LINCOLN ELECTRIC HOLDINGS INC (Form: 10-K, Received: 02/27/2019 16:55:09)

QuickLinks -- Click here to rapidly navigate through this document

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, 2018		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 x 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 x

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x 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 ¨

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



Large accelerated filer x		Accelerated filer o
Non-accelerated filer o		Smaller reporting company o
		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

The aggregate market value of the common shares held by non-affiliates as of June 29, 2018 was $5,556,447,259 (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, 2019 was 63,238,446 .

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 2019 Annual Meeting of Shareholders.

QuickLinks -- Click here to rapidly navigate through this document

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, Egypt, France, Germany, India, Italy, Mexico, the Netherlands, Poland, Romania, Russia, Spain, Turkey and the United Kingdom.

The Company's business units are 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 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.

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 fabrication,


•	energy and process industries,


•	heavy industries (heavy fabrication, ship building and maintenance and repair),


•	automotive and transportation, and


•	construction and infrastructure.

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, robotic components 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 47 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.

Employees

The number of persons employed by the Company worldwide at December 31, 2018 was approximately 11,000 . 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 dissemination 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. They are also influenced by import duties and tariffs (including the Section 232 steel and aluminum tariffs initiated by the U.S. government in 2018), speculative action, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, government trade practices and regulations 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, 2018 , we were a co-defendant in cases alleging asbestos induced illness involving claims by approximately 3,336 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: 54,977 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 890 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. In certain cases, we design automated welding systems for use in a customer’s production facilities (including automotive production facilities), which could expose us to financial losses or professional liability.

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. Integration efforts may include significant rationalization activities that could be disruptive to the business. Our current operational cash flow is sufficient to fund our 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, including with respect to the integration of acquired businesses. 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 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 and robotic arm manufacturers compete in the automated welding and cutting space. 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 rationalization efforts related to the integration of acquired businesses, 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 12 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 financial loss, 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 prohibited 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.

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. For more information regarding rationalization plans, refer to the rationalization and asset impairment related disclosure under Note 7 to the Company's consolidated financial statements.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS OF THE REGISTRANT



Name	Age	Position
Christopher L. Mapes	57	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	58	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; Vice President, Chief Financial Officer and Treasurer from February 4, 2004 to October 7, 2005.
Jennifer I. Ansberry	45	Executive Vice President, General Counsel and Secretary since April 20, 2017; Vice President, Deputy General Counsel from 2004 until April 20, 2017.
George D. Blankenship	56	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	51	Executive Vice President, Finance since January 1, 2019; Chief Human Resources Officer from July 1, 2016 to December 31, 2018; 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 from February 19, 2014 to March 7, 2015; Vice President, Chief Information Officer from May 1, 2012 to February 19, 2014; Vice President, Corporate Controller from 2005 to May 1, 2012.
Steven B. Hedlund	52	Executive Vice President and President, International Welding since June 1, 2017; Senior Vice President and President, Global Automation from January 22, 2015 to June 1, 2017; 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.
Michele R. Kuhrt	52	Executive Vice President, Chief Human Resources Officer since February 25, 2019; Executive Vice President, Chief Information Officer from July 1, 2016 to February 24, 2019; Senior Vice President, Tax from 2006 to July 1, 2016.
Geoffrey P. Allman	48	Senior Vice President, Strategy and Business Development since January 1, 2019; Senior Vice President, Corporate Controller from January 14, 2014 to December 31, 2018; 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	58	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.
David J. Nangle	62	Executive 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.
Douglas S. Lance	51	Senior Vice President, President, Cleveland Operations, North America since September 1, 2016; Senior Vice President, North American Operations from February 19, 2014 to August 31, 2016; Vice President, Operations from January 1, 2012 to February 18, 2014.
Michael Mintun	56	Senior Vice President, Sales and Marketing, North America since February 19, 2014; Vice President, Sales and Marketing, North America from January 1, 2013 to February 18, 2014; Vice President, Sales, North America from January 1, 2008 to December 31, 2012.



Michael J. Whitehead	45	Senior Vice President, President, Global Automation, Cutting and Additive Business since January 1, 2019; Senior Vice President, Strategy and Business Development from August 1, 2016 to December 31, 2018; President, Lincoln Canada from January 1, 2015 to July 31, 2016; Director, New Product Development, Consumables R&D from January 1, 2012 to December 31, 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 244 acres, of which present manufacturing facilities comprise an area of approximately 3,017,090 square feet.

