wayne Trail Technologies, Inc. and the purchasers party thereto (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on April 2, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.4		Note Purchase Agreement, dated as of October 20, 2016, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc., Techalloy, Inc. and Wayne Trail Technologies, Inc. and the purchaser party thereto (filed herewith).
10.5*		Supplemental Executive Retirement Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on January 7, 2009, SEC File No. 0-1402 and incorporated herein by reference and made part hereof).



Exhibit No.		Description
10.6*		Amendment No. 1 to Supplemental Executive Retirement Plan (As Amended and Restated as of December 31, 2008) dated November 29, 2016 (filed herewith).
10.7*		Deferred Compensation Plan for Certain Retention Agreements and Other Contractual Arrangements (Amended and Restated as of January 1, 2004) (filed as Exhibit 10(i) to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2003, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.8*		Non-Employee Directors' Deferred Compensation Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.3 to Form 8-K of Lincoln Electric Holdings, Inc. filed on January 7, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.9*		2005 Deferred Compensation Plan for Executives (Amended and Restated as of January 1, 2016) (filed as Exhibit 10.6 to Form 10-K of Lincoln Electrics Holdings, Inc. for the year ended December 31, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.10*		The Lincoln Electric Company Restoration Plan (filed as Exhibit 4.3 to Form S-8 of Lincoln Electric Holdings, Inc. filed on December 19, 2016, SEC File No. 333-215168, and incorporated herein by reference and made a part hereof).
10.11*		The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2017 dated December 20, 2016 (filed herewith).
10.12*		Form of Severance Agreement (as entered into by the Company and its executive officers) (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended June 30, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.13*		2006 Equity and Performance Incentive Plan (Restated as of March 3, 2011) (filed as Annex A to the Lincoln Electric Holdings, Inc. proxy statement filed on March 18, 2011, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.14*		2006 Stock Plan for Non-Employee Directors (filed as Appendix C to the Lincoln Electric Holdings, Inc. proxy statement dated March 28, 2006, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.15*		Amendment No. 1 to the 2006 Stock Plan for Non-Employee Directors dated October 20, 2006 (filed as Exhibit 10.2 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended March 31, 2007, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
10.16*		Amendment No. 2 to the 2006 Stock Plan for Non-Employee Directors dated July 26, 2007 (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2007, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
10.17*		Amendment No. 3 to the 2006 Stock Plan for Non-Employee Directors dated December 15, 2014 (filed as Exhibit 10.20 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2014, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
10.18*		2015 Equity and Incentive Compensation Plan (filed as Appendix B to the Lincoln Electric Holdings, Inc. definitive proxy statement filed on March 18, 2015, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
10.19*		2015 Stock Plan for Non-Employee Directors (filed as Appendix C to the Lincoln Electric Holdings, Inc. definitive proxy statement filed on March 18, 2015, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
10.20*		Form of Stock Option Agreement for Executive Officers (for awards made before December 2010) (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.21*		Form of Stock Option Agreement for Executive Officers (for awards made on or after December 1, 2010) (filed as Exhibit 10.37 to Form 10-K of the Lincoln Electric Holdings, Inc. for the year ended December 31, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.22*		Form of Restricted Stock Unit Agreement for Executive Officers (for awards made prior to December 2013) (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric Holdings, Inc. filed on August 4, 2011, SEC File No. 0-1402 and incorporated herein by reference and made a part thereof).
10.23*		Form of Amendment to Restricted Stock Unit Agreement for Executive Officers (for awards made prior to December 2013) (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric Holdings, Inc. filed on December 20, 2013, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).



Exhibit No.		Description
10.24*		Form of Restricted Stock Unit Agreement for Executive Officers (for awards made on or after December 2013 - October 2015) (filed as Exhibit 10.33 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2013, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.25*		Form of Restricted Share Agreement for Non-Employee Directors (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on July 29, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.26*		Form of Restricted Stock Unit Agreement for Executive Officers (for awards made on or after October 2015) (filed as Exhibit 10.21 to Form 10-K of Lincoln Electrics Holdings, Inc. for the year ended December 31, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.27*		Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.22 to Form 10-K of Lincoln Electrics Holdings, Inc. for the year ended December 31, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.28*		Form of Officer Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.29*		Form of Director Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
21		Subsidiaries of the Registrant.
23		Consent of Independent Registered Public Accounting Firm.
24		Powers of Attorney.
31.1		Certification by the Chairman, President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2		Certification by the Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document


*	Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	LINCOLN ELECTRIC HOLDINGS, INC.
	By:	/s/ GEOFFREY P. ALLMAN
		Geoffrey P. Allman Senior Vice President, Corporate Controller (principal accounting officer) February 24, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



/s/ CHRISTOPHER L. MAPES		/s/ VINCENT K. PETRELLA
Christopher L. Mapes, Chairman, President and Chief Executive Officer (principal executive officer) February 24, 2017		Vincent K. Petrella, Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer) February 24, 2017

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman, Senior Vice President, Corporate Controller (principal accounting officer) February 24, 2017		Geoffrey P. Allman as Attorney-in-Fact for Curtis E. Espeland, Director February 24, 2017

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for David H. Gunning, Director February 24, 2017		Geoffrey P. Allman as Attorney-in-Fact for Stephen G. Hanks, Director February 24, 2017

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Michael F. Hilton, Director February 24, 2017		Geoffrey P. Allman as Attorney-in-Fact for G. Russell Lincoln, Director February 24, 2017

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Kathryn Jo Lincoln, Director February 24, 2017		Geoffrey P. Allman as Attorney-in-Fact for William E. MacDonald, III, Director February 24, 2017

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Phillip J. Mason, Director February 24, 2017		Geoffrey P. Allman as Attorney-in-Fact for Hellene S. Runtagh, Director February 24, 2017

/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for George H. Walls, Jr., Director February 24, 2017

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Lincoln Electric Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Lincoln Electric Holdings, Inc. and subsidiaries as of December 31, 2016 and 2015 , and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2016 . Our audits also included the financial statement schedule listed in the Index as Item 15 (a) (2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Lincoln Electric Holdings, Inc. and subsidiaries at December 31, 2016 and 2015 , and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 , in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Lincoln Electric Holdings, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

February 24, 2017

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Lincoln Electric Holdings, Inc.

We have audited Lincoln Electric Holdings, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Lincoln Electric Holdings, Inc. and subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting in Item 9A. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Lincoln Electric Holdings, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016 , based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Lincoln Electric Holdings, Inc. and subsidiaries as of December 31, 2016 and 2015 , and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2016 of Lincoln Electric Holdings, Inc. and subsidiaries and our report dated February 24, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio

February 24, 2017

F-2

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



	December 31,
	2016			2015
ASSETS
Current Assets
Cash and cash equivalents	$	379,179		$	304,183
Accounts receivable (less allowance for doubtful accounts of $7,768 in 2016; $7,299 in 2015)	273,993			264,715
Inventories (Note 15)	255,406			275,930
Other current assets (Note 1)	135,135			91,167
Total Current Assets	1,043,713			935,995
Property, plant and equipment, net (Note 1)	$	372,377		$	411,323
Intangibles, net (Note 4)	130,088			120,719
Goodwill (Note 4)	231,919			187,504
Deferred income taxes (Note 12)	8,424			8,683
Other assets	156,916			119,947
TOTAL ASSETS	$	1,943,437		$	1,784,171
LIABILITIES AND EQUITY
Current Liabilities
Amounts due banks (Note 8)	$	1,758		$	2,822
Trade accounts payable	176,757			152,620
Accrued employee compensation and benefits	67,431			65,571
Dividends payable	22,986			22,622
Customer advances	21,238			16,112
Other current liabilities	97,806			108,919
Current portion of long-term debt (Note 8)	131			1,456
Total Current Liabilities	388,107			370,122
Long-term debt, less current portion (Note 8)	703,704			350,347
Deferred income taxes (Note 12)	41,617			46,662
Other liabilities (Note 1)	97,803			84,592
Total Liabilities	1,231,231			851,723
Shareholders' Equity
Preferred shares, without par value – at stated capital amount; authorized – 5,000,000 shares; issued and outstanding – none	—			—
Common shares, without par value – at stated capital amount; authorized – 240,000,000 shares; issued – 98,581,434 shares in 2016 and 2015; outstanding – 65,674,754 shares in 2016 and 70,693,389 shares in 2015	9,858			9,858
Additional paid-in capital	309,417			272,908
Retained earnings	2,236,071			2,125,838
Accumulated other comprehensive loss	(329,037		)	(296,267		)
Treasury shares, at cost – 32,906,680 shares in 2016 and 27,888,045 shares in 2015	(1,514,832		)	(1,180,750		)
Total Shareholders' Equity	711,477			931,587
Non-controlling interests	729			861
Total Equity	712,206			932,448
TOTAL LIABILITIES AND EQUITY	$	1,943,437		$	1,784,171

See notes to these consolidated financial statements.

F-3

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)



	Year Ended December 31,
	2016			2015			2014
Net sales	$	2,274,614		$	2,535,791		$	2,813,324
Cost of goods sold	1,485,316			1,694,647			1,864,027
Gross profit	789,298			841,144			949,297
Selling, general & administrative expenses	466,676			496,748			545,497
Rationalization and asset impairment charges (Note 6)	—			19,958			30,053
Pension settlement charges (Note 11)	—			142,738			—
Loss on deconsolidation of Venezuelan subsidiary (Note 1)	34,348			—			—
Operating income	288,274			181,700			373,747
Other income (expense):
Interest income	2,092			2,714			3,093
Equity earnings in affiliates	2,928			3,015			5,412
Other income	3,173			4,182			3,995
Interest expense	(19,079		)	(21,824		)	(10,434		)
Total other income (expense)	(10,886		)	(11,913		)	2,066
Income before income taxes	277,388			169,787			375,813
Income taxes (Note 12)	79,015			42,375			121,933
Net income including non-controlling interests	198,373			127,412			253,880
Non-controlling interests in subsidiaries' loss	(26		)	(66		)	(806		)
Net income	$	198,399		$	127,478		$	254,686

Basic earnings per share	$	2.94		$	1.72		$	3.22
Diluted earnings per share	$	2.91		$	1.70		$	3.18

Cash dividends declared per share	$	1.31		$	1.19		$	0.98

See notes to these consolidated financial statements.

F-4

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)



	Year Ended December 31,
	2016			2015			2014
Net income including non-controlling interests	$	198,373		$	127,412		$	253,880
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $(21) in 2016; $336 in 2015; $(121) in 2014	39			557			(378		)
Defined pension plan activity, net of tax of $4,297 in 2016; $61,538 in 2015; $(20,951) in 2014	3,837			98,117			(37,200		)
Currency translation adjustment	(36,752		)	(106,935		)	(98,365		)
Transactions with non-controlling interests	—			(7		)	(4		)
Other comprehensive loss	(32,876		)	(8,268		)	(135,947		)
Comprehensive income	165,497			119,144			117,933
Comprehensive loss attributable to non-controlling interests	(132		)	(689		)	(72		)
Comprehensive income attributable to shareholders	$	165,629		$	119,833		$	118,005

See notes to these consolidated financial statements.

F-5

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts)



	Common Shares Outstanding		Common Shares		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Shares			Non-controlling Interests			Total
Balance at December 31, 2013	81,010		$	9,858	$	240,519		$	1,908,462		$	(151,941	)	$	(480,296	)	$	4,086		$	1,530,688
Net income								254,686									(806		)	253,880
Unrecognized amounts from defined benefit pension plans, net of tax											(37,200		)							(37,200		)
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax											(378		)							(378		)
Currency translation adjustment											(99,099		)				734			(98,365		)
Cash dividends declared – $0.98 per share								(76,974		)										(76,974		)
Stock-based compensation activity	385				19,781									3,797						23,578
Purchase of shares for treasury	(4,398	)												(307,178		)				(307,178		)
Transactions with non-controlling interests					(1,484		)				(4		)				(782		)	(2,270		)
Balance at December 31, 2014	76,997		9,858		258,816			2,086,174			(288,622		)	(783,677		)	3,232			1,285,781
Net income								127,478									(66		)	127,412
Unrecognized amounts from defined benefit pension plans, net of tax											98,117									98,117
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax											557									557
Currency translation adjustment											(106,312		)				(623		)	(106,935		)
Cash dividends declared – $1.19 per share								(87,814		)										(87,814		)
Stock-based compensation activity	274				14,092									2,421						16,513
Purchase of shares for treasury	(6,578	)												(399,494		)				(399,494		)
Transactions with non-controlling interests											(7		)				(1,682		)	(1,689		)
Balance at December 31, 2015	70,693		9,858		272,908			2,125,838			(296,267		)	(1,180,750		)	861			932,448
Net income								198,399									(26		)	198,373
Unrecognized amounts from defined benefit pension plans, net of tax											3,837									3,837
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax											39									39
Currency translation adjustment											(36,646		)				(106		)	(36,752		)
Cash dividends declared – $1.31 per share								(88,166		)										(88,166		)
Stock-based compensation activity	843				36,509									7,921						44,430
Purchase of shares for treasury	(5,862	)												(342,003		)				(342,003		)
Balance at December 31, 2016	65,674		$	9,858	$	309,417		$	2,236,071		$	(329,037	)	$	(1,514,832	)	$	729		$	712,206

See notes to these consolidated financial statements.

F-6

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



	Year Ended December 31,
	2016			2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	198,399		$	127,478		$	254,686
Non-controlling interests in subsidiaries' loss	(26		)	(66		)	(806		)
Net income including non-controlling interests	198,373			127,412			253,880
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:
Rationalization and asset impairment charges	—			6,269			29,574
Loss on deconsolidation of Venezuelan subsidiary (Note 1)	34,348			—			—
Depreciation and amortization	65,073			64,007			69,607
Equity earnings in affiliates, net	(261		)	(530		)	(1,848		)
Deferred income taxes	(9,805		)	(55,728		)	17,887
Stock-based compensation (Note 9)	10,332			7,932			8,416
Pension expense, settlements and curtailments (Note 11)	13,988			162,815			12,395
Pension contributions and payments	(22,484		)	(53,547		)	(36,072		)
Other, net	(4,076		)	958			18,095
Changes in operating assets and liabilities, net of effects from acquisitions:
(Increase) decrease in accounts receivable	(12,314		)	56,741			5,876
Decrease (increase) in inventories	14,601			56,067			(5,718		)
Decrease (increase) in other current assets	1,532			(19,972		)	32,081
Increase (decrease) in accounts payable	29,627			(46,911		)	2,135
Decrease in other current liabilities	(18,440		)	(463		)	(3,736		)
Net change in other assets and liabilities	2,909			5,808			(870		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	303,403			310,858			401,702
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(49,877		)	(50,507		)	(72,990		)
Acquisition of businesses, net of cash acquired (Note 3)	(71,567		)	(37,076		)	(24,230		)
Proceeds from sale of property, plant and equipment	1,127			2,310			17,457
Purchase of marketable securities (Note 1)	(38,920		)	—			—
Other investing activities	(709		)	(79		)	778
NET CASH USED BY INVESTING ACTIVITIES	(159,946		)	(85,352		)	(78,985		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	1,892			12,505			11,124
Payments on short-term borrowings	(1,822		)	(9,268		)	(12,226		)
Amounts due banks, net	1,469			(37,466		)	48,978
Proceeds from long-term borrowings	350,261			357,780			8,754
Payments on long-term borrowings	(481		)	(6,945		)	(3,299		)
Proceeds from exercise of stock options	25,049			5,996			9,116
Excess tax benefit from stock-based compensation	9,154			1,974			5,967
Purchase of shares for treasury	(342,003		)	(399,494		)	(307,178		)
Cash dividends paid to shareholders	(87,330		)	(86,968		)	(73,261		)
Other financing activities (Note 14)	(19,043		)	(8,022		)	(2,330		)
NET CASH USED BY FINANCING ACTIVITIES	(62,854		)	(169,908		)	(314,355		)
Effect of exchange rate changes on cash and cash equivalents	(5,607		)	(29,794		)	(29,808		)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	74,996			25,804			(21,446		)
Cash and cash equivalents at beginning of year	304,183			278,379			299,825
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	379,179		$	304,183		$	278,379

See notes to these consolidated financial statements.

F-7

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the "Company") after elimination of all inter-company accounts, transactions and profits.

General Information

The Company is a manufacturer of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes computer numeric controlled ("CNC") plasma and oxy-fuel cutting systems, regulators and torches used in oxy-fuel welding, cutting and brazing and consumables used in the brazing and soldering alloys market.

Translation of Foreign Currencies

Venezuela – Deconsolidation

Effective June 30, 2016, the Company determined that deteriorating conditions in Venezuela had led the Company to no longer meet the accounting criteria for control over its Venezuelan subsidiary. The restrictive exchange controls in Venezuela and the lack of access to U.S. dollars through official currency exchange mechanisms resulted in an other-than-temporary lack of exchangeability between the Venezuela bolivar and the U.S. dollar, and restricted the Venezuela operations ability to pay dividends and satisfy other obligations denominated in U.S. dollars. Additionally, other operating restrictions including government controls on pricing, profits, imports and restrictive labor laws significantly impacted the Company’s ability to make key operational decisions, including the ability to manage its capital structure, purchasing, product pricing and labor relations. Therefore, as of June 30, 2016, the Company deconsolidated the financial statements of its subsidiary in Venezuela and began reporting the results under the cost method of accounting.

As a result of the deconsolidation, the Company recorded a pretax charge of $34,348 ( $33,251 after-tax) in the second quarter of 2016. The pretax charge includes the write-off of the Company’s investment in Venezuela, including all inter-company balances and $283 of Cash and cash equivalents. Additionally, the charge includes foreign currency translation losses and pension losses previously included in Accumulated other comprehensive loss.

Beginning July 1, 2016, the Company no longer includes the results of the Venezuelan subsidiary in its consolidated financial statements. Under the cost method of accounting, if cash were to be received from the Venezuela entity in future periods from the sale of inventory, dividends or royalties, income would be recognized. The Company does not anticipate dividend or royalty payments being made in the foreseeable future and has no outstanding receivables or payables with the Venezuelan entity. The factors that led to the Company’s conclusion to deconsolidate at June 30, 2016 continued to exist through December 31, 2016. The Company expects these conditions to continue for the foreseeable future.

Subsequent to the deconsolidation under the voting interest consolidation model, the Company determined that the Venezuelan subsidiary is considered to be a variable interest entity ("VIE"). As the Company does not have the power to direct the activities that most significantly affect the Venezuela subsidiary's economic performance, the Company is not the primary beneficiary of the VIE and therefore would not consolidate the entity under the VIE consolidation model. Due to the lack of ability to settle U.S. dollar obligations, the Company does not intend to sell into nor purchase inventory from the Venezuela

F-8

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

entity at this time. Additionally, the Company has no remaining financial commitments to the Venezuelan subsidiary and therefore believes the exposure to future losses are not material.

Prior to deconsolidation, the financial statements of the Company’s Venezuelan operation had been reported under highly inflationary accounting rules since January 1, 2010. Under highly inflationary accounting, the financial statements of the Company’s Venezuelan operation had been remeasured into the Company’s reporting currency and exchange gains and losses from the remeasurement of monetary assets and liabilities were reflected in current earnings.

In February 2015, the Venezuelan government announced a new exchange market called the Marginal Currency System (“SIMADI”), which allowed for trading based on supply and demand. At September 30, 2015, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SIMADI rate (now known as "DICOM"), as the SIMADI rate most appropriately approximated the rates used to transact business in its Venezuelan operations. At September 30, 2015, the SIMADI rate was 199.4 bolivars to the U.S. dollar, resulting in a remeasurement charge on the bolivar-denominated monetary net asset position of $4,334 . This foreign exchange loss was recorded in Selling, general & administrative expenses during the three months ended September 30, 2015. Additionally, the Company recorded a lower of cost or net realizable value inventory adjustments of $22,880 within Cost of goods sold, related to the adoption of the SIMADI rate.

In January 2014, the exchange rate applicable to the settlement of certain transactions, including payments of dividends and royalties, changed to utilize the Complementary System of Foreign Currency Administration ("SICAD") auction-based exchange rate (the "SICAD rate"). As of March 31, 2014, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SICAD rate as future remittances for dividend payments could be transacted at the SICAD rate. As of March 31, 2014, the SICAD rate was 10.7 bolivars to the U.S. dollar, which resulted in a remeasurement loss on the bolivar-denominated monetary net asset position of $17,665 which was recorded in Selling, general & administrative expenses in the three months ended March 31, 2014. Additionally, the Company incurred higher Cost of goods sold of $3,468 during the second quarter of 2014 related to the adoption of the SICAD rate.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable

Inventories

Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. The reserve for excess and obsolete inventory was $19,252 and $19,198 at December 31, 2016 and 2015, respectively.

Marketable Securities

The Company's marketable securities consist of short-term highly liquid investments classified as available-for-sale and recorded at fair value using quoted market prices for similar assets at the end of the reporting period. The marketable securities are included in Other current assets in the accompanying Consolidated Balance Sheets. Refer to Note 14 for fair value information.

F-9

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Prepaid Expenses

Prepaid expenses include prepaid insurance, prepaid rent, prepaid service contracts and other prepaid items. Prepaid expenses are included in Other current assets in the accompanying Consolidated Balance Sheets and amounted to $12,139 at December 31, 2016 and $11,624 at December 31, 2015.

Equity Investments

Investments in businesses in which the Company does not have a controlling interest and holds between a 20% and 50% ownership interest are accounted for using the equity method of accounting. The Company's 50% ownership interest in equity investments includes investments in Turkey and Chile. The amount of retained earnings that represents undistributed earnings of 50% or less owned equity investments was $19,333 at December 31, 2016 and $19,072 at December 31, 2015 .

Property, Plant and Equipment

Property, plant and equipment are stated at cost and include improvements which significantly increase capacities or extend the useful lives of existing plant and equipment. Depreciation and amortization are computed using a straight-line method over useful lives ranging from three to 20 years for machinery, tools and equipment, and up to 40 years for buildings. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur.

Routine maintenance, repairs and replacements are expensed as incurred. The Company capitalizes interest costs associated with long-term construction in progress.

Property, plant and equipment, net in the Consolidated Balance Sheet is comprised of the following components:



	December 31,
	2016		2015
Land	$	46,219	$	45,775
Buildings	335,885		362,325
Machinery and equipment	706,938		696,849
	1,089,042		1,104,949
Less accumulated depreciation	716,665		693,626
Total	$	372,377	$	411,323

Goodwill and Intangibles

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized, but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.

Long-Lived Assets

F-10

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. Refer to Notes 4 and 6 for additional details.

Fair Value Measurements

Financial assets and liabilities, such as the Company's defined benefit pension plan assets and derivative contracts, are valued at fair value using the market and income valuation approaches. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company uses the market approach to value similar assets and liabilities in active markets and the income approach that consists of discounted cash flow models that take into account the present value of future cash flows under the terms of the contracts using current market information as of the reporting date. The following hierarchy is used to classify the inputs used to measure fair value:



Level 1		Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2		Inputs to the valuation methodology include:
		• Quoted prices for similar assets or liabilities in active markets;
		• Quoted prices for identical or similar assets or liabilities in inactive markets;
		• Inputs other than quoted prices that are observable for the asset or liability; and
		• Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
		If the asset or liability has a specific (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3		Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Refer to Notes 11 and 14 for additional details.

Product Warranties

The Company accrues for product warranty claims based on historical experience and the expected material and labor costs to provide warranty service. Warranty services are generally provided for periods up to three years from the date of sale. The accrual for product warranty claims is included in Other current liabilities. Refer to Note 18.

Revenue Recognition

Distribution Costs

Distribution costs, including warehousing and freight related to product shipments, are included in Cost of goods sold.

Stock-Based Compensation

Common stock issuable upon the exercise of employee stock options is excluded from the calculation of diluted earnings per share when the calculation of option equivalent shares is anti-dilutive. Refer to Note 9 for additional details.

Financial Instruments

The Company uses derivative instruments to manage exposures to interest rates, commodity prices and currency exchange rate fluctuations on certain purchase and sales transactions, balance sheet and net investment exposures. Derivative contracts to

F-11

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

hedge currency and commodity exposures are generally written on a short-term basis but may cover exposures for up to two years while interest rate contracts may cover longer periods consistent with the terms of the underlying debt. The Company does not enter into derivatives for trading or speculative purposes.

All derivatives are recognized at fair value on the Company's Consolidated Balance Sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. The Company formally documents the relationship of the hedge with the hedged item as well as the risk-management strategy for all designated hedges. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness, when applicable. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, hedge accounting is discontinued. The cash flows from settled derivative contracts are recognized in operating activities in the Company's Consolidated Statements of Cash Flows.

The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. The Company manages individual counterparty exposure by monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the Company and the counterparty.

Cash flow hedges

Certain foreign currency forward contracts are qualified and designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows). The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of Accumulated other comprehensive income ("AOCI") with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. At settlement, the realized gain or loss is recorded in Cost of goods sold or sales for hedges of purchases and sales, respectively, in the same period or periods during which the hedged transaction affects earnings. The ineffective portion on cash flow hedges is recognized in current earnings.

Fair value hedges

Certain interest rate swap agreements were qualified and designated as fair value hedges. The interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under accounting standards for derivatives and hedging. Accordingly, changes in the fair value of these agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. The effective portion of the changes in fair value are recorded in Other assets or Other liabilities with offsetting amounts recorded as a fair value adjustment to the carrying value of Long-term debt, less current portion.

Net investment hedges

For derivative instruments that qualify as a net investment hedge (i.e., hedging the foreign currency exposure of a net investment in a foreign operation), the effective portion of the fair value gains or losses are recognized in AOCI with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. The gains or losses are subsequently reclassified to Selling, general and administrative expenses, as the underlying hedged investment is liquidated.

Derivatives not designated as hedging instruments

The Company has certain derivative instruments which are not designated as hedging instruments including foreign exchange forward contracts and commodity price contracts. Foreign exchange forward contracts are held as economic hedges of certain balance sheet exposures and qualify as fair value hedges (i.e., hedging the exposure to changes in the fair value of an asset or a liability). The gains or losses on t hese contracts are recognized in Selling, general and administrative expenses, offsetting the losses or gains on the exposures being hedged. Short-term commodity price contracts are not designated as hedges. Realized and unrealized gains and losses on these contracts are recognized in Costs of goods sold.

Refer to Note 13 for additional details.

Research and Development

Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled $44,720 , $47,182 and $43,256 in 2016 , 2015 and 2014 , respectively.

Bonus

Included in Selling, general & administrative expenses are the costs related to the Company's discretionary employee bonus programs, which for certain U.S.-based employees are net of hospitalization costs. Bonus costs were $83,620 in 2016 , $98,651 in 2015 and $128,478 in 2014 .

F-12

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Income Taxes

Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. Refer to Note 12 for additional details.

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates.

Reclassification

Certain reclassifications have been made to prior year financial statements to conform to current year classifications.

New Accounting Pronouncements

The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.

New Accounting Pronouncements Adopted:

The following ASUs were adopted as of January 1, 2016 and did not have a significant financial impact on the Company's financial statements:



Standard	Description
Accounting Standard Update ("ASU") No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , issued September 2015	ASU 2015-16 requires an acquiring entity to: recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustment amounts are determined; record the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts; present separately on the face of the statement of operations or disclose in the notes the portion of the amount recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date.
ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share , issued May 2015	ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient and removes the requirement to make certain disclosures for these investments.
ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , issued February 2015	ASU 2015-02 modifies the evaluation of whether limited partnership and similar legal entities are VIEs or voting interest entities, affects the consolidation analysis of reporting entities that are involved with VIEs and provides scope exceptions.

New Accounting Pronouncements to be Adopted:

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017.

ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies resulting from stock-based compensation awards vesting and exercises be recognized as a discrete income tax adjustment in the income statement. Previously, these amounts were recognized in Additional paid-in capital. The impact of the tax adjustment will vary depending on the amount and timing of stock options. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be prospectively excluded from the assumed future proceeds in the calculation of diluted shares. The Company expects this change to increase the number of diluted shares in subsequent periods, but not have a material impact on diluted earnings per share.

ASU 2016-09 requires that excess tax benefits from share based compensation awards be reported as operating activities in the Consolidated Statements of Cash Flows. Previously, this activity was included in financing activities on the Consolidated Statement of Cash Flows. The Company has elected to apply this change on a retrospective basis. As a result, in subsequent periods, the Company expects 2016 and 2015 Net cash provided by operating activities and Net cash used by financing

F-13

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

activities to increase by the amount reported as Excess tax benefits from stock-based compensation on the Consolidated Statements of Cash Flows.

ASU 2016-09 requires that employee taxes paid when an employer withholds shares for tax-withholding purposes be reported as financing activities in the Consolidated Statements of Cash Flows on a retrospective basis. Previously, this activity was included in operating activities. The Company expects the impact of this change to be immaterial to the Consolidated Statements of Cash Flows.

The Company has elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. In August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. To evaluate the impact of adopting this new guidance on the consolidated financial statements, the Company completed a scoping analysis of revenue streams against the requirements of the standard. In addition, the Company is in the process of reviewing customer contracts, as well as identifying and implementing changes to processes and controls to meet the standard’s reporting and disclosure requirements. ASU 2014-09 will accelerate the timing of when certain transactions are recognized as revenue upon adoption of the guidance’s control model. The Company is currently evaluating the impact of the adoption of ASU 2014-09.

The Company is currently evaluating the impact on its financial statements of the following ASUs:



Standard	Description
ASU No. 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , issued January 2017.	ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this ASU, an entity should perform the Step 1 annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The ASU is effective January 1, 2020, early adoption is permitted and the ASU should be applied prospectively.
ASU No. 2016-18, Statement of Cash Flows(Topic 230): Restricted Cash, issued November 2016.	ASU 2016-18 requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective January 1, 2018, early adoption is permitted and the ASU should be applied retrospectively.
ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, issued October 2016.	ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective January 1, 2018, early adoption is permitted and the ASU should be applied using a modified retrospective approach, through a cumulative-effect adjustment directly to retained earnings, as of the beginning of the period of adoption.
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, issued August 2016.	ASU 2016-15 reduces existing diversity in practice by addressing eight specific cash flow issues related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective January 1, 2018, early adoption is permitted and the ASU should be applied retrospectively (or prospectively as of earliest date practicable).
ASU No. 2016-02, Leases (Topic 842) , issued February 2016.	ASU 2016-02 aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing agreements. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The ASU is effective January 1, 2019, early adoption is permitted and the ASU should be applied using either a modified retrospective or modified retrospective with practical expedients approach.

F-14

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 2 - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:



	Year Ended December 31,
	2016		2015		2014
Numerator:
Net income	$	198,399	$	127,478	$	254,686
Denominator:
Basic weighted average shares outstanding	67,462		74,111		79,185
Effect of dilutive securities - Stock options and awards	694		743		911
Diluted weighted average shares outstanding	68,156		74,854		80,096
Basic earnings per share	$	2.94	$	1.72	$	3.22
Diluted earnings per share	$	2.91	$	1.70	$	3.18

For the years ended December 31, 2016 , 2015 and 2014 , common shares subject to equity-based awards of 774,502 , 522,471 and 260,090 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

NOTE 3 – ACQUISITIONS

During May 2016, the Company acquired Vizient Manufacturing Solutions ("Vizient"). Vizient, based in Bettendorf, Iowa, is a robotic integrator specializing in custom engineered tooling and automated arc welding systems for general and heavy fabrication applications. The acquisition assisted in diversifying end-market exposure and broadening global growth opportunities.

During August 2015, the Company acquired Specialised Welding Products ("SWP"). SWP, based in Melbourne, Australia, is a provider of specialty welding consumables and fabrication, maintenance and repair services for alloy and wear resistant products commonly used in mining and energy sector applications. The acquisition broadened the Company's presence and specialty alloy offering in Australia and New Zealand.

Also in August 2015, the Company acquired Rimrock Holdings Corporation ("Rimrock"). Rimrock is a manufacturer of industrial automation products and robotic systems with two divisions, Wolf Robotics LLC, based in Fort Collins, Colorado, and Rimrock Corporation, based in Columbus, Ohio. Wolf Robotics integrates robotic welding and cutting systems predominantly for heavy fabrication and transportation OEMs and suppliers. The acquisition advanced the Company's leadership position in automated welding and cutting solutions. Rimrock Corporation designs and manufactures automated spray systems and turnkey robotic systems for the die casting, foundry and forging markets.

During October 2014, the Company acquired substantially all of the assets of Easom Automation Systems, Inc. ("Easom"). Easom, based in Detroit, Michigan, is an integrator and manufacturer of automation and positioning solutions, serving heavy fabrication, aerospace and automotive OEMs and suppliers. The acquisition advanced the Company's leadership position in automated welding and cutting solutions. In addition, during 2014, the Company acquired the remaining interest in its majority-owned joint venture, Harris Soldas Especiais S.A.

Pro forma information related to these acquisitions has not been presented because the impact on the Company's Consolidated Statements of Income is not material. Acquired companies are included in the Company's consolidated financial statements as of the date of acquisition.

F-15

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 4 – GOODWILL AND INTANGIBLES

The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2016 and 2015 were as follows:



	Americas Welding		International Welding			The Harris Products Group			Consolidated
Balance as of December 31, 2014	$	138,192	$	28,850		$	13,085		$	180,127
Additions and adjustments	19,700		3,846			(301		)	23,245
Impairment charges	—		(6,315		)	—			(6,315		)
Foreign currency translation	(5,557)		(3,036		)	(960		)	(9,553		)
Balance as of December 31, 2015	152,335		23,345			11,824			187,504
Additions and adjustments	43,217		(30		)	(301		)	42,886
Foreign currency translation	826		349			354			1,529
Balance as of December 31, 2016	$	196,378	$	23,664		$	11,877		$	231,919

Additions to goodwill primarily reflect goodwill recognized in the acquisition of Vizient in 2016 and the acquisitions of Rimrock and SWP in 2015 (see Note 3 for additional details). During 2015, the Company determined that for certain long-lived assets of a business unit, the carrying value of the assets exceeded the fair value resulting in impairment (see Note 6 for additional details). This result was considered a possible indication of goodwill impairment, therefore, the Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches resulting in a $6,315 non-cash impairment charge to the carrying value of goodwill. The adjustments to goodwill include the tax benefit attributable to the amortization of tax deductible goodwill in excess of goodwill recorded for financial reporting purposes.

Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class as of December 31, 2016 and 2015 were as follows:



	December 31, 2016				December 31, 2015
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets not subject to amortization
Trademarks and trade names	$	17,113			$	15,919
Intangible assets subject to amortization
Trademarks and trade names	$	44,372	$	20,648	$	36,754	$	18,243
Customer relationships	85,816		39,033		77,590		33,932
Patents	28,073		11,467		24,208		6,884
Other	52,071		26,209		54,586		29,279
Total intangible assets subject to amortization	$	210,332	$	97,357	$	193,138	$	88,338

Increases in gross intangible assets primarily reflect the acquisition of Vizient in 2016 and the acquisitions of Rimrock and SWP in 2015. During 2015, the Company recognized non-cash impairment charges of $3,417 related to trademarks and trade names, customer relationships and other definite lived intangible assets (see Note 6 for additional details). All impairment charges have been recorded within Rationalization and asset impairment charges.

F-16

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

During 2016, the Company acquired intangible assets, either individually or as part of a group of assets, with an initial purchase price allocation and weighted-average lives as follows:



	Year Ended December 31, 2016
	Purchase Price Allocation		Weighted Average Life
Acquired intangible assets not subject to amortization
Trademarks and trade names	$	989
Acquired intangible assets subject to amortization
Trademarks and trade names	2,400		15
Customer relationships	14,500		10
Patents	1,458		20
Other	5,920		11
Total acquired intangible assets subject to amortization	$	24,278

Aggregate amortization expense was $14,525 , $13,296 and $13,869 for 2016 , 2015 and 2014 , respectively. Estimated annual amortization expense for intangible assets for each of the next five years is $14,647 in 2017 , $14,129 in 2018 , $12,861 in 2019 , $12,588 in 2020 and $11,678 in 2021 .

NOTE 5 – SEGMENT INFORMATION

The Company's primary business is the design and manufacture of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.

During the first quarter of 2016, the Company realigned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company's worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company's global cutting, soldering and brazing businesses as well as its retail business in the United States. All prior period results have been revised to reflect the realigned segment structure.

Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes ("Adjusted EBIT"). EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. The accounting principles applied at the operating segment level are generally the same as those applied at the consolidated financial statement level with the exception of LIFO. Segment assets include inventories measured on a FIFO basis while consolidated inventories include inventories reported on a LIFO basis. Segment and consolidated income before interest and income taxes include the effect of inventories reported on a LIFO basis. At December 31, 2016 , 2015 and 2014 , approximately 40% of total inventories were valued using the LIFO method. LIFO is used for a substantial portion of U.S. inventories included in Americas Welding. Inter-segment sales are recorded at agreed upon prices that approximate arm's length prices and are eliminated in consolidation. Corporate-level expenses are allocated to the operating segments.

F-17

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Financial information for the reportable segments follows:



	Americas Welding		International Welding		The Harris Products Group		Corporate / Eliminations			Consolidated
For the Year Ended December 31, 2016
Net sales	$	1,494,982	$	507,289	$	272,343	$	—		$	2,274,614
Inter-segment sales	93,612		15,975		8,709		(118,296		)	$	—
Total	$	1,588,594	$	523,264	$	281,052	$	(118,296	)	$	2,274,614
Adjusted EBIT	$	266,633	$	29,146	$	32,380	$	564		$	328,723
Special items charge	—		—		—		34,348			$	34,348
EBIT	$	266,633	$	29,146	$	32,380	$	(33,784	)	$	294,375
Interest income										2,092
Interest expense										(19,079		)
Income before income taxes										$	277,388

Total assets	$	1,278,417	$	529,223	$	161,391	$	(25,594	)	$	1,943,437
Equity investments in affiliates	3,946		23,355		—		—			$	27,301
Capital expenditures	35,314		12,354		2,209		—			$	49,877
Depreciation and amortization	47,359		15,063		2,860		(209		)	$	65,073
For the Year Ended December 31, 2015
Net sales	$	1,741,350	$	530,460	$	263,981	$	—		$	2,535,791
Inter-segment sales	92,538		18,747		9,312		(120,597		)	$	—
Total	$	1,833,888	$	549,207	$	273,293	$	(120,597	)	$	2,535,791
Adjusted EBIT	$	316,689	$	34,511	$	27,882	$	(275	)	$	378,807
Special items charge	173,239		16,671		—		—			$	189,910
EBIT	$	143,450	$	17,840	$	27,882	$	(275	)	$	188,897
Interest income										2,714
Interest expense										(21,824		)
Income before income taxes										$	169,787

Total assets	$	1,165,817	$	543,254	$	143,905	$	(68,805	)	$	1,784,171
Equity investments in affiliates	3,791		23,450		—		—			$	27,241
Capital expenditures	35,721		12,059		2,727		—			$	50,507
Depreciation and amortization	45,447		15,776		2,978		(194		)	$	64,007
For the Year Ended December 31, 2014
Net sales	$	1,837,670	$	681,424	$	294,230	$	—		$	2,813,324
Inter-segment sales	110,524		21,608		8,210		(140,342		)	$	—
Total	$	1,948,194	$	703,032	$	302,440	$	(140,342	)	$	2,813,324
Adjusted EBIT	$	353,255	$	48,720	$	28,563	$	3,802		$	434,340
Special items charge	21,647		29,539		—		—			$	51,186
EBIT	$	331,608	$	19,181	$	28,563	$	3,802		$	383,154
Interest income										3,093
Interest expense										(10,434		)
Income before income taxes										$	375,813

Total assets	$	1,214,988	$	663,164	$	147,990	$	(86,927	)	$	1,939,215
Equity investments in affiliates	3,579		23,902		—		—			$	27,481
Capital expenditures	62,066		10,099		825		—			$	72,990
Depreciation and amortization	44,710		21,624		3,512		(239		)	$	69,607

F-18

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

In 2016, special items within Corporate /Eliminations reflect a loss on the deconsolidation of the Venezuelan subsidiary.

In 2015, special items in Americas Welding and International Welding include rationalization charges primarily related to employee severance and other related costs. Americas Welding special items also reflect Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism, as well as pension settlement charges primarily related to the purchase of a group annuity contract. International Welding special items also include charges related to the impairment of long-lived assets and charges related to the impairment to the carrying value of goodwill.

In 2014, special items in Americas Welding and International Welding include net rationalization charges primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. Americas Welding special items also include Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism. International Welding special items also include net charges related to the impairment of long-lived assets partially offset by gains related to the sale of assets.

Export sales (excluding inter-company sales) from the United States were $134,216 in 2016 , $175,049 in 2015 and $210,325 in 2014 . No individual customer comprised more than 10% of the Company's total revenues for any of the three years ended December 31, 2016 .

The geographic split of the Company's Net sales, based on the location of the customer, and property, plant and equipment were as follows:



	Year Ended December 31,
	2016		2015		2014
Net sales:
United States	$	1,308,635	$	1,387,882	$	1,417,750
Foreign countries	965,979		1,147,909		1,395,574
Total	$	2,274,614	$	2,535,791	$	2,813,324



	December 31,
	2016			2015			2014
Property, plant and equipment, net:
United States	$	176,041		$	173,974		$	171,746
Foreign countries	196,679			237,718			267,423
Eliminations	(343		)	(369		)	(423		)
Total	$	372,377		$	411,323		$	438,746

NOTE 6 – RATIONALIZATION AND ASSET IMPAIRMENTS

In prior periods, the Company initiated various rationalization plans whose costs were substantially recognized in the prior year. As such, no charges were recorded in the twelve months ended December 31, 2016. The Company recorded rationalization net charges of $19,958 and $30,053 for the years ended December 31, 2015 and 2014 , respectively. A description of each restructuring plan and the related costs follows:

Americas Welding Plans:

During 2015, the Company initiated a rationalization plan within Americas Welding that included a voluntary separation incentive program covering certain U.S.-based employees. The plan was completed during 2016.

International Welding Plans:

During 2015, the Company initiated rationalization plans within International Welding. The plan included headcount restructuring to better align the cost structures with economic conditions and operating needs. The Company does not anticipate any additional charges related to the completion of these plans. At December 31, 2016 , liabilities relating to the International Welding plans of $5,190 , were recognized in Other current liabilities.

F-19

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods. The following table summarizes the activity related to the rationalization liabilities by segment for the year ended December 31, 2016 :



	Americas Welding			International Welding			Consolidated
Balance at December 31, 2014	$	—		$	305		$	305
Payments and other adjustments	(3,231		)	(3,128		)	(6,359		)
Charged (credited) to expense	3,298			10,421			13,719
Balance at December 31, 2015	$	67		$	7,598		$	7,665
Payments and other adjustments	(67		)	(2,408		)	(2,475		)
Balance at December 31, 2016	$	—		$	5,190		$	5,190

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The following tables set forth the total changes in AOCI by component, net of taxes, for the years ended December 31, 2016 and 2015 :



	Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges				Defined benefit pension plan activity				Currency translation adjustment				Total
Balance at December 31, 2014	$	(9	)		$	(197,893	)		$	(90,720	)		$	(288,622	)
Other comprehensive income (loss) before reclassification	979				(1,632		)	⁽²⁾	(106,319		)	⁽³⁾	(106,972		)
Amounts reclassified from AOCI	(422		)	⁽¹⁾	99,749			⁽²⁾	—				99,327
Net current-period other comprehensive income (loss)	557				98,117				(106,319		)		(7,645		)
Balance at December 31, 2015	$	548			$	(99,776	)		$	(197,039	)		$	(296,267	)
Other comprehensive income (loss) before reclassification	2,026				(1,268		)	⁽²⁾	(36,646		)	⁽³⁾	(35,888		)
Amounts reclassified from AOCI	(1,987		)	⁽¹⁾	5,105			⁽²⁾	—				3,118
Net current-period other comprehensive income (loss)	39				3,837				(36,646		)		(32,770		)
Balance at December 31, 2016	$	587			$	(95,939	)		$	(233,685	)		$	(329,037	)


(1)	During 2016 , this AOCI reclassification is a component of Net sales of $(1,580) (net of tax of $(577) ) and Cost of goods sold of $(407) (net of tax of $(24) ); during 2015 , the reclassification is a component of Net sales of $(1,191) (net of tax of $(547) ) and Cost of goods sold of $771 (net of tax of $549 ). See Note 13 for additional details.


(2)	This AOCI component is included in the computation of net periodic pension costs (net of tax of $4,297 and $61,538 during the years ended December 31, 2016 and 2015 , respectively). See Note 11 for additional details.


(3)	The Other comprehensive income before reclassifications excludes $(106) and $(623) attributable to Non-controlling interests in the years ended December 31, 2016 and 2015 , respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. See Consolidated Statements of Equity for additional details.

F-20

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 8 – DEBT

At December 31, 2016 and 2015 , debt consisted of the following:



	December 31,
	2016		2015
Long-term debt
Senior Unsecured Notes due through 2045, interest at 2.8% to 4.0% (net of debt issuance costs of $1,586 and $853 at December 31, 2016 and 2015, respectively), swapped $100,000 to variable interest rates of 1.5% to 2.7%	$	692,975	$	349,147
Other borrowings due through 2023, interest up to 8.0%	10,860		2,656
	703,835		351,803
Less current portion	131		1,456
Long-term debt, less current portion	703,704		350,347
Short-term debt
Amounts due banks, interest at 29.0% (24.1% in 2015)	1,758		2,822
Current portion long-term debt	131		1,456
Total short-term debt	1,889		4,278
Total debt	$	705,593	$	354,625

Senior Unsecured Notes

On April 1, 2015 , the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2015 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds were used for general corporate purposes. The 2015 Notes, as shown in the table below, have original maturities ranging from 10 to 30 years with a weighted average effective interest rate of 3.5% , excluding accretion of original issuance costs, and an initial average tenure of 19 years. Interest is payable semi-annually. The 2015 Notes contain certain affirmative and negative covenants. As of December 31, 2016, the Company was in compliance with all of its debt covenants .

The maturity and interest rates of the 2015 Notes are as follows:



	Amount		Maturity Date	Interest Rate
Series A	$	100,000	August 20, 2025	3.15	%
Series B	100,000		August 20, 2030	3.35	%
Series C	50,000		April 1, 2035	3.61	%
Series D	100,000		April 1, 2045	4.02	%

On October 20, 2016 the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2016 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds are being used for general corporate purposes. The 2016 Notes, as shown in the table below, have original maturities ranging from 12 to 25 years with a weighted average effective interest rate of 3.1% , excluding accretion of original issuance costs, and an initial average tenure of 18 years. Interest is payable semi-annually. The 2016 Notes contain certain affirmative and negative covenants. As of December 31, 2016, the Company was in compliance with all of its debt covenants .

F-21

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The maturity and interest rates of the 2016 Notes are as follows:



	Amount		Maturity Date	Interest Rate
Series A	$	100,000	October 20, 2028	2.75	%
Series B	100,000		October 20, 2033	3.03	%
Series C	100,000		October 20, 2037	3.27	%
Series D	50,000		October 20, 2041	3.52	%

The Company's total weighted average effective interest rate and weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 18 years, respectively.

Revolving Credit Agreement

The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (the “Credit Agreement”), which was entered into on September 12, 2014 . The Credit Agreement contains customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets, transactions with affiliates, a fixed charges coverage ratio and total leverage ratio. As of December 31, 2016, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. The Credit Agreement has a five -year term and may be increased, subject to certain conditions, by an additional amount up to $100,000 . The interest rate on borrowings is based on either the London Inter-Bank Offered Rate ("LIBOR") or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election.

Short-term Borrowings

The Company had short-term borrowings of $1,758 included in Amounts due banks at December 31, 2016 and had a balance of $2,822 at December 31, 2015. Amounts due banks included the borrowings of subsidiaries at weighted average interest rates of 29.0% and 24.1% at December 31, 2016 and 2015 , respectively.

Other

Maturities of long-term debt, including payments under capital leases and amounts due banks, for the five years succeeding December 31, 2016 are $1,889 in 2017 , $104 in 2018 , $103 in 2019 , $101 in 2020 , $103 in 2021 and $710,712 thereafter. Total interest paid was $15,332 in 2016 , $5,631 in 2015 and $2,190 in 2014 . The difference between interest paid and interest expense is due to the accrual of interest associated with the Senior Unsecured Notes and adjustments to the forward contract discussed in Note 14.

NOTE 9 – STOCK PLANS

F-22

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Stock Options

The following table summarizes stock option activity for the year ended December 31, 2016 under all Plans:



	Year Ended December 31,
	2016
	Options		Weighted Average Exercise Price
Balance at beginning of year	2,194,649		$	42.85
Options granted	247,310		58.14
Options exercised	(820,972	)	30.51
Options canceled	(11,285	)	66.48
Balance at end of year	1,609,702		51.32
Exercisable at end of year	1,151,320		46.56

Options granted under both the Employee Plan and its predecessor plans may be outstanding for a maximum of 10 years from the date of grant. The majority of options granted vest ratably over a period of three years from the grant date. The exercise prices of all options were equal to the quoted market price of the Company's common shares at the date of grant. The Company issued shares of common stock from treasury upon all exercises of stock options in 2016 . In 2016, all options issued were under the Employee Plan.

The Company uses the Black-Scholes option pricing model for estimating fair values of options. In estimating the fair value of options granted, the expected option life is based on the Company's historical experience. The expected volatility is based on historical volatility. The weighted average assumptions for each of the three years ended December 31, 2016 were as follows:



	Year Ended December 31,
	2016			2015			2014
Expected volatility	28.86		%	30.73		%	32.21		%
Dividend yield	1.70		%	1.48		%	1.41		%
Risk-free interest rate	1.27		%	1.32		%	1.61		%
Expected option life (years)	4.5			4.5			4.4
Weighted average fair value per option granted during the year	$	12.55		$	16.35		$	17.52

The following table summarizes non-vested stock options for the year ended December 31, 2016 :



	Year Ended December 31, 2016
	Number of Options		Weighted Average Fair Value at Grant Date
Balance at beginning of year	387,222		$	16.66
Granted	247,310		12.55
Vested	(168,050	)	17.05
Forfeited	(8,100	)	15.43
Balance at end of year	458,382		14.32

The aggregate intrinsic value of options outstanding and exercisable which would have been received by the optionees had all awards been exercised at December 31, 2016 was $40,803 and $34,666 , respectively. The total intrinsic value of awards exercised during 2016 , 2015 and 2014 was $30,967 , $6,879 and $14,647 , respectively. The total fair value of options that vested during 2016 , 2015 and 2014 was $2,865 , $3,273 and $5,104 , respectively.

F-23

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The following table summarizes information about awards outstanding as of December 31, 2016 :



	Outstanding				Exercisable
Exercise Price Range	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Life (years)	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Life (years)
Under $49.99	823,040	$	37.00	4.5	823,040	$	37.00	4.5
$50.00 - $59.99	254,517	58.06		9.1	4,760	53.96		6.8
Over $60.00	532,145	70.25		7.6	323,520	70.76		7.3
	1,609,702			6.3	1,151,320			5.3

Restricted Share Awards ("RSAs")

The following table summarizes restricted share award activity for the year ended December 31, 2016 under all Plans:



	Year Ended December 31,
	2016
	Shares		Weighted Average Grant Date Fair Value
Balance at beginning of year	44,629		$	61.84
Shares granted	13,470		79.43
Shares vested	(11,940	)	70.80
Shares forfeited	—		—
Balance at end of year	46,159		64.65

RSAs are valued at the quoted market price on the grant date. The majority of RSAs vest over a period of three to five years. The Company issued common shares from treasury upon the granting of RSAs in 2016 . Restricted shares issued in 2016 were under the 2015 Director Plan. The remaining weighted average vesting period of all non-vested RSAs is 2.0 years as of December 31, 2016 .

Restricted Stock Units ("RSUs") and Performance Share Units ("PSUs")

The following table summarizes RSU and PSU activity for the year ended December 31, 2016 under all Plans:



	Year Ended December 31,
	2016
	Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	221,532		$	59.10
Units granted	188,635		58.33
Units vested	(25,891	)	43.83
Units forfeited	(7,492	)	60.28
Balance at end of year	376,784		59.75

RSUs are valued at the quoted market price on the grant date. The majority of RSUs vest over a period of three to five years. The Company issues shares of common stock from treasury upon the vesting of RSUs and any earned dividend equivalents. Conversion of 17,132 RSUs to common shares in 2016 were deferred as part of the 2005 Deferred Compensation Plan for Executives (the "2005 Plan"). As of December 31, 2016 , 84,654 RSUs, including related dividend equivalents, have been deferred under the 2005 Plan. These units are reflected within dilutive shares in the calculation of earnings per share. In 2016, 142,165 RSUs were issued under the Employee Plan. The remaining weighted average vesting period of all non-vested RSUs is 2.3 years as of December 31, 2016 .

PSUs are valued at the quoted market price on the grant date. PSUs vest over a three -year period and are based on the Company's performance relative to pre-established performance goals. The Company issues common stock from treasury upon

F-24

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

the vesting of PSUs and any earned dividend equivalents. In 2016, the Company issued and has outstanding 46,470 PSUs under the Employee Plan at a weighted average fair value of $58.14 per share. The remaining weighted average vesting period of all non-vested PSUs is 2.1 years as of December 31, 2016.

Stock-Based Compensation Expense

Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares, RSUs or PSUs ultimately forfeited because recipients fail to meet vesting requirements. Total stock-based compensation expense recognized in the Consolidated Statements of Income for 2016 , 2015 and 2014 was $10,332 , $7,932 and $8,416 , respectively. The related tax benefit for 2016 , 2015 and 2014 was $3,955 , $3,037 and $3,222 , respectively. As of December 31, 2016 , total unrecognized stock-based compensation expense related to non-vested stock options, RSAs, RSUs and PSUs was $18,839 , which is expected to be recognized over a weighted average period of approximately 2.3 years .

Lincoln Stock Purchase Plan

The 1995 Lincoln Stock Purchase Plan provides employees the ability to purchase open market shares on a commission-free basis up to a limit of ten thousand dollars annually. Under this plan, 800,000 shares have been authorized to be purchased. Shares purchased were 15,827 in 2016 , 16,012 in 2015 and 5,511 in 2014 .

NOTE 10 – COMMON STOCK REPURCHASE PROGRAM

The Company has a share repurchase program for up to 55 million of the Company's common shares. At management's discretion, the Company repurchases its common shares from time to time in the open market, depending on market conditions, stock price and other factors. During the year ended December 31, 2016 , the Company purchased a total of 5.9 million shares at an average cost per share of $58.34 . As of December 31, 2016 , 8.9 million shares remained available for repurchase under the stock repurchase program. The treasury shares have not been retired.

NOTE 11 – RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS

The Company maintains a number of defined benefit and defined contribution plans to provide retirement benefits for employees. These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board of Directors. The plans generally provide benefits based upon years of service and compensation. Pension plans are funded except for a domestic non-qualified pension plan for certain key employees and certain foreign plans. The Company uses a December 31 measurement date for its plans.

The Company does not have, and does not provide for, any postretirement or postemployment benefits other than pensions and certain non-U.S. statutory termination benefits.

F-25

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Defined Benefit Plans

Contributions are made in amounts sufficient to fund current service costs on a current basis and to fund past service costs, if any, over various amortization periods.

Obligations and Funded Status



	December 31,
	2016			2015
Change in benefit obligations
Benefit obligations at beginning of year	$	558,169		$	1,045,471
Service cost	17,689			19,933
Interest cost	23,578			36,002
Plan participants' contributions	148			185
Acquisitions	—			6,170
Actuarial loss (gain)	28,004			(42,640		)
Benefits paid	(31,308		)	(32,217		)
Settlements/curtailments	(24,068		)	(463,943		)
Currency translation	(7,482		)	(10,792		)
Benefit obligations at end of year	564,730			558,169

Change in plan assets
Fair value of plan assets at beginning of year	576,101			1,010,937
Actual return on plan assets	38,264			9,298
Employer contributions	21,373			50,468
Plan participants' contributions	148			185
Acquisitions	—			5,995
Benefits paid	(30,146		)	(30,358		)
Settlement	—			(462,601		)
Currency translation	(6,655		)	(7,823		)
Fair value of plan assets at end of year	599,085			576,101

Funded status at end of year	34,355			17,932
Unrecognized actuarial net loss	146,585			156,019
Unrecognized prior service cost	(18		)	(1,304		)
Unrecognized transition assets, net	37			41
Net amount recognized	$	180,959		$	172,688

In August 2015, The Lincoln Electric Company, plan sponsor of the Lincoln Electric Retirement Annuity Program ("RAP") and subsidiary of the Company, entered into an agreement to purchase a group annuity contract from The Principal Financial Group ("Principal"). Under the agreement, Principal assumed the obligation to pay future pension benefits for specified U.S. retirees and surviving beneficiaries who retired on or before June 1, 2015 and are currently receiving payments from the RAP. The transaction will not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries. The purchase was funded by existing plan assets and required no additional cash contribution. The Company recorded pension settlement charges of $142,738 for the year ended December 31, 2015, primarily related to the purchase of the group annuity contract.

In October 2016, The Lincoln Electric Company amended the plan to freeze all benefit accruals for participants under the RAP effective as of December 31, 2016. The RAP includes approximately 1,500 domestic employees who will fully transition to The Lincoln Electric Company Employee Savings Plan (“Savings Plan”), a defined contribution retirement savings plan. The Company recorded pension curtailment gains of $2,206 for the year ended December 31, 2016 related to the amendment. The Company does not expect to contribute to the defined benefit plans in the United States in 2017.

F-26

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition assets included in Accumulated other comprehensive loss at December 31, 2016 were $95,927 , $(21) and $33 , respectively. The actuarial loss represents changes in the estimated obligation not yet recognized in the Consolidated Income Statement. The pre-tax amounts of unrecognized actuarial net loss, prior service credits and transition obligations expected to be recognized as components of net periodic benefit cost during 2017 are $3,928 , $12 and $2 , respectively.

Amounts Recognized in Consolidated Balance Sheets



	December 31,
	2016			2015
Prepaid pensions ⁽¹⁾	$	64,397		$	38,201
Accrued pension liability, current ⁽²⁾	(5,347		)	(5,026		)
Accrued pension liability, long-term ⁽³⁾	(24,695		)	(15,243		)
Accumulated other comprehensive loss, excluding tax effects	146,604			154,756
Net amount recognized in the balance sheets	$	180,959		$	172,688

(1) I ncluded in Other current assets.

(2) I ncluded in Other current liabilities.

(3) I ncluded in Other liabilities.

Components of Pension Cost for Defined Benefit Plans



	Year Ended December 31,
	2016			2015			2014
Service cost	$	17,689		$	19,933		$	19,062
Interest cost	23,578			36,002			42,485
Expected return on plan assets	(35,716		)	(54,638		)	(67,953		)
Amortization of prior service cost	(394		)	(626		)	(616		)
Amortization of net loss ⁽¹⁾	9,893			19,406			17,644
Settlement/curtailment (gain) loss	(1,062		)	142,738			1,773
Pension cost for defined benefit plans	$	13,988		$	162,815		$	12,395

(1) The amortization of net loss includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary during the year ended December 31, 2016.

The decrease in the components of total pension cost for the defined benefit plans in 2016 was primarily due to the purchase of a group annuity contract in August 2015, which triggered a settlement loss in the period.

Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets



	December 31,
	2016		2015
U.S. pension plans
Projected benefit obligation	$	25,731	$	16,822
Accumulated benefit obligation	25,460		15,223
Fair value of plan assets	5,548		—
Non-U.S. pension plans
Projected benefit obligation	$	47,776	$	3,393
Accumulated benefit obligation	45,128		2,831
Fair value of plan assets	38,200		—

The total accumulated benefit obligation for all plans was $560,230 as of December 31, 2016 and $523,728 as of December 31, 2015 .

F-27

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Benefit Payments for Plans

Benefits expected to be paid for the U.S. plans are as follows:



Estimated Payments
2017	$	39,820
2018	29,803
2019	29,375
2020	27,869
2021	28,236
2022 through 2026	150,813

Assumptions

Weighted average assumptions used to measure the benefit obligation for the Company's significant defined benefit plans as of December 31, 2016 and 2015 were as follows:



	December 31,
	2016		2015
Discount Rate	4.1	%	4.5	%
Rate of increase in compensation	2.6	%	2.7	%

Weighted average assumptions used to measure the net periodic benefit cost for the Company's significant defined benefit plans for each of the three years ended December 31, 2016 were as follows:



	December 31,
	2016		2015		2014
Discount rate	4.5	%	4.0	%	4.7	%
Rate of increase in compensation	2.7	%	2.7	%	4.1	%
Expected return on plan assets	6.1	%	6.3	%	7.3	%

To develop the discount rate assumption to be used for U.S. plans, the Company refers to the yield derived from matching projected pension payments with maturities of bonds rated AA or an equivalent quality. The expected long-term rate of return assumption is based on the weighted average expected return of the various asset classes in the plans' portfolio and the targeted allocation of plan assets. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance. The rate of compensation increase is determined by the Company based upon annual reviews.

Pension Plans' Assets

The primary objective of the pension plans' investment policy is to ensure sufficient assets are available to provide benefit obligations when such obligations mature. Investment management practices must comply with ERISA or any other applicable regulations and rulings. The overall investment strategy for the defined benefit pension plans' assets is to achieve a rate of return over a normal business cycle relative to an acceptable level of risk that is consistent with the long-term objectives of the portfolio. The target allocation for plan assets is 35% to 45% equity securities and 55% to 65% debt securities.

F-28

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2016 :



	Pension Plans' Assets at Fair Value as of December 31, 2016
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents	$	3,652	$	—	$	—	$	3,652
Equity securities ⁽¹⁾	4,071		—		—		4,071
Fixed income securities ⁽²⁾
U.S. government bonds	20,036		—		—		20,036
Corporate debt and other obligations	—		134,051		—		134,051
Investments measured at NAV ⁽³⁾
Common trusts and 103-12 investments ⁽⁴⁾							397,924
Private equity funds ⁽⁵⁾							39,351
Total investments at fair value	$	27,759	$	134,051	$	—	$	599,085

The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2015 :



	Pension Plans' Assets at Fair Value as of December 31, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents	$	5,740	$	—	$	—	$	5,740
Equity securities ⁽¹⁾	3,569		—		—		3,569
Fixed income securities ⁽²⁾
U.S. government bonds	11,603		—		—		11,603
Corporate debt and other obligations	—		120,470		—		120,470
Investments measured at NAV ⁽³⁾
Common trusts and 103-12 investments ⁽⁴⁾							394,318
Private equity funds ⁽⁵⁾							40,401
Total investments at fair value	$	20,912	$	120,470	$	—	$	576,101


(1)	Equity securities are primarily comprised of corporate stock and mutual funds directly held by the plans. Equity securities are valued using the closing price reported on the active market on which the individual securities are traded.


(2)	Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans. Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded.


(3)	Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been classified in the fair value hierarchy.

(4)

Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and credit indexes, and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates.

(5)

Private equity funds consist of four funds seeking capital appreciation by investing in private equity investment partnerships and venture capital companies. Private equity fund valuations are based on the NAV of the underlying assets. Funds are comprised of unrestricted and restricted publicly traded securities and privately held securities. Unrestricted securities are valued at the closing market price on the reporting date. Restricted securities may be valued at a discount from such closing public market price, depending on facts and circumstances. Privately held securities are valued at fair value as determined by the fund directors and general partners.

F-29

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Supplemental Executive Retirement Plan

The Company maintains a domestic unfunded Supplemental Executive Retirement Plan ("SERP") under which non-qualified supplemental pension benefits are paid to certain employees in addition to amounts received under the Company's qualified retirement plan which is subject to Internal Revenue Service ("IRS") limitations on covered compensation. The annual cost of this program has been included in the determination of total net pension costs shown above and was $2,113 , $1,703 and $3,012 in 2016 , 2015 and 2014 , respectively. The projected benefit obligation associated with this plan is also included in the pension disclosure shown above and was $16,738 , $14,643 and $17,953 at December 31, 2016 , 2015 and 2014 , respectively.

In October 2016, the Company announced an amendment to freeze and vest all benefit accruals under the SERP, effective November 30, 2016. The Company recorded a curtailment loss of $1,144 for the year ended December 31, 2016 related to the amendment. The value of the frozen vested benefit was converted into an account balance and deferred. In addition, the Company created The Lincoln Electric Company Restoration Plan (“Restoration Plan”) that will be effective January 1, 2017. The Restoration Plan is a domestic unfunded plan maintained for the purpose of providing certain employees the ability to fully participate in standard employee retirement offerings, effective January 1, 2017, which are limited by IRS regulations on covered compensation.

Defined Contribution Plans

Substantially all U.S. employees are covered under defined contribution plans. In October 2016, the Company announced a plan redesign of the Savings Plan that will be effective January 1, 2017. The Savings Plan will provide that eligible employees receive up to 6% of employees' annual compensation in Company contributions through Company matching contributions of 100% of the first 3% of employee compensation contributed to the plan, and automatic Company contributions equal to 3% of annual compensation. In addition, certain employees affected by the RAP freeze will also be eligible to receive employer contributions equal to 6% of annual compensation for a minimum period of five years or to the end of the year in which they complete thirty years of service.

The annual costs recognized for defined contribution plans were $8,361 , $10,082 and $11,088 in 2016 , 2015 and 2014 , respectively.

Other Benefits

The Cleveland, Ohio, area operations have a Guaranteed Continuous Employment Plan covering substantially all employees which, in general, provides that the Company will provide work for at least 75% of every standard work week (presently 40 hours). This plan does not guarantee employment when the Company's ability to continue normal operations is seriously restricted by events beyond the control of the Company. The Company has reserved the right to terminate this plan effective at the end of a calendar year by giving notice of such termination not less than six months prior to the end of such year.

F-30

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 12 – INCOME TAXES

The components of income before income taxes for the three years ended December 31, 2016 were as follows:



	Year Ended December 31,
	2016		2015		2014
U.S.	$	209,409	$	118,037	$	303,933
Non-U.S.	67,979		51,750		71,880
Total	$	277,388	$	169,787	$	375,813

The components of income tax expense (benefit) for the three years ended December 31, 2016 were as follows:



	Year Ended December 31,
	2016			2015			2014
Current:
Federal	$	57,090		$	60,500		$	71,601
Non-U.S.	23,344			28,046			24,210
State and local	8,386			9,557			8,235
	88,820			98,103			104,046
Deferred:
Federal	(1,716		)	(47,902		)	15,175
Non-U.S.	(8,261		)	(3,362		)	1,370
State and local	172			(4,464		)	1,342
	(9,805		)	(55,728		)	17,887
Total	$	79,015		$	42,375		$	121,933

The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2016 were as follows:



	Year Ended December 31,
	2016			2015			2014
Statutory rate of 35% applied to pre-tax income	$	97,086		$	59,426		$	131,534
Effect of state and local income taxes, net of federal tax benefit	5,554			1,868			6,694
Intangible and asset impairments/(write-off)	(4,438		)	2,184			11,674
Foreign rate variance	(8,128		)	(11,399		)	(22,495		)
Venezuela deconsolidation/devaluation	5,192			11,396			5,603
Increase/(decrease) of valuation allowances	(8,525		)	2,900			5,545
Manufacturing deduction	(5,190		)	(9,207		)	(7,316		)
U.S. tax cost (benefit) of foreign source income	(489		)	(8,754		)	(514		)
Other	(2,047		)	(6,039		)	(8,792		)
Total	$	79,015		$	42,375		$	121,933
Effective tax rate	28.5		%	25.0		%	32.4		%

The 2016 effective tax rate is impacted by the utilization of U.S. tax credits, income earned in lower tax rate jurisdictions, the reversal of an income tax valuation allowance as a result of a legal entity change and an income tax benefit related to a worthless stock deduction of a foreign subsidiary. Total income tax payments, net of refunds, were $72,965 in 2016 , $101,939 in 2015 and $119,102 in 2014 .

F-31

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Deferred Taxes

Significant components of deferred tax assets and liabilities at December 31, 2016 and 2015 , were as follows:



	December 31,
	2016			2015
Deferred tax assets:
Tax loss and credit carry-forwards	$	52,270		$	44,925
Inventory	2,080			1,607
Other accruals	18,186			17,874
Employee benefits	23,596			21,859
Pension obligations	2,503			2,477
Other	3,020			3,795
Deferred tax assets, gross	101,655			92,537
Valuation allowance	(47,849		)	(51,294		)
Deferred tax assets, net	53,806			41,243
Deferred tax liabilities:
Property, plant and equipment	32,210			33,627
Intangible assets	17,506			16,105
Inventory	10,059			10,770
Pension obligations	17,915			9,897
Other	9,309			8,800
Deferred tax liabilities	86,999			79,199
Total deferred taxes	$	(33,193	)	$	(37,956	)

At December 31, 2016 , certain subsidiaries had foreign tax credit carry-forwards of approximately $3,186 that expire in 2026, tax loss carry-forwards of approximately $87,519 that expire in various years from 2017 through 2032 , plus $103,528 for which there is no expiration date.

In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2016 , a valuation allowance of $47,849 was recorded against certain deferred tax assets based on this assessment. The Company believes it is more likely than not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company's assessment of future taxable income or tax planning strategies changes.

The Company does not provide deferred income taxes on unremitted earnings of certain non-U.S. subsidiaries which are deemed indefinitely reinvested. It is not practicable to calculate the deferred taxes associated with the remittance of these earnings. Deferred income taxes associated with earnings that are not expected to be indefinitely reinvested were not significant.

Unrecognized Tax Benefits

Liabilities for unrecognized tax benefits are classified as Other liabilities unless expected to be paid in one year, with a portion recorded to Deferred income taxes to offset tax attributes. The Company recognizes interest and penalties related to unrecognized tax benefits in Income taxes. Current income tax expense included expense of $597 for the year ended December 31, 2016 and income of $940 for the year ended December 31, 2015 for interest and penalties. For those same years, the Company's accrual for interest and penalties related to unrecognized tax benefits totaled $6,431 and $6,080 , respectively.

F-32

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

The following table summarizes the activity related to unrecognized tax benefits:



	2016			2015
Balance at beginning of year	$	14,332		$	18,389
Increase related to current year tax provisions	1,975			1,021
Increase (decrease) related to prior years' tax positions	5,188			317
Decrease related to settlements with taxing authorities	(265		)	(157		)
Resolution of and other decreases in prior years' tax liabilities	(1,982		)	(3,323		)
Other	(749		)	(1,915		)
Balance at end of year	$	18,499		$	14,332

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $9,813 at December 31, 2016 and $8,369 at December 31, 2015 .

The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2012. The Company is currently subject to various U.S. state audits and non-U.S. income tax audits. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained.

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a further reduction of $2,058 in prior years' unrecognized tax benefits in 2017 .

NOTE 13 – DERIVATIVES

The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial for each of the three years in the period ended December 31, 2016.

The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at December 31, 2016 . The Company does not expect any counterparties to fail to meet their obligations.

Cash flow hedges

Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $36,385 at December 31, 2016 and $30,388 at December 31, 2015 .

Fair value hedges

Certain interest rate swap agreements were qualified and designated as fair value hedges. At December 31, 2016, the Company had interest rate swap agreements outstanding that effectively convert notional amounts of $100,000 of debt from a fixed interest rate to a variable interest rate based on three-month LIBOR plus a spread of between 0.6% and 1.8% . The variable rates reset every three months, at which time payment or receipt of interest will be settled.

Net investment hedges

The Company had no foreign currency forward contracts that were qualified and designated as net investment hedges.

F-33

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

Derivatives not designated as hedging instruments

The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $261,168 at December 31, 2016 and $267,626 at December 31, 2015 .

The Company had short-term silver forward contracts with notional amounts of $2,804 at December 31, 2015.

Fair values of derivative instruments in the Company's Consolidated Balance Sheets follow:



	December 31, 2016						December 31, 2015
Derivatives by hedge designation	Other Current Assets		Other Current Liabilities		Other Liabilities		Other Current Assets		Other Current Liabilities
Designated as hedging instruments:
Foreign exchange contracts	$	439	$	923	$	—	$	178	$	731
Interest rate swap agreements	—		—		5,439		—		—
Not designated as hedging instruments:
Foreign exchange contracts	746		1,529		—		625		2,303
Commodity contracts	—		—		—		40		8
Total derivatives	$	1,185	$	2,452	$	5,439	$	843	$	3,042

The effects of undesignated derivative instruments on the Company's Consolidated Statements of Income for the years ended December 31, 2016 and 2015 consisted of the following:



		Year Ended December 31,
Derivatives by hedge designation	Classification of gains (losses)	2016			2015
Not designated as hedges:
Foreign exchange contracts	Selling, general & administrative expenses	$	(21,096	)	$	(18,875	)
Commodity contracts	Cost of goods sold	(742		)	440

The effects of designated cash flow hedges on AOCI and the Company's Consolidated Statements of Income for the years ended December 31, 2016 and 2015 consisted of the following:



	December 31,
Total gain (loss) recognized in AOCI, net of tax	2016			2015
Foreign exchange contracts	$	(512	)	$	(551	)
Net investment contracts	1,099			1,099

The Company expects a loss of $512 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.



		Year Ended December 31,
Derivative type	Gain (loss) reclassified from AOCI to:	2016			2015
Foreign exchange contracts	Sales	$	(1,580	)	$	(1,191	)
	Cost of goods sold	(407		)	771

F-34

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 14 – FAIR VALUE

The following table provides a summary of fair value assets and liabilities as of December 31, 2016 measured at fair value on a recurring basis:



Description	Balance as of December 31, 2016		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Foreign exchange contracts	$	1,185	$	—	$	1,185	$	—
Marketable securities	38,920		—		38,920		—
Total assets	$	40,105	$	—	$	40,105	$	—
Liabilities:
Foreign exchange contracts	$	2,452	$	—	$	2,452	$	—
Interest rate swap agreements	5,439		—		5,439		—
Contingent considerations	8,154		—		—		8,154
Forward contract	15,272		—		—		15,272
Deferred compensation	25,244		—		25,244		—
Total liabilities	$	56,561	$	—	$	33,135	$	23,426

The following table provides a summary of fair value assets and liabilities as of December 31, 2015 measured at fair value on a recurring basis:



Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Foreign exchange contracts	$	803	$	—	$	803	$	—
Commodity contracts	40		—		40		—
Total assets	$	843	$	—	$	843	$	—
Liabilities:
Foreign exchange contracts	$	3,034	$	—	$	3,034	$	—
Commodity contracts	8		—		8		—
Contingent consideration	9,184		—		—		9,184
Forward contract	26,484		—		—		26,484
Deferred compensation	23,201		—		23,201		—
Total liabilities	$	61,911	$	—	$	26,243	$	35,668

The Company's derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and interest rate swap agreements using Level 2 inputs based on observable spot and forward rates in active markets. The Company measures the fair value of commodity contracts using Level 2 inputs through observable market transactions in active markets provided by financial institutions. During the year ended December 31, 2016 , there were no transfers between Levels 1, 2 or 3.

The Company measures the fair value of marketable securities using Level 2 inputs based on quoted market prices for similar assets in active markets.

In connection with acquisitions, the Company recorded contingent considerations fair valued at $8,154 as of December 31, 2016 . Under the contingent consideration agreements the amounts to be paid are based upon actual financial results of the acquired entity for specified future periods. The fair value of the contingent considerations are a Level 3 valuation and fair valued using either a probability weighted discounted cash flow analysis or an option pricing model.

F-35

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

In connection with an acquisition, the Company obtained a controlling financial interest in the acquired entity and at the same time entered into a contract to obtain the remaining financial interest in the entity over a three -year period. The amount to be paid to obtain the remaining financial interest will be based upon actual financial results of the entity through 2016. A liability was recorded for the forward contract at a fair value of $15,272 as of December 31, 2016 . The change in the liability from December 31, 2015 was primarily the result of a $14,438 payment to acquire an additional financial interest in the entity offset by foreign exchange translation and additional accruals of $1,383 for the twelve months ended December 31, 2016 . The payment was included in Other financing activities in the accompanying Consolidated Statements of Cash Flows. The fair value of the contract is a Level 3 valuation and is based on the present value of the expected future payments. The expected future payments is based on a multiple of earnings and cash flows over the three-year period ending December 31, 2016, present valued utilizing a risk based discount rates of 3.5% reflective of the Company's cost of debt.

The deferred compensation liability is the Company's obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants' underlying investment fund elections.

The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations. The fair value of Cash and cash equivalents, Accounts receivable, Amounts due banks and Trade accounts payable approximated book value due to the short-term nature of these instruments at both December 31, 2016 and December 31, 2015 . See Note 8 for the fair value estimate of debt.

NOTE 15 – INVENTORY

Inventories in the Consolidated Balance Sheet is comprised of the following components:



	December 31,
	2016		2015
Raw materials	$	76,811	$	87,919
Work-in-process	40,556		39,555
Finished goods	138,039		148,456
Total	$	255,406	$	275,930

The valuation of LIFO inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. At December 31, 2016 and 2015 , approximately 40% of total inventories were valued using the LIFO method. The excess of current cost over LIFO cost was $61,329 at December 31, 2016 and $59,765 at December 31, 2015 .

NOTE 16 – LEASES

The Company leases sales offices, manufacturing facilities, warehouses and distribution centers, transportation equipment, office equipment and information technology equipment. Such leases, some of which are noncancelable and, in many cases, include renewals, expire at various dates. The Company pays most insurance, maintenance and taxes relating to leased assets. Rental expense was $16,897 in 2016 , $16,703 in 2015 and $18,103 in 2014 .

At December 31, 2016 , total future minimum lease payments for noncancelable operating leases were $12,267 in 2017 , $9,824 in 2018 , $7,670 in 2019 , $5,220 in 2020 , $3,816 in 2021 and $4,888 thereafter. Assets held under capital leases are included in property, plant and equipment and are immaterial.

F-36

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 17 – CONTINGENCIES

The Company accrues its best estimate of the probable costs, after a review of the facts with management and counsel and taking into account past experience. If an unfavorable outcome is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure would be provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves.

Based on the Company's historical experience in litigating product liability claims, including a significant number of dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the Company's current assessment of the underlying merits of the claims and applicable insurance, the Company believes resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the Company's consolidated financial statements.

NOTE 18 – PRODUCT WARRANTY COSTS

The changes in product warranty accruals for 2016 , 2015 and 2014 were as follows:



	December 31,
	2016			2015			2014
Balance at beginning of year	$	19,469		$	15,579		$	15,180
Accruals for warranties	13,058			19,824			12,368
Settlements	(11,434		)	(15,458		)	(11,495		)
Foreign currency translation	(40		)	(476		)	(474		)
Balance at end of year	$	21,053		$	19,469		$	15,579

F-37

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except share and per share amounts)

NOTE 19 – QUARTERLY FINANCIAL DATA (UNAUDITED)



	First		Second		Third			Fourth
2016
Net sales	$	550,722	$	592,418	$	567,646		$	563,828
Gross profit	189,102		202,927		199,812			197,457
Income before income taxes	73,182		45,758		80,296			78,152
Net income	53,638		31,317		60,049			53,395
Basic earnings per share	$	0.77	$	0.46	$	0.90		$	0.81
Diluted earnings per share	$	0.76	$	0.45	$	0.89		$	0.81
2015
Net sales	$	657,900	$	664,740	$	645,166		$	567,985
Gross profit	220,390		225,781		198,894			196,079
Income (loss) before income taxes	92,707		94,434		(88,526		)	71,172
Net income (loss)	68,354		70,898		(60,466		)	48,692
Basic earnings (loss) per share	$	0.90	$	0.95	$	(0.82	)	$	0.68
Diluted earnings (loss) per share	$	0.89	$	0.94	$	(0.82	)	$	0.68

The quarter ended June 30, 2016 includes special items charges of $34,348 ( $33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure.

The quarter ended December 31, 2015 includes net rationalization charges of $434 ( $450 after-tax) primarily related to employee severance and other related costs. Special items also include pension settlement charges of $6,407 ( $3,969 after-tax) and Venezuelan foreign exchange remeasurement losses of $708 related to the adoption of a new foreign exchange mechanism.

The quarter ended September 30, 2015 includes net rationalization and asset impairment charges of $18,285 ( $16,832 after-tax) primarily related to employee severance and other costs. Impairment charges include a non-cash charge to the carrying value of goodwill of $6,315 and non-cash long-lived asset impairment charges of $3,417 . Special items also include pension settlement charges of $136,331 ( $83,341 after-tax) primarily related to the purchase of a group annuity contract and Venezuelan foreign exchange remeasurement losses of $26,506 related to the adoption of a new foreign exchange mechanism.

The quarter ended June 30, 2015 includes net rationalization charges of $1,239 ( $900 after-tax) primarily related to employee severance and other costs.

The quarterly earnings per share ("EPS") amounts are each calculated independently. Therefore, the sum of the quarterly EPS amounts may not equal the annual totals.

F-38

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

LINCOLN ELECTRIC HOLDINGS, INC.

(In thousands)



			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged (Credited) to Other Accounts ⁽¹⁾			Deductions ⁽²⁾			Balance at End of Period
Allowance for doubtful accounts:
Year Ended December 31, 2016	$	7,299	$	1,657	$	72		$	1,260		$	7,768
Year Ended December 31, 2015	7,858		1,969		(1,046		)	1,482			7,299
Year Ended December 31, 2014	8,398		2,064		(867		)	1,737			7,858

Deferred tax asset valuation allowance:
Year Ended December 31, 2016	51,294		3,704		3,923			(11,072		)	47,849
Year Ended December 31, 2015	48,840		7,533		(521		)	(4,558		)	51,294
Year Ended December 31, 2014	49,684		8,006		(5,923		)	(2,927		)	48,840


(1)	Currency translation adjustment and other adjustments.


(2)	For the Allowance for doubtful accounts, deductions relate to uncollectible accounts written-off, net of recoveries. For the Deferred tax asset valuation allowance, deductions relate to the reversal of valuation allowances due to the realization of net operating loss carryforwards.

F-39

QuickLinks

ITEM 1. BUSINESS

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 1C. EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6. SELECTED FINANCIAL DATA (Dollars in thousands, except per share amounts)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts)

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

ITEM 9A. CONTROLS AND PROCEDURES

ITEM 9B. OTHER INFORMATION

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SIGNATURES

Report of Independent Registered Public Accounting Firm

LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)

LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)

LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except per share amounts)

LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share amounts)

LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

LINCOLN ELECTRIC HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts)

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS LINCOLN ELECTRIC HOLDINGS, INC. (In thousands)

Exhibit 10.4

LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC.

$350,000,000 SENIOR NOTES

$100,000,000 2.75% Senior Notes, Series A, due October 20, 2028

$100,000,000 3.03% Senior Notes, Series B, due October 20, 2033

$100,000,000 3.27% Senior Notes, Series C, due October 20, 2037

$50,000,000 3.52% Senior Notes, Series D, due October 20, 2041

___________

NOTE PURCHASE AGREEMENT

________________

DATED AS OF OCTOBER 20, 2016



TABLE OF CONTENTS
SECTION	HEADING	PAGE
SECTION 1.	AUTHORIZATION OF NOTES; RELEASE OF OBLIGORS	1
Section 1.1.	Authorization of Notes	1
Section 1.2.	Release of Obligors	1
Section 1.3.	Additional Interest	1
SECTION 2.	SALE AND PURCHASE OF NOTES	2
SECTION 3.	CLOSING	2
SECTION 4.	CONDITIONS TO CLOSING	3
Section 4.1.	Representations and Warranties	3
Section 4.2.	Performance; No Default	3
Section 4.3.	Compliance Certificates	3
Section 4.4.	Opinions of Counsel	3
Section 4.5.	Purchase Permitted By Applicable Law, Etc	4
Section 4.6.	Sale of Other Notes	4
Section 4.7.	Payment of Special Counsel Fees	4
Section 4.8.	Private Placement Number	4
Section 4.9.	Changes in Corporate Structure	4
Section 4.10.	Funding Instructions	4
Section 4.11.	Proceedings and Documents	4
SECTION 5.	REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS	5
Section 5.1.	Organization; Power and Authority	5
Section 5.2.	Authorization, Etc	5
Section 5.3.	Disclosure	5
Section 5.4.	Organization and Ownership of Shares of Subsidiaries	6
Section 5.5.	Financial Statements; Material Liabilities	6
Section 5.6.	Compliance with Laws, Other Instruments, Etc	7
Section 5.7.	Governmental Authorizations, Etc	7
Section 5.8.	Litigation; Observance of Agreements, Statutes and Orders	7
Section 5.9.	Taxes	7
Section 5.10.	Title to Property; Leases	8
Section 5.11.	Licenses, Permits, Etc	8
Section 5.12.	Compliance with ERISA	8
Section 5.13.	Private Offering by the Obligors	9
Section 5.14.	Use of Proceeds; Margin Regulations	9
Section 5.15.	Existing Indebtedness	10
Section 5.16.	Foreign Assets Control Regulations, Etc	10
Section 5.17.	Status under Certain Statutes	12
SECTION 6.	REPRESENTATIONS OF THE PURCHASERS	12
Section 6.1.	Purchase for Investment	12
Section 6.2.	Source of Funds	12

‑i‑



SECTION 7.	INFORMATION AS TO OBLIGORS	14
Section 7.1.	Financial and Business Information	14
Section 7.2.	Officer’s Certificate	17
Section 7.3.	Visitation	17
Section 7.4.	Electronic Delivery	18
SECTION 8.	PAYMENT AND PREPAYMENT OF THE NOTES	19
Section 8.1.	Maturity	19
Section 8.2.	Optional Prepayments with Make‑Whole Amount	19
Section 8.3.	Allocation of Partial Prepayments	19
Section 8.4.	Maturity; Surrender, Etc.	20
Section 8.5.	Purchase of Notes	20
Section 8.6.	Make‑Whole Amount	20
Section 8.7.	Change of Control	22
Section 8.8.	Payments Due on Non‑Business Days	23
SECTION 9.	AFFIRMATIVE COVENANTS.	23
Section 9.1.	Compliance with Law	23
Section 9.2.	Insurance	24
Section 9.3.	Maintenance of Properties	24
Section 9.4.	Payment of Taxes	24
Section 9.5.	Corporate Existence, Etc	24
Section 9.6.	Books and Records	24
Section 9.7.	Additional Obligors	25
SECTION 10.	NEGATIVE COVENANTS.	25
Section 10.1.	Transactions with Affiliates	26
Section 10.2.	Merger, Consolidation, Etc	26
Section 10.3.	Sales of Assets	27
Section 10.4.	Line of Business	28
Section 10.5.	Terrorism Sanctions Regulations	28
Section 10.6.	Liens	28
Section 10.7.	Fixed Charges Coverage	31
Section 10.8.	Total Leverage Ratio	31
Section 10.9.	Priority Debt	31
Section 10.10.	Distributions	31
SECTION 11.	EVENTS OF DEFAULT	31
SECTION 12.	REMEDIES ON DEFAULT, ETC	34
Section 12.1.	Acceleration	34
Section 12.2.	Other Remedies	34
Section 12.3.	Rescission	35
Section 12.4.	No Waivers or Election of Remedies, Expenses, Etc	35
SECTION 13.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES	35
Section 13.1.	Registration of Notes	35
Section 13.2.	Transfer and Exchange of Notes	36
Section 13.3.	Replacement of Notes	36

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SECTION 14.	PAYMENTS ON NOTES	37
Section 14.1.	Place of Payment	37
Section 14.2.	Home Office Payment	37
SECTION 15.	EXPENSES, ETC	37
Section 15.1.	Transaction Expenses	38
Section 15.2.	Survival	38
SECTION 16.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT	38
SECTION 17.	AMENDMENT AND WAIVER	38
Section 17.1.	Requirements	39
Section 17.2.	Solicitation of Holders of Notes	39
Section 17.3.	Binding Effect, etc	40
Section 17.4.	Notes Held by Obligors, etc	40
SECTION 18.	NOTICES	40
SECTION 19.	REPRODUCTION OF DOCUMENTS	41
SECTION 20.	CONFIDENTIAL INFORMATION	42
SECTION 21.	SUBSTITUTION OF PURCHASER	43
SECTION 22.	MISCELLANEOUS	43
Section 22.1.	Successors and Assigns	43
Section 22.2.	Accounting Terms; Accounting Changes	44
Section 22.3.	Severability	44
Section 22.4.	Construction, etc	44
Section 22.5.	Counterparts	45
Section 22.6.	Governing Law	45
Section 22.7.	Jurisdiction and Process; Waiver of Jury Trial	45
Section 22.8.	Joint and Several	46

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SCHEDULE A —	DEFINED TERMS

SCHEDULE 1(a) —	FORM OF 2.75% SENIOR NOTE, SERIES A, DUE OCTOBER 20, 2028

SCHEDULE 1(b) —	FORM OF 3.03% SENIOR NOTE, SERIES B, DUE OCTOBER 20, 2033

SCHEDULE 1(c) —	FORM OF 3.27% SENIOR NOTE, SERIES C, DUE OCTOBER 20, 2037

SCHEDULE 1(d) —	FORM OF 3.52% SENIOR NOTE, SERIES D, DUE OCTOBER 20, 2041

SCHEDULE 4.4(a) —	FORM OF OPINION OF SPECIAL COUNSEL FOR THE OBLIGORS

SCHEDULE 4.4(b) —	FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS

SCHEDULE 5.3 —	DISCLOSURE MATERIALS

SCHEDULE 5.4 —	SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK

SCHEDULE 5.5 —	FINANCIAL STATEMENTS

SCHEDULE 5.15 —	EXISTING INDEBTEDNESS

SCHEDULE 9.7 —	FORM OF JOINDER AGREEMENT AND AFFIRMATION

SCHEDULE 10.6 —	EXISTING LIENS

SCHEDULE B —	INFORMATION RELATING TO PURCHASERS

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LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC.

$100,000,000 2.75% Senior Notes, Series A, due October 20, 2028

$100,000,000 3.03% Senior Notes, Series B, due October 20, 2033

$100,000,000 3.27% Senior Notes, Series C, due October 20, 2037

$50,000,000 3.52% Senior Notes, Series D, due October 20, 2041

Dated as of October 20, 2016

TO EACH OF THE PURCHASERS LISTED IN

SCHEDULE B HERETO:

Ladies and Gentlemen:

LINCOLN ELECTRIC HOLDINGS, INC., an Ohio corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.2, the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), and Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), jointly and severally agree with each of the Purchasers as follows:

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SECTION 1.	AUTHORIZATION OF NOTES; RELEASE OF OBLIGORS .

Section 1.1. Authorization of Notes . The Obligors will authorize the issue and sale of (i) $100,000,000 aggregate principal amount of their 2.75% Senior Notes, Series A, due October 20, 2028 (the “Series A Notes” ), (ii) $100,000,000 aggregate principal amount of their 3.03% Senior Notes, Series B, due October 20, 2033 (the “Series B Notes” ), (iii) $100,000,000 aggregate principal amount of their 3.27% Senior Notes, Series C, due October 20, 2037 (the “Series C Notes” ) and (iv) $50,000,000 aggregate principal amount of their 3.52% Senior Notes, Series D, due October 20, 2041 (the “Series D Notes” and together with the Series A Notes, the Series B Notes and the Series C Notes, the “Notes,” in each case as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13). The Notes shall be substantially in the form set out in Schedule 1(a), Schedule 1(b), Schedule 1(c) and Schedule 1(d). Certain capitalized and other terms used in this Agreement are defined in Schedule A. References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified. References to a “Section” are references to a Section of this Agreement unless otherwise specified.

Section 1.2. Release of Obligors . The holders of the Notes agree to discharge and release any Obligor (other than the Company) from its obligations hereunder and under the Notes upon the written request of the Company, including, but not limited to, if the Company sells, leases or otherwise disposes of all or substantially all of the assets or all of the capital stock of such Obligor to any Person (other than an Affiliate), provided that (i) such Obligor has been released and discharged (or will be released and discharged concurrently with the release of such Obligor hereunder and under the Notes), whether as a borrower, obligor and/or guarantor, from all obligations under all Material Credit Facilities and the Company so certifies to the holders of the Notes in a certificate of a Responsible Officer, (ii) at the time of such release and discharge, the Company shall deliver a certificate of a Responsible Officer to the holders of the Notes stating that no Default or Event of Default exists or results therefrom, and (iii) if any fee or other form of consideration is given to any holder of Indebtedness of the Company for the purpose of such release, holders of the Notes shall receive equivalent consideration.

Section 1.3. Additional Interest . If the Total Leverage Ratio at any time exceeds 3.50 to 1.00, as evidenced by an Officer’s Certificate delivered pursuant to Section 7.2(a), the interest rate payable on the Notes shall be increased by 0.75% (the “Incremental Interest” ). Such Incremental Interest shall begin to accrue on the first day of the fiscal quarter following the fiscal quarter in respect of which such Certificate was delivered, and shall continue to accrue until the Company has provided an Officer’s Certificate pursuant to Section 7.2(a) demonstrating that, as of the last day of the fiscal quarter in respect of which such Certificate is delivered, the Total Leverage Ratio is not more than 3.50 to 1.00. In the event such Officer’s Certificate is delivered, the

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Incremental Interest shall cease to accrue on the last day of the fiscal quarter in respect of which such Certificate is delivered.


SECTION 2.	SALE AND PURCHASE OF NOTES .

Subject to the terms and conditions of this Agreement, the Obligors will issue and sell to each Purchaser and each Purchaser will purchase from the Obligors, at the Closing provided for in Section 3, Notes of the applicable series and in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non‑performance of any obligation by any other Purchaser hereunder.


SECTION 3.	CLOSING .

The sale and purchase of each series of Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe St., Chicago, Illinois 60603, at 10:00 a.m. Central time, at a closing (the “Closing” ) on October 20, 2016. At the Closing, the Obligors will deliver to each Purchaser or their special counsel the Notes to be purchased by such Purchaser in the form of a single Note for each applicable series (or such greater number of Notes of the applicable series in denominations of at least $100,000 as such Purchaser may request, dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Obligors or their order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Obligors to:

Bank Name: KeyBank, N.A.

Address: 127 Public Square, Cleveland, OH 44114

Beneficiary: The Lincoln Electric Company

Account: 000-014-9181

ABA: 041001039

SWIFT: KEYBUS33

If at the Closing the Obligors shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Obligors to tender such Notes.

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SECTION 4.	CONDITIONS TO CLOSING .

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1. Representations and Warranties . The representations and warranties of the Obligors under Section 5 of this Agreement shall be correct when made and at the Closing.

Section 4.2. Performance; No Default . The Obligors shall have performed and complied with all material agreements and conditions contained in this Agreement required to be performed or complied with by the Obligors prior to or at the Closing. Before and after giving effect to the issue and sale of the applicable Notes (and the application of the proceeds thereof as contemplated by Section 5.14), (i) no Default or Event of Default shall have occurred and be continuing and (ii) no Change of Control shall have occurred.