The Company has 60 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, Coldwater and Fort Loramie, Ohio; San Diego and Anaheim, California; Reno, Nevada; Ladson, South Carolina; Chattanooga, Tennessee; Detroit, Michigan; Fort Collins, Colorado; Bettendorf, Iowa; Churubusco, Indiana.
Brazil		Guarulhos; Indaiatuba.
Canada		Toronto; Mississauga; Hamilton; Montreal; Hawkesbury; Vankleek Hill.
Colombia		Bogota.
Mexico		Mexico City; Torreon.
International Welding:
Australia		Newcastle; Gladstone.
China		Shanghai; Nanjing; Zhengzhou; Luan County; Hangzhou.
Egypt		Cairo.
France		Grand-Quevilly; Partheny.
Germany		Essen; Eisenberg; Frankfurt.
India		Chennai.
Italy		Corsalone; Due Carrere; Verona; Storo.
Netherlands		Nijmegen.
Poland		Bielawa; Dzierzoniow.
Romania		Buzau.
Russia		Mtsensk.
Spain		Zaragoza.
Turkey		Istanbul.
United Kingdom		Sheffield, England; Port Talbot, Wales.
The Harris Products Group:
United States		Mason, Ohio; Gainesville, Georgia; Winston Salem, North Carolina.
Brazil		Maua.
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. Refer to Note 18 to the 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, 2018 , the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 3,336 plaintiffs, which is a net decrease of 133 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: 54,977 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 890 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, 2018 was 1,745.

Issuer purchases of equity securities for the fourth quarter 2018 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, 2018	455,734	⁽¹⁾	$	86.10	455,442	6,654,727
November 1-30, 2018	391,845		83.50		391,845	6,262,882
December 1-31, 2018	99,898	⁽¹⁾	82.26		85,658	6,177,224
Total	947,477		84.62		932,945


(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 48.8 million shares at a cost of $1.9 billion for a weighted average cost of $38.52 per share through December 31, 2018 .

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, 2014 and ending December 31, 2018 . This graph assumes that $100 was invested on December 31, 2013 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,
	2018 ⁽¹⁾		2017 ⁽²⁾		2016 ⁽³⁾		2015 ⁽⁴⁾		2014 ⁽⁵⁾
Net sales	$	3,028,674	$	2,624,431	$	2,274,614	$	2,535,791	$	2,813,324
Net income	287,066		247,503		198,399		127,478		254,686
Basic earnings per share	4.42		3.76		2.94		1.72		3.22
Diluted earnings per share	4.37		3.71		2.91		1.70		3.18
Cash dividends declared per share	1.64		1.44		1.31		1.19		0.98
Total assets	2,349,825		2,406,547		1,943,437		1,784,171		1,939,215
Long-term debt, less current portion	702,549		704,136		703,704		350,347		2,488

(1)

Results for 2018 include charges of $25,285 ($19,966 after-tax) in rationalization and asset impairment charges and gains or losses on the disposal of assets, $6,686 ($5,017 after-tax) in pension settlement charges and $4,498 ($3,682 after-tax) of transaction and integration costs related to the acquisition of Air Liquide Welding. Results also include charges of $399 related to the net impact of the U.S. Tax Act (as defined in Item 7).

(2)

Results for 2017 include charges related to the acquisition of Air Liquide Welding, including $15,002 ($11,559 after-tax) of transaction and integration costs, $4,578 ($3,453 after-tax) in amortization of step up in value of acquired inventories and a $49,650 bargain purchase gain. Results also include $8,150 ($5,030 after-tax) in pension settlement charges, $6,590 ($6,198 after-tax) in rationalization and asset impairment charges and charges of $28,616 related to the net impact of the U.S. Tax Act.

(3)

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.

(4)

Results for 2015 include $13,719 ($11,943 after-tax) of rationalization charges and non-cash net impairment charges of $6,239. Results also include pension settlement charges of $142,738 ($87,310 after-tax) and charges of $27,214 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.

(5)

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 related to Venezuelan remeasurement losses.

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 fabrication,


•	energy and process industries,


•	heavy industries (heavy fabrication, ship building and maintenance and repair),


•	automotive and transportation, and


•	construction and infrastructure.

The U.S. Tax Cuts and Jobs Act (the "U.S. Tax Act") was enacted on December 22, 2017. The U.S. Tax Act reduced the U.S. federal corporate income tax rate to 21% from 35%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") related to the U.S. Tax Act, which provided for a one-year measurement period and guidance for the application of Accounting Standards Codification ("ASC") Topic 740, Income Taxes . At December 31, 2017, the Company had not completed its accounting related to the U.S. Tax Act. All provisional amounts were based on reasonable estimates using the best information available at the time. At December 31, 2018, the Company has completed its accounting related to the U.S. Tax Act. Refer to Note 14 to the consolidated financial statements for further information on the financial statement impact of the U.S. Tax Act.