Section 4.3. Compliance Certificates .

(a) Officer’s Certificate . Each Obligor shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

(b) Secretary’s Certificate . Each Obligor shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) such Obligor’s organizational documents as then in effect.

Section 4.4. Opinions of Counsel . Such Purchaser shall have received opinions in form and substance reasonably satisfactory to such Purchaser, dated the date of the Closing (a) from Jones Day, counsel for the Obligors, covering the matters set forth in Schedule 4.4(a) (and the Obligors hereby instruct their counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

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Section 4.5. Purchase Permitted By Applicable Law, Etc . On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

Section 4.6. Sale of Other Notes . Contemporaneously with the Closing the Obligors shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule B.

Section 4.7. Payment of Special Counsel Fees . Without limiting Section 15.1, the Obligors shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Obligors at least one Business Day prior to the Closing.

Section 4.8. Private Placement Number . A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each series of the Notes.

Section 4.9. Changes in Corporate Structure . No Obligor shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

Section 4.10. Funding Instructions . At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Obligors confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

Section 4.11. Proceedings and Documents . All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

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SECTION 5.	REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS .

Each Obligor represents and warrants to each Purchaser that:

Section 5.1. Organization; Power and Authority . Each Obligor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect. Each Obligor has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

Section 5.2. Authorization, Etc . This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of each Obligor, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of each Obligor enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3. Disclosure . The Obligors, through their agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, has delivered to each Purchaser a copy of the Lincoln Electric Investor Presentation, as posted to Intralinks on June 29, 2016 (the “Investor Presentation” ), relating to the transactions contemplated hereby. This Agreement, the Investor Presentation, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Obligors after December 31, 2015 but on or prior to July 19, 2016 in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this Agreement, the Investor Presentation and such documents, certificates or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents” ), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not materially misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, since December 31, 2015 there has been no change in the financial condition, operations, business or properties of any Obligor and its Subsidiaries, taken as a whole, except changes that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates . (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary. Each of the Obligors (other than the Company) is wholly-owned by the Company, either directly or indirectly through one or more wholly-owned Subsidiaries.

(b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and non‑assessable and are owned by the Company or another Subsidiary free and clear of any Lien that is prohibited by this Agreement.

(c) Each Subsidiary listed on Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

Section 5.5. Financial Statements; Material Liabilities . Since December 31, 2015 the Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year‑end adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.

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Section 5.6. Compliance with Laws, Other Instruments, Etc . The execution, delivery and performance by each Obligor of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of any Obligor or any Subsidiary under, (A) any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by‑laws, shareholders agreement or (B) any other agreement or instrument evidencing Indebtedness listed on Schedule 5.15 to which any Obligor or any Subsidiary is bound or by which any Obligor or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to any Obligor or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to any Obligor or any Subsidiary.

Section 5.7. Governmental Authorizations, Etc . No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by each Obligor of this Agreement or the Notes.

Section 5.8. Litigation; Observance of Statutes and Orders . (a) There are no actions, suits, investigations or proceedings pending or, to the best knowledge of any Obligor, threatened against or affecting any Obligor or any Subsidiary or any property of any Obligor or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) No Obligor nor any Subsidiary is (i) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (ii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including, without limitation, Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.9. Taxes . The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The U.S. federal income tax

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liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2012.

Section 5.10. Title to Property; Leases . The Obligors and their Subsidiaries have good and sufficient title to their respective Material properties, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by any Obligor or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. All Material leases are valid and subsisting and are in full force and effect in all material respects.

Section 5.11. Licenses, Permits, Etc . The Obligors and their Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.

Section 5.12. Compliance with ERISA . (a) The Obligors and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect. None of the Obligors nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by any Obligor or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Obligor or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.

(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

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(c) None of the Obligors nor its ERISA Affiliates have incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.

(d) The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715‑60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material.

(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)‑(D) of the Code. The representation by the Obligors to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

Section 5.13. Private Offering by the Obligors . None of the Obligors nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 60 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. None of the Obligors or anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act.

Section 5.14. Use of Proceeds; Margin Regulations . The Obligors will apply the proceeds of the sale of the Notes hereunder for the repayment of existing Indebtedness and for general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Obligors in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 5% of the value of the consolidated assets of the Company and its Subsidiaries and none of the Obligors has any present intention that margin stock will constitute more than 5% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

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Section 5.15. Existing Indebtedness . (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries, the outstanding principal amount of which exceeds $5,000,000, as of September 30, 2016 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Obligors and their Subsidiaries. None of the Obligors nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of any Obligor or such Subsidiary and no event or condition exists with respect to any Indebtedness of any Obligor or any Subsidiary the outstanding principal amount of which exceeds $5,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

(b) None of the Obligors nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of any Obligor or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Obligors, except as disclosed in Schedule 5.15.

Section 5.16. Foreign Assets Control Regulations, Etc . (a) None of the Obligors nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury ( “OFAC” ) (an “OFAC Listed Person” ) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“ CISADA ”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions” ) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person” ). None of the Obligors nor any Controlled Entity has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.

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(b) No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Obligors or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions.

(c) None of the Obligors nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist‑related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti‑Money Laundering Laws” ) or any U.S. Economic Sanctions violations, (ii) to the Obligors’ actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti‑Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti‑Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti‑Money Laundering Laws. The Obligors have established procedures and controls which they reasonably believe are adequate (and otherwise comply with applicable law) to ensure that the Obligors and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti‑Money Laundering Laws and U.S. Economic Sanctions.

(d) (1) None of the Obligors nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti‑corruption related activity under any applicable law or regulation in a U.S. or any non‑U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti‑Corruption Laws” ), (ii) to the Obligors’ actual knowledge after making due inquiry, is under investigation by any U.S. or non‑U.S. Governmental Authority for possible violation of Anti‑Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti‑Corruption Laws or (iv) has been or is the target of sanctions imposed by the United Nations or the European Union;

(2) To the Obligors’ actual knowledge after making due inquiry, none of the Obligors nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Governmental Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure

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an improper advantage in material violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and

(3) No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage. Each Obligor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that each Obligor and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti‑Corruption Laws.

Section 5.17. Status under Certain Statutes . None of the Obligors nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.


SECTION 6.	REPRESENTATIONS OF THE PURCHASERS .

Section 6.1. Purchase for Investment . Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Obligors are not required to register the Notes.

Section 6.2. Source of Funds . Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source” ) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption ( “PTE” ) 95‑60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement” )) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate

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thereof as defined in PTE 95‑60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90‑1 or (ii) a bank collective investment fund, within the meaning of the PTE 91‑38 and, except as disclosed by such Purchaser to the Obligors in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84‑14 (the “QPAM Exemption” )) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Obligors that would cause the QPAM and any Obligor to be “related” within the meaning of Part VI(h) of the QPAM Exemption and the identity of such QPAM has been disclosed to the Obligors in writing pursuant to this clause (d);or

(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96‑23 (the “INHAM Exemption” )) managed by an “in‑house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in any Obligor and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets

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constitute the Source have been disclosed to the Obligors in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Obligors in writing pursuant to this clause (g); or

(h) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.


SECTION 7.	INFORMATION AS TO OBLIGORS .

Section 7.1. Financial and Business Information . The Obligors shall deliver to each Purchaser and each holder of a Note that is an Institutional Investor:

(a) Quarterly Statements — within 60 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10‑Q (the “Form 10‑Q” ) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

(i) an unaudited consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii) unaudited consolidated statements of income and cash flows of the Company and its Subsidiaries, for such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP

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applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year‑end adjustments, provided that delivery within the time period specified above of copies of the Company’s Form 10‑Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a);

(b) Annual Statements — within 105 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Company’s Annual Report on Form 10‑K (the “Form 10‑K” ) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each fiscal year of the Company, duplicate copies of

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Form 10‑K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a‑3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b);

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(c) SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to its public Securities holders generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such Purchaser or holder), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary with the SEC;

(d) Notice of Default or Event of Default — promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Obligors are taking or proposes to take with respect thereto;

(e) ERISA Matters — promptly, and in any event within ten days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that any Obligor or an ERISA Affiliate proposes to take with respect thereto:

(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by any Obligor or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

(iii) any event, transaction or condition that could result in the incurrence of any liability by any Obligor or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of any Obligor or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect; and

(f) Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries (including, but without limitation, actual copies of the Company’s Form 10‑Q and Form 10‑K) or relating to the ability of the Obligors

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to perform their obligations hereunder and under the Notes as from time to time may be reasonably requested by any such Purchaser or holder of a Note.

Section 7.2. Officer’s Certificate . Each set of financial statements delivered to a Purchaser or a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer:

(a) Covenant Compliance — setting forth the information from such financial statements that is required in order to establish whether the Obligors were in compliance with the requirements of Section 10 during the quarterly or annual period covered by the statements then being furnished, (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence. In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.2) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and

(b) Event of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Obligors and their Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action any Obligor shall have taken or proposes to take with respect thereto.

Section 7.3. Visitation . The Obligors shall permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:

(a) No Default — if no Default or Event of Default then exists, at the expense of such Purchaser or such holder and upon reasonable prior notice to the Obligors, to visit the principal executive office of the Obligors, to discuss the affairs, finances and accounts of the Obligors and their Subsidiaries with officers of the Obligors, and (with the consent of the Obligors, which consent will not be unreasonably withheld) to visit the other offices

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and properties of the Obligors and their Subsidiaries, all at such reasonable times and as often as may be reasonably requested in writing; and

(b) Default — if a Default or Event of Default then exists, at the expense of the Obligors to visit and inspect any of the offices or properties of the Obligors or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Obligors authorize said accountants to discuss the affairs, finances and accounts of the Obligors and their Subsidiaries), all at such times and as often as may be requested.

Section 7.4. Electronic Delivery . Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Obligors pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been delivered if the Obligors satisfy any of the following requirements with respect thereto:

(i) such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 are delivered to each Purchaser or holder of a Note by e‑mail;

(ii) the Company shall have timely filed such Form 10‑Q or Form 10‑K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements of Section 7.2 available on its home page on the internet, which is located at http://www.lincolnelectric.com as of the date of this Agreement;

(iii) such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 are timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; or

(iv) the Company shall have filed any of the items referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such items available on its home page on the internet or on IntraLinks or on any other similar website to which each holder of Notes has free access;

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provided however, that in the case of any of clauses (ii), (iii) or (iv), the Obligors shall have given each Purchaser or holder of a Note prior written notice, which may be by e‑mail or in accordance with Section 18, of such posting or filing in connection with each delivery, provided further, that upon request of any Purchaser or holder to receive paper copies of such forms, financial statements and Officer’s Certificates or to receive them by e‑mail, the Obligors will promptly e‑mail them or deliver such paper copies, as the case may be, to such Purchaser or holder.


SECTION 8.	PAYMENT AND PREPAYMENT OF THE NOTES .

Section 8.1. Maturity . As provided therein, the entire unpaid principal balance of each series of Notes shall be due and payable on the applicable Maturity Date thereof.

Section 8.2. Optional Prepayments with Make‑Whole Amount ‑. The Obligors may, at their option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make‑Whole Amount determined for the prepayment date with respect to such principal amount. The Obligors will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than ten days and not more than 60 days prior to the date fixed for such prepayment unless the Obligors and the Required Holders agree to another time period pursuant to Section 17. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make‑Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Obligors shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make‑Whole Amount as of the specified prepayment date.

Section 8.3. Allocation of Partial Prepayments . In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

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Section 8.4. Maturity; Surrender, Etc . In the case of each optional prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make‑Whole Amount, if any. From and after such date, unless the Obligors shall fail to pay such principal amount when so due and payable, together with the interest and Make‑Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Obligors and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5. Purchase of Notes . The Obligors will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Obligors or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least ten (10) Business Days. If the holders of more than 35% of the principal amount of the Notes then outstanding accept such offer, the Obligors shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least seven (7) Business Days from its receipt of such notice to accept such offer. The Obligors will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6. Make‑Whole Amount ‑.

“Make‑Whole Amount” means, with respect to any Note of any series, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note of such series over the amount of such Called Principal, provided that the Make‑Whole Amount may in no event be less than zero. For the purposes of determining the Make‑Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called

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Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on‑the‑run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on‑the‑run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360‑day year composed of twelve 30‑day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

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“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7. Change of Control . (a) Notice of Change of Control. The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence of any Change of Control, give written notice of such Change of Control to each holder of Notes unless notice in respect of such Change of Control shall have been given pursuant to subparagraph (b) of this Section 8.7. If a Change of Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (b) of this Section 8.7 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.7.

(b) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.7 shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date” ). If such Proposed Prepayment Date is in connection with an offer contemplated by subparagraph (a) of this Section 8.7, such date shall be not less than 20 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 45th day after the date of such offer).

(c) Acceptance; Rejection. A holder of Notes may accept or reject the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company at least 5 Business Days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7, or to accept an offer as to all of the Notes held by such holder, in each case on or before the 5th Business Day preceding the Proposed Prepayment Date, shall be deemed to constitute a rejection of such offer by such holder.

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(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment and without any Make-Whole Amount. The prepayment shall be made on the Proposed Prepayment Date.

(e) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; and (v) in reasonable detail, the nature and date or proposed date of the Change of Control.

Section 8.8. Payments Due on Non‑Business Days ‑ . Anything in this Agreement or the Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make‑Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.


SECTION 9.	AFFIRMATIVE COVENANTS .

So long as any of the Notes are outstanding , each Obligor covenants that:

Section 9.1. Compliance with Laws . Without limiting Section 10.5, each Obligor will, and will cause each Subsidiary to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non‑compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 9.2. Insurance . Each Obligor will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co‑insurance and self‑insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

Section 9.3. Maintenance of Properties . Each Obligor will, and will cause each Subsidiary to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent any Obligor or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and such Obligor has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.4. Payment of Taxes . Each Obligor will, and will cause each Subsidiary to, file all material income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent the same have become due and payable and before they have become delinquent, provided that none of the Obligors nor any Subsidiary need pay any such tax, assessment, charge or levy if (i) the amount, applicability or validity thereof is contested by such Obligor or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and any Obligor or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges and levies would not reasonably be expected to have a Material Adverse Effect.

Section 9.5. Corporate Existence, Etc . Subject to Section 10.2, each Obligor will at all times preserve and keep its corporate existence in full force and effect. Subject to Sections 10.2 and 10.3, each Obligor will at all times preserve and keep in full force and effect the corporate existence of each Subsidiary (unless merged into the Company, another Obligor or a Wholly‑Owned Subsidiary) and all rights and franchises of such Obligor and its Subsidiaries unless, in the good faith judgment of such Obligor, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not have a Material Adverse Effect.

Section 9.6. Books and Records . Each Obligor will, and will cause each Subsidiary to, maintain proper books of record and account in conformity with GAAP in all material respects and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over such Obligor or such Subsidiary, as the case may be. Each Obligor will, and will

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cause each Subsidiary to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.

Section 9.7 Additional Obligors. The Company will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co‑borrower or otherwise (each, an “Additional Obligor” ), for or in respect of any Indebtedness under any Material Credit Facility to concurrently therewith:

(a) enter into a joinder agreement in substantially the form attached hereto as Schedule 9.7 or enter into an amendment to this Agreement with the other parties hereto and thereto, in form and substance reasonably satisfactory to the Required Holders, providing that such Additional Obligor shall become an Obligor hereunder, and

(b) deliver the following to each of holder of a Note:

(i) an executed counterpart of such joinder agreement or such amendment to this Agreement and the Notes;

(ii) a certificate signed by an authorized responsible officer of such Additional Obligor containing representations and warranties on behalf of such Additional Obligor to the same effect, mutatis mutandis , as those contained in Section 5 of this Agreement (but with respect to such Additional Obligor);

(iii) all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and good standing of such Additional Obligor and the due authorization by all requisite action on the part of such Additional Obligor of the execution and delivery of such joinder agreement or such amendment to this Agreement and the performance by such Additional Obligor of its obligations thereunder and under the Notes; and

(iv) an opinion of counsel (which may be from internal counsel) reasonably satisfactory to the Required Holders covering such matters relating to such Additional Obligor and such joinder agreement or such amendment to this Agreement as the Required Holders may reasonably request.


SECTION 10.	NEGATIVE COVENANTS .

So long as any of the Notes are outstanding , each Obligor covenants that:

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Section 10.1. Transactions with Affiliates . No Obligor will or will permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company, another Obligor or another Subsidiary), except pursuant to the reasonable requirements of such Obligor’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to such Obligor or such Subsidiary than would be obtainable in a comparable arm’s‑length transaction with a Person not an Affiliate.

Section 10.2. Merger, Consolidation, Etc . No Obligor will or will permit any Subsidiary to consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:

(a) with regard to any such transaction involving an Obligor, the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Obligor as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any state thereof (including the District of Columbia), and, if such Obligor is not such corporation or limited liability company, such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes;

(b) any Subsidiary of any Obligor may (x) consolidate with or merge with, or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to, (i) an Obligor or a Subsidiary so long as in any merger or consolidation involving any Obligor, such Obligor shall be the surviving or continuing entity or (ii) any other Person so long as the survivor is a Subsidiary, or (y) convey, transfer or lease all of its assets in compliance with the provisions of Section 10.3;

(c) each other Obligor reaffirms its obligations under this Agreement and the Notes in writing at such time pursuant to documentation that is reasonably acceptable to the Required Holders; and

(d) immediately before and immediately after giving effect to such transaction or each transaction in any such series of transactions, no Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of any Obligor shall have the effect of releasing such Obligor or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability under this Agreement or the Notes.

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Section 10.3. Sales of Assets . No Obligor will or will permit any Subsidiary to, sell, lease or otherwise dispose of any Substantial Part (as defined below) of the assets of such Obligor and its Subsidiaries; provided, however, that any Obligor or any Subsidiary may sell, lease or otherwise dispose of assets constituting a Substantial Part of the assets of such Obligor and its Subsidiaries if such assets are sold in an arm’s length transaction and, at such time and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and an amount equal to the net proceeds received from such sale, lease or other disposition (but not less than that portion of such assets that exceeds the definition of Substantial Part) shall be used within 365 days of such sale, lease or disposition, in any combination:

(1) to acquire productive assets used or useful in carrying on the business of the Obligors and their Subsidiaries and having a value at least equal to the value of such assets sold, leased or otherwise disposed of; and/or

(2) to prepay or retire Senior Indebtedness of any Obligor and/or its Subsidiaries, provided that (i) such Obligor shall offer to prepay each outstanding Note in a principal amount which equals the Ratable Portion for such Note, and (ii) any such prepayment of the Notes shall be made at par, together with accrued interest thereon to the date of such prepayment, but without the payment of the Make-Whole Amount. Any offer of prepayment of the Notes pursuant to this Section 10.3 shall be given to each holder of the Notes by written notice that shall be delivered not less than thirty (30) days and not more than sixty (60) days prior to the proposed prepayment date. Each such notice shall state that it is given pursuant to this Section 10.3 and that the offer set forth in such notice must be accepted by such holder in writing and shall also set forth (i) the prepayment date, (ii) a description of the circumstances which give rise to the proposed prepayment and (iii) a calculation of the Ratable Portion for such holder’s Notes. Each holder of the Notes which desires to have its Notes prepaid shall notify the Obligors in writing delivered not less than five (5) Business Days prior to the proposed prepayment date of its acceptance of such offer of prepayment. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 10.3, or to accept an offer as to all of the Notes held by such holder, in each case on or before the 5th Business Day preceding the proposed prepayment date, shall be deemed to constitute a rejection of such offer by such holder. Prepayment of Notes pursuant to this Section 10.3 shall be made in accordance with Section 8.2 (but without payment of the Make-Whole Amount).

As used in this Section 10.3, a sale, lease or other disposition of assets shall be deemed to be a “Substantial Part” of the assets of any Obligor and its Subsidiaries if the book value of such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by all Obligors and their Subsidiaries during the period of 12 consecutive months ending on the date of such sale, lease or other disposition, exceeds 15% of the book value of Consolidated Total Assets,

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determined as of the end of the fiscal year immediately preceding such sale, lease or other disposition; provided that there shall be excluded from any determination of a “Substantial Part” (i) any sale or other disposition of obsolete or worn out property, (ii) any sale, lease or disposition of assets (including inventory and investments) in the ordinary course of business of any Obligor and its Subsidiaries, (iii) any transfer of assets from any Obligor to any Wholly-Owned Subsidiary or from any Subsidiary to any Obligor or a Wholly-Owned Subsidiary, or (iv) any sale or transfer of property acquired by any Obligor or any Subsidiary after the date of this Agreement to any Person within 365 days following the acquisition or construction of such property by any Obligor or any Subsidiary if such Obligor or a Subsidiary shall concurrently with such sale or transfer, lease such property, as lessee. For purposes of this Agreement, Trade Receivables sold or otherwise conveyed to a Special Purpose Company pursuant to one or more Qualifying Securitization Transactions shall be excluded from the limitations of this Section 10.3, to the extent that the aggregate amount outstanding under all financing facilities relating to such Qualifying Securitization Transactions shall not exceed $100,000,000 at any time of determination.

Section 10.4. Line of Business . No Obligor will or will permit any Subsidiary to engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Investor Presentation.

Section 10.5. Terrorism Sanctions Regulations . No Obligor will or will permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any Purchaser or holder to be in violation of any law or regulation applicable to such Purchaser or holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any Purchaser or holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

Section 10.6. Liens . No Obligor will or will permit any Subsidiary to, directly or indirectly, (a) acquire any property subject to any inventory consignment, lease, land contract or other title retention contract (this Section shall not apply to true leases, consignments, tolling or other possessory agreements in respect of the property of others whereby such Obligor or Subsidiary does not have legal or beneficial title to such property and which, pursuant to GAAP, are not required to be capitalized), (b) sell or otherwise transfer any Trade Receivables, whether with or without recourse, or (c) create, incur, suffer or permit any property now owned or hereafter acquired by it

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or any income or profits thereon to be or become encumbered by any mortgage, security interest, financing statement or Lien of any kind or nature or assign or otherwise convey any right to receive income or profits; provided, that this Section shall not apply to:

(i) any lien for a Tax, assessment or governmental charge or levy which is not yet due and payable or which is being contested in good faith and as to which such Obligor or such Subsidiary shall have made appropriate reserves;

(ii) any lien securing only its workers’ compensation, unemployment insurance and similar obligations;

(iii) any mechanics, carrier’s or similar common law or statutory lien incurred in the normal course of business;

(iv) any transfer of a check or other medium of payment for deposit or collection through normal banking channels or any similar transaction in the normal course of business;

(v) Permitted Purchase Money Security Interests;

(vi) any financing statement perfecting only a security interest permitted by this Section;

(vii) easements, restrictions, minor title irregularities and similar matters having no adverse effect as a practical matter on the ownership or use of any real property of the Company or any Subsidiary;

(viii) Liens existing on property at the time of acquisition (including Liens on property of any business entity at the time of acquisition of the capital stock or assets of such business entity or a merger with or consolidation with such business entity by any Obligor or any Subsidiary permitted pursuant to Section 10.2) and not created in contemplation thereof, provided that (i) the Lien shall attach solely to the property so acquired (and any repairs, renewals, replacements, additions, accessions, betterments, improvements, modifications or proceeds thereof or relating thereto), (ii) at the time of acquisition of such property, the aggregate amount remaining unpaid on all Indebtedness secured by Liens on the property so acquired, whether or not assumed by such Obligor or such Subsidiary, shall not exceed an amount equal to the lesser of the total purchase price or fair market value of such property at the time of acquisition (as determined in good faith by one or more officers of such Obligor or such Subsidiary, as the case may be), and (iii) the aggregate principal amount of all Indebtedness secured by such Liens shall be permitted hereunder;

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(ix) any attachment or judgment Lien, but only so long as the judgment it secures does not constitute an Event of Default under Section 11(i);

(x) Liens incurred in the ordinary course of business to secure (A) the non‑delinquent performance of bids, trade contracts, leases (other than Capitalized Leases) and statutory obligations, (B) contingent obligations on surety bonds and appeal bonds, and (C) other similar non‑delinquent obligations, in each case, not incurred or made in connection with the obtaining of advances or credit, the payment of the deferred purchase price of property or the incurrence of other Indebtedness, provided that such Liens, taken as a whole, would not, even if enforced, have a Material Adverse Effect;

(xi) leases or subleases granted to others, easements, rights‑of‑way, restrictions and other similar charges or encumbrances in the ordinary course of business, in each case incidental to, and not interfering in any material respect with, the ordinary conduct of the business of such Obligor or Subsidiary, and which do not in the aggregate materially impair the use of such property in the operation of the business of such Obligor or Subsidiary or the value of such property for the purposes of such business;

(xii) any other Liens existing on the date hereof which are identified on Schedule 10.6 hereto;

(xiii) any extension, renewal or refunding of any Lien permitted by the preceding clauses (vi), (viii) and (xii) of this Section 10.6 in respect of the same property theretofore subject to such Lien in connection with the extension, renewal or refunding of the Indebtedness secured thereby; provided that (A) such extension, renewal or refunding shall be without increase in the principal amount remaining unpaid as of the date of such extension, renewal or refunding, (B) such Lien shall attach solely to the same such property, (C) the principal amount remaining unpaid as of the date of such extension, renewal or refunding is less than or equal to the fair market value of the property (determined in good faith by the Board or Directors of the Company) to which such Lien is attached, (D) at the time of such extension, renewal or refunding and after giving effect thereto, no Default or Event of Default would exist; or

(xiv) Liens securing Priority Debt (other than Liens on Trade Receivables unless in connection with the sale or other transfer of Trade Receivables to a Special Purpose Company pursuant to one or more Qualifying Securitization Transactions, to the extent that the aggregate amount outstanding under all financing facilities relating to such Qualifying Securitization Transactions shall not exceed $100,000,000 at any time of determination) not otherwise permitted in the foregoing clauses (i) through (xiii), above, provided that Priority Debt shall not at any time exceed 15% of Consolidated Total Assets (determined as of the

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end of the then most recently ended fiscal quarter), provided, further, that notwithstanding the foregoing, no Obligor shall, or shall permit any of its Subsidiaries to, secure pursuant to this clause (xiv) of this Section 10.6 any Indebtedness outstanding under or pursuant to any Material Credit Facility (or any Guaranty delivered in connection therewith) unless and until the Notes (and any guaranty delivered in connection therewith) shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required Holders in substance and in form, including, without limitation, an intercreditor agreement and opinions of counsel to such Obligor and/or any such Subsidiary, as the case may be, from counsel that is reasonably acceptable to the Required Holders.

Section 10.7. Fixed Charges Coverage . The Company shall not permit the Fixed Charges Coverage Ratio as of the end of any fiscal quarter to be less than 1.75 to 1.00.

Section 10.8. Total Leverage Ratio. The Company shall not permit the Total Leverage Ratio as of the end of any fiscal quarter to be greater than 3.50 to 1.00; provided that, upon notice by the Company to the holders of Notes, as of the last day of each of the four consecutive fiscal quarters immediately following a Qualified Acquisition, such ratio may be greater than 3.50 to 1.00, but in no event greater than 4.00 to 1.00, but only so long as (i) the Total Leverage Ratio for the two full consecutive fiscal quarters immediately prior to such Qualified Acquisition was not greater than 3.50 to 1.00 and (ii) the Company pays the additional interest provided for in Section 1.3.

Section 10.9. Priority Debt . The Company shall not at any time permit the aggregate amount of all Priority Debt to exceed 15% of Consolidated Total Assets (Consolidated Total Assets to be determined as of the end of the then most recently ended fiscal quarter of the Company).

Section 10.10. Distributions . The Company shall not declare or pay any dividend or other Distribution in cash, property or obligations (other than in shares of capital stock of the Company or in options, warrants or other rights to acquire any such capital stock or in other securities convertible into any such capital stock) on any shares of capital stock of the Company of any class; and the Company shall not purchase, redeem or otherwise acquire for any consideration any shares of capital stock of the Company of any class or any option, warrant or other right to acquire any such capital stock, unless, as to any of the foregoing, no Default or Event of Default then exists or would exist after giving effect thereto.


SECTION 11.	EVENTS OF DEFAULT .

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An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a) any Obligor defaults in the payment of any principal or Make‑Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b) any Obligor defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

(c) any Obligor defaults in the performance of or compliance with any term contained in Section 7.1(d) or Sections 10.2, 10.3, 10.6, 10.7, 10.8, 10.9 and 10.10; or

(d) any Obligor defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) such Obligor receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

(e) any representation or warranty made in writing by or on behalf of any Obligor or by any officer of any Obligor in this Agreement or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or

(f) (i) any Obligor or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make‑whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount in excess of an amount equal to three percent (3%) of Consolidated Net Worth beyond any period of grace or notice provided with respect thereto, or (ii) any Obligor or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount in excess of an amount equal to three percent (3%) of Consolidated Net Worth or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition, such Indebtedness has become or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment; or

(g) any Obligor or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any

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bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

(h) a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by any Obligor or any Significant Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding‑up or liquidation of such Obligor or such Significant Subsidiary, or any such petition shall be filed against such Obligor or such Significant Subsidiary and such petition shall not be dismissed within 60 days; or

(i) one or more final judgments or orders for the payment of money aggregating in excess of an amount equal to three percent (3%) of Consolidated Net Worth at such time, including, without limitation, any such final order enforcing a binding arbitration decision, are rendered against one or more of any Obligor and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed an amount that would cause a Material Adverse Effect, (iv) any Obligor or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) any Obligor or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) any Obligor or any Subsidiary establishes or amends any employee welfare benefit plan that provides post‑employment welfare benefits in a manner that would increase the liability of any Obligor or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other

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such event or events, would reasonably be expected to have a Material Adverse Effect. As used in this Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.


SECTION 12.	REMEDIES ON DEFAULT, ETC .

Section 12.1. Acceleration . (a) If an Event of Default with respect to any Obligor described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Obligors, declare all the Notes then outstanding to be immediately due and payable.

(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Obligors, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make‑Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. Each Obligor acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Obligors (except as herein specifically provided for) and that the provision for payment of a Make‑Whole Amount by the Obligors in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies . If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate

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proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3. Rescission . At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders in principal amount of the Notes then outstanding, by written notice to the Obligors, may rescind and annul any such declaration and its consequences if (a) any Obligor has paid all overdue interest on the Notes, all principal of and Make‑Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make‑Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) no Obligor nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non‑payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc . No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Obligors under Section 15, the Obligors will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.


SECTION 13.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES .

Section 13.1. Registration of Notes . The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s

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option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement. Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Obligors shall not be affected by any notice or knowledge to the contrary. The Obligors shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes . Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Obligors shall execute and deliver, at the Obligor’s expense (except as provided below), one or more new Notes of the same series (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1(a), Schedule 1(b), Schedule 1(c) or Schedule 1(d), respectively. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Obligors may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

Section 13.3. Replacement of Notes . Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

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(b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Obligors at their own expense shall execute and deliver, in lieu thereof, a new Note of the same series, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.


SECTION 14.	PAYMENTS ON NOTES .

Section 14.1. Place of Payment . Subject to Section 14.2, payments of principal, Make‑Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of Bank of America, N.A. in such jurisdiction. The Obligors may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of any Obligor in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2. Home Office Payment . So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Obligors will pay all sums becoming due on such Note for principal, Make‑Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Obligors in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Obligors made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Obligors pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes of the same series pursuant to Section 13.2. The Obligors will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.


SECTION 15.	EXPENSES, ETC .

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Section 15.1. Transaction Expenses . Whether or not the transactions contemplated hereby are consummated, the Obligors will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of any Obligor or any Subsidiary or in connection with any work‑out or restructuring of the transactions contemplated hereby and by the Notes and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $5,000. The Obligors will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).

Section 15.2. Survival . The obligations of the Obligors under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.


SECTION 16.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT .

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations and warranties of such Obligor under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between each Purchaser and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof.


SECTION 17.	AMENDMENT AND WAIVER .

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Section 17.1. Requirements . This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Obligors and the Required Holders, except that:

(a) no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; and

(b) no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or (y) the Make‑Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver or the principal amount of the Notes that the Purchasers are to purchase pursuant to Section 2 upon the satisfaction of the conditions to Closing that appear in Section 4, or (iii) amend any of Sections 8 ( except as set forth in the second sentence of Section 8.2 and Section 17.1(c) ) , 11(a), 11(b), 12, 17 or 20.

Section 17.2. Solicitation of Holders of Notes .

(a) Solicitation. The Obligors will provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Obligors will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 17 to each Purchaser and each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Notes.

(b) Payment. No Obligor will directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

(c) Consent in Contemplation of Transfer . Any consent given pursuant to this Section 17 by a holder of a Note that has transferred or has agreed to transfer its Note to any Obligor or any Affiliate of any Obligor in connection with such consent shall be void and of no force or effect

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except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Section 17.3. Binding Effect, etc . Any amendment or waiver consented to as provided in this Section 17 applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Obligors without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Obligors and any Purchaser or holder of a Note and no delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any Purchaser or holder of such Note.

Section 17.4. Notes Held by Obligors, etc . Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Obligor or any of its Affiliates shall be deemed not to be outstanding.


SECTION 18.	NOTICES .

Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Obligors in writing,

(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Obligors in writing, or

(iii) if to any Obligor, to the Company at 22801 St. Clair Avenue, Cleveland, Ohio 44117-1199, to the attention of the Treasurer, or at such other address as such Obligor shall have specified to the holder of each Note in writing.

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Notices under this Section 18 will be deemed given only when actually received.


SECTION 19.	REPRODUCTION OF DOCUMENTS .

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. Each Obligor agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit any Obligor or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

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SECTION 20.	CONFIDENTIAL INFORMATION .

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of any Obligor or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of such Obligor or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by any Obligor or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of any Obligor (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be required (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes or this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Obligors in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Obligors embodying this Section 20.

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In the event that as a condition to receiving access to information relating to any Obligor or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and such Obligor, this Section 20 shall supersede any such other confidentiality undertaking.


SECTION 21.	SUBSTITUTION OF PURCHASER .

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser” ) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Obligors, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser. In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Obligors of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.


SECTION 22.	MISCELLANEOUS .

Section 22.1. Successors and Assigns . All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

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Section 22.2. Accounting Terms; Accounting Changes . All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP. For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825‑10‑25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

If any change in GAAP by reason of a change from GAAP to IFRS or, if applicable, portions thereof (as provided in the definition of “GAAP”) would affect in any material respect the computation of any ratio or other financial covenant, basket, calculation or requirement set forth herein or in any other document relating to the Notes, the Obligors and the holders shall endeavor to negotiate in good faith a modification of such ratio, covenant, basket, calculation or requirement to preserve the original intent thereof in light of such change from GAAP to IFRS or, if applicable, portions thereof (subject, however, to the approval of the Required Holders); and until, if ever, such modification shall have been effected by an amendment to such ratio, covenant, basket, calculation or requirement approved by the Obligors and the Required Holders as provided in Section 17.1 hereof, (i) such ratio, covenant, basket, calculation or requirement shall continue to be computed in accordance with GAAP prior to such change to IFRS (or, if applicable, portions thereof) and (ii) the Obligors shall provide to the holders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio, covenant, basket, calculation or requirement made before and after giving effect to such change from GAAP to IFRS (or, if applicable, portions thereof).

Section 22.3. Severability . Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4. Construction, etc . Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

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Section 22.5. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

Section 22.6. Governing Law . This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 22.7. Jurisdiction and Process; Waiver of Jury Trial . (a) Each Obligor irrevocably submits to the non‑exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, each Obligor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b) Each Obligor consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. Each Obligor agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(c) Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Obligors in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d) THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

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Lincoln Electric Holdings, Inc. Note Purchase Agreement

Section 22.8. Joint and Several . (a) Joint and Several. The Obligors agree and acknowledge that their liability to pay all obligations under this Agreement and the Notes and to perform all other obligations under this Agreement and the Notes and each other document to which they are a party is and shall be joint and several. No Obligor shall have any right of subrogation, reimbursement or similar right in respect of its payment of any sum or its performance of any other obligation hereunder or under the Notes unless and until all obligations have been paid in full. In addition, each Obligor confirms that it will have received adequate consideration and reasonably equivalent value for the Indebtedness incurred and other agreements made in this Agreement and the Notes. No Obligor could reasonably expect to obtain financing separately on terms as favorable as those provided for herein.

(b) Obligations Absolute . The obligations of each Obligor hereunder (the “Obligations” ) shall be valid and enforceable and, except as expressly provided herein, shall not be subject to limitation, impairment or discharge for any reason (other than the payment in full of the Obligations), including, without limitation, the occurrence of any failure to assert or enforce or agreement not to assert or enforce any claim or demand of any right power or remedy with respect to the Obligations or any agreement relating thereto, or with respect to any guaranty thereof or security therefor or any other act or thing or omission which may or might in any manner or to any extent vary the risk of such Obligor as an obligor in respect of the Obligations; and each Obligor hereby waives (i) any defense based upon any statute or rule of law or equity to the effect that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal, and (ii) to the fullest extent permitted by law, any defenses or benefits which may be derived from or afforded by law or equity which limit the liability of or exonerate guarantors or sureties, or which may conflict with terms of this Agreement, the Notes or any other documents delivered in connection therewith.

(c) Limitations . (i) If the Obligations of an Obligor would be held or determined by a court or tribunal having competent jurisdiction to be void, invalid or unenforceable on account of the amount of its aggregate liability under this Agreement or the Notes, then, notwithstanding any other provision of this Agreement or the Notes to the contrary, the aggregate amount of the liability of such Obligor under this Agreement and the Notes shall, without any further action by such Obligor, any holder or any other person, be automatically limited and reduced to an amount which is valid and enforceable.

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Lincoln Electric Holdings, Inc. Note Purchase Agreement

(ii) Without limiting the generality of clause (i) above, each Obligor, each Purchaser and each holder, hereby confirms that it is the intention of all such parties that none of this Agreement, the Notes or any other document delivered in connection therewith constitute a fraudulent transfer or conveyance under any Debtor Relief Law, the Uniform Fraudulent Conveyances Act, the Uniform Fraudulent Transfer Act or similar state statute applicable to this Agreement, the Notes or any other related document. Therefore, such parties agree that the Obligations of an Obligor shall be limited to such maximum amount as will, after giving effect to such maximum amount and other contingent and fixed liabilities of such Obligor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of the other Obligors and any other obligor, result in the Obligations not constituting a fraudulent transfer or conveyance.

(iii) The provisions of this Section 22.8 are intended solely to preserve the rights of the Purchasers and the holders hereunder to the maximum extent permitted by applicable law, and neither an Obligor nor any other Person shall have any right or claim under such provisions that would not otherwise be available under applicable law.

* * * * *

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Lincoln Electric Holdings, Inc. Note Purchase Agreement

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Obligors, whereupon this Agreement shall become a binding agreement between you and the Obligors.

Very truly yours,

LINCOLN ELECTRIC HOLDINGS, INC.

Name:

Title:

THE LINCOLN ELECTRIC COMPANY

Name:

Title:

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

Name:

Title:

Lincoln Electric Holdings, Inc. Note Purchase Agreement

J.W. HARRIS CO., INC.

Name:

Title:

LINCOLN GLOBAL, INC.

Name:

Title:

TECHALLOY, INC.

Name:

Title:

WAYNE TRAIL TECHNOLOGIES, INC.

Name:

Title:

Lincoln Electric Holdings, Inc. Note Purchase Agreement

This Agreement is hereby

accepted and agreed to as

of the date hereof.

[ADD PURCHASER SIGNATURE BLOCKS]

DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Additional Obligor” is defined in Section 9.7.

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of an Obligor.

“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Anti‑Corruption Laws” is defined in Section 5.16(d)(1).

“Anti‑Money Laundering Laws” is defined in Section 5.16(c).

“ Blocked Person ” is defined in Section 5.16(a).

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Cleveland, Ohio are required or authorized to be closed.

“Capitalized Leases” means, in respect of any Person, any lease of property imposing obligations on such Person, as lessee of such property, which are required in accordance with GAAP to be capitalized on a balance sheet of such Person.

“Change of Control” means and includes any of the following:

(i) during any period of twelve (12) consecutive calendar months, individuals who at the beginning of such period constituted the Company’s Board of Directors (together with any new directors (x) whose election by the Company’s Board of Directors was, or (y) whose nomination for election by the Company’s shareholders was (prior to the date of

SCHEDULE A
(to Note Purchase Agreement)

the proxy or consent solicitation relating to such nomination), approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved), shall cease for any reason to constitute a majority of the directors then in office;

(ii) any person or group (as such term is defined in section 13(d)(3) of the 1934 Act) shall acquire, directly or indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of more than 50%, on a fully diluted basis, of the economic or voting interest in the Company’s capital stock;

(iii) the shareholders of the Company approve a merger or consolidation of such with any other person, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted or exchanged for voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving or resulting entity outstanding after such merger or consolidation;

(iv) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement or agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets; and/or

(v) the Company ceases to own one hundred percent (100%) of the issued and outstanding capital stock of an Obligor, other than the Company, except as a result of a transaction expressly permitted in Section 10.2.

“CISADA” is defined in Section 5.16(a).

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

“Company” means Lincoln Electric Holdings, Inc., an Ohio corporation or any successor that becomes such in the manner prescribed in Section 10.2.

“Confidential Information” is defined in Section 20.

“Consolidated” means the Company and its Subsidiaries, taken as a whole in accordance with GAAP.

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“Consolidated Fixed Charges” means, with respect to any period, the sum of (a) Consolidated Interest Expense for such period and (b) Consolidated Lease Rentals for such period.

“Consolidated Income Available for Fixed Charges” means, with respect to any period, Consolidated Net Income for such period, plus, without duplication, all amounts deducted in the computation thereof on account of (a) Consolidated Fixed Charges and (b) Taxes imposed on or measured by income or excess profits.

“Consolidated Interest Expense” means, for any period, Interest Expense of the Company and its Subsidiaries on a Consolidated basis.

“Consolidated Lease Rentals” means, with respect to any period, the sum of the rental and other obligations required to be paid during such period by the Company and its Subsidiaries as lessee under all leases of real or personal property (other than Capitalized Leases), on a Consolidated basis, excluding any amount required to be paid by the lessee (whether or not therein designated as rental or additional rental) on account of maintenance and repairs, insurance, Taxes, assessments, water rates and similar charges, provided that, if at the date of determination, any such rental or other obligations (or portion thereof) are contingent or not otherwise definitely determinable by the terms of the related lease, the amount of such obligations (or such portion thereof) (i) shall be assumed to be equal to the amount of such obligations for the period of 12 consecutive calendar months immediately preceding the date of determination or (ii) if the related lease was not in effect during such preceding 12-month period, shall be the amount estimated by a responsible officer of the Company on a reasonable basis and in good faith.

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries for such period, on a Consolidated basis, as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP, provided that there shall be excluded:

(a) the income (or loss) of any Person (other than a Subsidiary) in which the Company or any Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the Company or such Subsidiary in the form of cash dividends or similar cash distributions,

(b) the undistributed earnings of any Subsidiary to the extent that, to the best of the knowledge of the Company, the declaration or payment of dividends or similar

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distributions by such Subsidiary is (i) not at the time permitted by the terms of its charter or any agreement, instrument, judgment, decree, order, or law applicable to such Subsidiary, or (ii) otherwise unavailable for payment,

(c) any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, conversion, exchange or other disposition of investments or capital assets (such term to include, without limitation, the following, whether or not current: all fixed assets, whether tangible or intangible, and all inventory sold in conjunction with the disposition of fixed assets), and any Taxes on such net gain (or net loss),

(d) any non-cash gains or losses resulting from any write-up or reappraisal of any assets, including, without limitation, goodwill of such Person as well as goodwill impairments and losses traced to the write-off of goodwill associated with the sale or other disposition of a business by such Person,

(e) any net gain from the collection of the proceeds of life insurance policies,

(f) any gain arising from the acquisition of any security (as defined in the Securities Act of 1933), or the extinguishment, under GAAP, of any Indebtedness, of the Company or any Subsidiary,

(g) any deferred or other credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of the investment in such Subsidiary, and

(h) any non-cash charges related to the implementation by the Company and its Subsidiaries of FASB Statement 142.

“Consolidated Net Worth” means, at any time,

(a) the sum (adjusted for any non-cash charges related to the implementation by the Company and its Subsidiaries of FASB Statement 142) of (i) the par value (or value stated on the books of the corporation) of the capital stock (but excluding treasury stock and capital stock subscribed and unissued) of the Company and its Subsidiaries, plus (ii) the amount of the paid-in capital and retained earnings of the Company and its Subsidiaries, in each case as such amounts would be shown on a Consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP, minus

(b) to the extent included in clause (a), all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries.

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“Consolidated Total Assets” means, as of any date of determination, the total amount of all assets of the Company and its Subsidiaries, determined on a Consolidated basis.

“Controlled Entity” means (i) any of the Subsidiaries of any Obligor and any of their or such Obligor’s respective Controlled Affiliates and (ii) if such Obligor has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means that rate of interest that is the greater of (i) 2.0% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.0% over the rate of interest publicly announced by Bank of America, N.A. in New York, New York as its “base” or “prime” rate.

“Disclosure Documents” is defined in Section 5.3.

“Distribution” means any payment made, liability incurred and other consideration (other than any stock dividend, or stock split or similar distributions payable only in capital stock of an Obligor) given (i) for the purchase, acquisition, redemption or retirement of any capital stock of an Obligor or (ii) as a dividend, return of capital or other distribution of any kind in respect of the capital stock of an Obligor outstanding at any time.

“EBITDA” means, for any period, the sum of the amounts of (i) Consolidated Net Income, (ii) Consolidated Interest Expense for such period, (iii) depreciation for such period on a Consolidated basis, as determined in accordance with GAAP, (iv) amortization for such period on a Consolidated basis, as determined in accordance with GAAP, and (v) all provisions for any Taxes imposed on or measured by income or excess profits made by the Company and its Subsidiaries during such period, in each case, for clauses (ii) through (v), inclusive, to the extent expensed or deducted in computing Consolidated Net Income and without duplication.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the

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environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Obligor under section 414 of the Code.

“Event of Default” is defined in Section 11.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fixed Charges Coverage Ratio” means, at any time, the ratio of (a) Consolidated Income Available for Fixed Charges for the period of four consecutive fiscal quarters ending as of the most recent fiscal quarter ended prior to such time to (b) Consolidated Fixed Charges for such period.

“Form 10‑K” is defined in Section 7.1(b).

“Form 10‑Q” is defined in Section 7.1(a).

“Funded Debt” means (a) Indebtedness, other than Indebtedness of the types described in clause (ix), (x), (xii) and (xiii) of the definition of such term, below, and (b) all guaranty obligations of such Person in respect of any Indebtedness of the type described in clause (a) of this definition.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time; it being understood and agreed that determinations in accordance with GAAP for purposes of Section 10, including defined terms as used therein, are subject (to the extent provided therein) to Section 22.2. If at any time the SEC permits or requires U.S.‑domiciled companies subject to the reporting requirements of the Exchange Act to use, in whole or in part, IFRS in lieu of GAAP for financial reporting purposes, the Company may elect by written notice to the holders to so use IFRS (or, to the extent permitted by the SEC and consistent with pronouncements of the Financial Accounting Standards Board and the International Accounting Standards Board, portions thereof from time to time) in lieu of GAAP and, upon any such notice, references herein to GAAP shall thereafter be construed to mean (a) for periods beginning on and after the date specified in such notice, IFRS (or, if applicable, such portions) as in effect from time to time and (b) for prior periods, GAAP as defined in the first sentence of this definition (and as theretofore modified pursuant to this sentence), in each case subject to Section 22.2.

“Global” is defined in the first paragraph of this Agreement.

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“Governmental Authority” means

(a) the government of

(i) the United States of America or any state or other political subdivision thereof, or

(ii) any other jurisdiction in which any Obligor or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of any Obligor or any Subsidiary, or

(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of any government‑owned or government‑controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

“Guarantor” means the obligor under any Guaranty.

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

(a) to purchase such indebtedness or obligation or any property constituting security therefor;

(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

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(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

“Harris” is defined in the first paragraph of this Agreement.

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

“Incremental Interest” is defined in Section 1.3.

“IFRS” means the International Financial Reporting Standards and applicable accounting requirements set by the International Accounting Standards Board or any successor thereto (or the Financial Accounting Standards Board, the Accounting Principles Board of the American Institute of Certified Public Accountants, or any successor to either such Board, or the SEC, as the case may be), as in effect from time to time.

“INHAM Exemption” is defined in Section 6.2(e).

“Indebtedness” means, with respect to any Person, without duplication, (i) all indebtedness for money borrowed of such Person; (ii) all bonds, notes, debentures and similar debt securities of such Person; (iii) the deferred purchase price of capital assets or services which in accordance with GAAP would be shown on the liability side of the balance sheet of such Person; (iv) the amounts drawn under all letters of credit issued for the account of such Person (other than commercial or trade letters of credit issued in connection with customer or supplier relationships in the ordinary course of business) and, without duplication, all drafts drawn thereunder; (v) all obligations,

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contingent or otherwise, of such Person in respect of bankers’ acceptances; (vi) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed; (vii) all Capitalized Lease obligations of such Person and all Indebtedness of such Person secured by purchase money Liens; (viii) the present value, determined on the basis of the implicit interest rate, of all basic rental obligations under all “synthetic” leases ( i.e., leases accounted for by the lessee as operating leases under which the lessee is the “owner” of the leased property for Federal income Tax purposes); (ix) all obligations of such Person to pay a specified purchase price for goods or services whether or not delivered or accepted, i.e., take‑or‑pay and similar obligations; (x) all net obligations of such Person under any so‑called “hedge,” “swap,” “collar,” “cap” or similar interest rate or currency fluctuation protection agreements; (xi) the full outstanding balance of trade receivables, notes or other instruments sold with full recourse (and the portion thereof subject to potential recourse, if sold with limited recourse), including, without limitation, in connection with a Qualifying Securitization Transaction, other than in any such case any thereof sold solely for purposes of collection of delinquent accounts; (xii) the stated value, or liquidation value if higher, of all redeemable stock (or other equity interest) of such Person; and (xiii) all guaranty obligations of such Person; provided that (a) neither trade payables nor other similar accrued expenses, in each case arising in the ordinary course of business, unless evidenced by a note, shall constitute Indebtedness; and (b) the Indebtedness of any Person shall in any event include (without duplication) the Indebtedness of any other entity (including any general partnership in which such Person is a general partner) to the extent such Person is liable thereon as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide expressly that such Person is not liable thereon.

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 2% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

“Interest Expense” means, for any fiscal period, all expense of the Company or any of its Subsidiaries for such fiscal period classified as interest expense for such period, including capitalized interest and interest under “synthetic” leases, in accordance with GAAP.

“International” is defined in the first paragraph of this Agreement.

“Investor Presentation” is defined in Section 5.3.

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“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person.

“Lincoln” is defined in the first paragraph of this Agreement.

“Lincoln Party” means any of the Obligors or any other direct or indirect Subsidiary of any of them from time to time, collectively, the “Lincoln Parties.”

“Make‑Whole Amount” is defined in Section 8.6.

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of an Obligor and its Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, financial condition, assets or properties of an Obligor and its Subsidiaries taken as a whole, (b) the ability of an Obligor to perform its obligations under this Agreement and the Notes, (c) the ability of any Guarantor to perform its obligations under any Guaranty guaranteeing the obligations of the Obligors under the Notes and this Agreement, or (d) the validity or enforceability of this Agreement, the Notes or any such Guaranty.

“Material Credit Facility” means, as to the Obligors and their Subsidiaries,

(a) the Amended and Restated Credit Agreement dated as of July 26, 2012, by and among the Company, the Subsidiaries of the Company party thereto, KeyBank National Association, in its capacities as letter of credit issuer and administrative agent for the lenders, and the financial institutions party thereto as lenders, as amended to date, including any renewals, extensions, further amendments, supplements, restatements, replacements or refinancing thereof;

(b) any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of Closing by any Obligor or any Subsidiary, or in respect of which any Obligor or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support ( “Credit Facility” ), in a principal amount outstanding or available for borrowing equal to or greater than $50,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then any Credit Facility in a principal amount outstanding or available for borrowing equal to or greater than $5,000,000 (or the equivalent

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of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency) shall be deemed to be a Material Credit Facility; and

(c) any private placement document pursuant to which any Obligor has issued senior notes, either now existing or existing in the future .

“Maturity Date” is defined in the first paragraph of each Note.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

“Notes” is defined in Section 1.

“Obligor” and “Obligors” is defined in the first paragraph of this Agreement.

“Obligations” is defined in Section 22.8(b).

“OFAC” is defined in Section 5.16(a).

“OFAC Listed Person” is defined in Section 5.16(a).

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource‑center/sanctions/Programs/Pages/Programs.aspx.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company or any other Obligor whose responsibilities extend to the subject matter of such certificate.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Permitted Purchase Money Security Interest” means any Lien which is created or assumed in purchasing, constructing or improving any real or personal property (other than inventory) in the ordinary course of business, or to which any such property is subject when so purchased, including, without limitation, Capitalized Leases, provided, that (i) such Lien shall be confined to the aforesaid property, (ii) the Indebtedness secured thereby does not exceed the total

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cost of the purchase, construction or improvement, and (iii) any refinancing of such indebtedness does not increase the amount of indebtedness owing as of the date of such refinancing.

“Person” means an individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, association, institution, estate, trust, unincorporated organization, business entity or Governmental Authority.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Obligor or any ERISA Affiliate or with respect to which any Obligor or any ERISA Affiliate may have any liability.

“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.

“Priority Debt” means (without duplication), as of the date of any determination thereof, the sum of (i) all unsecured Indebtedness of Subsidiaries (including all Guaranties of Indebtedness but excluding (w) Indebtedness owing to the Company or any other Subsidiary, (x) Indebtedness outstanding at the time such Person became a Subsidiary, provided that such Indebtedness shall have not been incurred in contemplation of such person becoming a Subsidiary, (y) Indebtedness of the Obligors and (z) all Indebtedness of Guarantors guaranteeing the obligations of the Obligors under the Notes and this Agreement), and (ii) all Indebtedness of any Obligor and its Subsidiaries secured by Liens other than Indebtedness secured by Liens permitted by clauses (i) through (xiii), inclusive, of Section 10.6.

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“Proposed Prepayment Date” is defined in Section 8.7(b).

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Obligors and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

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“Qualified Acquisition” means any acquisition of either or both the capital stock or assets of any Person or Persons (or any portion thereof), or the last to occur of a series of such acquisitions consummated within a period of six consecutive months, if the aggregate amount of Indebtedness incurred by one or more of the Company and its Subsidiaries to finance the purchase price of, or assumed by one or more of them in connection with the acquisition of, such stock and property is at least $100,000,000.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

“Qualifying Securitization Transaction” shall mean a bona fide securitization transaction effected under terms and conditions customary in the capital markets and consisting of sales of Trade Receivables by a Lincoln Party to a Special Purpose Company which in turn either sells or pledges such Trade Receivables (or undivided interests therein) to a commercial paper conduit or other financing source (whether with or without recourse to the Special Purpose Company), and as to which each of the following conditions shall be satisfied: (i) such sales to the Special Purpose Company are not accounted for under GAAP as secured loans, (ii) such transactions are, in the good faith opinion of a responsible officer of the Company, for fair value and in the best interests of such Lincoln Party, and (iii) recourse to any Lincoln Party in connection with any such sale of Trade Receivables is limited to repurchase, substitution or indemnification obligations customarily provided for in asset securitization transactions and arising from breaches of representations or warranties made by any Lincoln Party in connection with such sale.

“QPAM Exemption” is defined in Section 6.2(d).

“Ratable Portion” means, with respect to any Note, an amount equal to the product of (x) the amount equal to the net proceeds being so applied to the prepayment of Senior Indebtedness in accordance with Section 10.3(2), multiplied by (y) a fraction, the numerator of which is the aggregate principal amount of Senior Indebtedness of any Obligor and its Subsidiaries being prepaid pursuant to Section 10.3(2) and the denominator is the aggregate principal amount of Senior Indebtedness of such Obligor and its Subsidiaries.

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Required Holders” means at any time on or after the Closing, the holders of at least 51% in principal amount of the Notes at the time outstanding, exclusive of Notes then owned by any Obligor or any of its Affiliates.

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“Responsible Officer” means any Senior Financial Officer and any other officer of the Company or any other Obligor with responsibility for the administration of the relevant portion of this Agreement.

“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

“Senior Indebtedness” means with respect to any Person, as of the date of any determination thereof, all Indebtedness of such Person other than Subordinated Debt.

“series” means any series of Notes issued pursuant to this Agreement.

“Series A Notes” is defined in Section 1.1.

“Series B Notes” is defined in Section 1.1.

“Series C Notes” is defined in Section 1.1.

“Series D Notes” is defined in Section 1.1.

“Significant Subsidiary” means at any time any Subsidiary that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S‑X of the SEC as in effect on the date of the Closing) of any Obligor.

“Source” is defined in Section 6.2.

“Special Purpose Company” shall mean any Person created in connection with a Qualifying Securitization Transaction, provided, that any Special Purpose Company shall not own any property or conduct any activities other than those properties and activities which are reasonably required to be owned and conducted in connection with the involvement of such Person in Qualifying Securitization Transactions.

A‑14

“Subordinated Debt” means with respect to any Person, all unsecured Indebtedness of such Person which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other Indebtedness of such Person (including without limitation, with respect to any Obligor, the obligations of such Obligor under this Agreement or the Notes).

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Substantial Part” is defined in Section 10.3.

“Substitute Purchaser” is defined in Section 21.

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including interest, penalties and additions to tax with respect thereto.

“Techalloy” is defined in the first paragraph of this Agreement.

“Total Funded Debt” shall mean, as at the date of any determination, and on a Consolidated basis, the principal amount of any and all outstanding Funded Debt of the Company and its Subsidiaries at such date, including, without limitation, the outstanding obligations of the Obligors under this Agreement and the Notes at such date and any other obligations of the Obligors to the holders at such date.

“Total Leverage Ratio” shall mean, as of the end of any fiscal quarter, the ratio of (i) Total Funded Debt outstanding on such fiscal quarter end to (ii) Trailing EBITDA as of such fiscal quarter end.

“Trade Receivables” shall mean indebtedness and other obligations owed to the Company or any other Lincoln Party, whether constituting accounts, chattel paper, instruments or general

A‑15

intangibles, arising in connection with the sale of goods and services by the Company or such Lincoln Party to commercial customers, including, without limitation, the obligation to pay any finance charges with respect thereto, and agreements relating thereto, collateral securing the foregoing, books and records relating thereto and all proceeds thereof.

“Trailing EBITDA” shall mean, as of the end of any fiscal quarter, EBITDA for such fiscal quarter, plus EBITDA for the three (3) immediately preceding fiscal quarters.

“USA PATRIOT Act” means United States Public Law 107‑56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions” is defined in Section 5.16(a).

“Wayne” is defined in the first paragraph of this Agreement.

“Wholly‑Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of any Obligor and such Obligor’s other Wholly‑Owned Subsidiaries at such time.

A‑16

[FORM OF SERIES A NOTE]

LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC.

2.75% SENIOR NOTE, SERIES A, DUE OCTOBER 20, 2028

No. RA-[_____] [Date]

$[_______] PPN 53359# AE2

FOR VALUE RECEIVED, the undersigned, Lincoln Electric Holdings, Inc. , a corporation organized and existing under the laws of the State of Ohio (herein called the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), jointly and severally hereby promise to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on October 20, 2028 (the “Maturity Date” ), with interest (computed on the basis of a 360‑day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 2.75% per annum from the date hereof, payable semiannually, on the 20th day of April and October in each year, commencing with the April 20 or October 20 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make‑Whole Amount, at a rate per annum from time to time equal to the greater of (i) 4.75% or (ii) 2.0% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make‑Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New

SCHEDULE 1(a)
(to Note Purchase Agreement)

York, New York or at such other place as the Obligors shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes” ) issued pursuant to the Note Purchase Agreement, dated as of October 20, 2016 (as from time to time amended, the “Note Purchase Agreement” ), between the Obligors and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Obligors may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Obligors will not be affected by any notice to the contrary.

The Obligors will make any required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make‑Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

1(a)‑2

LINCOLN ELECTRIC HOLDINGS, INC.

Name:

Title:

THE LINCOLN ELECTRIC COMPANY

Name:

Title:

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

Name:

Title:

J.W. HARRIS CO., INC.

Name:

Title:

LINCOLN GLOBAL, INC.

Name:

Title:

1(a)‑3

TECHALLOY, INC.

Name:

Title:

WAYNE TRAIL TECHNOLOGIES, INC.

Name:

Title:

1(a)‑4

[FORM OF SERIES B NOTE]

LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC .

3.03% SENIOR NOTE, SERIES B, DUE OCTOBER 20, 2033

No. RB-[_____] [Date]

$[_______] PPN 53359# AF9

FOR VALUE RECEIVED, the undersigned, Lincoln Electric Holdings, Inc. , a corporation organized and existing under the laws of the State of Ohio (herein called the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), jointly and severally hereby promise to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on October 20, 2033 (the “Maturity Date” ), with interest (computed on the basis of a 360‑day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 3.03% per annum from the date hereof, payable semiannually, on the 20th day of April and October in each year, commencing with the April 20 or October 20 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make‑Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.03% or (ii) 2.0% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make‑Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New

SCHEDULE 1(b)
(to Note Purchase Agreement)

York, New York or at such other place as the Obligors shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note shall be construed and enforced in accordance with, and the rights of the Obligors and the holder of this Note shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

1(b)‑2

LINCOLN ELECTRIC HOLDINGS, INC.

Name:

Title:

THE LINCOLN ELECTRIC COMPANY

Name:

Title:

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

Name:

Title:

J.W. HARRIS CO., INC.

Name:

Title:

LINCOLN GLOBAL, INC.

Name:

Title:

1(b)‑3

TECHALLOY, INC.

Name:

Title:

WAYNE TRAIL TECHNOLOGIES, INC.

Name:

Title:

1(b)‑4

[FORM OF SERIES C NOTE]

LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC.

3.27% SENIOR NOTE, SERIES C, DUE OCTOBER 20, 2037

No. RC-[_____] [Date]

$[_______] PPN 53359# AG7

FOR VALUE RECEIVED, the undersigned, Lincoln Electric Holdings, Inc. , a corporation organized and existing under the laws of the State of Ohio (herein called the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), jointly and severally hereby promise to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on October 20, 2037 (the “Maturity Date” ), with interest (computed on the basis of a 360‑day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 3.27% per annum from the date hereof, payable semiannually, on the 20th day of April and October in each year, commencing with the April 20 or October 20 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make‑Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.27% or (ii) 2.0% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make‑Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New

SCHEDULE 1(c)
(to Note Purchase Agreement)

York, New York or at such other place as the Obligors shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

1(c)‑2

LINCOLN ELECTRIC HOLDINGS, INC.

Name:

Title:

THE LINCOLN ELECTRIC COMPANY

Name:

Title:

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

Name:

Title:

J.W. HARRIS CO., INC.

Name:

Title:

LINCOLN GLOBAL, INC.

Name:

Title:

1(c)‑3

TECHALLOY, INC.

Name:

Title:

WAYNE TRAIL TECHNOLOGIES, INC.

Name:

Title:

1(c)‑4

[FORM OF SERIES D NOTE]

LINCOLN ELECTRIC HOLDINGS, INC.

THE LINCOLN ELECTRIC COMPANY

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

J.W. HARRIS CO., INC.

LINCOLN GLOBAL, INC.

TECHALLOY, INC.

WAYNE TRAIL TECHNOLOGIES, INC.

3.52% SENIOR NOTE, SERIES D, DUE OCTOBER 20, 2041

No. RD-[_____] [Date]

$[_______] PPN 53359# AH5

FOR VALUE RECEIVED, the undersigned, Lincoln Electric Holdings, Inc. , a corporation organized and existing under the laws of the State of Ohio (herein called the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), jointly and severally hereby promise to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on October 20, 2041 (the “Maturity Date” ), with interest (computed on the basis of a 360‑day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 3.52% per annum from the date hereof, payable semiannually, on the 20th day of April and October in each year, commencing with the April 20 or October 20 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make‑Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.52% or (ii) 2.0% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make‑Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New

SCHEDULE 1(d)
(to Note Purchase Agreement)

York, New York or at such other place as the Obligors shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

1(d)‑2

LINCOLN ELECTRIC HOLDINGS, INC.

Name:

Title:

THE LINCOLN ELECTRIC COMPANY

Name:

Title:

LINCOLN ELECTRIC INTERNATIONAL HOLDING COMPANY

Name:

Title:

J.W. HARRIS CO., INC.

Name:

Title:

LINCOLN GLOBAL, INC.

Name:

Title:

1(d)‑3

TECHALLOY, INC.

Name:

Title:

WAYNE TRAIL TECHNOLOGIES, INC.

Name:

Title:

1(d)‑4

FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY

Matters To Be Covered in
Opinion of Special Counsel to the Company

1. Each of the Company and its Subsidiaries being duly incorporated, validly existing and in good standing and having requisite corporate power and authority to issue and sell the Notes and to execute and deliver the documents.

2. Each of the Company and its Significant Subsidiaries being duly qualified and in good standing as a foreign corporation in appropriate jurisdictions.

3. Due authorization and execution of the documents and such documents being legal, valid, binding and enforceable.

4. No conflicts with charter documents, laws or other agreements.

5. All consents required to issue and sell the Notes and to execute and deliver the documents having been obtained.

6. No litigation questioning validity of documents.

7. The Notes not requiring registration under the Securities Act of 1933, as amended; no need to qualify an indenture under the Trust Indenture Act of 1939, as amended.

8. No violation of Regulations T, U or X of the Federal Reserve Board.

9. Company not an “investment company”, or a company “controlled” by an “investment company”, under the Investment Company Act of 1940, as amended.

SCHEDULE 4.4(a)
(to Note Purchase Agreement)

FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS

To be provided to the Purchasers only.

SCHEDULE 4.4(b)
(to Note Purchase Agreement)

DISCLOSURE MATERIALS


•	Lincoln Electric Holdings, Inc. Form 10-K for fiscal year ended December 31, 2015.


•	Lincoln Electric Holdings, Inc. Form 10-Q for the quarterly periods ended March 31, 2016 and June 30, 2016.


•	Lincoln Electric Q&A – July 15, 2016


•	Lincoln Electric Management Presentation and Call Recording – July 11, 2016


•	Offering Letter, dated as of June 29, 2016, by Merrill Lynch, Pierce, Fenner & Smith Incorporated


•	Circle Letter, dated as of July 19, 2016, by Bank of America Merrill Lynch

SCHEDULE 5.3
(to Note Purchase Agreement)

SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK



Entity Name	Jurisdiction of Organization	Owner Name	Type of Interest Owned	Percent Owned
A. B. Arriendos S.A.	Santiago	Inversiones Libertad S.A.	Nominative Shares	0.010000
A. B. Arriendos S.A.	Santiago	Inversiones LyL S.A.	Nominative Shares	99.980000
A. B. Arriendos S.A.	Santiago	Lincoln Electric Holdings, Inc.	Nominative Shares	0.010000
Arc Products, Inc.	Delaware	Lincoln Electric Holdings, Inc.	Common Shares	100.000000
Burlington Automation Corporation	Ontario	1333712 Ontario Inc.	Class A Common Shares	7.500000
Burlington Automation Corporation	Ontario	1856292 Ontario Inc.	Class A Common Shares	2.500000
Burlington Automation Corporation	Ontario	1856292 Ontario Inc.	Class B Common Shares	10.000000
Burlington Automation Corporation	Ontario	Lincoln Canada Holdings ULC	Class A Common Shares	90.000000
Burlington Automation Corporation	Ontario	Lincoln Canada Holdings ULC	Class B Common Shares	90.000000
Data Driven Robotics Inc.	Ontario	1333712 Ontario Inc.	Class A Common Shares	5.000000
Data Driven Robotics Inc.	Ontario	1856292 Ontario Inc.	Class A Common Shares	1.666680
Data Driven Robotics Inc.	Ontario	1856292 Ontario Inc.	Class B Common Shares	5.000000
Data Driven Robotics Inc.	Ontario	Abtron Automation Inc.	Class A Common Shares	1.666680
Data Driven Robotics Inc.	Ontario	Abtron Automation Inc.	Class B Common Shares	5.000000
Data Driven Robotics Inc.	Ontario	Lincoln Canada Holdings ULC	Class A Common Shares	89.998000
Data Driven Robotics Inc.	Ontario	Lincoln Canada Holdings ULC	Class B Common Shares	90.000000
Data Driven Robotics Inc.	Ontario	Muscat-Tyler, Robin	Class A Common Shares	1.666660
Easom Automation Systems, Inc.	Delaware	Lincoln Electric Holdings, Inc.	Common Stock	100.000000
Electro-Arco, S.A.	Portugal	Lincoln Electric Novo Holdings LLC	Shares	100.000000
Harris Calorific GmbH	Heimertingen	Lincoln Europe Holdings GmbH	Shares	100.000000
Harris Calorific International Sp. z o.o.	Poland	Lincoln Electric Luxembourg S.àr.l.	Shares	100.000000
Harris Calorific S.r.l.	Bologna	Lincoln Electric Italia S.r.l.	Quotas	100.000000
Harris Euro, S.L.	Spain	Harris-Euro Corp.	Percentage Ownership Interest	100.000000
Harris-Euro Corp.	Ohio	Lincoln Electric Holdings, Inc.	Common Shares	100.000000
Inversiones LyL S.A.	Santiago	Cabala, Eduardo Bizama	Nominative Shares	50.000000
Inversiones LyL S.A.	Santiago	Lincoln Electric International Holding Company	Nominative Shares	50.000000
J. W. Harris Co., Inc.	Ohio	Lincoln Electric Holdings, Inc.	Class A Common Shares	100.000000
J. W. Harris Co., Inc.	Ohio	Lincoln Electric Holdings, Inc.	Class B Common Shares	100.000000
Jinzhou Zheng Tai Welding and Metal Co., Ltd.	Jinzhou City, Liaoning Province	Tenwell Development Pte. Ltd.	Percentage Ownership Interest	100.000000

SCHEDULE 5.4
(to Note Purchase Agreement)

NAI-1501882682v2



Kaliburn, Inc.	South Carolina	Lincoln Electric Holdings, Inc.	Shares	100.000000
Kaynak Teknigi Sanayi ve Ticaret A.S.	Turkey	Eczacibasi Holding AS	Class B	67.988106
Kaynak Teknigi Sanayi ve Ticaret A.S.	Turkey	Eczacibasi Yatrim Holding Ortakligi AS	Class B	32.011894
Kaynak Teknigi Sanayi ve Ticaret A.S.	Turkey	Lincoln Electric France S.A.S.	Class A	100.000000
Kaynak Teknigi Sanayi ve Ticaret A.S.	Turkey	Other Shareholders	Class C	100.000000
LE Torreon BCS, S. de R.L. de C.V.	Monterrey, Nuevo Leon	Lincoln Electric Manufactura, S.A. de C.V.	Percentage Ownership Interest	99.970000
LE Torreon BCS, S. de R.L. de C.V.	Monterrey, Nuevo Leon	Lincoln Electric Maquinas, S. de R.L. de C.V.	Percentage Ownership Interest	0.030000
Lincoln Canada Finance ULC	Alberta	Lincoln Canada Holdings ULC	Common Shares	100.000000
Lincoln Canada Holdings ULC	Nova Scotia	Lincoln Electric Holdings S.a.r.l.	Common Shares	100.000000
Lincoln Canada International Holdings LP	Ontario	Lincoln Canada Holdings ULC	Percentage Ownership Interest	99.004000
Lincoln Canada International Holdings LP	Ontario	Lincoln Electric Company of Canada GP Limited	Percentage Ownership Interest	0.996000
Lincoln Electric (Jinzhou) Welding Materials Co., Ltd.	Jinzhou City, Liaoning Province	Tenwell Development Pte. Ltd.	Percentage Ownership Interest	100.000000
Lincoln Electric (Tangshan) Welding Materials Co., Ltd.	Tangshan	Tenwell Development Pte. Ltd.	Percentage Ownership Interest	100.000000
Lincoln Electric (U.K.) Ltd.	England	Lincoln Electric UK Holdings Limited	Ordinary Shares	100.000000
Lincoln Electric (U.K.) Ltd.	England	Lincoln Electric UK Holdings Limited	Redeemable Preference Shares	100.000000
Lincoln Electric Bester Sp. Zo.o.	Poland	Lincoln Electric Luxembourg S.àr.l.	Percentage Ownership Interest	100.000000
Lincoln Electric Company (India) Private Limited	India	Lincoln Electric Cyprus Holdings LLC	Shares	0.055986
Lincoln Electric Company (India) Private Limited	India	Lincoln Electric Cyprus Limited	Shares	99.944014
Lincoln Electric Company of Canada GP Limited	Ontario	Lincoln Canada Holdings ULC	Common Shares	100.000000
Lincoln Electric Company of Canada LP	Ontario	Lincoln Canada International Holdings LP	Percentage Ownership Interest	99.999000
Lincoln Electric Company of Canada LP	Ontario	Lincoln Electric Company of Canada GP Limited	Percentage Ownership Interest	0.001000
Lincoln Electric Cutting Systems, Inc.	Delaware	Lincoln Electric Holdings, Inc.	Common Shares	100.000000
Lincoln Electric Cyprus Holdings LLC	Delaware	Lincoln Electric Cyprus Limited	Common Shares	100.000000
Lincoln Electric Cyprus Limited	Nicosia	Lincoln Electric International Holding Company	Ordinary Shares	100.000000
Lincoln Electric do Brasil Indústria e Comércio Ltda.	São Paulo	Lincoln Electric International Holding Company	Quotas	0.01
Lincoln Electric do Brasil Indústria e Comércio Ltda.	São Paulo	Lincoln Electric Luxembourg S.àr.l.	Quotas	99.99
Lincoln Electric Dutch Holdings B.V.	The Netherlands	Lincoln Electric International Holding Company	Shares	100.000000
Lincoln Electric Europe B.V.	Nijmegen	Lincoln Electric Dutch Holdings B.V.	Shares	100.000000
Lincoln Electric Europe, S.L.	Barcelona	Lincoln Electric Iberia, S.L.	Shares	100.000000
Lincoln Electric Finance LP	Cardiff	Lincoln Electric Luxembourg S.àr.l.	Percentage Ownership Interest	99.000000

5.4‑2



Lincoln Electric Finance LP	Cardiff	Lincoln Maquinas Holdings LLC	Percentage Ownership Interest	1.000000
Lincoln Electric France S.A.S.	Rouen	Lincoln Electric Europe B.V.	Shares	100.000000
Lincoln Electric Henan Investment Holdings LLC	Delaware	Lincoln Electric International Holding Company	Common Shares	100.000000
Lincoln Electric Holdings S.a.r.l.	Grand-Duchy of Luxembourg	Lincoln Electric North America, Inc.	Common Shares	100.000000
Lincoln Electric Iberia, S.L.	Spain	Lincoln Electric Europe B.V.	Class A	12.990194
Lincoln Electric Iberia, S.L.	Spain	Lincoln Electric International Holding Company	Class A	87.009806
Lincoln Electric Iberia, S.L.	Spain	Lincoln Electric International Holding Company	Class B	100.000000
Lincoln Electric International Holding Company	Delaware	Lincoln Electric Holdings, Inc.	Common Stock	100.000000
Lincoln Electric Italia S.r.l.	Genoa	Lincoln Electric Luxembourg S.àr.l.	Quotas	100.000000
Lincoln Electric Japan K.K.	Japan	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Common Shares	100.000000
Lincoln Electric Luxembourg Holdings S.a.r.l.	Grand-Duchy of Luxembourg	Lincoln Electric Holdings S.a.r.l.	Ordinary Shares	100.000000
Lincoln Electric Luxembourg Holdings S.a.r.l.	Grand-Duchy of Luxembourg	Lincoln Electric North America, Inc.	Preferred Stock	100.000000
Lincoln Electric Luxembourg S.àr.l.	Grand-Duchy of Luxembourg	Lincoln Electric France S.A.S.	Shares	100.000000
Lincoln Electric Luxembourg S.àr.l.	Grand-Duchy of Luxembourg	Lincoln Electric Luxembourg Holdings S.a.r.l.	Class B shares	100.000000
Lincoln Electric Management (Shanghai) CO., Ltd.	Shanghai	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Percentage Ownership Interest	100.000000
Lincoln Electric Manufactura, S.A. de C.V.	Mexico	Lincoln Electric International Holding Company	Series B Fixed Capital	0.004000
Lincoln Electric Manufactura, S.A. de C.V.	Mexico	Lincoln Mexico Holdings LLC	Series B Fixed Capital	99.992000
Lincoln Electric Manufactura, S.A. de C.V.	Mexico	Lincoln Mexico Holdings LLC	Series B-1 Variable Capital	100.000000
Lincoln Electric Manufactura, S.A. de C.V.	Mexico	The Lincoln Electric Company	Series B Fixed Capital	0.004000
Lincoln Electric Maquinas, S. de R.L. de C.V.	Mexico City	Lincoln Electric Luxembourg S.àr.l.	Percentage Ownership Interest	99.989300
Lincoln Electric Maquinas, S. de R.L. de C.V.	Mexico City	Lincoln Maquinas Holdings LLC	Percentage Ownership Interest	0.000080
Lincoln Electric Mexicana, S.A. de C.V.	Mexico City	Lincoln Mexico Holdings LLC	Series B Fixed Capital	99.999800
Lincoln Electric Mexicana, S.A. de C.V.	Mexico City	Lincoln Mexico Holdings LLC	Series B-1 Variable Capital	100.000000
Lincoln Electric Mexicana, S.A. de C.V.	Mexico City	The Lincoln Electric Company	Series B Fixed Capital	0.000200
Lincoln Electric Middle East FZE	Dubai, UAE	Lincoln Electric Europe B.V.	Common Shares	100.000000
Lincoln Electric North America, Inc.	Delaware	Lincoln Electric International Holding Company	Common Stock	100.000000
Lincoln Electric Novo Holdings LLC	Delaware	Lincoln Electric Europe B.V.	Common Shares	100.000000
Lincoln Electric S.A.	Buenos Aires	Lincoln Electric International Holding Company	Shares	68.816275

5.4‑3



Lincoln Electric S.A.	Buenos Aires	The Lincoln Electric Company	Shares	31.183725
Lincoln Electric UK Holdings Limited	England and Wales	Lincoln Electric Luxembourg S.àr.l.	Ordinary Shares	100.000000
Lincoln Electric Venezuela, C.A.	Caracas	Lincoln Electric International Holding Company	Common Shares	100.000000
Lincoln Electric Welding Technology & Training Center, LLC (The)	Ohio	The Lincoln Electric Company	Percentage Ownership Interest	100.000000
Lincoln Europe Holdings GmbH	Germany	Lincoln Electric Iberia, S.L.	Percentage Ownership Interest	100.000000
Lincoln Global Holdings LLC	Delaware	Lincoln Electric North America, Inc.	Common Shares	100.000000
Lincoln Global, Inc.	Delaware	Lincoln Global Holdings LLC	Common Shares	100.000000
Lincoln Luxembourg Holdings S.a r.l.	Luxembourg	Lincoln Electric Luxembourg S.àr.l.	Ordinary Shares	100.000000
Lincoln Maquinas Holdings LLC	Delaware	Lincoln Electric Luxembourg S.àr.l.	Common Shares	100.000000
Lincoln Mexico Holdings LLC	Delaware	Lincoln Luxembourg Holdings S.a r.l.	Common Shares	100.000000
Lincoln Nanjing Holdings LLC	Delaware	Lincoln Electric International Holding Company	Common Shares	100.000000
Lincoln Singapore Holdings LLC	Delaware	Lincoln Canada International Holdings LP	Common Shares	100.000000
Lincoln Smitweld B.V.	The Netherlands	Lincoln Electric Europe B.V.	Common Shares	100.000000
Lincoln Soldaduras de Colombia Ltda.	Colombia	Lincoln Electric Holdings, Inc.	Percentage Ownership Interest	5.000000
Lincoln Soldaduras de Colombia Ltda.	Colombia	Lincoln Electric International Holding Company	Percentage Ownership Interest	95.000000
Lincoln Soldaduras de Venezuela, C.A.	Caracas	Lincoln Electric Dutch Holdings B.V.	Capital Stock	100.000000
Metrode Products Limited	England and Wales	Lincoln Electric UK Holdings Limited	Ordinary Shares	100.000000
Mezhgosmetiz - Mtsensk (MGM)	Russian Federation	MGM Holdings	Percentage Ownership Interest	0.000100
Mezhgosmetiz - Mtsensk (MGM)	Russian Federation	Torgovyi Dom "Mezhgosmetiz" (TD-MGM)	Percentage Ownership Interest	99.999900
MGM Holdings	Russian Federation	Lincoln Electric Dutch Holdings B.V.	Common Shares	99.500000
MGM Holdings	Russian Federation	Lincoln Electric International Holding Company	Common Shares	0.500000
Nanjing Xue Song Welding Material Sales Co., Ltd.	People's Republic Of China	The Nanjing Lincoln Electric Co., Ltd.	Percentage Ownership Interest	100.000000
OOO "Severstal-metiz: welding consumables"	Russian Federation	SSM RP Holding B.V.	Percentage Ownership Interest	100.000000
PT Lincoln Electric Indonesia	Indonesia	Abidin, Suryadi	Class A shares	5.000000
PT Lincoln Electric Indonesia	Indonesia	Abidin, Suryadi	Class B shares	5.000000
PT Lincoln Electric Indonesia	Indonesia	Sin Soon Huat Ltd.	Class A shares	25.000000
PT Lincoln Electric Indonesia	Indonesia	Surya Sarana Hidup Pte. Ltd.	Class A shares	10.000000
PT Lincoln Electric Indonesia	Indonesia	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Class A shares	60.000000
PT Lincoln Electric Indonesia	Indonesia	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Class B shares	95.000000
PT Lincoln Electric Indonesia	Indonesia	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Class C	100.000000
PT Lincoln Indoweld	Indonesia	Lincoln Electric International Holding Company	Percentage Ownership Interest	99.000000

5.4‑4



PT Lincoln Indoweld	Indonesia	Lincoln Electric North America, Inc.	Percentage Ownership Interest	1.000000
Rimrock Corporation	Ohio	Rimrock Holdings Corporation	Common Stock	100.000000
Rimrock Holdings Corporation	Delaware	Lincoln Electric Holdings, Inc.	Common Shares	100.000000
Robolution GmbH	Hesse	Lincoln Europe Holdings GmbH	Shares	100.000000
Smart Force, LLC	Delaware	J. W. Harris Co., Inc.	Percentage Ownership Interest	100.000000
Specialised Welding Products Pty. Ltd.	Australia	The Lincoln Electric Company (Australia) Proprietary Limited	Ordinary Shares	100.000000
SSM RP Holding B.V.	The Netherlands	Lincoln Electric Dutch Holdings B.V.	Common Shares	99.996364
SSM RP Holding B.V.	The Netherlands	Lincoln Electric International Holding Company	Common Shares	0.003636
SWP N.Z. Limited	New Zealand	The Lincoln Electric Company (Australia) Proprietary Limited	Shares	100.000000
Techalloy, Inc.	Delaware	Lincoln Electric Holdings, Inc.	Common Shares	100.000000
Tennessee Rand, Inc.	Tennessee	Lincoln Electric Holdings, Inc.	Shares	100.000000
Tenwell Development Pte. Ltd.	Singapore	Lincoln Electric Luxembourg S.àr.l.	Ordinary Shares	100.000000
The Lincoln Electric Company	Ohio	Lincoln Electric Holdings, Inc.	Common Stock	100.000000
The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Singapore	Lincoln Singapore Holdings LLC	Ordinary Shares	100.000000
The Lincoln Electric Company (Australia) Proprietary Limited	New South Wales	Lincoln Electric International Holding Company	Shares	100.000000
The Lincoln Electric Company (New Zealand) Limited	New Zealand	The Lincoln Electric Company (Australia) Proprietary Limited	Shares	100.000000
The Lincoln Electric Company of South Africa (Pty) Ltd	South Africa	Lincoln Electric International Holding Company	Ordinary Shares	1.000000
The Lincoln Electric Company of South Africa (Pty) Ltd	South Africa	The Lincoln Electric Company	Ordinary Shares	99.000000
The Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.	People's Republic Of China	Lincoln Electric Henan Investment Holdings LLC	Percentage Ownership Interest	68.160000
The Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.	People's Republic Of China	Lincoln Electric Management (Shanghai) CO., Ltd.	Percentage Ownership Interest	25.170000
The Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.	People's Republic Of China	Zhengzhou Heli Welding Materials Co., Ltd.	Percentage Ownership Interest	6.670000
The Nanjing Lincoln Electric Co., Ltd.	Nanjing	Lincoln Nanjing Holdings LLC	Percentage Ownership Interest	100.000000
The Shanghai Lincoln Electric Co., Ltd.	Baoshan Province	Tenwell Development Pte. Ltd.	Percentage Ownership Interest	7.500000
The Shanghai Lincoln Electric Co., Ltd.	Baoshan Province	The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Percentage Ownership Interest	92.500000
Torgovyi Dom "Mezhgosmetiz" (TD-MGM)	Russian Federation	MGM Holdings	Percentage Ownership Interest	100.000000
Uhrhan & Schwill Schweisstechnik GmbH	Essen, Germany	Lincoln Electric Europe B.V.	Percentage Ownership Interest	6.000000
Uhrhan & Schwill Schweisstechnik GmbH	Essen, Germany	Lincoln Europe Holdings GmbH	Percentage Ownership Interest	94.000000
Vizient Manufacturing Solutions, Inc.	Delaware	Lincoln Electric Holdings, Inc.	Common Shares	100.000000

5.4‑5



Wayne Trail Technologies, Inc.	Ohio	Lincoln Electric Holdings, Inc.	Class A	100.000000
Wayne Trail Technologies, Inc.	Ohio	Lincoln Electric Holdings, Inc.	Class B	100.000000
Weartech International Limited	United Kingdom	Weartech International, Inc.	Percentage Ownership Interest	100.000000
Weartech International, Inc.	California	Lincoln Electric North America, Inc.	Common Shares	100.000000
Welding, Cutting, Tools & Accessories, LLC	Delaware	J. W. Harris Co., Inc.	Percentage Ownership Interest	100.000000
Wolf Robotics do Brasil Sistemas Roboticos Ltda.	São Paulo	Wolf Robotics, LLC	Shares	100.000000
Wolf Robotics, LLC	Delaware	Lincoln Electric Holdings, Inc.	Percentage Ownership Interest	100.000000

5.4‑6

FINANCIAL STATEMENTS


•	Lincoln Electric Holdings, Inc. Form 10-K for fiscal year ended December 31, 2015.

Lincoln Electric Holdings, Inc. Form 10-Q for the quarterly periods ended March 31, 2016 and June 30, 2016.

SCHEDULE 5.5
(to Note Purchase Agreement)

EXISTING INDEBTEDNESS



The Lincoln Electric Company
Amended and Restated Credit Agreement, dated as of July 26, 2012, by and among the Company, the Subsidiaries of the Company party thereto, KeyBank National Association, as administrative agent, and the lenders party thereto (as the same may be amended, restated, supplemented or otherwise modified from time to time)			155,000,000.00
Uncommitted Discretionary Facility with PNC Bank			15,000,000.00
Uncommitted Discretionary Facility with KeyBank			11,879,893.00
3.15% Senior Note due August 20, 2025			100,000,000.00
3.35% Senior Note due August 20, 2030			100,000,000.00
3.61% Senior Note due April 1, 2035			50,000,000.00
4.02% Senior Note due April 1, 2045			100,000,000.00
Total			531,879,893.00


The Lincoln Electric Welding Technology & Training Center, LLC
Chase New Markets Corporation			10,500,000.00
Total			10,500,000.00

SCHEDULE 5.15
(to Note Purchase Agreement)

FORM OF JOINDER AGREEMENT AND AFFIRMATION

JOINDER AGREEMENT AND AFFIRMATION

This Joinder Agreement and Affirmation (this “Joinder Agreement” ), dated as of [___________], is executed and delivered by [_______________], a [describe type of entity] (the “Additional Obligor” ), pursuant to Section 9.7 of that certain Note Purchase Agreement, dated as of October 20, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement” ), by and among (a) Lincoln Electric Holdings, Inc., an Ohio corporation (the “Company” ), The Lincoln Electric Company, an Ohio corporation ( “Lincoln” ), Lincoln Electric International Holding Company, a Delaware corporation ( “International” ), J.W. Harris Co., Inc., an Ohio corporation ( “Harris” ), Lincoln Global, Inc., a Delaware corporation ( “Global” ), Techalloy, Inc., a Delaware corporation ( “Techalloy” ), and Wayne Trail Technologies, Inc., an Ohio corporation ( “Wayne” and with the Company, Lincoln, International, Harris, Global and Techalloy, each an “Obligor” and, collectively, the “Obligors” ), (b) each additional Subsidiary of the Company from time to time party thereto, and (c) each of the institutional investors from time to time party thereto. All capitalized terms used in this Joinder Agreement and not otherwise defined herein shall have the same meanings herein as in the Note Purchase Agreement.


SECTION 1.	JOINDER TO NOTE PURCHASE AGREEMENT; AFFIRMATION.

(a) Joinder . The Additional Obligor hereby acknowledges that it has received and reviewed a copy of the Note Purchase Agreement, the Notes and each of the other documents executed in connection therewith. The Additional Obligor hereby agrees to become an Obligor in respect of the obligations as set forth in the Note Purchase Agreement and the Notes and, by executing and delivering this Joinder Agreement, does hereby join and become a party to the Note Purchase Agreement as an Obligor, assuming all of the obligations and liabilities of an Obligor thereunder. The Additional Obligor hereby further agrees to comply with, and be bound by, all of the terms and conditions of the Note Purchase Agreement in all respects as an original Obligor thereunder, as if such Additional Obligor was an original signatory thereto, assuming all obligations and liabilities arising or incurred under the Note Purchase Agreement and the Notes on and after the Closing. The Additional Obligor hereby further acknowledges that such terms and conditions include, without limitation, joint and several liability with regard to all obligations under the Note Purchase Agreement and the Notes.

(b) Affirmation . The Obligors and the Additional Obligor each hereby ratifies and confirms all of its obligations to the holders, and the Obligors and the Additional Obligor each

SCHEDULE 9.7
(to Note Purchase Agreement)

hereby affirms its absolute and unconditional promise to pay to the holders all amounts due or to become due and payable to the holders under the Note Purchase Agreement and the Notes.

(c) Effectiveness. This Joinder Agreement shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

(i) executed counterparts of this Joinder Agreement, duly executed by the Additional Obligors and agreed and consented to by the Obligors, shall have been delivered to the holders (or counsel to the holders);

(ii) the representations and warranties of the Additional Obligors set forth in Section 2 hereof are true and correct on and with respect to the date hereof;

(iii) the Additional Obligor shall have delivered an executed allonge to each of the Notes, which allonge shall add the Additional Obligor as a maker of the Notes, each in form and substance satisfactory to the Required Holders; and

(iv) the holders shall have received from the Additional Obligor (x) a certificate as to the good standing of such Additional Obligor from the Secretary of State or other appropriate official of the state of its incorporation or organization, dated as of a recent date; (y) a certificate signed by an authorized responsible officer of such Additional Obligor containing representations and warranties on behalf of such Additional Obligor to the same effect, mutatis mutandis , as those contained in Section 5 of the Note Purchase Agreement (but with respect to such Additional Obligor); and (z) an opinion of counsel (which may be from internal counsel) reasonably satisfactory to the Required Holders covering such matters relating to such Additional Obligor and this Joinder Agreement as reasonably requested by the Required Holders.

[Add any other provision agreed to by the parties.]


SECTION 2.	REPRESENTATIONS AND WARRANTIES.

The Additional Obligor hereby represents and warrants that as of the date hereof and as of the date of execution and delivery of this Joinder Agreement that:

(a) this Joinder Agreement has been duly authorized by all necessary entity action on the part of the Additional Obligor and has been executed and delivered by the Additional Obligor, and this Joinder Agreement constitutes the legal, valid and binding obligation of the Additional Obligor enforceable against the Additional Obligor in accordance with its terms, except as such enforceability may be limited by general principles

9.7‑2

of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(b) the execution, delivery and performance by the Additional Obligor of this Joinder Agreement will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Additional Obligor or any of its Subsidiaries under, (A) any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, shareholders agreement or (B) any other agreement or instrument evidencing Indebtedness to which the Additional Obligor or any of its Subsidiaries is bound or by which the Obligor or any of its Subsidiaries or any of their respective properties may be bound or affected, (ii) conflict with or result in breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Additional Obligor or any of its Subsidiaries or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Additional Obligor or any of its Subsidiaries; and

(c) no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Additional Obligor of this Joinder Agreement.


SECTION 3.	GOVERNING LAW.

THIS JOINDER AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.


SECTION 4.	MISCELLANEOUS.

The Note Purchase Agreement and the Notes and all documents, instruments and agreements related thereto are hereby ratified and confirmed by each of the Obligors and the Additional Obligor in all respects and shall continue in full force and effect. The undersigned agrees that this Joinder Agreement shall be deemed to be, and is hereby made a part of, the Note Purchase Agreement and the Notes as if set forth therein in full. This Joinder Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which counterparts taken together shall be deemed to constitute one and the same instrument

9.7‑3

IN WITNESS WHEREOF, each the undersigned have caused this Joinder Agreement to be duly executed as of the date first written above.

[SIGNATURES]

9.7‑4

EXISTING LIENS



Entity	Obligation Amount	Obligation Description	Property Subject to Lien	Holder of Lien
The Nanjing Lincoln Electric Co. Ltd.	$923,741	Defined benefit pension plan obligation	Building	Nanjing Industrial Group
The Lincoln Electric Company	$1,550,000	Forgivable loans	Building	Cuyahoga County
The Lincoln Electric Welding Technology & Training Center, LLC	$10,500,000	Forgivable loans	Building	Chase New Markets Corporation and Western Reserve DF Affiliate VIII, LLC
Lincoln Electric do Brasil Industria e Comercio Ltda.	$60,500	Guarantee for payment of electricity invoices	Accounts Receivable	Banco Itau Unibanco
Electro-Arco, SA	$38,661	Capital lease of warehouse space	Building	Caixa Leasing
Electro-Arco, SA	$2,739	Capital lease of computers	Computers	SFLAG
Lincoln Electric (UK) Limited	$12,069	Capital lease of forklift	Forklift being leased	BNP Paribas

SCHEDULE 10.6
(to Note Purchase Agreement)

NAMES AND ADDRESSES OF PURCHASERS

SCHEDULE B

(to Note Purchase Agreement)

Exhibit 10.6

AMENDMENT NO. 1
TO
LINCOLN ELECTRIC HOLDINGS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AS AMENDED AND RESTATED AS OF DECEMBER 31, 2008 )

WHEREAS, Lincoln Electric Holdings, Inc. (the “Company”) maintains the Lincoln Electric Holdings, Inc. Supplement Executive Retirement Plan, as amended and restated as of December 31, 2008 (the “Plan”);

WHEREAS, the Company has reserved the right pursuant to Section 9.1 of the Plan to amend the Plan in any manner by resolution of its Board of Directors;

WHEREAS, the Board of Directors has authorized an amendment to the Plan to (i) freeze all benefit accruals under the Plan prior to the end of 2016, (ii) fully vest the benefit of each active participant who has accrued a benefit as of the date of the freeze, (iii) convert the value of each such participant’s frozen benefit to a notional account balance in accordance with assumptions prescribed by the Chairman, President and Chief Executive Officer and the Executive Vice President, Chief Human Resources Officer, and (iv) credit the notional account of each such participant with earnings, gains and losses as determined by the Chairman, President and Chief Executive Officer and the Executive Vice President, Chief Human Resources Officer, until the time that the participant’s Plan benefit is payable pursuant to the provisions of the Plan;

NOW THEREFORE, the Company hereby adopts this Amendment No. 1 to the Plan as hereinafter provided, effective as of the close of business on November 30, 2016:

(1) The definition of “Account” in Section 2.1 of the Plan is hereby amended in its entirety to read as follows:

“Account” means the account established on behalf of the Participant as described in Section 4.6 or Section 5.3, as applicable.”

(2) Section 3.1 of the Plan is hereby amended by inserting the following new sentence at the end thereof:

“Notwithstanding the preceding provisions of this Section or any other provision of the Plan to the contrary, no employee shall be eligible to become a Participant in the Plan on or after November 30, 2016.”

(3) Article IV of the Plan is hereby amended by inserting the following new Sections at the end thereof:

“Section 4.6 Freeze of Accruals and Conversion to Accounts. Notwithstanding the preceding provisions of this Article IV or any other provision of the Plan to the contrary, effective as of the close of business on November 30, 2016 (the “Freeze Date”), the following provisions of this Section 4.6 shall apply.

(a) As of the Freeze Date, all future benefit accruals with respect to each Participant under the Plan shall cease.

(b) The Benefit as of the Freeze Date of each Participant who as of the Freeze Date is an employee of the Controlled Group and has a Benefit in excess of $0 shall be fully vested on the Freeze Date (subject to Section 4.3(b)(i) of the Plan).

(c) The Benefit as of the Freeze Date of each Participant who as of the Freeze Date is an employee of the Controlled Group and has a Benefit in excess of $0 shall be converted to a single sum, effective as of December 1, 2016, in the amount set forth opposite each such Participant’s name on Exhibit B hereto. The Benefit as of the Freeze Date of any Participant that is equal to $0 shall remain $0 on and after the Freeze Date. The single sum amounts set forth on Exhibit B shall be credited to a notional Account established and maintained for each such Participant commencing on December 1, 2016. The single sum amounts shown on Exhibit B were determined in accordance with assumptions designated by the Chairman, President and Chief Executive Officer, and the Executive Vice President, Chief Human Resources Officer (the “Authorized Officers”) and approved by the Board, including projecting to December 31, 2016 the Participant’s Compensation, Qualified Plan Benefit and the Social Security Benefit to calculate the present value of the projected accrued benefit as of December 31, 2016. Further, the Authorized Officers determined that the single sum amount shown on Exhibit B for each Participant is not less than the Actuarial Equivalent of the Participant’s Benefit as of the Freeze Date.

(d) The notional Account established for each Participant pursuant to Section 4.6(c) shall be (i) deemed to be invested in accordance with the deemed investments and procedures established by the Committee that are similar to the deemed investments and procedures established by the Committee pursuant to the Company’s 2005 Deferred Compensation Plan for Executives, and (ii) credited with earnings, gains and losses in accordance with such deemed investments. Neither the Participant nor his beneficiary(s) shall have any interest or right in any such Account at any time and all amounts credited to such Accounts shall remain assets of the Employer subject to the claims of such Employer’s general creditors.

(e) The notional Accounts established for each Participant shall be distributed in the same form and at the same time that such Participant’s Benefit would have been distributed without regard to this Section 4.6.

(f) The preceding provisions of this Section 4.6 shall have no effect on any Benefit of a Participant or beneficiary that was distributed or commenced to be distributed prior to December 1, 2016.”

(4) Section 5.3 of the Plan is hereby amended by inserting the following new sentence at the end thereof:

“ Notwithstanding the preceding provisions of this Section or any other provision of the Plan to the contrary, no Account shall be established pursuant to this Section 5.3 on or after December 1, 2016.”

(5) The Plan is hereby amended by inserting an Exhibit B at the end thereof in the form attached hereto.

* * * * *

[The remainder of this page is left blank intentionally.]

IN WITNESS WHEREOF, Lincoln Electric Holdings, Inc. has caused this Amendment No. 1 to be executed on this _______ day of November, 2016.

LINCOLN ELECTRIC HOLDINGS, INC.

By:_________________________________________

Title: Chairman, President and Chief Executive Officer

By:__________________________________________

Title: Executive Vice President, Chief Human Resources Officer

Exhibit B
to the Lincoln Electric Holdings, Inc.
Supplemental Executive Retirement Plan

Beginning Balances for Accounts Established as of December 1, 2016

Participant’s Name Participant’s Account Balance as of December 1, 2016

Frederick Stueber $4,319,580

George Blankenship $3,758,738

Vincent Petrella $2,175,968

Thomas Flohn $1,377,703

Exhibit 10.11

THE LINCOLN ELECTRIC COMPANY

EMPLOYEE SAVINGS PLAN

As Amended and Restated Effective January 1, 2017

- i -

TABLE OF CONTENTS

Page



ARTICLE I -	DEFINITIONS AND CONSTRUCTION	1
1.1	Definitions	1
(1)	Account and Sub-Account	1
(2)	Administrative Committee or Committee	1
(3)	Administrator or Plan Administrator	1
(4)	Automatic Salary Reduction Agreement	1
(5)	Base Compensation	1
(6)	Before-Tax Contributions	1
(7)	Beneficiary	2
(8)	Board	2
(9)	Bonus Compensation	2
(10)	Break in Service and 1-Year Break in Service	2
(11)	Code	3
(12)	Company	3
(13)	Compensation	3
(14)	Controlled Group	3
(15)	Controlled Group Member	3
(16)	Covered Employee	3
(17)	Death Beneficiary	4
(18)	Disability	4
(19)	Eligible Employee	5
(20)	Eligible Rollover Distribution	5
(21)	Employee	5
(22)	Employer	6
(23)	Employer Contributions	6
(24)	Employment	6
(25)	Employment Commencement Date	6
(26)	Employment Severance and Employment Severance Date	7
(27)	Enrollment Date	7
(28)	ERISA	7
(29)	ESOP	7
(30)	Former Weartech Plan Participant	7
(31)	FSP Compensation	7
(32)	FSP Contributions	8
(33)	FSP Participant	8
(34)	FSP Plus Contributions	8
(35)	FSP Plus Participant	8
(36)	Fiduciary	8
(37)	Hardship	9
(38)	Highly Compensated Employee	9
(39)	Holdings Stock	10
(40)	Holdings Stock Fund	10
(41)	Hour of Service	10

- 1 -

TABLE OF CONTENTS

(continued)

Page



(42)	Instrument of Adoption	11
(43)	Investment Committee	11
(44)	Investment Funds	11
(45)	Matching Contribution Participant	11
(46)	Matching Employer Contributions	11
(47)	Matching Employer Percentage	11
(48)	Member	12
(49)	Named Fiduciaries	12
(50)	Nonelective Contribution Participant	12
(51)	Nonelective Employer Contributions	12
(52)	Normal Retirement Date	12
(53)	Plan	12
(54)	Plan Year	12
(55)	Prior ESOP Contributions	12
(56)	Qualified Nonelective Contributions	12
(57)	Reemployment Commencement Date	13
(58)	Retirement Annuity Program	13
(59)	Retirement Choice	13
(60)	Rollover Contributions	13
(61)	Salary Reduction Agreement	13
(62)	Self-Directed Investment Account	13
(63)	Spouse	14
(64)	Transitional Contribution Participant	14
(65)	Transitional Employer Contributions	14
(66)	Trust	14
(67)	Trust Agreement	14
(68)	Trustee	14
(69)	Trust Fund	14
(70)	Valuation Date	14
(71)	Vested Interest	14
(72)	Vesting Service	16
(73)	Weartech Plan	17
(74)	Weartech Prior Matching Contributions	17
(75)	Year of Eligibility Service	17
(76)	Year of Vesting Service	18
1.2	Construction	18
ARTICLE II -	ELIGIBILITY AND MEMBERSHIP	20
2.1	Eligible Employees	20
2.2	Commencement of Membership	20
2.3	Enrollment Pursuant to an Automatic Salary Reduction Agreement	22
2.4	Duration of Membership	23
2.5	FSP Participation	23
2.6	FSP Plus Participation	24

- 2 -

TABLE OF CONTENTS

(continued)

Page



2.7	Matching Contribution Participation	24
2.8	Nonelective Contribution Participation	24
2.9	Transitional Contribution Participation	25
2.10	Re-Employed Employees	25
2.11	Transferred Employees	27
ARTICLE III -	BEFORE-TAX AND ROLLOVER CONTRIBUTIONS	28
3.1	Amount of Contributions	28
3.2	Payments to Trustee	28
3.3	Changes in Contributions	29
3.4	Suspension and Resumption of Contributions	29
3.5	Excess Deferrals	29
3.6	Excess Before-Tax Contributions	30
3.7	Excess Matching Employer Contributions	32
3.8	Monitoring Procedures	34
3.9	Rollover Contributions	35
3.10	Transfers of Assets to this Plan from Other Plans	36
3.11	Catch-Up Before-Tax Contributions	37
ARTICLE IV -	EMPLOYER CONTRIBUTIONS	38
4.1	Amount of Matching Employer Contributions	38
4.2	Time of Matching Employer Contributions	38
4.3	Allocation of Matching Employer Contributions	38
4.4	Qualified Nonelective Contributions	39
4.5	Allocation of Qualified Nonelective Contributions	39
4.6	Nonelective Employer Contributions	39
4.7	Allocation of Nonelective Employer Contributions	40
4.8	Transitional Employer Contributions	41
4.9	Allocation of Transitional Employer Contributions	42
4.10	Return of Contributions to Employers	42
4.11	Maximum Additions	43
4.12	Definitions	45
4.13	FSP Contributions	45
4.14	Allocation of FSP Contributions	45
4.15	FSP Plus Contributions	46
4.16	Allocation of FSP Plus Contributions	46
ARTICLE V -	INVESTMENTS	48
5.1	Investment Funds	48
5.2	Account; Sub-Account	49
5.3	Reports	49
5.4	Valuation of Investment Funds	49
5.5	Investment of Contributions	50
5.6	Directions to Trustee	51
5.7	Loans to Members	51

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TABLE OF CONTENTS

(continued)

Page



5.8	Dividends on Holdings Stock	55
ARTICLE VI -	DISTRIBUTIONS	56
6.1	Distributions	56
6.2	Distributions on Death While an Employee	56
6.3	Distributions on Employment Severance	56
6.4	Distributions on Death after Employment Severance	59
6.5	Distributions Pursuant to a QDRO	60
6.6	Latest Time of Distribution	60
6.7	Withdrawals	66
6.8	Effect of Five Consecutive 1-Year Breaks in Service on Vesting Service	68
6.9	Transfers of Eligible Rollover Distributions	68
6.10	Distribution of Holdings Stock	69
6.11	Transfers of Assets from this Plan to Other Plans	70
6.12	Distributions to Certain Individuals Performing Military Service	70
ARTICLE VII -	ADMINISTRATION OF THE TRUST FUND	71
7.1	The Trust Fund	71
7.2	No Guarantee Against Loss	71
7.3	Payment of Benefits	71
7.4	No Diversion of Trust Fund	72
ARTICLE VIII -	COMMITTEES	73
8.1	Composition of Committees	73
8.2	Certification of Members	73
8.3	Formalities of Committee Action	73
8.4	Adoption of Rules	74
8.5	Functions and Duties of Administrative Committee	74
8.6	Reliance on Records	75
8.7	Revocability of Administrative Committee Action	75
8.8	Responsibilities of Investment Committee	76
8.9	Compensation and Expenses	76
8.10	Uniform Administration	76
ARTICLE IX -	CLAIMS PROCEDURES	77
9.1	Method of Filing Claim	77
9.2	Notification to Claimant	77
9.3	Review Procedure	77
ARTICLE X -	ADMINISTRATION OF THE PLAN AND FIDUCIARY RESPONSIBILITIES	79
10.1	Responsibility for Administration	79
10.2	Named Fiduciaries	79
10.3	Delegation of Fiduciary Responsibilities	79
10.4	Immunities	80
10.5	Limitation on Exculpatory Provisions	80
ARTICLE XI -	MISCELLANEOUS	81
11.1	Spendthrift Provisions	81
11.2	Facility of Payment	81

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TABLE OF CONTENTS

(continued)

Page



11.3	No Enlargement of Employment Rights	81
11.4	Merger or Transfer of Assets	82
11.5	Action by Company	82
11.6	Severability Provision	82
11.7	Correction of Errors	82
11.8	Military Service	82
11.9	Recovery of Overpayments	82
11.10	Limitations on Investments and Transactions/Conversions	83
11.11	Electronic Media	84
ARTICLE XII -	OTHER EMPLOYERS	85
12.1	Adoption by Other Employers	85
12.2	Costs and Expenses	85
12.3	Withdrawal of Employer	85
ARTICLE XIII -	AMENDMENT OR TERMINATION	87
13.1	Right to Amend or Terminate	87
13.2	Procedure for Termination or Amendment	87
13.3	Distribution Upon Termination	87
13.4	Amendment Changing Vesting Schedule	87
13.5	Nonforfeitable Amounts	88
13.6	Prohibition on Decreasing Accrued Benefits	88
ARTICLE XIV -	RULES REGARDING HOLDINGS STOCK	89
14.1	Voting Holdings Stock	89
14.2	Sale of Holdings Stock	89
14.3	Tender Offer for Holdings Stock	89
ARTICLE XV -	TOP-HEAVY PLAN REQUIREMENTS	91
15.1	Definitions	91
(1)	Aggregation Group	91
(2)	Compensation	91
(3)	Defined Benefit Plan	91
(4)	Defined Contribution Plan	91
(5)	Determination Date	91
(6)	Former Key Employee	91
(7)	Key Employee	91
(8)	Non-Key Employee	91
(9)	Permissive Aggregation Group	91
(10)	Required Aggregation Group	92
(11)	Top-Heavy Account Balance	92
(12)	Top-Heavy Group	92
(13)	Top-Heavy Plan	92
15.2	Determination of Top-Heavy Status	93
15.3	Top-Heavy Plan Requirements	93
15.4	Minimum Vesting Requirement	93
15.5	Minimum Contribution Requirement	94
15.6	Coordination With Other Plans	1

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THE LINCOLN ELECTRIC COMPANY

EMPLOYEE SAVINGS PLAN

The Lincoln Electric Company, an Ohio corporation, hereby amends and restates this profit sharing plan known as The Lincoln Electric Company Employee Savings Plan (the “Plan”), effective as of January 1, 2017. The Plan was originally effective as of November 1, 1994.

Plan History

The Lincoln Electric Company previously sponsored The Lincoln Electric Company Employee Stock Ownership Plan (the “Frozen Plan”). On July 1, 1997, the Frozen Plan was merged into the Plan and all participant accounts in the Frozen Plan were transferred to the Plan. These assets are reflected in the Prior ESOP Contributions account under the Plan.

Effective December 20, 2001, the Plan was amended to provide that the Holdings Stock Fund is intended to be a stock bonus plan as defined in Treasury Regulation Section 1.401-1(b)(1)(iii) and a non-leveraged employee stock ownership plan satisfying the requirements of sections 401(a), 409(e), (h) and (o), and 4975(e)(7) of the Code. Notwithstanding the foregoing, the Prior ESOP Contributions Sub-Accounts held under the Plan will continue to reflect only amounts relating to the Frozen Plan.

Effective as of August 29, 2016, pursuant to an Instrument of Merger entered into by The Lincoln Electric Company and Weartech International, Inc., the Weartech International, Inc. 401(k) Plan (the “Weartech Plan”) was merged with and into the Plan and all accounts held under the Weartech Plan were transferred to the Plan.

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ARTICLE I - DEFINITIONS AND CONSTRUCTION

1.1 Definitions . The following terms when used in the Plan and the Trust Agreement with initial capital letters, unless the context clearly indicates otherwise, shall have the following respective meanings:

(1) Account and Sub-Account : See Section 5.2.

(2) Administrative Committee or Committee : The committee provided for in Section 8.1, which shall have the functions and duties specified in Section 8.5.

(3) Administrator or Plan Administrator : The Administrator of the Plan, as defined in section 3(16)(A) of ERISA and section 414(g) of the Code, shall be the Company, which may delegate all or any part of its powers, duties and authorities in such capacity (without ceasing to be the Administrator of the Plan) as hereinafter provided.

(4) Automatic Salary Reduction Agreement : An arrangement under the Plan which an Employee is deemed to have entered into and pursuant to which the Employee is deemed to have agreed to reduce, or forgo an increase in, his Base Compensation and his Employer agrees to contribute to the Trust the amount so reduced or foregone as a Before-Tax Contribution.

(5) Base Compensation : The regular salary and/or wages and overtime, commissions, vacation pay, shift and incentive premiums and regular pay adjustments paid to an Employee by the Employers, specifically excluding, however, Bonus Compensation, reimbursed expenses and other special payments. Unless otherwise indicated herein, an Employee’s Base Compensation shall be calculated prior to any reduction thereof made pursuant to a Salary Reduction Agreement or an Automatic Salary Reduction Agreement, as applicable, under the Plan, pursuant to any agreement under section 125 of the Code or as a result of “deemed 125 compensation” within the meaning of Revenue Ruling 2002-27. Effective as of January 1, 2009, the term “Base Compensation” shall not include any differential wage payments (within the meaning of section 3401(h)(2) of the Code) made to an Employee by the Employers.

(6) Before-Tax Contributions : The contributions made pursuant to Section 3.1 of the Plan and elective deferral contributions made to the Weartech Plan on behalf of Former Weartech Plan Participants. Except as otherwise specifically provided in the Plan, the term “Before-Tax

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Contributions” when used herein shall include all Catch-Up Before-Tax Contributions, as defined in Section 3.11.

(7) Beneficiary : A Member’s Death Beneficiary or any other person who, after the death of a Member, is entitled to receive any benefit payable with respect to such Member.

(8) Board : The Board of Directors of the Company.

(9) Bonus Compensation : Bonuses paid to an Employee by the Employers in connection with an Employer’s or the Employers’ regular incentive compensation program, excluding special payments such as signing bonuses, retention bonuses and other similar payments. Unless otherwise indicated herein, an Employee’s Bonus Compensation shall be calculated prior to any reduction thereof made pursuant to a Salary Reduction Agreement under the Plan, pursuant to any agreement under section 125 of the Code or as a result of “deemed 125 compensation” within the meaning of Revenue Ruling 2002-27.

(10) Break in Service and 1-Year Break in Service : An Employee incurs a Break in Service on his Employment Severance Date and a 1‑Year Break in Service if he fails to perform an Hour of Service for a Controlled Group Member during the 12‑month period beginning on such Employment Severance Date; provided, however, that an Employee whose Employment Severance occurs by reason of his resignation, retirement or discharge shall not incur a Break in Service (or a 1‑Year Break in Service) if during the 12‑month period commencing with his Employment Severance Date (or, if such Employment Severance occurs during a period of absence referred to in Section 1.1(26)(b), during the 12 month period commencing with the first day of such period of absence) he performs an Hour of Service for a Controlled Group Member. If an Employee is absent from work (a) by reason of the pregnancy of the Employee, (b) by reason of the birth of a child of the Employee, (c) by reason of the placement of a child with the Employee in connection with the adoption of such child by the Employee, or (d) for purposes of caring for a child for a period beginning immediately following the birth or placement of such child, such Employee shall not, solely by reason of such absence, be considered to have incurred a Break in Service until the expiration of the consecutive 24‑month period commencing on the first day of such absence and shall incur a 1‑Year Break in Service if he does not perform an Hour of Service during the 12‑month period immediately following such 24‑month period. With respect to a Former Weartech Plan

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Participant, for periods prior to August 29, 2016, the term “Break in Service” shall mean “Break in Vesting Service” (as defined in the Weartech Plan).

(11) Code : The Internal Revenue Code of 1986, as it has been and may be amended from time to time.

(12) Company : The Lincoln Electric Company, an Ohio corporation.

(13) Compensation :

(a) The total Base Compensation and Bonus Compensation paid to an Employee by the Employers.

(b) Effective as of January 1, 2002, notwithstanding the foregoing, Compensation of an Employee taken into account for any purpose for any Plan Year shall not exceed $200,000 (as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code).

(14) Controlled Group : The Employers and any and all other corporations, trades and/or businesses, the employees of which together with Employees of an Employer are required by section 414 of the Code to be treated as if they were employed by a single employer.

(15) Controlled Group Member : Each corporation or unincorporated trade or business that is or was a member of the Controlled Group, but only during such period as it is or was such a member of the Controlled Group.

(16) Covered Employee : An Employee of an Employer, excluding, however, (a) any “leased employee” (as defined in Section 1.1(20)) of such Employer, (b) prior to July 1, 1995, any Employees of the Harris Calorific Division of the Company, (c) any Employees of J.W. Harris Co., Inc. other than Employees of its Harris Products Group employed at its Gainesville location (formerly the Harris Calorific Division of J.W. Harris Co., Inc.) and (d) any Disabled Employee. Notwithstanding the preceding provisions of this Section 1.1(16) or any other provision of the Plan to the contrary, (i) no Employee of Smart Force, LLC or of the Harris Products Group of J.W. Harris Co., Inc. employed at its Gainesville location (formerly the Harris Calorific Division of J.W. Harris Co., Inc.), whose Employment Commencement Date, Reemployment Commencement Date or date of transfer to such company or location occurs on or after May 1, 2007 shall be a “Covered Employee” under the Plan for any period of time on or after such Employment Commencement Date, Reemployment Commencement Date or date of transfer, (ii) no Employee of Smart Force, LLC or

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of the Harris Products Group of J.W. Harris Co., Inc. employed at its Gainesville location (formerly the Harris Calorific Division of J.W. Harris Co., Inc.), who made an irrevocable election, pursuant to the retirement choice provided by J.W. Harris Co., Inc. in 2007, to become eligible to participate in the J.W. Harris Co., Inc. Profit Sharing/401(k) Plan effective as of January 1, 2008, shall be a “Covered Employee” under the Plan for any period of time on or after January 1, 2008, and (iii) no Employee of the Seal Seat division of Lincoln Global, Inc. whose Employment Commencement Date, Reemployment Commencement Date or date of transfer to such company or location occurs on or after May 1, 2013 shall be a “Covered Employee” under the Plan for any period of time on or after such Employment Commencement Date, Reemployment Commencement Date or date of transfer.

(17) Death Beneficiary : A Member’s Spouse or, if he has no Spouse or if his Spouse consents (in the manner hereinafter described in this Subsection) to the designation hereinafter provided for in this Subsection, such person or persons other than, or in addition to, his Spouse as may be designated by a Member as his Death Beneficiary under the Plan. Such a designation may be made, revoked or changed only by an instrument (in form acceptable to the Committee) that is signed by the Member, that, if he has a Spouse, includes his Spouse’s written consent to the action to be taken pursuant to such instrument (unless such action results in the Spouse being named as the Member’s sole Death Beneficiary), and that is filed with the Committee before the Member’s death. A Spouse’s consent required by this Subsection shall be signed by the Spouse, shall acknowledge the effect of such consent, shall be witnessed by any person designated by the Committee as a Plan representative or by a notary public and shall be effective only with respect to such Spouse. At any time when all the persons designated by the Member as his Death Beneficiary have ceased to exist or if the Member has not made an effective Death Beneficiary designation pursuant to this Subsection, his Death Beneficiary shall be his Spouse or, if he does not then have a Spouse, his estate.

(18) Disability : In the case of a Member who is a Former Weartech Plan Participant, Disability means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than twelve months. The permanence and degree of such impairment must be supported by medical evidence satisfactory to the Administrative

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Committee. In the case of all other Members, a Member shall be considered to have incurred a Disability if he is eligible for and receives disability insurance benefits under the Federal Social Security Act. A Former Weartech Plan Participant who is eligible for and receives disability insurance benefits under the Federal Social Security Act shall be deemed to have incurred a Disability. A Member who incurs a Disability is “Disabled”.

(19) Eligible Employee : An Employee who is eligible to have his Employer make Before-Tax Contributions for him to the Trust as provided in Article II of the Plan.

(20) Eligible Rollover Distribution : Any distribution of all or any portion of the balance to the credit of the distributee, except (a) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified period of ten years or more, (b) any distribution to the extent the distribution is required under section 401(a)(9) of the Code, (c) the portion of any distribution that consists of after-tax employee contributions or contributions made to a designated Roth account (as defined in section 402A of the Code), (d) any distribution that is made upon hardship of the Employee and (e) such other amounts specified in Treasury regulations or Internal Revenue Service rulings, notices or announcements issued under section 402(c) of the Code.

(21) Employee : An employee of a Controlled Group Member and, to the extent required by section 414(n) of the Code, any person who is a “leased employee” of a Controlled Group Member. For purposes of this Subsection, a “leased employee” means any person who, pursuant to an agreement between a Controlled Group Member and any other person (“leasing organization”), has performed services for the Controlled Group Member on a substantially full‑time basis for a period of at least one year, and such services are performed under the primary direction and control of the Controlled Group Member. Contributions or benefits provided a leased employee by the leasing organization that are attributable to services performed for a Controlled Group Member will be treated as provided by the Controlled Group Member. A leased employee will not be considered an Employee of a Controlled Group Member, however, if (a) leased employees do not constitute more than 20 percent of the Controlled Group Member’s nonhighly compensated work force (within the meaning of section 414(n)(5)(C)(ii) of the Code) and (b) such leased employee is covered by a money purchase pension plan maintained by the leasing organization that provides (i) a

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nonintegrated employer contribution rate of at least 10 percent of compensation (including amounts contributed pursuant to a salary reduction agreement that are excludable from the leased employee’s gross income under section 125, section 402(e)(3), section 402(h) or section 403(b) of the Code), (ii) immediate participation, and (iii) full and immediate vesting. The term “Employee” shall not include (a) any person rendering services solely as a director, (b) any person who is classified by the Employer or a Controlled Group Member as an independent contractor, or (c) any person who is a nonresident alien and who receives no earned income (within the meaning of section 911(b) of the Code) from the Employer or a Controlled Group Member that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code).

(22) Employer : The Company and any other Controlled Group Member adopting the Plan pursuant to Article XII.

(23) Employer Contributions : Matching Employer Contributions as described in Section 4.1 (and in any Instrument of Adoption), Qualified Nonelective Contributions as described in Section 4.4, Nonelective Employer Contributions as described in Section 4.6, Transitional Employer Contributions as described in Section 4.8, FSP Contributions as described in Section 4.13 and FSP Plus Contributions as described in Section 4.15.

(24) Employment : An Employee’s Employment shall equal the total aggregate periods of his regular, full-time employment with an Employer. Periods of Employment are aggregated on the basis that one calendar month of Employment equals one month and each additional 30 days of Employment equals one month. Notwithstanding the foregoing, periods of employment with Vernon Tool Co., LTD prior to November 30, 2007, shall not be treated as Employment for any purpose under the Plan. Further notwithstanding the foregoing, (a) in the case of an Employee of Kaliburn, Inc. Employment shall include periods of employment with ITT Corporation prior to November 14, 2012, provided that such Employee was an “Employee” (as defined in the Plan) on November 14, 2012, and (b) in the case of a Former Weartech Plan Participant who is an Employee on August 29, 2016, Employment shall include periods of regular, full-time employment with Weartech International, Inc. prior to August 29, 2016.

(25) Employment Commencement Date : The date on which an Employee first performs an Hour of Service for a Controlled Group Member.

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(26) Employment Severance and Employment Severance Date : An Employment Severance occurs on the earlier of (a) the date on which an Employee’s employment with the Controlled Group is terminated because of death, resignation, retirement or discharge or (b) the first anniversary of the first day of a period in which the Employee remains absent from employment (with or without pay) with the Controlled Group for any reason other than death, resignation, retirement or discharge; and the date on which an Employee’s Employment Severance occurs shall be referred to as his Employment Severance Date.

(27) Enrollment Date : The first day of each month; provided, however, that in any case where pursuant to Section 3.1(1) the Administrative Committee has provided for separate elections to reduce Base Compensation and Bonus Compensation, “Enrollment Date” with respect to Bonus Compensation shall mean the date designated by the Administrative Committee, which date shall not be later than the day before the date that such Bonus Compensation is determined.

(28) ERISA : The Employee Retirement Income Security Act of 1974, as amended.

(29) ESOP : The Holdings Stock Fund which is intended to be a stock bonus plan as defined in Treasury Regulation Section 1.401-1(b)(1)(iii) and a non-leveraged employee stock ownership plan satisfying the requirements of sections 401(a), 409(e), (h) and (o), and 4975(e)(7) of the Code.

(30) Former Weartech Plan Participant : Any person who immediately prior to the effective time of the merger of the Weartech Plan into this Plan had amounts held on his behalf in one or more accounts maintained under the Weartech Plan.

(31) FSP Compensation : For a Plan Year commencing prior to January 1, 2017, the regular salary and/or wages, including overtime, vacation pay, shift and incentive premiums and regular pay adjustments but excluding commissions and Bonus Compensation, received by an FSP Participant or an FSP Plus Participant from the Employer during the Plan Year while an FSP Participant or an FSP Plus Participant, as applicable, provided, however, that for the initial Plan Year that an Employee first becomes either an FSP Participant or an FSP Plus Participant (excluding an Employee who first becomes an FSP Participant on July 16, 2006), FSP Compensation shall be deemed to include the regular salary and/or wages, including overtime, vacation pay, shift and incentive premiums and regular pay adjustments but excluding commissions and Bonus Compensation, received by the Employee from the Employer for the two calendar months preceding

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the date that he became an FSP Participant or FSP Plus Participant; and, provided, further, however, that for the Plan Year commencing January 1, 2016, FSP Compensation shall be deemed to include any regular salary and/or wages, including overtime, vacation pay, shift and incentive premiums and regular pay adjustments but excluding commissions and Bonus Compensation, received by the Employee from the Employer in January of 2017 that was earned prior to January 1, 2017 while the Employee was an FSP Participant or an FSP Plus Participant, as applicable. Notwithstanding the foregoing, (a) FSP Compensation shall not include any amounts received from J.W. Harris Co., Inc. (or prior to May 1, 2006, Harris Calorific, Inc.), Lincoln Global, Inc., Torchmate, Inc., Smart Force, LLC (or prior to January 1, 1999, the Harris Calorific Division or the Seal Seat Division of the Company) or Easom Automation Systems, Inc., provided, however, that FSP Compensation shall include amounts received from Lincoln Global, Inc. that are earned prior to January 1, 2017 by an FSP Participant or an FSP Plus Participant who continues to be treated as an Employee of the Company, as provided in the Plan as in effect prior to January 1, 2017, (b) FSP Compensation shall not include any amounts received from Kaliburn, Inc. for periods prior to January 1, 2013 or after December 31, 2016, and (c) FSP Compensation of an Employee taken into account for any purpose under the Plan for any Plan Year shall not exceed $200,000 (as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code). Effective as of January 1, 2009 and prior to January 1, 2017, the term “FSP Compensation” shall not include any differential wage payments (within the meaning of section 3401(h)(2) of the Code) received by an FSP Participant or an FSP Plus Participant from the Employer.

(32) FSP Contributions : Employer Contributions described in Section 4.13.

(33) FSP Participant : An Employee who prior to January 1, 2017 was an “FSP Participant” as such term was defined under the Plan as in effect prior to January 1, 2017.

(34) FSP Plus Contributions : Employer Contributions described in Section 4.15.

(35) FSP Plus Participant : An Employee who prior to January 1, 2017 was an “FSP Plus Participant” as such term was defined under the Plan as in effect prior to January 1, 2017.

(36) Fiduciary : Any person who (a) exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of the Trust Fund, (b) renders investment advice for fee or other compensation, direct or indirect, with respect to the Trust Fund, or has authority or responsibility

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to do so, or (c) has any discretionary authority or discretionary responsibility in the administration of the Plan or the Trust Fund. The term “Fiduciary” shall also include any person to whom a Named Fiduciary delegates any of its or his fiduciary responsibilities hereunder in accordance with the provisions of the Plan or Trust Agreement.

(37) Hardship : Financial need on the part of a Member on account of:

(a) expenses for (or necessary to obtain) medical care that would be deductible under section 213(d) of the Code (determined without regard to whether the expenses exceed 7.5% of adjusted gross income);

(b) costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Member;

(c) the payment of tuition and related educational fees and room and board expenses for up to the next 12 months of post‑secondary education for the Member, his Spouse, children, or dependents (as defined in section 152 of the Code and, for taxable years beginning on or after January 1, 2005, without regard to section 152(b)(1), (b)(2) or (d)(1)(B) of the Code);

(d) payments necessary to prevent the eviction of the Member from his principal residence or foreclosure on the mortgage of the Member’s principal residence;

(e) payments for burial or funeral expenses for the Member’s deceased parent, Spouse, children or dependents (as defined in section 152 of the Code, and, for taxable years beginning on or after January 1, 2005, without regard to section 152(d)(1)(B) of the Code);

(f) expenses for the repair of damage to the Member’s principal residence that would qualify for the casualty deduction under section 165 of the Code (determined without regard to whether the loss exceeds 10% of adjusted gross income); or

(g) any other financial need that the Commissioner of Internal Revenue, through the publication of revenue rulings, notices and other documents of general applicability, may from time to time designate as a deemed immediate and heavy financial need.

(38) Highly Compensated Employee :

(a) For a particular Plan Year, any Employee (i) who, during the current or preceding Plan Year, was at any time a 5-percent owner (as such term is defined in section 416(i)(1) of the Code), or (ii) for the preceding Plan Year, received compensation from the

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Controlled Group in excess of the amount in effect for such Plan Year under section 414(q)(1)(B) of the Code.

(b) “Highly Compensated Employee” shall include a former Employee whose Employment with the Controlled Group terminated prior to the Plan Year and who was a Highly Compensated Employee for the Plan Year in which his employment terminated or for any Plan Year ending on or after his 55th birthday.

(c) For purposes of this Subsection, the term “compensation” shall mean, effective on and after January 1, 1998, an Employee’s compensation under Section 4.11(3).

(39) Holdings Stock : Stock that constitutes “qualifying employer securities,” including voting or non-voting common stock of Lincoln Electric Holding, Inc. The term “qualifying employer securities,” as defined in Section 409(l) of the Code, means common stock issued by the Employer (or by a Controlled Group Member) which is readily tradable on an established securities market. If there is no common stock which meets the requirements of the previous sentence, the term “employer securities” means common stock issued by the Employer (or by a Controlled Group Member) having a combination of voting power and dividend rights equal to or in excess of (i) that class of common stock of the Employer (or of any such Controlled Group Member) having the greatest voting power, and (ii) that class of common stock of the Employer (or of any such Controlled Group Member) having the greatest dividend rights.

(40) Holdings Stock Fund : The Investment Fund within the Trust that is intended to be invested primarily in Holdings Stock and in which is held Holdings Stock allocated to a Member’s Account (or Sub-Account).

(41) Hour of Service :

(a) For all purposes other than determining whether an Employee has been credited with a Year of Eligibility Service, an “Hour of Service” shall mean an hour for which an Employee is paid, or entitled to payment, by one or more Controlled Group Members for the performance of duties as an Employee.

(b) For purposes of determining whether an Employee has been credited with a Year of Eligibility Service, an “Hour of Service” shall mean:

(i) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Controlled Group Member. These hours shall be

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credited to the Employee for the computation period or periods in which the duties are performed;

(ii) Each hour for which an Employee is paid, or entitled to payment, by a Controlled Group Member on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence. Hours under this subparagraph shall be calculated and credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations, which are incorporated herein by this reference; and

(iii) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Controlled Group Member. The same Hours of Service shall not be credited both under subparagraph (i) or (ii) above, as the case may be, and under this subparagraph (iii). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains, rather than the computation period in which the award, agreement, or payment is made.

(42) Instrument of Adoption : The instrument referred to in Section 12.1.

(43) Investment Committee : The committee provided for in Section 8.1 which shall have the responsibilities specified in Section 8.8.

(44) Investment Funds : Any of the investment funds established by the Investment Committee under Section 5.1.

(45) Matching Contribution Participant : An Employee who has become and continues to be a Matching Contribution Participant in accordance with the provisions of Article II.

(46) Matching Employer Contributions : The contributions made pursuant to Section 4.1 of the Plan (or pursuant to any Instrument of Adoption) and employer matching contributions made to the Weartech Plan on behalf of Former Weartech Plan Participants who are Employees on August 29, 2016.

(47) Matching Employer Contribution Percentage : One hundred (100) percent or such other percentage applicable to a particular Employer’s employees (or group of employees) as approved by the Administrative Committee and specified in the Employer’s Instrument of Adoption.

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The applicable Matching Employer Contribution Percentage shall be applied as provided in Section 4.1 (or the Employer’s Instrument of Adoption) against Before-Tax Contributions made for a Plan Year that are not in excess of the percentage of Compensation specified in Section 4.1 or in the Employer’s Instrument of Adoption. Except as otherwise specifically provided in the Plan or an Instrument of Adoption, if an Employer’s Instrument of Adoption does not specify a Matching Employer Contribution Percentage, the applicable percentage shall be one hundred (100) percent.

(48) Member : An Employee who has become and continues to be a Member of the Plan in accordance with the provisions of Article II.

(49) Named Fiduciaries : The persons designated in or pursuant to Section 10.2.

(50) Nonelective Contribution Participant : An Employee who has become and continues to be a Nonelective Contribution Participant in accordance with the provisions of Article II.

(51) Nonelective Employer Contributions : The contributions made pursuant to Section 4.6 of the Plan.

(52) Normal Retirement Date : The date on which a Member attains age 60.

(53) Plan : The Lincoln Electric Company Employee Savings Plan, the terms and provisions of which are herein set forth, as the same may be amended, supplemented or restated from time to time. The Plan shall consist of two portions, the ESOP and the remainder of the Plan which is a profit sharing plan.

(54) Plan Year : November 1, 1994 through December 31, 1994 and thereafter, a calendar year.

(55) Prior ESOP Contributions : Amounts attributable to contributions, plus gains and losses thereon that were held prior to July 1, 1997 in The Lincoln Electric Company Employee Stock Ownership Plan, a frozen profit sharing plan which was merged into the Plan effective January 1, 1997.

(56) Qualified Nonelective Contributions : A contribution made by an Employer pursuant to Section 4.4 that (a) Members eligible to share therein may not elect to receive in cash until distribution from the Plan, (b) are nonforfeitable when made, (c) are distributable only in accordance with the distribution rules applicable to Before‑Tax Contributions and (d) are paid to the Trust Fund during the Plan Year for which made or within the time following the close of such Plan Year that

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is prescribed by law for the filing by an Employer of its federal income tax return (including extensions thereof).

(57) Reemployment Commencement Date : The date following an Employee’s Break in Service on which he again performs an Hour of Service for a Controlled Group Member.

(58) Retirement Annuity Program : The Lincoln Electric Company Retirement Annuity Program.

(59) Retirement Choice : The choice provided by the Company in June 2006 to Employees who were Participating Members (as such term is defined in the Retirement Annuity Program) under the Retirement Annuity Program and certain Employees who were eligible to become Participating Members under the Retirement Annuity Program, with respect to the retirement benefits that would be earned by such Employees during their employment on and after July 16, 2006. The choice given to an Employee described in the preceding sentence was to have his retirement benefit attributable to his employment on and after July 16, 2006 determined by (a) a continuation of the terms of the Retirement Annuity Program applicable to such Employee on July 15, 2006, or the terms of the Retirement Annuity Program that would have been applicable to the Employee if he had been a Participating Member in the Retirement Annuity Program on July 15, 2006, and FSP Contributions hereunder if he was eligible therefor prior to July 16, 2006 or would have been eligible therefor prior to July 16, 2006 if he had been a Participating Member in the Retirement Annuity Program on July 15, 2006, or (b) the RAP 1.25% Formula (as defined in the Retirement Annuity Program) under the Retirement Annuity Program and FSP Plus Contributions hereunder. The election made pursuant to the choice described in this Section 1.1(59) shall be irrevocable.

(60) Rollover Contributions : Cash or cash equivalents received and held by the Trustee pursuant to the provisions of Section 3.9 and rollover contributions made to the Weartech Plan by Former Weartech Plan Participants.

(61) Salary Reduction Agreement : An arrangement made under the Plan pursuant to which an Employee agrees to reduce, or to forego an increase in, his Compensation and his Employer agrees to contribute to the Trust the amount so reduced or foregone as a Before‑Tax Contribution.

(62) Self-Directed Investment Account : A self-directed investment account, as described in Section 5.1, that is an Investment Fund within the Trust.

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(63) Spouse : The person to whom a Member is legally married at the specified time; provided, however, that a former Spouse may be treated as a Spouse or surviving Spouse to the extent required under the terms of a qualified domestic relations order (as defined in section 414(p) of the Code).

(64) Transitional Contribution Participant : An Employee who has become and continues to be a Transitional Contribution Participant in accordance with the provisions of Article II. Transitional Contribution Participants described in Section 2.9(1)(b)(i) are also referred to herein as a “Transitional RAP Participants,” and Transitional Contribution Participants described in Section 2.9(1)(b)(ii) are also referred to herein as “Transitional Kaliburn Participants.”

(65) Transitional Employer Contributions : The contributions made pursuant to Section 4.8 of the Plan.

(66) Trust : The trust created by the Trust Agreement and known as The Lincoln Electric Company Savings Plan Trust.

(67) Trust Agreement : The Trust Agreement between the Company and the Trustee providing among other things for the Trust and the investment of the Trust Fund, as such Trust Agreement may be amended or restated from time to time, or any trust agreement superseding the same. The Trust Agreement is hereby incorporated in the Plan by reference.

(68) Trustee : The trustee or trustees under the Trust Agreement or its or their successor or successors in trust under such Trust Agreement.

(69) Trust Fund : The trust estate held by the Trustee under the provisions of the Plan and the Trust Agreement, without distinction as to principal or income.

(70) Valuation Date : Each day on which the New York Stock Exchange is open for trading.

(71) Vested Interest : The portion of a Member’s Account that has not previously been withdrawn by him or distributed to or for him and that (a) is derived from his Before-Tax Contributions, Rollover Contributions, Prior ESOP Contributions, Qualified Nonelective Contributions, Nonelective Employer Contributions and Transitional Employer Contributions and nonforfeitable at all times, (b) is derived from Matching Employer Contributions and (i) in the case of a Member employed by the Company, Welding, Cutting, Tools & Accessories, LLC, Lincoln Electric Cutting Systems, Inc., Kaliburn, Inc., J.W. Harris Co., Inc., Smart Force, LLC, Vizient

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Manufacturing Solutions, Inc. and Lincoln Global, Inc. (but only with respect to employees of its Seal Seat division whose Employment Commencement Date, Reemployment Commencement Date or date of transfer to such company or location occurred prior to May 1, 2013 and with respect to employees in its licensing department) is nonforfeitable at all times, or (ii) in the case of all other Members is (A) 0% nonforfeitable prior to the Member’s completion of three Years of Vesting Service and (B) 100% nonforfeitable on and after the Member’s completion of three Years of Vesting Service, and (c) is derived from FSP Contributions and FSP Plus Contributions and is (i) 0% nonforfeitable prior to the Member’s completion of three Years of Vesting Service and (ii) 100% nonforfeitable on and after the Member’s completion of three Years of Vesting Service. Notwithstanding the foregoing, in the case of a Member who is an Employee on January 1, 2017, the portion of such Member’s Account that is derived from FSP Contributions and FSP Plus Contributions shall be 100% nonforfeitable on January 1, 2017. Further notwithstanding the foregoing, in the case of a Former Weartech Plan Participant who is an Employee on August 29, 2016, the portion of such Former Weartech Plan Participant’s Account that is derived from Matching Employer Contributions shall be 20% nonforfeitable on and after completion of two Years of Vesting Service and 100% nonforfeitable on and after completion of three Years of Vesting Service. A Member whose Vested Interest is less than 100% nonforfeitable under the preceding provisions of this Subsection shall nonetheless have a 100% nonforfeitable interest in his entire Account upon his attainment of age 60 while an Employee, upon his death while an Employee, upon his death while performing ‘qualified military service’ (as defined in Section 11.8) and upon his incurrence of a Disability while an Employee. Further notwithstanding the foregoing, but subject to section 6.3(7), in the case of a Former Weartech Plan Participant who is not an Employee on August 29, 2016, the portion of such Former Weartech Plan Participant’s Account that is derived from Weartech Prior Matching Contributions shall be nonforfeitable in accordance with the following table based on his Years of Vesting Service at any particular time:

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Years of Vesting Service	Percent of Weartech Prior Matching Contributions Nonforfeitable
Less than 2	0%
2 but less than 3	20%
3 but less than 4	40%
4 but less than 5	60%
5 but less than 6	80%
6 or more	100%

(72) Vesting Service :

(a) An Employee’s Vesting Service shall equal the total of his periods of employment with the Controlled Group beginning with his Employment Commencement Date or his Reemployment Commencement Date, if applicable, and ending on his next following Employment Severance Date, except that if an Employee whose Employment Severance occurs by reason of his resignation, retirement or discharge performs an Hour of Service for a Controlled Group Member during the 12 consecutive month period beginning on his Employment Severance Date, the period beginning on such Employment Severance Date and ending on the date on which he performs such Hour of Service shall be deemed to be employment with the Controlled Group; provided, however, that if such Employee’s Employment Severance occurs by reason of his resignation, retirement or discharge during a period of absence referred to in Section 1.1(26)(b), the period beginning on his Employment Severance Date and ending on the date on which he performs such Hour of Service shall not be deemed to be employment with the Controlled Group unless such Hour of Service is performed within 12 months of the date on which such period of absence commenced.

(b) Notwithstanding the foregoing paragraph (a), (i) in the case of any Employee who has a Break in Service and who does not have a nonforfeitable right to a benefit under the Plan, Years of Vesting Service before his Break in Service shall not be taken into account only if the number of his consecutive 1‑Year Breaks in Service equals or exceeds the greater of five or the aggregate number of his Years of Vesting Service before his Break in Service; and such aggregate number of his Years of Vesting Service before his Break in Service shall not include any Years of Vesting Service not required to be taken into account under this

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paragraph by reason of any prior Break in Service, and (ii) an Employee shall not be credited with Vesting Service for any period after the termination of the Plan as to him.

(c) In determining the number of an Employee’s Years of Vesting Service, all periods of his employment with the Controlled Group (whether or not consecutive) counted as Vesting Service pursuant to this Subsection shall (subject to the provisions of Sections 6.3(6) and 6.8) be aggregated on the basis that 365 days of such employment shall equal a Year of Vesting Service and that each additional 30 days of such employment shall equal one‑twelfth of a Year of Vesting Service.

(d) Anything in the Plan to the contrary notwithstanding, an Employee shall be credited with such Vesting Service not otherwise credited to him under the Plan as may be required by applicable law.

(e) Further notwithstanding any other provision of the Plan to the contrary, in the case of an Employee of Kaliburn, Inc., Years of Vesting Service shall also include periods of employment with ITT Corporation prior to November 14, 2012, provided that such Employee was an “Employee” (as defined in the Plan) on November 14, 2012.

(f) Further notwithstanding any other provision of the Plan to the contrary, with respect to any Former Weartech Plan Participant, (i) Years of Vesting Service shall include service credited for vesting purposes under the Weartech Plan as of December 31, 2015 (excluding any service that is disregarded under the terms of the Weartech Plan) and (ii) for the Plan Year commencing January 1, 2016, Vesting Service shall be credited in accordance with Treasury Regulation section 1.410(a)-7(g).

(73) Weartech Plan : The Weartech International, Inc. 401(k) Plan, as in effect immediately prior to its merger into the Plan effective as of August 29, 2016.

(74) Weartech Prior Matching Contributions : Employer matching contributions made to the Weartech Plan on behalf of Former Weartech Plan Participants who are not Employees on August 29, 2016.

(75) Year of Eligibility Service : An Employee shall be credited with a Year of Eligibility Service when he is credited with at least 1,000 Hours of Service in the 12-month period beginning with the Employment Commencement Date and, if applicable, his Reemployment Commencement Date, either of which 12-month periods shall be the “Initial Eligibility Computation Period.”

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Whether or not an Employee is entitled to be credited with 1,000 Hours of Service during an Initial Eligibility Computation Period, such Employee shall be credited with a Year of Eligibility Service if he is credited with at least 1,000 Hours of Service during the Plan Year that includes the first anniversary of his Employment Commencement Date or Reemployment Commencement Date (whichever is applicable) or any Plan Year thereafter; provided, however, that an Employee who is credited with 1,000 Hours of Service in both the Initial Eligibility Computation Period and the Plan Year that includes the first anniversary of his Employment Commencement Date or Reemployment Commencement Date (whichever is applicable) shall be credited with two Years of Eligibility Service. For purposes of this Section 1.1(75), the term “Hour of Service” has the meaning set forth in Section 1.1(41)(b). Notwithstanding any other provision of the Plan to the contrary, (a) in the case of an Employee of Kaliburn, Inc., Years of Eligibility Service shall also include periods of employment with ITT Corporation prior to November 14, 2012, provided that such Employee was an “Employee” (as defined in the Plan) on November 14, 2012, and (b) in the case of a Former Weartech Plan Participant, Years of Eligibility Service shall include any service credited for eligibility purposes under the Weartech Plan immediately prior to August 29, 2016.

(76) Year of Vesting Service : As defined in Section 1.1(72).

1.2 Construction .

(1) Unless the context otherwise indicates, the masculine wherever used in the Plan or Trust Agreement shall include the feminine and neuter.

(2) Where headings have been supplied to portions of the Plan and the Trust Agreement (other than the headings to the Subsections in Section 1.1), they have been supplied for convenience only and are not to be taken as limiting or extending the meaning of any of such portions of such documents.

(3) Wherever the word “person” appears in the Plan, it shall refer to both natural and legal persons.

(4) A number of the provisions hereof and of the Trust Agreement are designed to contain provisions required or contemplated by certain federal laws and/or regulations thereunder. All such provisions herein and in the Trust Agreement are intended to have the meaning required or contemplated by such provisions of such law or regulations and shall be construed in accordance

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with valid regulations and valid published governmental rulings and interpretations of such provisions. In applying such provisions hereof or of the Trust Agreement, each Fiduciary may rely (and shall be protected in relying) on any determination or ruling made by any agency of the United States Government that has authority to issue regulations, rulings or determinations with respect to the federal law thus involved.

(5) Except to the extent federal law controls, the Plan and Trust Agreement shall be governed, construed and administered according to the laws of the State of Ohio. All persons accepting or claiming benefits under the Plan or Trust Agreement shall be bound by and deemed to consent to their provisions.

(6) This amendment and restatement of the Plan is generally effective as of January 1, 2017. However, certain provisions of this amendment and restatement of the Plan are effective as of some other date. The provisions of this amendment and restatement of the Plan that are effective prior to January 1, 2017 shall be deemed to amend the corresponding provisions of the Plan as in effect before this amendment and restatement and all amendments thereto. Events occurring before the applicable effective date of any provision of this amendment and restatement of the Plan shall be governed by the applicable provision of the Plan in effect on the date of the event.

(7) The benefits payable with respect to an Employee or former Employee whose employment with the Controlled Group terminated, including by reason of death, before January 1, 2017 (and who is not rehired by a Controlled Group Member thereafter) shall be determined by and paid in accordance with the terms and provisions of the Plan as in effect at the date of such termination, except to the extent that certain provisions of the Plan, as amended and restated as of January 1, 2017 apply to such individual as a result of applicable law or the context clearly requires the application of such provision to such individual.

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ARTICLE II - ELIGIBILITY AND MEMBERSHIP

2.1 Eligible Employees . Each Covered Employee who is an Eligible Employee under the Plan on January 1, 2017 shall continue to be an Eligible Employee under the Plan after January 1, 2017 so long as he remains a Covered Employee. Each other Employee shall become an Eligible Employee under the Plan on the first Enrollment Date on which he is a Covered Employee. Prior to January 1, 2017, each Employee was eligible to become an Eligible Employee under the Plan on the first Enrollment Date on which he met the following requirements:

(1) he was a Covered Employee, and

(2) either (a) he had been in Employment for at least six consecutive months, or (b) he had been credited with one Year of Eligibility Service.

Notwithstanding the preceding provisions of this Section, for purposes of becoming an Eligible Employee prior to January 1, 2017, the requirement of Subsection (2) of this Section was waived in the case of an Employee who (i) was employed by Applied Robotics, Inc. immediately prior to becoming an employee of Torchmate, Inc. or (ii) was an Employee of Easom Automation Systems, Inc. on January 1, 2015. Further, notwithstanding the preceding provisions of this Section, a Former Weartech Plan Participant was eligible to become an Eligible Employee on August 29, 2016 upon the merger of the Weartech Plan into the Plan if he satisfied the requirements of Subsections (1) and (2) of this Section at such time.

2.2 Commencement of Membership .

(1) Any Eligible Employee may enroll in the Plan for purposes of having his Employer make Before-Tax Contributions for him to the Trust on the Enrollment Date on which he is initially eligible or on any subsequent Enrollment Date by filing with the Administrative Committee at least 30 days (or such shorter period as the Committee shall determine) before such Date an enrollment form prescribed by the Committee, which form shall include (a) the desired effective date of the Eligible Employee’s enrollment in the Plan, (b) his agreement commencing on or after the effective date to have his Employer make Before-Tax Contributions for him to the Trust, (c) his authorization to his Employer to withhold from his Compensation payable on or after such effective date, any designated Before-Tax Contributions and to pay the same to the Trust, and (d) his direction that the

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Before-Tax Contributions and Employer Contributions, if any, made by or for him be invested (to the extent permitted under the Plan) in any one of the investment options permitted by Section 5.5. Notwithstanding the foregoing, an Eligible Employee who is employed by Vernon Tool Co., LTD on January 1, 2009 and who otherwise meets the requirements to participate in the Plan on such date may enroll in the Plan for purposes of having his Employer make Before-Tax Contributions for him to the Trust on February 1, 2009 or any Enrollment Date thereafter. An Eligible Employee who enrolls as provided in this Subsection (1) shall become a Member, if he is not otherwise a Member under the Plan. Notwithstanding the foregoing, a Former Weartech Plan Participant who becomes an Eligible Employee on August 29, 2016 and who on August 19, 2016 had in effect an election under the Weartech Plan to have a percentage of his compensation contributed as before-tax contributions, shall become a Member on August 29, 2016 and his elected percentage (in effect on August 19, 2016) under the Weartech Plan shall continue in effect under the Plan, until changed or suspended pursuant to Section 3.3 or Section 3.4, with respect to his Compensation to be contributed as Before-Tax Contributions under the Plan, provided, however, that if such elected percentage under the Weartech Plan was greater than 100%, such percentage shall be reduced to 80% with respect to his Compensation to be contributed as Before-Tax Contributions under the Plan.

(2) The following Employees shall be deemed to have enrolled as a Member for purposes of having his Employer make Before-Tax Contributions from his Base Compensation to the Trust pursuant to an Automatic Salary Reduction Agreement in accordance with the provisions of Section 2.3:

(a) each Employee of The Lincoln Electric Company who is an Eligible Employee pursuant to Section 2.1 on a date in December 2011 designated by the Administrative Committee, and who as of such date does not have an affirmative election in effect under the Plan to have Before-Tax Contributions withdrawn from his Base Compensation and contributed to the Plan on his behalf; and

(b) each Employee of The Lincoln Electric Company who becomes (or again becomes) an Eligible Employee on or after January 1, 2012.

An Eligible Employee who is deemed to have enrolled pursuant to this Section 2.2(2) and Section 2.3 for purposes of having his Employer make Before-Tax Contributions from his Base

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Compensation may separately elect (but shall not be deemed to have elected) to enroll pursuant to Section 2.2(1) for purposes of having his Employer make Before-Tax Contributions from his Bonus Compensation.

(3) Notwithstanding the preceding provisions of this Section, an Eligible Employee who is not enrolled in the Plan as provided in Subsection (1) or Subsection (2) shall be eligible to have Qualified Nonelective Contributions, if any, made on his behalf and shall become a Member, if he is not otherwise a Member under the Plan, on the Enrollment Date on which he is initially eligible pursuant to Section 2.1.

(4) A Former Weartech Plan Participant who had an account under the Weartech Plan immediately prior to the effective time of the merger of the Weartech Plan into this Plan but does not become a Member pursuant to Subsection (1), shall become a Member on August 29, 2016 upon such merger, but shall not be eligible to have Before-Tax Contributions made for him unless he is an Eligible Employee and enrolls in the Plan in accordance with Subsection (1).

2.3 Enrollment Pursuant to an Automatic Salary Reduction Agreement .

(1) The effective date of an Eligible Employee’s enrollment pursuant to an Automatic Salary Reduction Agreement as provided Section 2.2(2) shall be the first Enrollment Date that is as soon as administratively practicable after the end of the election period specified in the notice described in Section 2.3(2). Notwithstanding any other provision of this Article II to the contrary, an Automatic Salary Reduction Agreement shall not become effective for any Eligible Employee who, within the election period specified in the notice described in Section 2.3(2) and in accordance with the procedures established by the Administrative Committee, enters into a Salary Reduction Agreement with respect to his Base Compensation or makes an election not to have Before-Tax Contributions contributed to the Trust on his behalf with respect to his Base Compensation.

(2) At least 30 days (and not more than 90 days) before (a) the effective date of an Eligible Employee’s enrollment pursuant to an Automatic Salary Reduction Agreement and (b) the first day of each Plan Year (or at such other time or times as is required or permitted under applicable law), the Administrative Committee (or its delegate) shall provide each Employee of The Lincoln Electric Company, who is (or will become) an Eligible Employee, notice of his deemed enrollment pursuant to Sections 2.2(2) and 2.3(1), which notification shall include the following: (i) the

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percentage of Before-Tax Contributions that will be made on his behalf under Section 3.1 with respect to his Base Compensation if an Automatic Salary Reduction Agreement goes into effect, (ii) his right to reject such deemed enrollment and enter into a Salary Reduction Agreement with respect to his Base Compensation within the period specified in the notice or to elect within the period specified in the notice not to have Before-Tax Contributions made on his behalf with respect to his Base Compensation, (iii) the Investment Fund in which such Before-Tax Contributions shall be invested in the absence of any investment election (which Investment Fund shall be a ‘qualified default investment alternative’ within the meaning of Department of Labor regulations), and (iv) such other information as may be required by applicable law.

2.4 Duration of Membership . An Employee shall cease to be an Eligible Employee when he ceases to be a Covered Employee. An Employee shall cease to be a Nonelective Contribution Participant upon the date he ceases to be a Covered Employee who is described in Section 2.8(1). An Employee shall cease to be a Transitional Contribution Participant upon the date described in Section 2.9(2). An Employee shall cease to be a Matching Contribution Participant when he ceases to be a Covered Employee. An Employee shall cease to be a Member when he ceases to be an Eligible Employee, a Nonelective Contribution Participant, a Transitional Contribution Participant and a Matching Contribution Participant, provided, however, that if after he ceases to be an Eligible Employee, a Nonelective Contribution Participant, a Transitional Contribution Participant and a Matching Contribution Participant, an Account continues to be maintained for him, he shall (subject to Section 13.1) remain a Member for all purposes of the Plan other than for purposes of making, or having his Employer make Before-Tax, Rollover or Employer Contributions.

2.5 FSP Participation . Any Employee who was an FSP Participant on December 31, 2016 under the terms of the Plan then in effect shall not be an FSP Participant at any time on or after January 1, 2017. Further, on and after January 1, 2017 no Employee shall be eligible to become an FSP Participant.

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2.6 FSP Plus Participation . Any Employee who was an FSP Plus Participant on December 31, 2016 under the terms of the Plan then in effect shall not be an FSP Plus Participant at any time on or after January 1, 2017. Further, on and after January 1, 2017 no Employee shall be eligible to become an FSP Plus Participant.

2.7 Matching Contribution Participation .

(1) An Employee shall be eligible to become a Matching Contribution Participant under this Plan on January 1, 2017 if he was an Eligible Employee under the Plan immediately prior to January 1, 2017. Each other Employee shall become a Matching Contribution Participant under this Plan on the first Enrollment Date on which he meets the following requirements:

(a) he is a Covered Employee, and

(b) he has been in Employment for at least six consecutive months, or has been credited with one Year of Eligibility Service.

Notwithstanding the preceding provisions of this Section, for purposes of becoming a Matching Contribution Participant, the requirement of Subsection (1)(b) of this Section shall be waived in the case of a Covered Employee employed by Vizient Manufacturing Solutions, Inc. on January 1, 2017.

(2) A Covered Employee shall be treated as a Matching Contribution Participant only for those periods of time during which he is a Matching Contribution Participant described in Subsection (1).

2.8 Nonelective Contribution Participation .

(1) An Employee shall be eligible to become a Nonelective Contribution Participant under this Plan if he meets the following requirements:

(a) he is a Covered Employee who is employed by the Company, Welding, Cutting, Tools & Accessories, LLC, Lincoln Electric Cutting Systems, Inc., Kaliburn, Inc., J.W. Harris Co., Inc., Smart Force, LLC and Lincoln Global, Inc., and

(b) he has been in Employment for at least six consecutive months, or has been credited with one Year of Eligibility Service.

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(2) An Employee who satisfies the requirements of Subsection (1) of this Section on January 1, 2017 shall become a Nonelective Contribution Participant and a Member (if he is not otherwise a Member under the Plan) on January 1, 2017. Each other Employee who satisfies the requirements of Subsection (1) of this Section shall become a Nonelective Contribution Participant and a Member (if he is not otherwise a Member under the Plan) as of the first Enrollment Date on which he satisfies the requirements of Subsection (1) of this Section.

(3) A Covered Employee shall be treated as a Nonelective Contribution Participant only for those periods of time during which he is a Nonelective Contribution Participant described in Subsection (1).

2.9 Transitional Contribution Participation .

(1) An Employee shall be eligible to become a Transitional Contribution Participant under this Plan on January 1, 2017 if he meets the following requirements:

(a) he is a Covered Employee under the Plan on January 1, 2017, provided that he is not an Employee of J.W. Harris, Co., Inc., Smart Force, LLC, or the Seal Seat division of Lincoln Global, Inc., and

(b) either (i) immediately prior to the freeze of all benefit accruals under the Retirement Annuity Program effective as of December 31, 2016, he was a “covered employee” and “participant” under the Retirement Annuity Program (as such terms were then defined under the Retirement Annuity Program) and eligible to accrue a benefit thereunder or (ii) he was an FSP Plus Participant employed by Kaliburn, Inc. on December 31, 2016 whose Years of Vesting Service under the Plan includes periods of service with ITT Corporation or its predecessors prior to January 1, 2006.

(2) An Employee shall cease to be a Transitional Contribution Participant under the Plan on the earliest of (a) his Employment Severance Date, (b) the date he ceases to be a Covered Employee, or (c) the later of (i) the end of the Plan Year that includes the date on which he completes 30 Years of Vesting Service, or (ii) the close of business on December 31, 2021.

2.10 Re-Employed Employees .

(1) Before-Tax Contributions . If a former Eligible Employee again becomes an Eligible Employee, he may again enroll as provided in Section 2.2(1) on the first Enrollment Date following

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the date he so again becomes an Eligible Employee by filing with the Administrative Committee at least 30 days (or such shorter period as the Committee shall determine) before such Enrollment Date an enrollment form prescribed in Section 2.2(1). A former Eligible Employee who again becomes an Eligible Employee and is employed by The Lincoln Electric Company but has not enrolled for purposes of having his Employer make Before-Tax Contributions with respect to his Base Compensation pursuant to the preceding sentence shall be deemed to have enrolled pursuant to Section 2.2(2) and Section 2.3. A former Employee who is not a former Eligible Employee may enroll as provided in Section 2.2(1) on the first Enrollment Date following the date he becomes an Eligible Employee pursuant to Section 2.1, or if he is employed by The Lincoln Electric Company and does not enroll for purposes of having his Employer make Before-Tax Contributions with respect to Base Compensation, he shall be deemed to have enrolled pursuant to Section 2.2(2) and Section 2.3.

(2) FSP Contributions and FSP Plus Contributions . No Employee who is reemployed on or after January 1, 2017 shall become or again become an FSP Participant or an FSP Plus Participant.

(3) Matching Employer Contributions . A former Matching Contribution Participant who is reemployed as an Employee shall again become a Matching Contribution Participant upon satisfaction of the requirements of Subsection (1)(a) of Section 2.7.

(4) Nonelective Employer Contributions . A former Nonelective Contribution Participant who is reemployed as an Employee shall again become a Nonelective Contribution Participant and a Member (if he is not otherwise a Member under the Plan) upon satisfaction of the requirements of Subsection (1)(a) of Section 2.8.

(5) Transitional Employer Contributions . A former Transitional Contribution Participant who is reemployed as an Employee shall not be eligible to again become a Transitional Contribution Participant.

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2.11 Transferred Employees .

(1) Before-Tax Contributions . An Employee who transfers from non-covered employment with the Controlled Group to employment as a Covered Employee shall become an Eligible Employee under the Plan on the first Enrollment Date on which he is a Covered Employee.

(2) FSP Contributions and FSP Plus Contributions . No Employee who transfers from non-covered employment with the Controlled Group to employment as a Covered Employee on or after January 1, 2017 shall be eligible to become or again become an FSP Participant or an FSP Plus Participant.

(3) Matching Employer Contributions . An Employee who transfers from non-covered employment with the Controlled Group to employment as a Covered Employee shall become a Matching Contribution Participant upon satisfaction of the requirements of Subsection (1) of Section 2.7.

(4) Nonelective Employer Contributions . An Employee who transfers from non-covered employment with the Controlled Group to employment as a Covered Employee shall become a Nonelective Contribution Participant and a Member (if he is not otherwise a Member under the Plan) upon satisfaction of the requirements of Subsection (1) of Section 2.8.

(5) Transitional Employer Contributions . An Employee who transfers from non-covered employment with the Controlled Group to employment as a Covered Employee after January 1, 2017 shall not be eligible to become a Transitional Contribution Participant.

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ARTICLE III - BEFORE-TAX AND ROLLOVER CONTRIBUTIONS

3.1 Amount of Contributions .

(1) Upon enrollment pursuant to Section 2.2(1), a Member shall agree pursuant to a Salary Reduction Agreement to have his Employer make Before-Tax Contributions for him to the Trust of a specified percentage of between 1% and 80% of his Compensation in 1% increments through equal percentage pay period reductions with respect to his Base Compensation and through payroll deduction with respect to his Bonus Compensation. Unless otherwise provided pursuant to procedures established by the Administrative Committee for a specified group or groups of Members, the percentage elected by a Member pursuant to this Subsection shall apply to the Member’s Base and Bonus Compensation. If the Administrative Committee establishes procedures that provide for a specified group of Members to make separate Before-Tax Contribution elections with respect their Base Compensation and their Bonus Compensation, the Committee may permit such Members to elect to contribute a whole dollar amount, rather than a specified percentage, with respect to their Bonus Compensation.

(2) Upon enrollment pursuant to Sections 2.2(2) and 2.3, a Member shall be deemed to have elected pursuant to an Automatic Salary Reduction Agreement to have his Employer make Before-Tax Contributions for him to the Trust in an amount equal to 4% of his Base Compensation through equal percentage pay period reductions.

(3) If a Member’s Before-Tax Contributions must be reduced pursuant to Sections 3.5 through 3.8 or the requirements of applicable law, his Before-Tax Contributions as so reduced shall be the maximum percentage of his Compensation permitted by such Sections or law notwithstanding the foregoing provisions of this Section requiring that Before-Tax Contributions be made in specified increments of his Compensation.

3.2 Payments to Trustee . Before‑Tax Contributions shall be transmitted to the Trustee as soon as practicable, but in any event not later than the 15 ^th business day of the month following the month in which such Contributions would otherwise have been paid to the Members.

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3.3 Changes in Contributions . The percentage designated, or deemed to have been designated, by a Member pursuant to Section 3.1 shall continue in effect, notwithstanding any changes in the Member’s Compensation. A Member may, however, in accordance with the percentages permitted by Section 3.1, change the percentage of his Compensation to be made as Before-Tax Contributions effective as soon as practicable after such prior written notice of the change is filed with the Administrative Committee as the Committee may require. In the case of any Member for whom the Administrative Committee has provided pursuant to Section 3.1(1) for a separate election to reduce the Member’s Bonus Compensation, for each payment of Bonus Compensation the Member shall make an election with respect to the percentage, or amount, if any, of each such payment to be made as Before-Tax Contributions effective as soon as practicable after such prior written is notice filed with the Administrative Committee as the Committee may require.

3.4 Suspension and Resumption of Contributions . A Member may suspend his Before‑Tax Contributions effective as of any future date upon such prior written notice filed with the Administrative Committee as the Committee may require. A Member who has suspended his Before‑Tax Contributions may, upon such prior written notice filed with the Administrative Committee as the Committee may require, resume making such Before‑Tax Contributions as of any Enrollment Date if he is then an Eligible Employee and he has again enrolled pursuant to Sections 2.2(1) and 3.1.

3.5 Excess Deferrals .

(1) Notwithstanding the foregoing provisions of this Article III, a Member’s Before‑Tax Contributions for any taxable year of such Member shall not exceed the limitation in effect under section 402(g) of the Code (except to the extent permitted under the Catch-Up Before-Tax Contribution provisions set forth in Section 3.11 and section 414(v) of the Code). Except as otherwise provided in this Section, a Member’s Before‑Tax Contributions for purposes of this Section shall include (a) any employer contribution made under any qualified cash or deferred arrangement as defined in section 401(k) of the Code to the extent not includible in gross income for the taxable year under section 402(e)(3) of the Code or, effective January 1, 2006, to the extent includible in gross income for the taxable year under section 402A of the Code (determined without regard to section 402(g) of the Code), (b) any employer contribution to the extent not includible in

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gross income for the taxable year under section 402(h)(1)(B) of the Code (determined without regard to section 402(g) of the Code), (c) any employer contribution to purchase an annuity contract under section 403(b) of the Code under a salary reduction agreement within the meaning of section 3121(A)(5)(D) of the Code, and (d) any elective contributions under section 408(p)(2)(A)(i) of the Code.

(2) In the event that a Member’s Before‑Tax Contributions exceed the amount described in Subsection (1) of this Section (hereinafter called the “excess deferrals”), such excess deferrals (and any income allocable thereto through the end of the Plan Year in which such excess deferrals were made) shall be distributed to the Member by April 15 following the close of the taxable year in which such excess deferrals occurred if (and only if), by April 15 following the close of such taxable year the Member (a) allocates the amount of such excess deferrals among the plans under which the excess deferrals were made and (b) notifies the Administrative Committee of the portion allocated to this Plan.

(3) In the event that a Member’s Before‑Tax Contributions under this Plan exceed the amount described in Subsection (1) of this Section, or in the event that a Member’s Before‑Tax Contributions made under this Plan do not exceed such amount but he allocates a portion of his excess deferrals to his Before‑Tax Contributions made to this Plan, Matching Employer Contributions, if any, made with respect to such Before‑Tax Contributions (and any income applicable thereto) shall be applied to reduce subsequent Matching Employer Contributions made under the Plan.

3.6 Excess Before-Tax Contributions .

(1) Notwithstanding the foregoing provisions of this Article III, for any Plan Year,

(a) the actual deferral percentage (as defined in Subsection (2) of this Section) for the group of Highly Compensated Eligible Employees (as defined in Subsection (3) of this Section) for such Plan Year shall not exceed the actual deferral percentage for all other Eligible Employees for such Plan Year multiplied by 1.25, or

(b) the excess of the actual deferral percentage for the group of Highly Compensated Eligible Employees for such Plan Year over the actual deferral percentage for all other Eligible Employees for such Plan Year shall not exceed 2 percentage points, and the actual deferral percentage for the group of Highly Compensated Eligible Employees for

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such Plan Year shall not exceed the actual deferral percentage for all other Eligible Employees for such Plan Year multiplied by 2.

If two or more plans that include cash or deferred arrangements are considered as one plan for purposes of section 401(a)(4) or 410(b) of the Code, such arrangements included in such plans shall be treated as one arrangement for the purposes of this Subsection; and if any Highly Compensated Eligible Employee is a participant under two or more cash or deferred arrangements of the Controlled Group, all such arrangements shall be treated as one cash or deferred arrangement for purposes of determining the deferral percentage with respect to such Eligible Employee and, effective January 1, 2006, in the event that such arrangements have different plan years, all Before-Tax Contributions made during the Plan Year under all such arrangements shall be aggregated. Notwithstanding the foregoing, cash or deferred arrangements that are not permitted to be aggregated under Treasury Regulations issued under section 401(k) of the Code shall be treated as separate arrangements.

(2) For the purposes of this Section, the actual deferral percentage for a specified group of Eligible Employees for a Plan Year shall be the average of the ratios (calculated separately for each Eligible Employee in such group) of (a) the amount of Before‑Tax Contributions and, at the election of an Employer, any Qualified Nonelective Contributions, actually paid to the Trust for each such Eligible Employee for such Plan Year (including any “excess deferrals” described in Section 3.5) to (b) the Eligible Employee’s compensation for such Plan Year. For purposes of this Subsection (2), the term “compensation” shall mean, effective on and after January 1, 1998, an Eligible Employee’s compensation under Section 4.11(3). Notwithstanding the foregoing, for purposes of this Subsection (2), Qualified Nonelective Contributions shall not be taken into account for a Plan Year for any Eligible Employee who is not a Highly Compensated Employee to the extent such Contributions exceed the product of such Eligible Employee’s compensation and the greater of 5% or two times the Plan’s “representative contribution rate” (as defined in Treasury Regulation Section 1.401(k)-2(a)(6)(iv)(B)).

(3) For the purposes of this Section, the term “Highly Compensated Eligible Employee” for a particular Plan Year shall mean any Highly Compensated Employee who is an Eligible Employee.

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(4) In the event that excess contributions (as such term is hereinafter defined) are made to the Trust for any Plan Year, then, within the time prescribed by applicable law, such excess contributions (and any income allocable thereto through the end of the Plan Year in which such excess contributions were made) shall be distributed to the Highly Compensated Eligible Employees on the basis of the respective portions of the excess contributions attributable to each such Highly Compensated Eligible Employee in order of the dollar amount of Before-Tax Contributions made by or on behalf of such Highly Compensated Eligible Employee beginning with the Highly Compensated Eligible Employee with the highest dollar amount of Before-Tax Contributions. For the purposes of this Subsection (4), the term “excess contributions” shall mean, for any Plan year, the excess of (a) the aggregate amount of Before-Tax Contributions actually paid to the Trust on behalf of Highly Compensated Eligible Employees for such Plan Year over (b) the maximum amount of such Before-Tax Contributions permitted for such Plan Year under Subsection (1) of this Section, determined by hypothetically reducing Before-Tax Contributions made on behalf of Highly Compensated Eligible Employees in order of their actual deferral percentages (as defined in Section 3.6(2) beginning with the highest of such percentages.

(5) Matching Employer Contributions, if any, made with respect to a Member’s excess contributions (and any income allocable thereto) shall be applied to reduce subsequent Matching Employer Contributions made under the Plan.

(6) The portion of the Plan that constitutes an employee stock ownership plan, and that is mandatorily disaggregated from the balance of the Plan pursuant to Treasury Regulation Section 1.401(k)-1(g)(11), shall be tested separately under the provisions of this Section 3.6.

3.7 Excess Matching Employer Contributions .

(1) Notwithstanding the foregoing provisions of this Article III or the provisions of Article IV, for any Plan Year the contribution percentage (as defined in Subsection (2) of this Section) for the group of Highly Compensated Eligible Employees (as defined in Section 3.6(3)) for such Plan Year shall not exceed the greater of (a) 125 percent of the contribution percentage for all other Eligible Employees or (b) the lesser of 200 percent of the contribution percentage for all other Eligible Employees, or the contribution percentage for all other Eligible Employees plus 2 percentage points. If two or more plans of the Controlled Group to which matching contributions,

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Employee after‑tax contributions or Before‑Tax Contributions (as defined in Section 3.5(1)) are made are treated as one plan for purposes of section 410(b) of the Code, such plans shall be treated as one plan for purposes of this Subsection (1); and if a Highly Compensated Eligible Employee participates in two or more plans of the Controlled Group to which such contributions are made, all such contributions shall be aggregated for purposes of this Subsection (1) and, effective January 1, 2006, in the event that such plans have different plan years, all such contributions made during the Plan Year under all such plans shall be aggregated. Notwithstanding the foregoing, plans that are not permitted to be aggregated under Treasury Regulations issued under section 401(m) of the Code shall be treated as separate plans.

(2) For the purposes of this Section, the contribution percentage for a specified group of Eligible Employees for a Plan Year shall be the average of the ratios (calculated separately for each Eligible Employee in such group) of (a) the sum of the Matching Employer Contributions and, at the election of an Employer, any Before-Tax Contributions or Qualified Nonelective Contributions paid under the Plan by or on behalf of each such Eligible Employee for such Plan Year and not taken into account for such Plan Year under Section 3.6(2), to (b) the Eligible Employee’s compensation (as defined in Section 3.6(2)) for such Plan Year. Notwithstanding the foregoing, for purposes of this Subsection (2), Qualified Nonelective Contributions shall not be taken into account for a Plan Year for any Eligible Employee who is not a Highly Compensated Employee to the extent such Contributions exceed the product of such Eligible Employee’s compensation and the greater of 5% or two times the Plan’s “representative contribution rate” (as defined in Treasury Regulation Section 1.401(m)-2(a)(6)(v)(B)).

(3) In the event that excess aggregate contributions (as such term is hereinafter defined) are made to the Trust for any Plan Year, then, prior to March 15 of the following Plan Year, such excess aggregate contributions (and any income allocable thereto through the end of the Plan Year in which such excess aggregate contributions were made) shall be forfeited (if forfeitable) and applied as provided in Section 6.3(5) or (if not forfeitable) shall be distributed to the Highly Compensated Eligible Employees on the basis of the respective portions of the excess aggregate contributions attributable to each such Highly Compensated Eligible Employee in order of the dollar amount of Matching Employer Contributions made with respect to Highly Compensated Eligible Employees beginning with the Highly Compensated Eligible Employee with the highest dollar

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amount of Matching Employer Contributions. For the purposes of this Subsection (3), the term “excess aggregate contributions” shall mean, for any Plan Year, the excess of (a) the aggregate amount of the Matching Employer Contributions actually paid to the Trust by or on behalf of Highly Compensated Eligible Employees for such Plan Year over (b) the maximum amount of such Matching Employer Contributions permitted for such Plan Year under Subsection (1) of this Section, determined by hypothetically reducing Matching Employer Contributions made by or on behalf of Highly Compensated Eligible Employees in order of their actual contribution percentages (as defined in Section 3.7(2)) beginning with the highest of such percentages.

(4) The determination of excess aggregate contributions under this Section shall be made after (a) first determining the excess deferrals under this Section 3.5 and (b) then determining the excess contributions under Section 3.6.

(5) The portion of the Plan that constitutes an employee stock ownership plan, and that is mandatorily disaggregated from the balance of the Plan pursuant to Treasury Regulation Section 1.401(m)-1(b)(3)(ii), shall be tested separately under the provisions of this Section 3.7.

3.8 Monitoring Procedures .

(1) In order to ensure that at least one of the actual deferral percentages specified in Section 3.6(1) and at least one of the contribution percentages specified in Section 3.7(1) are satisfied for each Plan Year, the Company may monitor (or cause to be monitored) the amount of Before-Tax Contributions and Matching Employer Contributions, if any, being made to the Plan for each Eligible Employee during each Plan Year. In the event that the Company determines that neither of such actual deferral percentages or neither of such contribution percentages will be satisfied for a Plan Year, the Before-Tax Contributions and/or Matching Employer Contributions made thereafter for each Highly Compensated Eligible Employee (as defined in Section 3.6(3)) shall be reduced (pursuant to non-discriminatory rules adopted by the Company) to the extent necessary to decrease the actual deferral percentage and/or contribution percentage for Highly Compensated Eligible Employees for such Plan Year to a level which satisfies either of the actual deferral percentages and/or either of the contribution percentages.

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(2) In order to ensure that excess deferrals (as such term is defined in Section 3.5(2)) shall not be made to the Plan for any taxable year for any Member, the Company may monitor (or cause to be monitored) the amount of Before‑Tax Contributions being made to the Plan for each Member during each taxable year and may take such action (pursuant to non‑discriminatory rules adopted by the Company) to prevent Before‑Tax Contributions made for any Member under the Plan for any taxable year from exceeding the maximum amount applicable under Section 3.5(1).

(3) In applying the limitations set forth in Sections 3.6 and 3.7, the Company may, at its option, utilize such testing procedures as may be permitted under sections 401(a)(4), 401(k), 401(m) or 410(b) of the Code, including, without limitation, (a) aggregation of the Plan with one or more other qualified plans of the Controlled Group, (b) inclusion of qualified matching contributions, qualified nonelective contributions or elective deferrals described in, and meeting the requirements of, Treasury regulations under sections 401(k) and 401(m) of the Code to any other qualified plan of the Controlled Group in applying the limitations set forth in Sections 3.6 and 3.7, (c) effective January 1, 1999, exclusion of all Eligible Employees (other than Highly Compensated Eligible employees) who have not met the minimum age and service requirements of section 410(a)(1)(A) of the Code in applying the limitations set forth in Sections 3.6 and 3.7, or (d) any permissible combination thereof.

3.9 Rollover Contributions .

(1) The Trustee shall, at the direction of the Company, receive and thereafter hold and administer as Rollover Contributions and part of the Trust Fund (a) for a Covered Employee, all or any portion of an Eligible Rollover Distribution that was distributed to the Covered Employee, or is transferred at the request of the Covered Employee, from a qualified trust described in section 401(a) of the Code, an annuity plan described in section 403(a) of the Code, an annuity contract described in section 403(b) of the Code, or an eligible plan described in section 457(b) of the Code maintained by a state, political subdivision of a state or an agency or instrumentality of a state or a political subdivision of a state, provided that the requirements of section 402(c) or 401(a)(31) of the Code are met; (b) for a Covered Employee, the entire amount of a distribution to the Covered Employee from an individual retirement account described in section 408(a) of the Code or an individual retirement annuity described in section 408(b) of the Code, provided that the requirements

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of section 408(d)(3)(A)(ii) of the Code are met, or (c) for a former Employee who has an Account balance under the Plan at the time the rollover is made, all or any portion of an Eligible Rollover Distribution that was distributed to the former Employee or is transferred at the request of the former Employee from a qualified trust (described in section 401(a) of the Code) established or maintained by the Company or J.W. Harris Co., Inc. to hold the assets of its defined benefit pension plan, provided that the requirements of section 402(c) or 401(a)(31) of the Code are met. The Trustee may accept cash or cash equivalents that constitute all or a portion of any such distribution. Notwithstanding the preceding provisions of this Section, a Rollover Contribution shall not include any amounts distributed from a designated Roth account (as defined in section 402A of the Code) or from a Roth IRA (as defined in section 408A of the Code). Further notwithstanding any other provision of the Plan to the contrary, solely with respect to a Covered Employee who was an Employee of Easom Automation Systems, Inc. on December 31, 2014, the Trustee shall, at the direction of the Company, receive and thereafter hold and administer as a Rollover Contribution and part of the Trust Fund the portion of an “eligible rollover distribution” (within the meaning of section 402(c) of the Code) that is transferred (in the form of a direct rollover) at the request of the Covered Employee from the Easom Automation Systems, Inc. 401(k) Plan and is a note representing an outstanding plan loan of such Covered Employee under such plan, provided that no portion of such plan loan was attributable to a loan from amounts held in a designated Roth account (as defined in section 402A of the Code) under such plan.

(2) A Covered Employee for whom a Rollover Contribution is made to the Trust Fund pursuant to Subsection (1) of this Section and who is otherwise not a Member shall be deemed to be a Member on and after the date of such Rollover Contribution for all purposes of the Plan other than Articles III and IV.

3.10 Transfers of Assets to this Plan from Other Plans .

(1) The Trustee shall, at the direction of the Company, receive and thereafter hold all amounts that may be transferred to it from a trust held under another plan that meets the requirements of sections 401(a) and 501(a) of the Code and that is not subject to the funding standards of section 412 of the Code.

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(2) An Employee who has Prior ESOP Contributions transferred to the Trust Fund on his behalf and who is otherwise not a Member shall be deemed to be a Member on and after the date of such transfer for all purposes of the Plan other than Articles III and IV.

3.11 Catch-Up Before-Tax Contributions . All Members who have elected, or are deemed to have elected, to make Before-Tax Contributions to this Plan and who have attained age 50 before the end of a particular Plan Year shall be eligible to make catch-up contributions (the ‘Catch-Up Before-Tax Contributions’) in accordance with, and subject to the limitations of, section 414(v) of the Code; provided, however that Catch-Up Before-Tax Contributions shall not be eligible for Matching Employer Contributions under Section 4.1, and provided further that Catch-Up Before-Tax Contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of section 401(a)(30) and 415(c) of the Code ( i.e. , Sections 3.6 and 4.11, respectively). In addition, notwithstanding any provision of the Plan to the contrary, the Plan shall not be treated as failing to satisfy the requirements of sections 401(k)(3), 401(k)(11), 410(b) or 416 of the Code, as applicable, by reason of the making of any such Catch-Up Before-Tax Contributions. In furtherance of, but without limiting the foregoing, effective January 1, 2004, Before-Tax Contributions that exceed (i) the percentage limits described in Section 3.1, (ii) the statutory limits described in Sections 3.5(1) and 4.11, or (iii) the limits specified by the Company under Section 3.8 for the Plan Year, shall be treated as Catch-Up Before-Tax Contributions; provided, however, that whether Before-Tax Contributions are in excess of any applicable limit and therefore shall be treated as Catch-Up Before-Tax Contributions shall be determined as of the end of the Plan Year.

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ARTICLE IV - EMPLOYER CONTRIBUTIONS

4.1 Amount of Matching Employer Contributions . Except as otherwise provided in any other provision of the Plan or Trust Agreement, each Employer may, in its discretion, contribute to the Trust on account of each Plan Year commencing on or after January 1, 2017 an amount (the “Matching Employer Contributions”) equal to the Matching Employer Contribution Percentage multiplied by the Before-Tax Contributions (not in excess of 3% of Compensation or such other percentage of Compensation specified in the Employer’s Instrument of Adoption) made during such Plan Year pursuant to Section 3.1 for the Employees of the Employer who are Matching Contribution Participants and are entitled to participate in such Employer’s Matching Employer Contributions for such Year pursuant to Section 4.3. Notwithstanding any provision of the Plan (including any Instrument of Adoption) to the contrary, an Employer’s Matching Employer Contributions to the Trust on account of any Plan Year shall in no event exceed the amount that would be deductible for such Year for purposes of federal taxes on income under applicable provisions of the Code and shall be made on the condition that such Contributions are deductible under applicable provisions of the Code. The amount of Matching Employer Contributions determined to be payable to the Trust shall be reduced by amounts that have been forfeited or held in a suspense account in accordance with the terms of the Plan. Notwithstanding any provision of the Plan to the contrary, no Matching Employer Contributions shall be made with respect to any Catch-Up Before-Tax Contributions (as defined in Section 3.11).

4.2 Time of Matching Employer Contributions . Matching Employer Contributions may be made in cash or Holdings Stock. An Employer may make its Matching Employer Contributions on account of any Plan Year, or partial payments of such Matching Employer Contributions, at any time during such Year or within the time following the close of such Year that is prescribed by law for filing its federal income tax return (including extensions thereof).

4.3 Allocation of Matching Employer Contributions . Except as otherwise provided in any other provision of the Plan or Trust Agreement, each Employer’s Matching Employer Contributions made for a Plan Year shall, subject to the provisions of Sections 3.5(3), 3.6(5) and 3.7(3), be allocated and credited to the Account of each Employee of the Employer who is a Matching Contribution

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Participant, who is entitled to receive Matching Employer Contributions and for whom Before-Tax Contributions were made during such Plan Year, with each such Matching Contribution Participant being credited with a portion of such Employer’s Matching Employer Contributions equal to the Matching Employer Contribution Percentage of the Before-Tax Contributions (not in excess of 3% of Compensation or such other percentage of Compensation specified in the Employer’s Instrument of Adoption) made for him pursuant to Section 3.1. An Employee of the Employer who is a Matching Contribution Participant and for whom Before-Tax Contributions are made shall be entitled to receive an allocation of Matching Employer Contributions in accordance with the preceding sentence for the period during which he was a Matching Contribution Participant. For purposes of this Section, the term “Before-Tax Contributions” shall not include any Catch-Up Before-Tax Contributions (as defined in Section 3.11).

4.4 Qualified Nonelective Contributions . For any Plan Year, an Employer, in its discretion, may make a Qualified Nonelective Contribution (1) in such amount, (2) for such Members and (3) in such proportions among such Members as such Employer shall determine. Qualified Nonelective Contributions may be made in cash or Holdings Stock and shall be made within the time prescribed by law for making Qualified Nonelective Contributions. Each Employer shall designate to the Trustee the Plan Year for which and the Members for whom any Qualified Nonelective Contribution is made.

4.5 Allocation of Qualified Nonelective Contributions . Qualified Nonelective Contributions shall be allocated to the Accounts of Members who are designated by an Employer as eligible to share therein in such amounts as such Employer directs.

4.6 Nonelective Employer Contributions . Effective for Plan Years commencing on or after January 1, 2017 and subject to the provisions of the Plan and Trust Agreement, each Employer of Nonelective Contribution Participants shall contribute to the Trust on account of each Plan Year an amount (the “Nonelective Employer Contributions”) equal to 3% of the Compensation received by those Employees of the Employer who are Members and Nonelective Contribution Participants for such Plan Year, but only with respect to Compensation received while such Members were Nonelective Contribution Participants. Notwithstanding the foregoing, for Nonelective Employer

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Contributions made on account of the Plan Year commencing January 1, 2017, “Compensation” for purposes of this Section 4.6 and Section 4.7 will exclude any Base Compensation earned prior to January 1, 2017 by any Nonelective Contribution Participant who, during the period in which such Base Compensation was earned, (a) was an FSP Participant or FSP Plus Participant or (b) was a “covered employee” and “participant” under the Retirement Annuity Program (as such terms were then defined under the Retirement Annuity Program) and eligible to accrue a benefit thereunder. An Employer may make Nonelective Employer Contributions on account of a Plan Year, or partial payments of such Contributions, at any time during such Plan Year or within the time following the close of such Year that is prescribed by law for the filing by each such Employer of its federal income tax return (including extensions thereof). Nonelective Employer Contributions shall be made in cash.

4.7 Allocation of Nonelective Employer Contributions . Effective for Plan Years commencing on and after January 1, 2017, each Employer’s Nonelective Employer Contributions made for a Plan Year shall be allocated and credited to the Accounts of those Members who were Nonelective Contribution Participants at any time during such Plan Year, but only with respect to the period during which they were Nonelective Contribution Participants. As of the last day of the period for which Nonelective Employer Contributions are made but in no event later than the last day of the Plan Year there shall be credited to the Account of each such Nonelective Contribution Participant a portion of the Nonelective Employer Contributions of such Nonelective Contribution Participant’s Employer made for such period equal to the amount of such Nonelective Employer Contribution multiplied by a fraction, the numerator of which is the Nonelective Contribution Participant’s Compensation received while a Nonelective Contribution Participant for such period and the denominator of which is the total Compensation received while Nonelective Contribution Participants for such period of all Nonelective Contribution Participants of such Employer.

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4.8 Transitional Employer Contributions . Effective for Plan Years commencing on or after January 1, 2017, and subject to the provisions of the Plan and Trust Agreement, each Employer of Transitional RAP Participants shall contribute to the Trust on account of each Plan Year an amount equal to 6% of the Compensation received by those Employees of the Employer who are Members and Transitional RAP Participants for such Plan Year, but only with respect to Compensation received while such Members were Transitional RAP Participants (the “Transitional RAP Contributions”). Effective for Plan Years commencing on or after January 1, 2017, and subject to the provisions of the Plan and Trust Agreement, each Employer of Transitional Kaliburn Participants shall contribute to the Trust on account of each Plan Year an amount equal to 3% of the Compensation received by those Employees of the Employer who are Members and Transitional Kaliburn Participants for such Plan Year, but only with respect to Compensation received while such Members were Transitional Kaliburn Participants (the “Transitional Kaliburn Contributions” and, together with the Transitional RAP Contributions, the “Transitional Employer Contributions”). Notwithstanding the foregoing, for Transitional Employer Contributions made on account of the Plan Year commencing January 1, 2017, “Compensation” for purposes of this Section 4.8 and Section 4.9 will exclude any Base Compensation earned prior to January 1, 2017 by any Transitional Contribution Participant who, during the period in which such Base Compensation was earned, (a) was an FSP Participant or FSP Plus Participant or (b) was a “covered employee” and “participant” under the Retirement Annuity Program (as such terms were then defined under the Retirement Annuity Program) and eligible to accrue a benefit thereunder. An Employer may make Transitional Employer Contributions on account of a Plan Year, or partial payments of such Contributions, at any time during such Plan Year or within the time following the close of such Year that is prescribed by law for the filing by each such Employer of its federal income tax return (including extensions thereof). Transitional Employer Contributions shall be made in cash.

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4.9 Allocation of Transitional Employer Contributions .

(1) Effective for Plan Years commencing on or after January 1, 2017, each Employer’s Transitional RAP Contributions made for a Plan Year shall be allocated and credited to the Accounts of those Members who were Transitional RAP Participants at any time during such Plan Year, but only with respect to the period during which they were Transitional RAP Participants. As of the last day of the period for which Transitional RAP Contributions are made but in no event later than the last day of the Plan Year there shall be credited to the Account of each such Transitional RAP Participant a portion of the Transitional RAP Contributions of such Transitional RAP Participant’s Employer made for such period equal to the amount of such Transitional RAP Contribution multiplied by a fraction, the numerator of which is the Transitional RAP Participant’s Compensation received while a Transitional RAP Participant for such period and the denominator of which is the total Compensation received while Transitional RAP Participants for such period of all Transitional RAP Participants of such Employer.

(2) Effective for Plan Years commencing on or after January 1, 2017, each Employer’s Transitional Kaliburn Contributions made for a Plan Year shall be allocated and credited to the Accounts of those Members who were Transitional Kaliburn Participants at any time during such Plan Year, but only with respect to the period during which they were Transitional Kaliburn Participants. As of the last day of the period for which Transitional Kaliburn Contributions are made but in no event later than the last day of the Plan Year there shall be credited to the Account of each such Transitional Kaliburn Participant a portion of the Transitional Kaliburn Contributions of such Transitional Kaliburn Participant’s Employer made for such period equal to the amount of such Transitional Kaliburn Contribution multiplied by a fraction, the numerator of which is the Transitional Kaliburn Participant’s Compensation received while a Transitional Kaliburn Participant for such period and the denominator of which is the total Compensation received while Transitional Kaliburn Participants for such period of all Transitional Kaliburn Participants of such Employer.

4.10 Return of Contributions to Employers .

(1) Except as specifically provided in this Section or in the other Sections of the Plan, the Trust Fund shall never inure to the benefit of the Employers and shall be held for the exclusive

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purposes of providing benefits to Employees, Members and their Beneficiaries and defraying reasonable expenses of administering the Plan.

(2) If an Employer Contribution to the Trust is made by an Employer by a mistake of fact, the excess of the amount contributed over the amount that would have been contributed had there not occurred a mistake of fact shall be returned to such Employer within one year after the payment of such Contribution. If an Employer Contribution to the Trust made by an Employer is not fully deductible under section 404 of the Code (or any successor thereto), such Contribution, to the extent the deduction therefor is disallowed, shall be returned to the Employer within one year after the disallowance of the deduction. Earnings attributable to Employer Contributions returned to an Employer pursuant to this Subsection may not be returned, but losses attributable thereto shall reduce the amount to be returned; provided, however, that if the withdrawal of the amount attributable to the mistaken or non‑deductible contribution would cause the balance of the individual Account of any Member to be reduced to less than the balance that would have been in such Account had the mistaken or non‑deductible amount not have been contributed, the amount to be returned to the Employer pursuant to this Section shall be limited so as to avoid such reduction.

4.11 Maximum Additions .

(1) Notwithstanding any other provision of the Plan, except to the extent permitted under Section 3.11 and section 414(v) of the Code, the maximum annual additions (as defined in Subsection (2) of this Section) to a Member’s account for any limitation year (which shall be the Plan Year) shall in no event exceed the lesser of (a) $40,000 (as adjusted pursuant to section 415(d) of the Code) or (b) 100% of his compensation for such Plan Year.

(2) For the purpose of this Section, the term “annual additions” means the sum for any limitation year of:

(a) all contributions (including, without limitation, Before‑Tax Contributions made pursuant to Section 3.1) made by the Controlled Group that are allocated to the Member’s account pursuant to a defined contribution plan maintained by a Controlled Group Member,

(b) all employee contributions made by the Member to a defined contribution plan maintained by a Controlled Group Member,

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(c) all forfeitures allocated to the Member’s account pursuant to a defined contribution plan maintained by a Controlled Group Member, and

(d) any amount attributable to medical benefits allocated to the Member’s account established under section 419A(d)(1) of the Code if the Member is or was a key‑employee (as such term is defined in section 416(i) of the Code) during such limitation year or any preceding limitation year.

(3) For purposes of Section 4.11, the term “compensation” shall include those items of remuneration specified in Treasury Regulation Section 1.415(c)-2(b) (including “deemed section 125 compensation” as defined in Treasury Regulation Section 1.415(c)-2(g)(6)(ii), and amounts described in Treasury Regulation Section 1.415(c)-2(g)(5) that are paid to any nonresident alien who is a Member) and shall exclude those items of remuneration specified in Treasury Regulation Section 1.415(c)-2(c), taking into account the timing rules specified in Treasury Regulation Section 1.415(c)-2(e), but shall not include any amount in excess of the limitation under section 401(a)(17) of the Code in effect for the year. Effective as of January 1, 2008, the term “compensation” as defined in the preceding sentence shall include any payments made to a Member by the later of (a) two and one-half (2-1/2) months after the date of the Member’s severance from employment with the Controlled Group or (b) the end of the limitation year that includes the date of the Member’s severance from employment with the Controlled Group, provided that, absent a severance from employment, such payments (i) would have been paid to the Member if the Member had continued in employment with the Controlled Group and (ii) are regular compensation for services performed during the Member’s regular working hours, compensation for services outside the Member’s regular working hours (such as overtime or shift differential pay), commissions, bonuses or other similar compensation. Effective as of January 1, 2009, the term “compensation” shall also include any differential wage payments (within the meaning of section 3401(h)(2) of the Code) made to a Member by the Controlled Group.

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4.12 Definitions .

(1) For purposes of applying the limitations set forth in Section 4.11, all qualified defined contribution plans (whether or not terminated) ever maintained by one or more Controlled Group Members shall be treated as one defined contribution plan.

(2) For purposes of this Section 4.12 and Section 4.11, the term “Controlled Group Member” shall be construed in the light of section 415(h) of the Code.

4.13 FSP Contributions . Effective for Plan Years commencing prior to January 1, 2017, and subject to the provisions of the Plan and Trust Agreement, each Employer shall contribute to the Trust on account of each Plan Year an amount equal to 2% of the FSP Compensation received by Members who are FSP Participants for such Plan Year, but only with respect to FSP Compensation received (or deemed received as provided in Section 1.1(31)) while such Members were FSP Participants. The FSP Contributions of each Employer shall be made in cash. For Plan Years commencing prior to January 1, 2017, an Employer may make FSP Contributions on account of a Plan Year, or partial payments of such Contributions, at any time during such Plan Year or within the time following the close of such Year that is prescribed by law for the filing by each such Employer of its federal income tax return (including extensions thereof). Notwithstanding the foregoing, for the Plan Year ending on December 31, 1997, the amount of the FSP Contribution for such year shall be an amount equal to 2% of the FSP Compensation of FSP Participants for the period from November 1, 1997 through December 31, 1997. Further notwithstanding the foregoing or any other provisions of the Plan, no FSP Contributions shall be contributed to the Trust on account of any Plan Year commencing on or after January 1, 2017.

4.14 Allocation of FSP Contributions . Effective for Plan Years commencing prior to January 1, 2017, each Employer’s FSP Contributions made for a Plan Year shall be allocated and credited to the Accounts of those Members who were FSP Participants at any time during such Plan Year, but only with respect to the period during which they were FSP Participants. As of the last day of the period for which FSP Contributions are made but in no event later than the last day of the Plan Year there shall be credited to the Account of each such FSP Participant a portion of the FSP Contributions of such FSP Participant’s Employer made for such period equal to the amount of such FSP Contribution multiplied by a fraction, the numerator of which is the FSP Participant’s FSP

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Compensation received (or deemed received as provided in Section 1.1(31)) while an FSP Participant for such period and the denominator of which is the total FSP Compensation received (or deemed received as provided in Section 1.1(31)) while FSP Participants for such period of all FSP Participants of such Employer.

4.15 FSP Plus Contributions . Effective for Plan Years commencing prior to January 1, 2017, and subject to the provisions of the Plan and Trust Agreement, each Employer shall contribute to the Trust on account of each Plan Year an amount, determined in accordance with Section 4.16, of the FSP Compensation received by Members who are FSP Plus Participants for such Plan Year, but only with respect to FSP Compensation received (or deemed received as provided in Section 1.1(31)) while such Members were FSP Plus Participants. The FSP Plus Contributions of each Employer shall be made in cash. For Plan Years commencing prior to January 1, 2017, an Employer may make FSP Plus Contributions on account of a Plan Year, or partial payments of such Contributions, at any time during such Plan Year or within the time following the close of such Year that is prescribed by law for the filing by each such Employer of its federal income tax return (including extensions thereof). Notwithstanding the foregoing or any other provisions of the Plan, no FSP Plus Contributions shall be contributed to the Trust on account of any Plan Year commencing on or after January 1, 2017.

4.16 Allocation of FSP Plus Contributions . Effective for Plan Years commencing prior to January 1, 2017, each Employer’s FSP Plus Contributions made for a Plan Year shall be allocated and credited to the Accounts of those Members who were FSP Plus Participants at any time during such Plan Year, but only with respect to the period during which they were FSP Plus Participants. The amount of FSP Plus Contributions to be allocated and credited for each FSP Plus Participant for a Plan Year shall be the aggregate of the amounts determined for each calendar month during that Plan Year that the Member is an FSP Plus Participant equal to the percentage of such FSP Plus Participant’s FSP Compensation received (or deemed received as provided in Section 1.1(31)) while an FSP Plus Participant during the month as corresponds to such FSP Plus Participant’s years of Vesting Service as of the end of the previous month as set forth in the following table:

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Years of Vesting Service as of the end of a month	Percentage of FSP Compensation
1 year of Vesting Service	4% of FSP Compensation
5 years of Vesting Service	5% of FSP Compensation
10 years of Vesting Service	6% of FSP Compensation
15 years of Vesting Service	7% of FSP Compensation
20 years of Vesting Service	8% of FSP Compensation
25 years of Vesting Service	10% of FSP Compensation

The FSP Plus Contributions of each Employer shall be made in cash. Notwithstanding any other provision of the Plan, no FSP Plus Contributions will be made to the Plan for any Member for any period prior to July 16, 2006 or after December 31, 2016 or, except as otherwise specifically provided in Section 1.1(31), with respect to any FSP Compensation received prior to July 16, 2006 or after December 31, 2016.

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ARTICLE V - INVESTMENTS

5.1 Investment Funds .

(1) The Trust Fund shall be divided into such Investment Funds as the Investment Committee shall from time to time determine, and all Before‑Tax Contributions, Rollover Contributions, Prior ESOP Contributions, Weartech Prior Matching Contributions and Employer Contributions shall be invested therein as provided in Section 5.5. Notwithstanding the foregoing, the Investment Committee shall direct the Trustee (a) to establish and maintain a Holdings Stock Fund as one of the Investment Funds, and (b) to establish and maintain self-directed investment accounts, subject to such rules and procedures as are established by the Investment Committee, (“Self-Directed Investment Accounts”) for each Member who so elects in accordance with Section 5.5, each of which Self-Directed Investment Accounts shall be considered an Investment Fund hereunder. The Trustee shall invest and reinvest the principal and income of each such Fund and shall keep each such Fund invested, without distinction between principal and income, as required under the terms of the Plan and Trust Agreement. Subject to Section 5.8, dividends, interest and other distributions received by the Trustee in respect of each Investment Fund shall be reinvested in the same Fund. The Holdings Stock Fund shall be maintained as an Investment Fund at all times during which a portion of the Plan is intended to constitute an ESOP.

(2) The Administrative Committee shall adopt, and may amend, from time to time general rules of uniform application that shall provide for the administration of each Investment Fund, including, but not limited to, rules providing for (a) procedures pursuant to which a Member may elect to have his Account invested in any such Fund (if more than one such Fund is established) in accordance with Section 5.5, (b) the method of changing any such election pursuant to Section 5.5 by either the Member or his Beneficiary and the frequency of any such election, (c) the Fund or Funds in which a Member’s Account shall be invested in the absence of an effective election, and (d) any other matters that the Administrative Committee deems necessary or advisable in the administration of any such Fund.

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5.2 Account; Sub-Account . The Company shall establish and maintain, or cause to be established and maintained, an Account for each Member, which Account shall reflect, pursuant to Sub Accounts established and maintained thereunder, the amount, if any, of the Member’s (1) Before Tax Contributions, (2) Rollover Contributions, (3) Prior ESOP Contributions, (4) Matching Employer Contributions, (5) Qualified Nonelective Contributions, (6) Nonelective Employer Contributions, (7) Transitional Employer Contributions, (8) FSP Contributions, (9) FSP Plus Contributions, and (10) Weartech Prior Matching Contributions.

5.3 Reports . The Company shall cause reports to be made at least annually to each Member and to the Beneficiary of each deceased Member as to the value of his Account and the amount of his Vested Interest.

5.4 Valuation of Investment Funds .

(1) The Trustee shall, as of the close of business on each Valuation Date, determine the value of each Investment Fund. Each such valuation shall be made on the basis of the market value (as determined by the Trustee) of the assets of each Fund, except that property which the Trustee determines does not have a readily determinable market value, and bonds and notes issued or guaranteed by the United States, shall be valued at fair market value as determined by the Trustee in such manner as it deems appropriate, and the Trustee’s determination of such value shall be conclusive on all interested persons for all purposes of the Plan. A similar valuation shall be made at any other time upon the written direction of the Administrative or the Investment Committee to the Trustee or when the Trustee deems it appropriate to make such a valuation. In accordance with section 401(a)(28)(C) of the Code, valuation of Holdings Stock that is or becomes not readily tradable on an established securities market shall be made by an independent appraiser who meets the requirements similar to the requirements of the regulations prescribed under section 170(a)(1) of the Code.

(2) The Trustee shall determine, from the change in value of each Investment Fund between the current Valuation Date and the then last preceding Valuation Date, the net gain or loss of each such Fund during such period resulting from expenses and realized and unrealized earnings, profits and losses of the Fund during such period. For this purpose, the transfer of funds to or from an Investment Fund pursuant to Section 5.5, Before‑Tax Contributions, Rollover Contributions,

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Prior ESOP Contributions, Weartech Prior Matching Contributions and Employer Contributions allocated to an Investment Fund, and payments, distributions and withdrawals from an Investment Fund to provide benefits under the Plan for Members or Beneficiaries shall not be deemed to be earnings, profits, expenses or losses of the Investment Fund.

(3) After each Valuation Date, the net gain or loss of each Investment Fund determined pursuant to Subsections (1) and (2) of this Section shall be allocated as of such Valuation Date to the Accounts of Members and Beneficiaries of deceased Members in proportion to the amounts of such Accounts invested in each Fund on such Valuation Date. In determining the amounts of Accounts on a Valuation Date for the purposes of this Subsection (3), the Investment Committee shall adopt rules to the effect that in determining the allocation of the net gain or loss of each Investment Fund for any such period there shall be counted, on a proportionate basis, contributions to or distributions from, or other credits or debits to, the Accounts of Members and Beneficiaries since the beginning of such period to the extent the amounts so distributed or debited were in such Fund during such period. Such rules shall be uniform in their application to all persons who are similarly situated.

5.5 Investment of Contributions . Each Member may, pursuant to rules and procedures adopted by the Administrative Committee, direct that Before-Tax Contributions, Rollover Contributions, Employer Contributions, Weartech Prior Matching Contributions and Prior ESOP Contributions made by or for him shall be invested in any or all of the Investment Funds (other than any Self-Directed Investment Account). An investment option selected by a Member shall remain in effect and be applicable to all subsequent such Contributions made by or for him unless and until an investment change is made by him and becomes effective pursuant to rules and procedures adopted by the Administrative Committee. Each Member may, pursuant to rules and procedures adopted by the Administrative Committee, make a change in the investment options selected by the Member with respect to amounts then held in his Account, including an election to transfer amounts then held in his Account into or out of a Self-Directed Investment Account; provided, however, that (1) no such transfer into a Self-Directed Investment Account will result in more than 50% of a Member’s Vested Interest being then held in a Self-Directed Investment Account, (2) only amounts attributable to a Member’s Vested Interest and no less than a minimum amount designated by the Investment

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Committee may be transferred to a Self-Directed Investment Account, and (3) a Self-Directed Investment Account may not invest in Holdings Stock or any other type of security or other property designated by the Investment Committee as an impermissible investment for a Self-Directed Investment Account. In the absence of an effective investment direction and/or an effective investment change, Before-Tax, Rollover Weartech Prior Matching, and Employer Contributions shall be invested in such Investment Fund or Funds (each of which shall be a “qualified default investment alternative” within the meaning of Department of Labor regulations), and in such proportions, as is designated by the Investment Committee from time to time for such purpose, and Prior ESOP Contributions shall be invested in the Holdings Stock Fund (or in such other Investment Fund as the Investment Committee shall designate for such purpose). To the extent not otherwise permitted by the preceding provisions of this Section, Members shall be permitted, pursuant to procedures established by the Administrative Committee, to diversify the investment of that portion of their Account held in the ESOP to the extent required by section 401(a)(28)(B) of the Code, provided that such members are “qualified participants” within the meaning of section 401(a)(28) of the Code.

5.6 Directions to Trustee . The Administrative Committee shall give appropriate and timely directions to the Trustee in order to permit the Trustee to give effect to the investment choice and investment change elections made under Section 5.5 and to provide funds for distributions and withdrawals pursuant to Article VI.

5.7 Loans to Members .

(1) A Member who is an Employee or a “party in interest” within the meaning of section 3(14) of ERISA, but who is not a Disabled Member, may apply on the form provided by the Administrative Committee for a loan from his Vested Interest in his Account. If the Committee determines that the Member is not in bankruptcy or similar proceedings and is entitled to a loan in accordance with the following provisions of this Section, the Committee shall direct the Trustee to make a loan to the Member from his Account. Each loan shall be charged against the Member’s Vested Interest in his Sub-Accounts as follows: first, against the Member’s Rollover Contributions Sub-Account, if any; second, to the extent necessary, against the Member’s Before-Tax Contributions Sub-Account, if any; third, to the extent necessary, against the Member’s Qualified

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Nonelective Contributions Sub-Account, if any; fourth, to the extent necessary, against the Member’s Matching Employer Contributions Sub-Account, if any; fifth, to the extent necessary, against the Member’s Nonelective Employer Contributions Sub-Account, if any; sixth, to the extent necessary, against the Member’s Transitional Employer Contributions Sub-Account, if any; seventh, to the extent necessary, against the Member’s Prior ESOP Contributions Sub-Account, if any; eighth, to the extent necessary, against the Member’s Weartech Prior Matching Contributions Sub-Account, if any; ninth, to the extent necessary, against the Member’s FSP Contributions Sub-Account; and tenth, to the extent necessary, against the Member’s FSP Plus Contributions Sub-Account.

(2) A Member shall not be entitled to a loan under this Section unless the Member consents to (a) the use of the Member’s Account as security as provided in Subsection (5)(c) of this Section and (b) the possible reduction of the Member’s Account as provided in Subsection (6) of this Section.

(3) Each loan shall be in an amount that is not less than $1,000. A Member may have up to three loans outstanding at any one time. The maximum loan to any Member (when added to the outstanding balance of all other loans to the Member from all qualified employer plans (as defined in section 72(p)(4) of the Code) of the Controlled Group) shall be an amount that does not exceed the lesser of:

(a) $50,000, reduced by the excess (if any) of (i) the highest outstanding balance of such other loans during the one-year period ending on the day before the date on which such loan is made, over (ii) the outstanding balance of such other loans on the date on which such loan is made, or

(b) 50% of the value of such Member’s Vested Interest in his Account on the date on which such loan is made.

(4) For each Member for whom a loan is authorized pursuant to this Section, the Committee shall (a) direct the Trustee to liquidate the Member’s interest in the Investment Funds, on a pro rata basis, to the extent necessary to provide funds for the loan, (b) direct the Trustee to disburse such funds to the Member upon the Member’s execution of the promissory note and security agreement referred to in Subsection (5)(d) of this Section, (c) transmit to the Trustee the executed promissory note and security agreement referred to in Subsection (5)(d) of this Section, and (d) establish and maintain a separate recordkeeping account within the Member’s Account (the “Loan

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Account”) (i) which initially shall be in the amount of the loan, (ii) to which the funds for the loan shall be deemed to have been allocated and then disbursed to the Member, (iii) to which the promissory note shall be allocated and (iv) which shall show the unpaid principal of and interest on the promissory note from time to time. All payments of principal and interest by a Member shall be credited initially to his Loan Account and applied against the Member’s promissory note, and then invested in the Investment Funds pursuant to the Member’s direction under Section 5.5.

(5) Loans made pursuant to this Section:

(a) shall be made available to all Members on a reasonable equivalent basis;

(b) shall not be made available to Highly Compensated Employees in a percentage amount greater than the percentage amount made available to other Members;

(d) shall be evidenced by a promissory note and security agreement executed by the Member that provides for:

(i) the security referred to in paragraph (c) of this Subsection;

(ii) a rate of interest determined by the Committee in accordance with applicable law;

(iii) repayment within a specified period of time, which shall not extend beyond five years, unless the loan is used to acquire any dwelling unit that within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the Member, in which case the maximum repayment period shall not extend beyond fifteen years;

(iv) repayment in equal payments over the term of the loan, with payments not less frequently than quarterly, provided, however, that the Administrative Committee may waive such requirement for a period of not longer than one year in the case of a Member who is on an unpaid leave of absence in accordance with Treasury regulations issued under section 72(p) of the Code; and

(v) for such other terms and conditions as the Committee shall determine, that shall include provision that:

(A) with respect to a Member who is an Employee, the loan will be repaid pursuant to authorization by the Member of equal payroll

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deductions over the repayment period sufficient to amortize fully the loan within the repayment period, provided, however, the Committee may waive the requirement of equal payroll deductions if the Company payroll through which the Member is paid cannot accommodate such deductions;

(B) the loan shall be prepayable in whole at any time without penalty; and

(I) the Member’s failure to make required payments on the promissory note;

(II) in the case of a Member who is not an Employee, distribution of his Account; or

(III) the filing of a petition, the entry of an order or the appointment of a receiver, liquidator, trustee or other person in a similar capacity, with respect to the Member, pursuant to any state or federal law relating to bankruptcy, moratorium, reorganization, insolvency or liquidation, or any assignment by the Member for the benefit of his creditors.

(6) Notwithstanding any other provision of the Plan, a loan made pursuant to this Section shall be a first lien against the Member’s Loan Account. Any amount of principal or interest due and unpaid on the loan at the time of any default on the loan shall be satisfied by deduction from the Member’s Loan Account, and shall be deemed to have been distributed to the Member, as follows:

(a) in the case of a Member who is an Employee and who is not, at the time of the default, eligible to receive distribution of his Account under the provisions of Article VI, other than Section 6.7(1), or by order of a court, at such time as he first becomes eligible to receive distribution of his Account under the provisions of Article VI, other than Section 6.7(1), or by order of a court; or

(b) in the case of any other Member, immediately upon such default.

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(7) Notwithstanding any other provision of the Plan, loan repayments will be suspended under the Plan as permitted under section 414(u)(4) of the Code (for Members on a leave of absence for “qualified military service” (as defined in Section 11.8)).

5.8 Dividends on Holdings Stock . Notwithstanding any other provision of the Plan, cash dividends paid on shares of Holdings Stock in which a Member has a Vested Interest that are held in the ESOP as of the record date of such dividend shall be, at the election of the Member or his Beneficiary, either:

(a) paid by Lincoln Electric Holding, Inc. in cash to the Member or Beneficiary, or, at the discretion of the Administrator, paid by Lincoln Electric Holding, Inc. to the Trust and distributed from the Trust to Members or Beneficiaries, not later than ninety (90) days after the close of the Plan Year in which paid to the Plan; or

(b) paid to the Plan and reinvested in the Holdings Stock Fund.

In the absence of an effective election under this Section 5.8, dividends on Holdings Stock shall be paid to the Plan and reinvested in the Holdings Stock Fund. The Plan Administrator shall determine the scope, manner and timing of the elections, dividend payments or distributions, and reinvestment in Holdings Stock described herein in any manner that is consistent with section 404(k) of the Code and other applicable provisions of the Code and ERISA. Notwithstanding any other provision of the Plan to the contrary, any dividends reinvested in the Holdings Stock Fund pursuant to this Section 5.8 shall be 100% vested and nonforfeitable at all times.

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ARTICLE VI - DISTRIBUTIONS

6.1 Distributions . A Member’s interest in the Trust Fund shall only be distributable as provided in this and the following Sections of this Article. A Member or Beneficiary who is eligible to receive a distribution under applicable Sections of this Article shall obtain an application for that purpose from the Administrative Committee and file with the Administrative Committee his application in writing on such form, furnishing such information as the Administrative Committee may reasonably require, including satisfactory proof of his age and that of his Spouse (if applicable) and any authority in writing that the Administrative Committee may request authorizing it to obtain pertinent information, certificates, transcripts and/or other records from any public office.

6.2 Distributions on Death While an Employee . If a Member dies while in the employ of a Controlled Group Member or, effective as of January 1, 2007, while performing “qualified military service” (as defined in Section 11.8), his entire Account, valued as of the Valuation Date coinciding with or next following the date on which the Death Beneficiary’s application for distribution is received by the Administrative Committee, shall be paid to the Member’s Death Beneficiary in a lump sum in cash within 60 days after such Valuation Date. Notwithstanding the foregoing, if the Member’s Death beneficiary is his Spouse, such distribution shall be made no later than the date on which the Member would have attained age 70 ½, or if the Member’s Death Beneficiary is not his Spouse, such distribution shall be made within the one year period commencing on the date of the Member’s death.

6.3 Distributions on Employment Severance .

(1) Upon a Member’s Employment Severance, the Member shall be eligible to elect the distribution of his entire Vested Interest, valued as of the Valuation Date specified in Subsection (3) of this Section, and it shall be paid to him pursuant to one of the following methods as the Member shall elect:

(a) such amount shall be paid to him in a lump sum in cash, or

(b) such amount shall be paid to him in cash in not more than 10 annual installments, as elected by the Member, with each annual installment being based on the

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value of the Member’s Vested Interest in his Account on the Valuation Date immediately preceding the date such installment is to be paid and being a fraction of such value, in which the numerator is one and the denominator is the total number of remaining annual installments to be made.

(2) An election by a Member pursuant to Subsection (1) of this Section may be made by the Member in writing on an application prescribed by the Administrative Committee pursuant to Section 6.1, signed by the Member and filed with the Administrative Committee and may be changed or revoked at any time before the date on which the Member’s Account is to be paid or commence to be paid pursuant to Subsection (3) of this Section. Notwithstanding the previous sentence, a Member who begins to receive a distribution of his entire Vested Interest in annual installments pursuant to Subsection (1)(b) of this Section may elect at any time prior to his receipt of his entire Vested Interest to receive the remainder of his Vested Interest in a lump sum in cash. Such an election shall be made by the Member in writing on an application prescribed by the Administrative Committee pursuant to Section 6.1, signed by the Member and filed with the Administrative Committee.

(3) Distributions to a Member pursuant to this Section shall be based on the value of the Member’s Vested Interest in his Account on the Valuation Date coinciding with or next following the later of (a) the date on which he files his application with the Administrative Committee pursuant to Section 6.1 or (b) his Employment Severance Date, and shall be paid or commence to be paid to the Member within 60 days after such Valuation Date.

(4) Notwithstanding any other provision of the Plan, if the value of a Member’s Vested Interest on the Valuation Date coinciding with or next following his Employment Severance Date does not exceed $1,000, such Vested Interest shall be paid to him in a lump sum in cash (or, if the value of the Member’s Vested Interest on such Valuation Date is zero, shall be deemed to have been paid to him in a lump sum) within 60 days after such Valuation Date.

(5) In the case of a Member who incurs an Employment Severance, if any portion of the Member’s Account is not nonforfeitable under Section 1.1(71), that portion shall be forfeited as of the earlier of (a) the Valuation Date specified in Subsection (3) (if payment is made in the form of a lump sum) or Subsection (4) of this Section, as applicable and (b) the Valuation Date coinciding with or next following the date on which he incurs five consecutive 1-Year Breaks in

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Service. Amounts, if any, forfeited pursuant to this Subsection shall be used to pay expenses of administering the Plan or to reduce subsequent Employer Contributions, as determined by the Committee in its discretion. In the event of the termination of the Plan, any forfeiture not so applied at the time of such termination shall be returned to the Employers.

(6) If the Vested Interest of a Member who incurs an Employment Severance is paid (or deemed to be paid) to him in a lump sum, such Member’s Years of Vesting Service to which such lump sum payment relates shall thereafter be disregarded for the purpose of determining his Vested Interest in the amount attributable to Employer Contributions included in such payment. Notwithstanding the provisions of the immediately preceding sentence, however, if (a) such Member’s Vested Interest is less than 100% of his Account, (b) he is rehired as an Employee before he incurs five consecutive 1‑Year Breaks in Service and (c) he repays to the Trust Fund, not later than the earlier of (i) the end of the five‑year period beginning with his date of rehire or (ii) the close of the first period of five consecutive 1‑Year Breaks in Service incurred by him after such payment of his Vested Interest, an amount equal to such payment (including the amount attributable to his Member contributions included in such payment), (A) his said Years of Vesting Service to which such payment related shall be reinstated for all purposes of the Plan and (B) the amount of his Account shall be restored, as of the date of such repayment, to an amount equal to the sum of the amount paid to him and the amount forfeited under the preceding Subsections of this Section. For purposes of the preceding sentence, a Member whose Vested Interest was deemed to have been distributed to him at the time of his Employment Severance shall be deemed to have repaid such distribution upon his rehire as an Employee.

(7) If a Former Weartech Plan Participant who forfeited all or a portion of his interest under the Weartech Plan on account of a distribution (or deemed distribution) to him from the Weartech Plan prior to August 29, 2016 is reemployed as an Eligible Employee under this Plan on or after August 29, 2016 but prior to incurring five consecutive 1‑Year Breaks in Service, such Former Weartech Plan Participant shall have the right to repay to the Trust Fund the full amount of the distribution on or before the earlier of (a) the date such Former Weartech Plan Participant incurs five consecutive 1‑Year Breaks in Service following the date of distribution or (b) the end of the five year period beginning with the date on which such Former Weartech Plan Participant is reemployed. If a Former Weartech Plan Participant who received a deemed distribution from the

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Weartech Plan prior to August 29, 2016 is reemployed as an Eligible Employee on or after August 29, 2016 but prior to incurring five consecutive 1‑Year Breaks in Service, such Former Weartech Plan Participant will be deemed to have immediately repaid such distribution to the Plan. In the event of a repayment as described in this Subsection, the Former Weartech Plan Participant’s Year of Vesting Service to which such payment related shall be reinstated and an Account shall be established for such Former Weartech Plan Participant with a value that is not less than the sum of the amount of the distribution and the amount forfeited at the time the distribution was made, unadjusted for any subsequent gains or losses. Thereafter, the portion of such Former Weartech Plan Participant’s Account that is derived from Matching Employer Contributions and Weartech Prior Matching Contributions shall be 20% nonforfeitable on and after completion of two Years of Vesting Service and 100% nonforfeitable on and after completion of three Years of Vesting Service. The sources for restoration of the Former Weartech Plan Participant’s forfeitures shall, in the discretion of the Employer, be income or gain to the Plan, forfeitures or Employer Contributions. Notwithstanding any provision of the Weartech Plan, any forfeitures arising under the provisions of the Weartech Plan that have not been allocated or applied as of August 29, 2016 shall be used to pay expenses of administering the Plan or to reduce subsequent Employer Contributions, as determined by the Committee in its discretion.

6.4 Distributions on Death after Employment Severance . If a Member dies after his Employment Severance and before his entire Vested Interest has been paid to him, the undistributed portion of his Vested Interest valued as of the Valuation Date described in Section 6.2, shall continue to be paid to his Death Beneficiary in the same manner as it was being paid to the Member, or if the Death Beneficiary so elects, shall be paid in a lump sum in cash within 60 days after the Valuation Date coinciding with or next following the date on which the Death Beneficiary makes such election. That portion of such Member’s Account that is not nonforfeitable under Section 1.1(71) shall be forfeited as of the date of his death and such forfeited amount shall be applied as provided in Section 6.3(5).

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6.5 Distributions Pursuant to a QDRO . If a qualified domestic relations order (as defined in section 414(p) of the Code) so provides, the portion of a Member’s Account payable to the alternate payee(s) may be distributed to the alternate payee(s) at the time specified in such order, regardless of whether the Member is entitled to a distribution from the Plan at such time. The portion of the Account so payable shall be valued as of the Valuation Date coincident with or next following the date specified in such order.

6.6 Latest Time of Distribution .

(1) The distribution of a Member’s Vested Interest shall occur, or if such distribution is to take place over a period of time, such distribution shall begin, as provided in the preceding Sections of this Article, but (subject to the application requirements of Section 6.1) in no event later than 60 days after the close of the Plan Year in which the latest of the following events occur: (a) the date on which the Member attains age 60, (b) the 10th anniversary of the year in which the Member commenced membership in the Plan, or (c) the Member’s termination of employment with the Controlled Group.

(2) Distributions Pursuant to Section 401(a)(9) of the Code.

(a) Definitions . For the purposes of this Section 6.6(2), the following terms, when used with initial capital letters, shall have the following respective meanings:

(i) Designated Beneficiary : The person who is designated as the Beneficiary as defined in Section 1.1(7) of the Plan and is the designated beneficiary under section 401(a)(9) of the Code and section 1.401(a)(9)-4, Q&A-1, of the Treasury Regulations.

(ii) Distribution Calendar Year : A calendar year for which a minimum distribution is required. For distributions beginning before the Member’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year that contains the Member’s Required Beginning Date. For distributions beginning after the Member’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 6.6(2)(c). The required minimum distribution for the Member’s first Distribution Calendar Year will be made on or before the Member’s Required Beginning Date. The required

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minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Member’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

(iii) Life Expectancy : Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the Treasury Regulations.

(iv) Member’s Account Balance : The Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (the “Valuation Calendar Year”) increased by the amount of any contributions made and allocated or forfeitures allocated to the Account balance as of dates in the Valuation Calendar Year after the Valuation Date and decreased by distributions made in the Valuation Calendar Year after the Valuation Date. The Account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year.

(v) Required Beginning Date : The applicable date specified in Section 6.6(2)(c) below.

(b) General Rules . Notwithstanding any provision of the Plan to the contrary, all distributions under the Plan shall be made in accordance with this Section and the Treasury Regulations issued under section 401(a)(9) of the Code, provided that this Section and such Regulations shall override the other distribution provisions of the Plan only to the extent required by the provisions of section 401(a)(9) of the Code and such Regulations.

(i) The Member’s entire Vested Interest will be distributed, or begin to be distributed, to the Member no later than the Member’s Required Beginning Date. Except as described in (ii) below, the Required Beginning Date of a Member who is a 5% owner (as defined in section 416 of the Code) shall be the April 1 of the calendar year following the calendar year he attains age 70½ and the Required Beginning Date of any other Member shall be the April 1 of the calendar year

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following the later of (A) the calendar year he terminates employment or (B) the calendar year he attains age 70½.

(ii) If the Member dies before distributions begin, the Member’s entire Vested Interest will be distributed, or begin to be distributed, no later than as follows:

(A) If the Member’s surviving Spouse is the Member’s sole Designated Beneficiary, then, unless the election described in (iv) below is made, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Member died, or by December 31 of the calendar year in which the Member would have attained age 70½, if later.

(B) If the Member’s surviving Spouse is not the Member’s sole Designated Beneficiary, then, unless the election described in (iv) below is made, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Member died.

(C) If there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, the Member’s entire Vested Interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.

(D) If the Member’s surviving Spouse is the Member’s sole Designated Beneficiary and the surviving Spouse dies after the Member but before distributions to the surviving Spouse begin, this Section 6.6(2)(c)(ii), other than subparagraph (A), will apply as if the surviving Spouse were the Member.

(iii) For purposes of this Section 6.6(2), unless subparagraph (D) of Section 6.6(2)(c)(ii) applies, distributions are considered to begin on the Member’s Required Beginning Date. If subparagraph (D) of Section 6.6(2)(c)(ii) applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under subparagraph (A) of Section 6.6(2)(c)(ii).

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(iv) Notwithstanding the foregoing, if a Member dies before distributions begin and there is a Designated Beneficiary, distribution to the Designated Beneficiary is not required to begin by the Required Beginning Date specified above if the Member or the Beneficiary elects, on an individual basis, that the Member’s entire Vested Interest will be distributed to the Designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Member’s death; provided, however, that if the Member’s surviving Spouse is the Member’s sole Designated Beneficiary and the surviving Spouse dies after the Member but before distributions to either the Member of the surviving Spouse begin, this election will apply as if the surviving Spouse were the Member. The election provided in this Section 6.6(2)(c)(iv) must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin, or by September 30 of the calendar year that contains the fifth anniversary of the Member’s (or, if applicable, surviving Spouse’s) death.

(d) Required Minimum Distributions During Member’s Lifetime.

(i) During the Member’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

(A) the quotient obtained by dividing the Member’s Account balance by the distribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations, using the Member’s age as of the Member’s birthday in the Distribution Calendar Year; or

(B) if the Member’s sole Designated Beneficiary for the Distribution Calendar Year is the Member’s Spouse, the quotient obtained by dividing the Member’s Account balance by the number in the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations, using the Member’s and Spouse’s attained ages as of the Member’s and Spouse’s birthdays in the Distribution Calendar Year.

(ii) Required minimum distributions will be determined under this Section 6.6(2)(d) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Member’s date of death.

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(e) Required Minimum Distributions After Member’s Death.

(i) Death on or after date distributions begin:

(A) If the Member dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account balance by the longer of the remaining Life Expectancy of the Member or the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as follows:

(I) The Member’s remaining Life Expectancy is calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

(II) If the Member’s surviving Spouse is the Member’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving Spouse is calculated for each Distribution Calendar Year after the year of the Member’s death using the surviving Spouse’s age as of the Spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving Spouse’s death, the remaining Life Expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse’s birthday in the calendar year of the Spouse’s death, reduced by one for each subsequent calendar year.

(III) If the Member’s surviving Spouse is not the Member’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Member’s death, reduced by one for each subsequent year.

(B) If the Member dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Member’s death, the minimum amount that will be distributed

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for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account balance by the Member’s remaining Life Expectancy calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

(ii) Death before date distributions begin:

(A) If the Member dies before the date distributions begin and there is a Designated Beneficiary, then, unless the election described in Section 6.6(2)(c)(iv) above is made, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account balance by the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as provided in Section 6.6(2)(e)(i).

(B) If the Member dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, distribution of the Member’s entire Vested Interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.

(C) If the Member dies before the date distributions begin, the Member’s surviving Spouse is the Member’s sole Designated Beneficiary, and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Section 6.6(2)(c)(ii), this Section 6.6(2)(e)(ii) will apply as if the surviving Spouse were the Member.

(f) 2009 Required Minimum Distributions . Notwithstanding the preceding provisions of this Section 6.6(2), a Member or Designated Beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of section 401(a)(9)(H) of the Code (“2009 RMDs”), and who would have satisfied that requirement by receiving distributions that are (a) equal to the 2009 RMDs or (b) one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Member, the joint lives (or joint life expectancy) of the Member and the Member’s Designated

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Beneficiary, or for a period of at least 10 years, will not receive those distributions for 2009 unless the Member or Designated Beneficiary chooses to receive such distributions. Members and Designated Beneficiaries described in the preceding sentence will be given the opportunity to elect to receive the distributions described in the preceding sentence. The opportunity to make a direct rollover pursuant to Section 6.9 of the Plan will be offered only for distributions that would be eligible rollover distributions without regard to section 401(a)(9)(H) of the Code.

6.7 Withdrawals .

(1) Withdrawals on Account of Hardship . A Member who is an Employee and who has obtained all distributions and withdrawals (including distributions of ESOP dividends under section 404(k) of the Code but not Hardship distributions) and all nontaxable loans then available under all plans maintained by the Controlled Group (including, without limitation, any qualified and non-qualified deferred compensation plan and any cash or deferred arrangement that is part of a cafeteria plan (other than mandatory employee contributions under a welfare plan or pension plan)), may request, on a form provided by and filed with the Committee, a withdrawal on account of Hardship of all or a part of his Vested Interest in the following Sub-Accounts: Rollover Contributions Sub-Account, Before-Tax Contributions Sub-Account (excluding any earnings allocated thereto), Matching Employer Contributions Sub-Account, Transitional Employer Contributions Sub-Account, Prior ESOP Contributions Sub-Account and Weartech Prior Matching Contributions Sub-Account. Upon making a determination that the Member is entitled to a withdrawal on account of Hardship, the Committee shall direct the Trustee to distribute to such Member the amount requested and charge the amount of the withdrawal to the Member’s Sub-Accounts in the order set forth in the preceding sentence, provided, however, that the amount of the withdrawal shall not be in excess of the amount necessary to alleviate such Hardship. If a withdrawal on account of Hardship is made by a Member pursuant to this Subsection, notwithstanding any other provision of the Plan (or any other plan maintained by the Controlled Group) to the contrary, the Member’s Before-Tax Contributions to the Plan (or any comparable contributions to any other plan maintained by the Controlled Group, including, without limitation, any non-qualified deferred compensation plan, any cash or deferred arrangement that is part of a cafeteria plan (other than mandatory employee

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contributions under a welfare plan or pension plan) and any stock option, stock purchase or similar plan) shall be suspended for a period of 6 months following receipt of the Hardship withdrawal. A Member who has made a withdrawal pursuant to this Section and who desires to resume having Before-Tax Contributions made for him may do so, as of any Valuation Date after the expiration of the suspension period specified in this Section, if he is then an Eligible Employee and he again enrolls as a contributing Member pursuant to Sections 2.2(1) and 3.1.

(2) Withdrawals upon Attainment of Age 59 ½ . A Member who is an Employee and who is at least age 59 ½ may request, on a form provided by and filed with the Committee, a withdrawal of all or a part of his Vested Interest in the following Sub Accounts: Rollover Contributions Sub-Account, Before-Tax Contributions Sub Account, Qualified Nonelective Contributions Sub-Account, Matching Employer Contributions Sub-Account, Nonelective Employer Contributions Sub-Account, Transitional Employer Contributions Sub-Account, FSP Contributions Sub-Account, FSP Plus Contributions Sub-Account, Prior ESOP Contributions Sub-Account and Weartech Prior Matching Contributions Sub Account. Any such partial withdrawal shall be charged pro-rata to such Sub Accounts.

(3) Withdrawals of Rollover Contributions . A Member who is an Employee may request, on a form provided by and filed with the Committee, a withdrawal of all or any part of his Rollover Contributions Sub-Account.

(4) Withdrawals upon Disability . A Member, who is an Employee and who incurs a Disability, may request, on a form provided by and filed with the Committee, a withdrawal of all or a part of his Vested Interest in the following Sub Accounts: Rollover Contributions Sub-Account, Before-Tax Contributions Sub Account, Qualified Nonelective Contributions Sub-Account, Matching Employer Contributions Sub-Account, Nonelective Employer Contributions Sub-Account, Transitional Employer Contributions Sub-Account, FSP Contributions Sub-Account, FSP Plus Contributions Sub-Account, Prior ESOP Contributions Sub-Account and Weartech Prior Matching Contributions Sub Account. Any such withdrawal shall be charged pro rata to such Sub Accounts. For purposes of this Section 6.7(4), a Member is disabled on the date the Committee determines the Member satisfies the definition of Disability. The Committee may require a Member to submit to a physical examination in order to confirm the Member’s Disability.

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(5) Withdrawals made pursuant to this Section may be made, effective as of any Valuation Date, upon such prior notice as may be required by the Administrative Committee. Withdrawals made pursuant to this Section shall be in an amount not less than any minimum amount established by the Committee. Withdrawals from a Member’s Sub-Accounts made pursuant to this Section shall be allocated among the Investment Funds in the same proportion as the value (determined as of the Valuation Date that is the effective date of such withdrawal) of such Member’s Sub-Accounts invested in each such Investment Fund bears to the total value (determined as of such Valuation Date) of such Sub Accounts.

6.8 Effect of Five Consecutive 1-Year Breaks in Service on Vesting Service . If a Member’s Employment Severance occurs and he is subsequently rehired as an Employee after incurring five consecutive 1‑Year Breaks in Service, Years of Vesting Service after such five‑year period shall not be taken into account for the purpose of determining his Vested Interest in the amount attributable to Employer Contributions or Weartech Prior Matching Contributions allocated to his Account before such five‑year period.

6.9 Transfers of Eligible Rollover Distributions .

(1) If a Member, Spouse or a Beneficiary who is a designated beneficiary within the meaning of section 401(a)(9) of the Code (each of which are hereinafter referred to as the “distributee”) is eligible to receive a distribution from the Plan that constitutes an Eligible Rollover Distribution and the distributee elects to have all or a portion of such distribution paid directly to an “eligible retirement plan” (as defined in Subsection (3) of this Section) and specifies the eligible retirement plan to which the distribution is to be paid, such distribution (or portion thereof) shall be made in the form of a direct rollover to the eligible retirement plan so specified. A distributee may not elect a direct rollover of a portion of an Eligible Rollover Distribution unless the amount to be rolled over is at least $500. A direct rollover is a payment made by the Plan to the eligible retirement plan so specified for the benefit of the distributee. Notwithstanding the preceding provisions of this Section, a direct rollover of an Eligible Rollover Distribution shall not be made if a distributee’s Eligible Rollover Distributions for a Plan Year are reasonably expected to total less than $200.

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(2) The Company shall prescribe reasonable procedures for elections to be made pursuant to this Section. Within a reasonable period of time (as prescribed by Treasury regulations or rulings) before the payment of an Eligible Rollover Distribution, the Company shall provide a written notice to the distributee describing his or her rights under this Section and such other information required to be provided under section 402(f) of the Code. Unless otherwise specifically provided herein, for purposes of this Section, the term “Spouse” shall include a former spouse who is an alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code.

(3) For purposes of this Section, the term “eligible retirement plan” means an individual retirement account or annuity described in section 408 of the Code, a defined contribution plan that meets the requirements of section 401(a) of the Code and accepts rollovers, an annuity plan described in section 403(a) of the Code, an annuity contract described in section 403(b) of the Code, an eligible plan described in section 457(b) of the Code that is maintained by a state, political subdivision of a state, or an agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into such plan from this Plan, effective January 1, 2008 a Roth IRA described in section 408A(b) of the Code, or any other type of plan that is included within the definition of “eligible retirement plan” under section 401(a)(31)(E) of the Code. The preceding definition of “eligible retirement plan” shall apply in the case of a distribution to a Spouse after a Member’s death, or to a Spouse or former spouse who is an alternate payee. However, in the case of a distributee other than the Member, Spouse or former Spouse who is an alternate payee, the term ‘eligible retirement plan’ shall mean only an individual retirement account or annuity described in section 408 of the Code.

6.10 Distribution of Holdings Stock .

(1) Notwithstanding the preceding provisions of this Article, a Member or Beneficiary who is eligible to receive a distribution pursuant to this Article VI (other than pursuant to Section 6.7(1)) may elect to receive that portion of his distribution that is attributable to his interest in the Holdings Stock Fund in the form of whole shares of Holdings Stock with any fractional shares of Holdings Stock in cash.

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(2) In accordance with sections 409(h)(4), (5) and (6) of the Code, if the Holdings Stock is or becomes not readily tradable on an established market, then any Member who is otherwise entitled to a total distribution from the Plan shall have the non-terminable right (hereinafter referred to as the “Put Option”) to require that his Holdings Stock be repurchased by the Company. The Trustee may elect to repurchase such Holdings Stock, in lieu of the Company. The Put Option shall only be exercisable during the sixty-day (60) period immediately following the date of distribution, and if the Put Option is not exercised within such sixty-day (60) period, it can be exercised for an additional sixty (60) days in the following Plan Year.

The amount paid for Holdings Stock pursuant to the exercise of a Put Option as part of a lump sum distribution shall be paid in substantially equal periodic payments (not less frequently than annually) over a period beginning not later than thirty (30) days after the request for total distribution and not exceeding five (5) years. There shall be adequate security provided and reasonable interest paid on an unpaid balance due under this paragraph.

If the Company is required to repurchase Holdings Stock as part of an installment distribution, the amount to be paid for Holdings Stock will be paid not later than thirty (30) days after the exercise of the Put Option.

6.11 Transfers of Assets from this Plan to Other Plans . The Trustee shall, at the direction of the Company, transfer amounts held under this Plan to a trust held under another plan that meets the requirements of sections 401(a) and 501(a) of the Code; provided that such transfer satisfies the requirements of sections 414(l) and 411(d)(6) of the Code and Treasury regulations issued thereunder.

6.12 Distributions to Certain Individuals Performing Military Service .

(1) To the extent permitted by section 414(u)(12)(B) of the Code, a Member shall be treated as having had an Employment Severance during any period that the Member is performing services in the uniformed services (as defined in section 3401(h)(2)(A) of the Code) on active duty for a period of more than 30 days, and may elect to receive a distribution of all or a portion of his Before-Tax Contributions made under the Plan. A Member who receives a distribution from the Plan by reason of this Section 6.12(1) shall have his Before-Tax Contributions suspended for a period of 6 months beginning on the date of distribution.

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(2) A Member who is an Employee and is ordered or called to active duty may elect a Qualified Reservist Distribution. A “Qualified Reservist Distribution” is any distribution, if (a) the distribution is from amounts attributable to Before-Tax Contributions; (b) the Member was, by reason of being a member of a reserve component, as defined in Section 101 of Title 37 of the United States Code, ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and (c) such distribution is made during the period beginning on the date of such order or call, and ending at the close of the Member’s active duty period.

ARTICLE VII - ADMINISTRATION OF THE TRUST FUND

7.1 The Trust Fund . The Trust Fund shall be held by the Trustee for the exclusive benefit of the Members and their Beneficiaries and shall be invested by the Trustee upon such terms and in such property as is provided in the Plan and in the Trust Agreement. The Trustee shall, from time to time, make payments, distributions and deliveries from the Trust Fund as provided in the Plan. The Trustee in its relation to the Plan shall be entitled to all of the rights, privileges, immunities and benefits conferred upon it and shall be subject to all of the duties imposed upon it under the Plan and Trust Agreement. The Trust Agreement is hereby incorporated in the Plan by reference, and each Employer, by adopting the Plan, affirms the authority of the Company to execute the Trust Agreement (including any amendment or supplement thereto) in its behalf with respect to the Plan.

7.2 No Guarantee Against Loss . Neither the Trustee, the Administrative Committee, the Investment Committee nor any Employer in any manner guarantees the Trust Fund or any part thereof against loss or depreciation. All persons having any interest in the Trust Fund shall look solely to the Trust Fund for payment with respect to such interest.

7.3 Payment of Benefits . All payments of benefits provided for by the Plan shall be made solely out of the Trust Fund in accordance with instructions given to the Trustee by the Administrative Committee pursuant to the terms of the Plan, and neither any Employer, the Administrative Committee, the Investment Committee nor the Trustee shall be otherwise liable for any benefits payable under the Plan.

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7.4 No Diversion of Trust Fund . Except as specifically provided in other Sections of the Plan, it shall be and is hereby made impossible, at any time prior to the satisfaction of all liabilities with respect to Employees and their Beneficiaries under the Plan, for any part of the corpus or income of the Trust Fund to be (within the taxable year or thereafter) used for, or diverted to, purposes other than the exclusive benefit of Employees or their Beneficiaries.

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ARTICLE VIII - COMMITTEES

8.1 Composition of Committees . The Administrative Committee and the Investment Committee shall each consist of three or more members who may be, but are not required to be, Members, Employees or directors of an Employer. The members of the Administrative Committee and the Investment Committee and their successors shall be appointed by the Board to serve for such terms as the Board may fix. Any member of the Administrative or Investment Committee may be removed at any time by the Board, which may also increase, or decrease to not less than three, the number of Committee members. Any member of the Administrative or Investment Committee may resign by delivering his written resignation to the Board. Upon the existence of any vacancy in the membership of the Administrative or Investment Committee, the Board shall appoint a successor, unless the number of Committee members is decreased as provided in this Section.

8.2 Certification of Members . The Company shall certify the number and names of the members of the Administrative Committee and the Investment Committee to the Trustee. The Trustee may rely upon such certification until it receives written notice from the Company as to a change in the membership of the Administrative or Investment Committee.

8.3 Formalities of Committee Action . The Administrative Committee and the Investment Committee may adopt, and amend from time to time, such rules for its government and the conduct of its business as it deems advisable, including a rule authorizing one or more of its members or its officers to execute instruments on its behalf evidencing its action and the Trustee and any other persons may rely on any instrument signed by such a person or persons so authorized as properly evidencing the action of the Committee. The Administrative or Investment Committee may from time to time, by resolution adopted by it, delegate to one or more of its members or officers, to a sub‑committee or sub‑committees or to an agent or agents of the Committee, such of the Committee’s functions and duties as the Committee deems advisable. The Administrative or Investment Committee shall each elect its Chairman from its membership, and may elect other officers who need not be Committee members. Except as may otherwise be provided by rules or

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procedures adopted by the Committee, the Administrative and Investment Committees may each act by majority action either at a meeting or in writing without a meeting and any action that purports to be an action of the Committee and that is evidenced by the signatures of a majority of the members of the Committee shall be deemed to be the action of the Committee.

8.4 Adoption of Rules . The Administrative Committee may from time to time adopt rules for the administration of the Plan. Such rules may be amended by the Administrative Committee from time to time, but such rules, as the same may be amended, (a) insofar as they apply to the rights of Members, shall be uniform in their application to all Members who are similarly situated and (b) shall not be inconsistent with the terms of the Plan or Trust Agreement.

8.5 Functions and Duties of Administrative Committee .

(1) The Administrative Committee shall have such functions and duties and only such functions and duties as are specifically conferred upon it by the Plan or the Trust Agreement or as may be delegated to it pursuant to Section 10.3. A member of the Administrative Committee shall not be disqualified from acting because of any interest, benefit or advantage, inasmuch as Committee members may be directors of an Employer, Employees or Members, but no Committee member shall vote or act in connection with the Committee’s action relating solely to himself. Except as may be required by law, no bond or other security need be required of any member of the Administrative Committee in such capacity in any jurisdiction.

(2) The Administrative Committee shall have sole and absolute discretion to interpret the provisions of the Plan (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of the Plan), to make factual findings with respect to any issue arising under the Plan, to determine the rights and status under the Plan of Members or other persons, to decide disputes arising under the Plan and to make any determinations and findings (including factual findings) with respect to the benefits payable thereunder and the persons entitled thereto as may be required for the purposes of the Plan. In furtherance of, but without limiting, the foregoing, the Administrative Committee is hereby granted the following specific authorities, which it shall discharge in its sole and absolute discretion in accordance with the terms of the Plan (as interpreted, to the extent necessary, by the Administrative Committee):

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(a) To resolve all questions (including factual questions) arising under the provisions of the Plan as to any individual’s entitlement to become a Member;

(b) To determine the amount of benefits, if any, payable with respect to any person under the Plan (including, to the extent necessary, making any factual findings with respect thereto);

(d) To conduct the review procedure specified in Section 9.3.

All decisions of the Administrative Committee as to the facts of any case, as to the interpretation of any provision of the Plan or its application to any case, and as to any other interpretation, matter or other determination or question under the Plan shall be final and binding on all parties affected thereby subject to the provisions of Sections 8.7 and 9.3. The Administrative Committee shall instruct the Trustee as to the benefits to be paid under the Plan and shall furnish the Trustee with any information reasonably required by it for the purpose of the payment of such benefits.

(3) The Administrative Committee may employ such clerical, legal, accounting or other assistance as it deems necessary or advisable for the proper performance of its functions and duties under the Plan.

8.6 Reliance on Records . The Administrative Committee may rely upon the records of a Controlled Group Member or upon any certificate, statement or other representation made to it by an Employee, a Member, a Beneficiary, a Controlled Group Member, an auditor or the Trustee concerning any fact required to be determined under any of the provisions of the Plan and shall not be required to make inquiry into the propriety of any action by an Employer, an auditor or the Trustee.

8.7 Revocability of Administrative Committee Action . Any action taken by the Administrative Committee with respect to the rights or benefits of any person under the Plan shall be revocable by the Administrative Committee as to payments or distributions not theretofore made, pursuant to such action, from the Trust Fund; and appropriate adjustments may be made in future payments or distributions to a Member or his Beneficiary to offset any excess payment or underpayment theretofore made to such Member or his Beneficiary from the Trust Fund.

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8.8 Responsibilities of Investment Committee .

(1) The Investment Committee shall have such responsibilities and authority and only such responsibilities and authority as are specifically conferred upon it by the Plan or Trust Agreement or as may be delegated to it pursuant to Section 10.3. Except as may be required by law, no bond or other security need be required of any member of the Investment Committee in such capacity in any jurisdiction.

(2) The Investment Committee shall have the responsibilities and authority set forth in the Plan and the Trust Agreement, including, but not limited to, the responsibility and authority to:

(a) monitor the performance of the Trustee,

(b) select the Investment Funds to be made available pursuant to Section 5.1,

(c) pursuant to Section 5.5, to select the Investment Fund or Funds that will apply in the absence of a Member’s direction,

(d) designate the person or persons (including the Investment Committee or the Trustee) who will have discretionary investment authority regarding the assets of the Investment Funds, and

(e) to perform the duties specified in Article XIV with respect to Holdings Stock.

8.9 Compensation and Expenses . The members of the Administrative and Investment Committees shall serve without compensation for their services as Committee members unless the Company shall provide for compensation for such services. The reasonable expenses of the Administrative and Investment Committees shall be paid as provided in Section 12.2.

8.10 Uniform Administration . All action taken by the Administrative Committee under the Plan shall treat all persons similarly situated in a uniform and consistent manner.

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ARTICLE IX - CLAIMS PROCEDURES

9.1 Method of Filing Claim . Any Member or Beneficiary who believes that he is entitled to receive a benefit under the Plan that he has not received may file with the Administrative Committee a written claim specifying the basis for his claim and the facts upon which he relies in making such claim. Such a claim must be signed by the claimant or his authorized representative and shall be deemed filed when delivered to any member of the Administrative Committee.

9.2 Notification to Claimant . Unless such claim is allowed in full by the Administrative Committee, the Committee shall (within 90 days after such claim was filed, plus an additional period of 90 days if the Administrative Committee determines that special circumstances require an extension of time for processing the claim and if written notice of the additional 90 day extension of time indicating the specific circumstances requiring the extension and the date by which a decision shall be rendered is given within the first 90 day period) cause written notice to be mailed to the claimant of the total or partial denial of such claim. Such notice shall be written in a manner calculated to be understood by the claimant and shall state (1) the specific reason(s) for the denial of the claim, (2) specific reference(s) to pertinent provisions of the Plan and/or Trust Agreement on which the denial of the claim was based, (3) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and (4) a description of the Plan’s review procedure specified in Section 9.3 including the time limits applicable to such procedure and a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review. Notwithstanding the provisions of this Article IX, in the case of a determination of Disability (other than pursuant to the Federal Social Security Act) involving a Former Weartech Plan Participant, the disability claims procedures and review procedures of the Weartech Plan shall apply.

9.3 Review Procedure . Within six months after the denial of his claim, the claimant or his duly authorized representative may appeal such denial by filing with the Administrative Committee his written request for a review of his said claim. If the claimant does not file such request with the Administrative Committee within such six month period, the claimant shall be conclusively

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presumed to have accepted as final and binding the initial decision of the Administrative Committee on his claim. If such an appeal is so filed within such six months, a Named Fiduciary designated by the Company shall conduct a full and fair review of such claim. During such full and fair review, the claimant shall be provided with the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits, and reasonable access to and copies of, upon request and free of charge, all documents, records, and other information relevant to the claimant’s claim for benefits. In addition, such full and fair review shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial decision. The Administrative Committee shall mail or deliver to the claimant written notice of the Named Fiduciary’s decision within a reasonable period of time, but not later than 60 days after the receipt of the request for review unless special circumstances require an extension of time for processing. If the Administrative Committee determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant setting forth the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render a decision, and shall be furnished prior to the termination of the initial 60 day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. In the case of an adverse decision on review, the notice of decision (a) shall be written in a manner calculated to be understood by the claimant, (b) shall state the specific reason(s) for the decision, (c) shall make specific reference(s) to pertinent provisions of the Plan and/or Trust Agreement on which the decision is based, (d) shall contain a statement that the claimant is entitled to receive, upon request, and free of change, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits and (e) shall contain a statement describing any voluntary appeal procedures offered by the Plan including the claimant’s right to bring an action under section 502(a) of ERISA. To the extent permitted by applicable law, the decision on review shall be final and binding on all interested persons. The Named Fiduciary appointed to conduct the review procedure set forth in this Section shall have the same powers to interpret the Plan and make factual findings with respect thereto as are granted to the Administrative Committee under Section 8.5

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ARTICLE X - ADMINISTRATION OF THE PLAN
AND FIDUCIARY RESPONSIBILITIES

10.1 Responsibility for Administration . Except to the extent that particular responsibilities are assigned or delegated to other Fiduciaries pursuant to the Trust Agreement, other Articles of the Plan or Section 10.3, the Company (as the Administrator) shall be responsible for the administration of the Plan. Each other Fiduciary shall have only such powers, duties, responsibilities and authorities as are specifically conferred upon him or it pursuant to provisions of the Plan or Trust Agreement.

10.2 Named Fiduciaries . For the purposes of the Plan, the Named Fiduciaries shall be the Company, the Administrative Committee, the Investment Committee and the Trustee. The Company may designate any other person or persons as a Named Fiduciary or Named Fiduciaries to perform functions specified in such instrument (or in a delegation pursuant to Section 10.3) that relate to the administration of the Plan, provided such designee accepts such designation. Such a designation may be terminated at any time by notice from the Company to the designee or by notice from the designee to the Company.

10.3 Delegation of Fiduciary Responsibilities .

(1) The Company, the Administrative Committee and the Investment Committee may each delegate to any person or persons any one or more powers, functions, duties and/or responsibilities with respect to the Plan or the Trust Fund.

(2) Any delegation pursuant to Subsection (1) of this Section, (a) shall be signed on behalf of the delegator, be delivered to and accepted in writing by the delegatee, (b) shall contain such provisions and conditions relating to such delegation as the delegator deems appropriate, (c) shall specify the powers, functions, duties and/or responsibilities therein delegated, (d) may be amended from time to time by written agreement signed on behalf of the delegator and by the delegatee and (e) may be revoked (in whole or in part) at any time by written notice from one party to the other. A fully executed copy of any instrument relating to any delegation (or revocation of any delegation) under the Plan shall be filed with each of the Named Fiduciaries.

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10.4 Immunities . Except as otherwise provided in Section 10.5 or by applicable law, (a) no Fiduciary shall have the duty to discharge any duty, function or responsibility that is specifically assigned exclusively to another Fiduciary or Fiduciaries by the terms of the Plan or Trust Agreement or is delegated exclusively to another Fiduciary or Fiduciaries pursuant to procedures for such delegation provided for in the Plan or Trust Agreement; (b) no Fiduciary shall be liable for any action taken or not taken with respect to the Plan or Trust Fund except for his own negligence or willful misconduct; (c) no Fiduciary shall be personally liable upon any contract or other instrument made or executed by him or on his behalf in the administration of the Plan or Trust Fund; (d) no Fiduciary shall be liable for the neglect, omission or wrongdoing of another Fiduciary; and (e) any Fiduciary may rely and shall be fully protected in acting upon the advice of counsel, who may be counsel for any Controlled Group Member, upon the records of a Controlled Group Member, upon the opinion, certificate, valuation, report, recommendation or determination of the Auditor of a Controlled Group Member, or upon any certificate, statement or other representation made by an Employee, a Member, a Beneficiary or the Trustee concerning any fact required to be determined under any of the provisions of the Plan.

10.5 Limitation on Exculpatory Provisions . Notwithstanding any other provision of the Plan or Trust Agreement, no provision of the Plan or Trust Agreement shall be construed to relieve (or have the effect of relieving) any Fiduciary from any responsibility or liability for any obligation, responsibility or duty imposed on such Fiduciary by Part 4 of Title 1 of ERISA.

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ARTICLE XI - MISCELLANEOUS

11.1 Spendthrift Provisions . No right or interest of any kind of a Member or Beneficiary in the Trust Fund shall be anticipated, assigned (either in law or equity), alienated or be subject to encumbrance, garnishment, attachment, execution or levy of any kind, voluntary or involuntary, or any other legal or equitable process, except in accordance with a qualified domestic relations order as defined in section 414(p) of the Code. The Administrative Committee shall establish procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders in accordance with section 414(p) of the Code. Notwithstanding any provision of the Plan to the contrary, the Plan shall honor a judgment, order, decree or settlement providing for the offset of all or a part of a Member’s benefit under the Plan, to the extent permitted under section 401(a)(13)(C) of the Code; provided that the requirements of section 401(a)(13)(C)(ii) of the Code relating to the protection of the Member’s Spouse (if any) are satisfied.

11.2 Facility of Payment . In the event the Committee finds that any Member or Beneficiary to whom a benefit is payable under the Plan is (at the time such benefit is payable) unable to care for his affairs because of physical, mental or legal incompetence, the Committee, in its sole discretion, may cause any payment due to him hereunder, for which prior claim has not been made by a duly qualified guardian or other legal representative, to be paid to the person or institution deemed by the Committee to be maintaining or responsible for the maintenance of such Member or Beneficiary; and any such payment shall be deemed a payment for the account of such Member or Beneficiary and shall constitute a complete discharge of any liability therefor under the Plan.

11.3 No Enlargement of Employment Rights . Nothing herein contained shall constitute or be construed as a contract of employment between any Employer and any Employee or Member and all Employees shall remain subject to discipline, discharge and layoff to the same extent as if the Plan had never gone into effect. An Employer by adopting the Plan, making contributions to the Trust Fund or taking any other action with respect to the Plan does not obligate itself to continue the employment of any Member or Employee for any period or, except as expressly provided in the Plan, to make any payments into the Trust Fund.

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11.4 Merger or Transfer of Assets . There shall not be any merger or consolidation of the Plan with, or the transfer of assets or liabilities of the Plan to, any other plan, unless each Member of the Plan would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation or transfer that is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated).

11.5 Action by Company . Wherever the Company is authorized to act under the Plan (including but not limited to any delegation of its fiduciary powers and responsibilities under the Plan), such action shall be taken, unless otherwise provided in the Plan, by written instrument executed by an officer of the Company. The Trustee may rely on any instrument so executed as being validly authorized and as properly evidencing the action of the Company.

11.6 Severability Provision . If any provision of the Plan or Trust Agreement or the application thereof to any circumstance or person is invalid, the remainder of the Plan or Trust Agreement and the application of such provision to other circumstances or persons shall not be affected thereby.

11.7 Correction of Errors . Notwithstanding anything herein to the contrary, the Plan Administrator or the Administrative Committee may take such actions or permit such actions to be taken as are necessary and reasonably calculated to correct an administrative error made by an Employer, the Plan Administrator, the Committee, the Trustee or any other Fiduciary or administrator.

11.8 Military Service . Notwithstanding any provisions of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code. “Qualified military service” means any service in the uniformed services (as defined in chapter 43 of title 38 of the United States Code) by any individual if such individual is entitled to reemployment rights under such chapter with respect to such service.

11.9 Recovery of Overpayments . In the event of an erroneous payment or payment amount in excess of the Plan’s obligation, the Plan may reduce future benefits by the amount of the error or may recover the excess directly from the person to or for whom the payment was made. This right of recovery does not limit the Plan’s right to recover an erroneous payment in any other manner.

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11.10 Limitations on Investments and Transactions/Conversions .

(1) The Plan Administrator, in its sole and absolute discretion, may temporarily suspend, in whole or in part, certain Plan transactions, including, without limitation, the right to change or suspend contributions, and/or the right to receive a distribution, loan or withdrawal from an Account in the event of any conversion, change in recordkeeper and/or Plan merger or spinoff.

(2) The Plan Administrator, in its sole and absolute discretion, may suspend, in whole or in part, temporarily or permanently, Plan transactions dealing with investments, including without limitation, the right of a Member to change investment elections or reallocate Account balances in the event of any conversion, change in recordkeeper, change in Investment Funds and/or Plan merger or spinoff.

(3) In the event of a change in Investment Funds and/or a Plan merger or spinoff, the Investment Committee, in its sole and absolute discretion, may decide to map investments from a Member’s prior Investment Fund elections to the then available Investment Funds under the Plan. In the event that investments are mapped in this manner, the Member shall be permitted to reallocate funds among the Investment Funds (in accordance with the terms of the Plan and any relevant rules and procedures adopted for this purpose) after the suspension period described in Subsection (2) of this Section (if any) is lifted.

(4) Notwithstanding any provision of the Plan to the contrary, the Investment Funds shall be subject to, and governed by, all applicable legal rules and restrictions and the rules specified by the Investment Fund providers in the Fund prospectus(es) or other governing documents thereof (to the extent such rules and procedures are imposed and enforced by the Investment Fund provider against the Plan or a particular Member). Such rules, procedures and restrictions may limit the ability of a Member to make transfers into or out of a particular Investment Fund and/or may result in additional transaction fees or other costs relating to such transfers. In furtherance of, but without limiting the foregoing, the Trustee, recordkeeper, Plan Administrator, Investment Committee or Investment Fund provider (or their delegate, as applicable) may decline to implement any investment election or instruction where it deems appropriate.

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11.11 Electronic Media . Notwithstanding any provision of the Plan to the contrary, including any provision which requires the use of a written instrument, to the extent permitted by applicable law, the Committee may establish procedures for the use of electronic media in communications and transactions between the Plan or the Committee and Members and Beneficiaries. Electronic media may include, but are not limited to, e-mail, the Internet, intranet systems and telephonic response systems.

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ARTICLE XII - OTHER EMPLOYERS

12.1 Adoption by Other Employers . The Employers under the Plan are the Company and those Employers listed on Exhibit A to the Plan. Any other Controlled Group Member may, with the consent of the Administrative Committee, adopt the Plan and thereby become an Employer hereunder by executing an Instrument of Adoption evidencing such adoption and filing a copy thereof with the Company. Such Instrument of Adoption shall (subject to such terms and conditions as the Committee may require or approve) become incorporated in the Plan by reference. Further, such Instrument of Adoption may include such terms and conditions as the Committee requires or approves, including without limitation terms regarding the level of Matching Employer Contributions to be made by the Employer, if any. By their adoption of the Plan, Employers other than the Company shall be deemed to consent to actions taken by the Company in entering into the Trust Agreement and any other arrangements for the purpose of providing benefits under the Plan, and to authorize the Company and the Administrative Committee to take any actions within the authority of the Company or the Administrative Committee, as applicable, under the terms of the Plan.

12.2 Costs and Expenses . The costs and expenses incurred in connection with the administration of the Plan and Trust Fund shall be paid from the Trust Fund; provided, however, that the Company, in its absolute discretion, may elect at any time to pay part or all thereof directly, but any such election shall not bind the Company as to its right to elect with respect to the same or other expenses at any other time to have such expenses reimbursed or paid from the Trust Fund.

12.3 Withdrawal of Employer . Any Employer (other than the Company) that adopts the Plan may elect separately to withdraw from the Plan. Any such withdrawal shall be expressed in an instrument executed by the withdrawing Employer and filed with the Company and the Trustee. In the event of such a withdrawal of an Employer, or in the event the Plan is terminated as to an Employer (but not all the Employers) pursuant to Section 13.1, such Employer (herein called “former Employer”) shall cease to be an Employer, Employer Contributions of such former Employer and

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Before‑Tax Contributions, and Rollover Contributions of or for Employees of such former Employer shall cease.

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ARTICLE XIII - AMENDMENT OR TERMINATION

13.1 Right to Amend or Terminate . Subject to the limitations of Sections 4.10(1) and 7.4 of the Plan, the Company has reserved, and does hereby reserve, the right at any time, without the consent of any other Employer or of the Members, Beneficiaries or any other person, (a) to terminate the Plan, in whole or in part or as to any or all of the Employers or as to any designated group of Employees, Members and their Beneficiaries, or (b) to amend the Plan, in whole or in part. The Plan may be amended only by the Company.

13.2 Procedure for Termination or Amendment . Any termination or amendment of the Plan pursuant to Section 13.1 shall be expressed in an instrument executed by an officer of the Company and shall become effective as of the date designated in such instrument or, if no date is so designated, on the date of its execution.

13.3 Distribution Upon Termination . If the Plan shall be terminated by the Company pursuant to Section 13.1, Employer Contributions, Before‑Tax Contributions, and Rollover Contributions to the Plan shall cease, but the Trust Fund shall be distributed as if the Plan had not been terminated.

13.4 Amendment Changing Vesting Schedule .

(1) If any Plan amendment changes any vesting schedule under the Plan, each Member having not less than three years of service shall be permitted to elect, during the election period described in Subsection (2) of this Section, to have his nonforfeitable percentage computed under the Plan without regard to such amendment.

(2) Such election period shall begin on the date the Plan amendment is adopted and shall end no earlier than the latest of the following dates: (a) the date that is 60 days after the day the Plan amendment is adopted, (b) the date that is 60 days after the day the Plan amendment becomes effective, or (c) the date that is 60 days after the day the Member is issued written notice of the Plan amendment by the Company.

(3) For purposes of Subsection (1) of this Section, a Member shall be considered to have completed three years of service if such Member has completed three years of service, whether or

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not consecutive, without regard to the exceptions of section 411(a)(4) of the Code, prior to the expiration of the election period described in Subsection (2) of this Section.

13.5 Nonforfeitable Amounts . Notwithstanding any other provision of the Plan, upon the termination or partial termination of the Plan or upon complete discontinuance of contributions under the Plan, the rights of all Employees to benefits accrued to the date of such termination or partial termination or discontinuance, to the extent then funded, or the amounts credited to the Employees’ Accounts, shall be nonforfeitable.

13.6 Prohibition on Decreasing Accrued Benefits . No amendment to the Plan (other than an amendment described in section 412(c)(8) of the Code) shall have the effect of decreasing the accrued benefit of any Member. For purposes of the preceding sentence, a Plan amendment that has the effect of (a) eliminating or reducing an early retirement benefit or a retirement‑type subsidy (as defined in regulations of the Secretary of the Treasury) or (b) eliminating an optional form of benefit (except as permitted by any such regulations) with respect to benefits attributable to service before the amendment, shall be treated as decreasing accrued benefits, provided, however, that in the case of a retirement‑type subsidy, this sentence shall apply only with respect to a Member who satisfies (either before or after the amendment) the preamendment conditions for the subsidy.

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ARTICLE XIV - RULES REGARDING HOLDINGS STOCK

14.1 Voting Holdings Stock . Before each annual or special meeting of the shareholders of the Lincoln Electric Holdings, Inc., the Administrative Committee shall cause to be sent to each Member and Beneficiary who has voting shares of Holdings Stock allocated to his Account on the record date of such meeting a copy of the proxy solicitation material therefor, together with a form requesting confidential instructions on how to vote the voting shares of Holdings Stock allocated to his Account. Upon receipt of such instructions, the Trustee shall vote the voting shares allocated to such Member’s or Beneficiary’s Accounts as instructed. The Trustee shall not vote shares allocated to a Member’s or Beneficiary’s Account for which no instructions are received. The Trustee shall vote all voting shares of Holdings Stock that represent forfeited Account values that have not been reallocated at the time of any such proxy solicitation in the same proportion as it exercises voting rights as directed by Members and Beneficiaries. A Member has the right to instruct the Trustee with respect to voting shares of Holdings Stock on all matters which involve the voting of such shares, including the exercise of any appraisal rights, dissenters’ rights or similar rights granted by applicable law to the registered or beneficial holders of Holdings Stock.

14.2 Sale of Holdings Stock . Subject to the rights of Members in a tender offer as described in Section 14.3, the Investment Committee may direct the Trustee to sell shares of Holdings Stock to any person, including the Company, provided that any sale to the Company or other “disqualified person” within the meaning of section 4975 of the Code or “party in interest” within the meaning of section 3(14) of ERISA is made at a price that is not less than adequate consideration as defined in section 3(18) of ERISA and no commission is charged with respect to the sale.

14.3 Tender Offer for Holdings Stock . In the event of a tender offer for shares of Holdings Stock subject to section 14(d)(1) of the Securities Exchange Act of 1934 or subject to Rule 13e 4 promulgated under that Act (as those provisions may from time to time be amended or replaced by successor provisions of federal securities laws), the Company will advise the Trustee of the commencement date of the tender offer. The Administrative Committee shall cause each Member who has shares of Holdings Stock credited to his Account to be advised in writing of the terms of

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the tender offer as soon as practicable after its commencement and shall cause each Member to be furnished with a form by which he may instruct the Trustee confidentially to tender shares credited to his Account (whether or not vested). The Trustee shall tender those shares it has been properly instructed to tender, and shall not tender those shares that it has been properly instructed not to tender or for which no instructions are properly received. The Trustee shall tender those shares of Holdings Stock that represent forfeited Account values that have not been reallocated at the time of the tender offer in the same proportion as the shares of Holdings Stock credited to Members’ and Beneficiaries’ Accounts were tendered. The Administrative Committee’s (or its delegate’s) advice to Members will include notice that allocated shares for which no instructions are received shall not be tendered and such related documents as are prepared by any person and provided to the shareholders of the Company pursuant to the Securities Exchange Act of 1934. The Administrative Committee or its delegate may also provide Members with such other material concerning the tender offer as the Committee or its delegate in its discretion determines to be appropriate. A Member’s instructions to the Trustee to tender shares will not be deemed a withdrawal or suspension from the Plan or a forfeiture of any portion of the Member’s interest in the Plan. Funds received in exchange for tendered stock will be credited to the Account of the Member or Beneficiary whose stock was tendered and shall, unless otherwise directed by the Member or Beneficiary, be invested as provided in the Trust Agreement.

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ARTICLE XV - TOP-HEAVY PLAN REQUIREMENTS

15.1 Definitions . For the purposes of this Article, the following terms, when used with initial capital letters, shall have the following respective meanings:

(1) Aggregation Group : Permissive Aggregation Group or Required Aggregation Group, as the context shall require.

(2) Compensation : “Compensation” as defined in Section 4.11(3).

(3) Defined Benefit Plan : A qualified plan as defined in section 414(j) of the Code.

(4) Defined Contribution Plan : A qualified plan as defined in section 414(i) of the Code.

(5) Determination Date : For any Plan Year, the last day of the immediately preceding Plan Year, except that in the case of the first Plan Year of the Plan, the Determination Date shall be the last day of such first Plan Year.

(6) Former Key Employee : A Non‑Key Employee with respect to a Plan Year who was a Key Employee in a prior Plan Year. Such term shall also include his Beneficiary in the event of his death.

(7) Key Employee : An Employee or former Employee who is or was a Member and who, at any time during the current Plan Year, is (a) an officer of an Employer (limited to no more than 50 Employees or, if lesser, the greater of 3 Employees or 10 percent of the Employees) having an annual Compensation greater than $130,000 (as adjusted under section 416(i)(1) of the Code for Plan years beginning after December 31, 2002), (b) a 5-percent owner (as such term is defined in section 416(i)(1)(B)(i) of the Code) of the Employer, or (c) a 1-percent owner (as such term is defined in section 416(i)(1)(B)(ii) of the Code) of an Employer having an annual Compensation of more than $150,000. The term “Key Employee” shall also include such Employee’s Beneficiary in the event of his death. For purposes of this Subsection, “Compensation” has the meaning given such term by section 415(c)(3) of the Code.

(8) Non-Key Employee : An Employee or former Employee who is or was a Member and who is not a Key Employee. Such term shall also include his Beneficiary in the event of his death.

(9) Permissive Aggregation Group : The group of qualified plans of an Employer consisting of:

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(a) the plans in the Required Aggregation Group; plus

(b) one (1) or more plans designated from time to time by the Administrative Committee that are not part of the Required Aggregation Group but that satisfy the requirements of sections 401(a)(4) and 410 of the Code when considered with the Required Aggregation Group.

(10) Required Aggregation Group : The group of qualified plans of an Employer consisting of:

(a) each plan in which a Key Employee participates; plus

(b) each other plan that enables a plan in which a Key Employee participates to meet the requirements of section 401(a)(4) or 410 of the Code.

(11) Top-Heavy Account Balance : A Member’s (including a Member who has received a total distribution from this Plan) or a Beneficiary’s aggregate balance standing to his account as of the Valuation Date coinciding with or immediately preceding the Determination Date (as adjusted by the amount of any Employer Contributions made or due to be made after such Valuation Date but before the expiration of the extended payment period in section 412(c)(10) of the Code), provided, however, that such balance shall include the aggregate distributions made to such Member or Beneficiary during the 1-year period ending on the Determination Date (including distributions under a terminated plan that, if it had not been terminated, would have been included in a Required Aggregation Group) unless such aggregate distributions were made for a reason other than severance from employment, death or disability in which case this Section 15.1(11) shall be applied by substituting a 5-year period for the 1-year period, and provided further that if an Employee or former Employee has not performed services for any Employer maintaining the Plan at any time during the 1-year period ending on the Determination Date, his Account (and/or the Account of his Beneficiary) shall not be taken into account.

(12) Top-Heavy Group : An Aggregation Group if, as of a Determination Date, the aggregate present value of accrued benefits for Key Employees in all plans in the Aggregation Group (whether Defined Benefit Plans or Defined Contribution Plans) is more than sixty percent (60%) of the aggregate present value of accrued benefits for all employees in such plans.

(13) Top-Heavy Plan : See Section 15.2.

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15.2 Determination of Top-Heavy Status .

(1) Except as provided by Subsections (2) and (3) of this Section, the Plan shall be a Top‑Heavy Plan if, as of a Determination Date:

(a) the aggregate of Top‑Heavy Account Balances for Key Employees is more than sixty percent (60%) of the aggregate of all Top‑Heavy Account Balances, excluding for this purpose the aggregate Top‑Heavy Account Balances of Former Key Employees; or

(b) if the Plan is included in a Required Aggregation Group that is a Top‑Heavy Group.

(2) If the Plan is included in a Required Aggregation Group that is not a Top‑Heavy Group, the Plan shall not be a Top‑Heavy Plan notwithstanding the fact that the Plan would otherwise be a Top‑Heavy Plan under paragraph (a) of Subsection (1) of this Section.

(3) If the Plan is included in a Permissive Aggregation Group that is not a Top‑Heavy Group, the Plan shall not be a Top‑Heavy Plan notwithstanding the fact that the Plan would otherwise be a Top‑Heavy Plan under Subsection (1) of this Section.

15.3 Top-Heavy Plan Requirements . Notwithstanding any other provisions of the Plan to the contrary, if the Plan is a Top‑Heavy Plan for any Plan Year, the Plan shall then satisfy the following requirements for such Plan Year:

(a) The minimum vesting requirements as set forth in Section 15.4.

(b) The minimum contribution requirement as set forth in Section 15.5.

15.4 Minimum Vesting Requirement . If the Plan is a Top‑Heavy Plan for any Plan Year, each Employee who has completed at least three Years of Vesting Service and who has an Hour of Service after the Plan becomes a Top‑Heavy Plan shall have a nonforfeitable right to 100 percent of his Matching Employer Contributions Sub‑Account. The vesting schedule described in the immediately preceding sentence shall cease to be applicable when the Plan ceases to be a Top‑Heavy Plan, provided that an Employee’s Matching Employer Contributions that become nonforfeitable pursuant thereto before the Plan ceases to be a Top‑Heavy Plan shall remain nonforfeitable and the change in the vesting schedule resulting from the inapplicability of the vesting schedule described in the immediately preceding sentence shall be subject to the provisions of Section 13.4.

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15.5 Minimum Contribution Requirement . If the Plan is a Top‑Heavy Plan for any Plan Year:

(a) Each Non‑Key Employee who is eligible to share in any Employer Contribution for such Plan Year (or who would have been eligible to share in any such Employer Contribution if a Before‑Tax Contribution had been made for him during such Plan Year) shall be entitled to receive an allocation of such Employer Contribution, which is at least equal to three percent (3%) of his Compensation for such Plan Year.

(b) The three percent (3%) minimum contribution requirement under paragraph (a) above for a Non‑Key Employee shall be increased to four percent (4%) if the Employer maintains a Defined Benefit Plan that does not cover such Non‑Key Employee.

(c) The percentage minimum contribution requirement set forth in paragraphs (a) and (b) above with respect to a Plan Year shall not exceed the percentage at which Employer Contributions are made (or required to be made) under the Plan for such Plan Year for the Key Employee for whom such percentage is the highest for such Year.

(d) The percentage minimum contribution requirement set forth in paragraphs (b) and (c) above may also be reduced or eliminated in accordance with Section 15.6(2).

(e) For the purpose of paragraph (a) above, contributions taken into account shall include like contributions under all other Defined Contribution Plans in the Required Aggregation Group, excluding any such plan in the Required Aggregation Group if that plan enables a Defined Benefit Plan in such Required Aggregation Group to meet the requirements of section 401(a)(4) or section 410 of the Code.

(f) For the purpose of this Section, the term “Employer Contributions” shall include Before-Tax Contributions and Matching Employer Contributions made for an Employee; provided, however, that Matching Employer Contributions taken into account in satisfying the percentage minimum contribution requirement set forth in paragraphs (a) and (b) above shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of section 401(m) of the Code.

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15.6 Coordination With Other Plans .

(1) In applying this Article, an Employer and all Controlled Group Members shall be treated as a single employer, and the qualified plans maintained by such single employer shall be taken into account.

(2) In the event that another Defined Contribution Plan or Defined Benefit Plan maintained by the Controlled Group provides contributions or benefits on behalf of Members in this Plan, such other plan(s) shall be taken into account in determining whether this Plan satisfies Section 15.3; and the minimum contribution required for a Non‑Key Employee in this Plan under Section 15.5 will be reduced or eliminated, in accordance with the requirements of section 416 of the Code and the Regulations thereunder, if a minimum contribution or benefit is made or accrued in whole or in part in respect of such other plan(s).

(3) Principles similar to those specifically applicable to this Plan under this Article, and in general as provided for in section 416 of the Code and the Regulations thereunder, shall be applied to the other plan(s) required to be taken into account under this Article in determining whether this Plan and such other plan(s) meet the requirements of such section 416 of the Code and the Regulations thereunder.

EXECUTED at ________________, Ohio, this ____ day of ______________, 2016.

THE LINCOLN ELECTRIC COMPANY

Title:

- 1 -

EXHIBIT A

Participating Employers
as of January 1, 2017

The Lincoln Electric Company

J.W. Harris Co., Inc., solely with respect to its Employees who are “Covered Employees”

as defined in the Plan

Lincoln Global, Inc.

Welding, Cutting, Tools & Accessories, LLC

Smart Force, LLC

Lincoln Electric Cutting Systems, Inc.

Kaliburn, Inc.

Easom Automation Systems, Inc.

Weartech International, Inc.

Vizient Manufacturing Solutions, Inc.

- 1 -

Exhibit 21

LINCOLN ELECTRIC HOLDINGS, INC.

SUBSIDIARIES OF THE REGISTRANT

The Company's subsidiaries and joint ventures are listed in the following table:



Name	Country of Incorporation
A. B. Arriendos S.A.	Chile
Arc Products, Inc.	United States
Burlington Automation Corporation	Canada
Easom Automation Systems, Inc.	United States
Electro-Arco S.A.	Portugal
Harris Calorific GmbH	Germany
Harris Calorific International Sp. z o.o.	Poland
Harris Calorific S.r.l.	Italy
Harris Euro S.L.	Spain
Inversiones LyL S.A.	Chile
J.W. Harris Co., Inc.	United States
Jinzhou Zheng Tai Welding and Metal Co., Ltd.	China
Kaliburn, Inc.	United States
Kaynak Teknigi Sanayi ve Ticaret A.S.	Turkey
Lincoln Canada Finance ULC	Canada
Lincoln Canada Holdings ULC	Canada
Lincoln Electric Bester Sp. z o.o.	Poland
Lincoln Electric Company of Canada LP	Canada
Lincoln Electric Company (India) Private Limited	India
Lincoln Electric Cutting Systems, Inc.	United States
Lincoln Electric do Brasil Industria e Comercio Ltda.	Brazil
Lincoln Electric Europe B.V.	The Netherlands
Lincoln Electric Europe, S.L.	Spain
Lincoln Electric France S.A.S.	France
Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.	China
Lincoln Electric Holdings S.ar.l.	Luxembourg
Lincoln Electric Iberia, S.L.	Spain
Lincoln Electric International Holding Company	United States
Lincoln Electric Italia S.r.l.	Italy
Lincoln Electric Japan K.K.	Japan
Lincoln Electric (Jinzhou) Welding Materials Co., Ltd.	China
Lincoln Electric Luxembourg S.ar.l.	Luxembourg
Lincoln Electric Management (Shanghai) Co., Ltd.	China
Lincoln Electric Manufactura, S.A. de C.V.	Mexico
Lincoln Electric Maquinas, S. de R.L. de C.V.	Mexico
Lincoln Electric Mexicana, S.A. de C.V.	Mexico



Name	Country of Incorporation
Lincoln Electric Middle East FZE	United Arab Emirates
Lincoln Electric North America, Inc.	United States
Lincoln Electric S.A.	Argentina
Lincoln Electric (Tangshan) Welding Materials Co., Ltd.	China
Lincoln Electric (U.K.) Ltd.	United Kingdom
Lincoln Global Holdings LLC	United States
Lincoln Global, Inc.	United States
Lincoln Smitweld B.V.	The Netherlands
Lincoln Soldaduras de Colombia Ltda.	Colombia
Lincoln Soldaduras de Venezuela C.A.	Venezuela
Metrode Products Limited	United Kingdom
OAO Mezhgosmetiz – Mtsensk	Russia
OOO Torgovyi Dom Mezhgosmetiz	Russia
OOO Severstal – metiz: Welding Consumables	Russia
PT Lincoln Electric Indonesia	Indonesia
Rimrock Corporation	United States
Rimrock Holdings Corporation	United States
Robolution GmbH	Germany
Smart Force, LLC	United States
Specialised Welding Products Pty. Ltd.	Australia
SWP N.Z. Limited	New Zealand
Tennessee Rand, Inc.	United States
Tenwell Development Pte. Ltd.	Singapore
The Lincoln Electric Company	United States
The Lincoln Electric Company (Asia Pacific) Pte. Ltd.	Singapore
The Lincoln Electric Company (Australia) Proprietary Limited	Australia
The Lincoln Electric Company (New Zealand) Limited	New Zealand
The Lincoln Electric Company of South Africa (Pty) Ltd.	South Africa
The Nanjing Lincoln Electric Co., Ltd.	China
The Shanghai Lincoln Electric Co., Ltd.	China
Uhrhan & Schwill Schweisstechnik GmbH	Germany
Vizient Manufacturing Solutions, Inc.	United States
Wayne Trail Technologies, Inc.	United States
Weartech International, Inc.	United States
Weartech International Limited	United Kingdom
Welding, Cutting, Tools & Accessories, LLC	United States
Wolf Robotics, LLC	United States

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following registration statements:

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for The Lincoln Electric Company Employee Savings Plan (Form S-8 Nos. 333-107114 and 333-132036),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. (as successor to The Lincoln Electric Company) for The Lincoln Electric Company Employee Savings Plan, including Post-Effective Amendment No. 1 (Form S-8 No. 033-64187),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. (as successor to The Lincoln Electric Company) for the 1995 Lincoln Stock Purchase Plan, including Post-Effective Amendment No. 1 (Form S-8 No. 033-64189),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for the 2006 Equity and Performance Incentive Plan (Form S-8 No. 333-134212),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for the 2006 Stock Plan for Non-Employee Directors (Form S-8 No. 333-134210),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for the 2015 Equity and Incentive Compensation Plan (Form S-8 No. 333-203602),

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for the 2015 Stock Plan for Non-employee Directors (Form S-8 No. 333-203603), and

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for The Lincoln Electric Company Employee Savings Plan (As Amended and restated Effective January 1, 2010), as amended (Form S-8 No. 333-203604);

Form S-8 Registration Statement of Lincoln Electric Holdings, Inc. for The Lincoln Electric Company Restoration Plan (Form S-8 No. 333-215168);

of our reports dated February 24, 2017 , with respect to the consolidated financial statements and schedule of Lincoln Electric Holdings, Inc. and subsidiaries, and the effectiveness of internal control over financial reporting of Lincoln Electric Holdings, Inc. and subsidiaries, included in this Annual Report (Form 10-K) of Lincoln Electric Holdings, Inc. for the year ended December 31, 2016 .

/s/ Ernst & Young LLP

Cleveland, Ohio

February 24, 2017

Exhibit 24

POWER OF ATTORNEY

Directors of Lincoln Electric Holdings, Inc.

Each of the undersigned Directors of Lincoln Electric Holdings, Inc. hereby appoints Christopher L. Mapes, Vincent K. Petrella, Frederick G. Stueber and Geoffrey P. Allman, and each of them, as attorneys for the undersigned, for and in the name, place and stead of the undersigned in the capacity specified, to prepare or cause to be prepared, to execute and to file with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Act"), an Annual Report on Form 10-K for the year ended December 31, 2016 relating to Lincoln Electric Holdings, Inc., such other periodic reports as may be required pursuant to the Act, amendments and exhibits to any of the foregoing and any and all other documents to be filed with the Securities and Exchange Commission or elsewhere pertaining to such reports, with full power and authority to take any other action deemed necessary or appropriate to effect the filing of the documents.

Executed the date set forth below.



/s/ Christopher L. Mapes	/s/ Curtis E. Espeland	/s/ David H. Gunning
Christopher L. Mapes, Director	Curtis E. Espeland, Director	David H. Gunning, Director
February 22, 2017	February 22, 2017	February 22, 2017

/s/ Stephen G. Hanks	/s/ Michael F. Hilton	/s/ G. Russell Lincoln
Stephen G. Hanks, Director	Michael F. Hilton, Director	G. Russell Lincoln, Director
February 22, 2017	February 22, 2017	February 22, 2017

/s/ Kathryn Jo Lincoln	/s/ William E. MacDonald, III	/s/ Phillip J. Mason
Kathryn Jo Lincoln, Director	William E. MacDonald, III, Director	Phillip J. Mason, Director
February 22, 2017	February 22, 2017	February 22, 2017

/s/ Hellene S. Runtagh	/s/ George H. Walls, Jr.
Hellene S. Runtagh, Director	George H. Walls, Jr., Director
February 22, 2017	February 22, 2017

Exhibit 31.1

CERTIFICATION

I, Christopher L. Mapes, certify that:


1.	I have reviewed this annual report on Form 10-K of Lincoln Electric Holdings, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: February 24, 2017
		/s/ Christopher L. Mapes
		Christopher L. Mapes Chairman, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Vincent K. Petrella, certify that:


1.	I have reviewed this annual report on Form 10-K of Lincoln Electric Holdings, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: February 24, 2017
		/s/ Vincent K. Petrella
		Vincent K. Petrella Executive Vice President, Chief Financial Officer and Treasurer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Lincoln Electric Holdings, Inc. (the "Company") for the year ended December 31, 2016 , as filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.



Date: February 24, 2017
		/s/ Christopher L. Mapes
		Christopher L. Mapes Chairman, President and Chief Executive Officer

		/s/ Vincent K. Petrella
		Vincent K. Petrella Executive Vice President, Chief Financial Officer and Treasurer