During the first quarter of 2016, the Company realigned its organizational and leadership structure. The new structure allowed for further integration of operational and product development processes across regions and supported 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. Refer to Note 6 to the 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 earnings before interest, taxes and bonus; 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,
	2018					2017					2016					Increase (Decrease) Actual vs. Prior Year
	Amount			% of Sales		Amount			% of Sales		Amount			% of Sales		2018 vs. 2017		2017 vs. 2016
Net sales	$	3,028,674				$	2,624,431				$	2,274,614				15.4	%	15.4	%
Cost of goods sold	2,000,153					1,749,324					1,488,055					14.3	%	17.6	%
Gross profit	1,028,521			34.0	%	875,107			33.3	%	786,559			34.6	%	17.5	%	11.3	%
Selling, general & administrative expenses	627,697			20.7	%	541,225			20.6	%	468,597			20.6	%	16.0	%	15.5	%
Rationalization and asset impairment charges	25,285					6,590					—					283.7	%	100.0	%
Loss on deconsolidation of Venezuelan subsidiary	—					—					34,348					—		(100.0	%)
Bargain purchase gain	—					(49,650		)			—					(100.0	%)	100.0	%
Operating income	375,539			12.4	%	376,942			14.4	%	283,614			12.5	%	(0.4	%)	32.9	%
Interest expense, net	17,565					19,432					16,987					(9.6	%)	14.4	%
Other income (expense)	10,686					8,726					10,761					22.5	%	(18.9	%)
Income before income taxes	368,660			12.2	%	366,236			14.0	%	277,388			12.2	%	0.7	%	32.0	%
Income taxes	81,667					118,761					79,015					(31.2	%)	50.3	%
Effective tax rate	22.2		%			32.4		%			28.5		%
Net income including non-controlling interests	286,993					247,475					198,373					16.0	%	24.8	%
Non-controlling interests in subsidiaries' loss	(73		)			(28		)			(26		)			160.7	%	7.7	%
Net income	$	287,066		9.5	%	$	247,503		9.4	%	$	198,399		8.7	%	16.0	%	24.8	%
Diluted earnings per share	$	4.37				$	3.71				$	2.91

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, 2018 on a consolidated basis:



			Change in Net Sales due to:
	Net Sales 2017		Volume			Acquisitions			Price			Foreign Exchange			Net Sales 2018
Lincoln Electric Holdings, Inc.	$	2,624,431	$	27,792		$	239,242		$	146,193		$	(8,984	)	$	3,028,674

% Change
Lincoln Electric Holdings, Inc.			1.1		%	9.1		%	5.6		%	(0.3		%)	15.4		%

Net sales increased primarily as a result of stronger organic sales and the acquisition of Air Liquide Welding within Americas Welding and International Welding.

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, 2017 on a consolidated basis:



			Change in Net Sales due to:
	Net Sales 2016		Volume			Acquisitions			Price			Foreign Exchange			Net Sales 2017
Lincoln Electric Holdings, Inc.	$	2,274,614	$	95,171		$	181,900		$	55,078		$	17,668		$	2,624,431

% Change
Lincoln Electric Holdings, Inc.			4.2		%	8.0		%	2.4		%	0.8		%	15.4		%

Net sales increased primarily as a result of acquisitions, improved volume due to higher demand and increased product pricing. Net sales for 2016 include $10,813 in sales from the Company's Venezuelan operations. The increase in Net sales from acquisitions for 2017 was driven by the acquisition of Air Liquide Welding within Americas Welding and International Welding.

Gross Profit:

Gross profit for 2018 increased, as a percent of sales, compared to the prior year due to price management and segment mix. The year ended December 31, 2018 includes a last-in, first-out ("LIFO") charge of $10,990, as compared with a LIFO charge of $7,312 in the prior year.

Gross profit for 2017 decreased, as a percent of sales, compared to the prior year due to the acquisition of Air Liquide Welding and rising input costs. The year ended December 31, 2017 includes a last-in, first-out ("LIFO") charge of $7,312, as compared with a LIFO charge of $1,564 in the prior year.

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

The increase in SG&A expense in 2018 as compared to 2017 was due to SG&A from acquisitions and higher compensation costs and professional fees.

The increase in SG&A expense in 2017 as compared to 2016 was due to SG&A from acquisitions, higher compensation costs and acquisition transaction and integration costs, partially offset by lower professional fees.

Rationalization and Asset Impairment Charges:

In 2018, the Company recorded $25,285 ($19,966 after-tax) in charges primarily related to employee severance, asset impairment charges and gains or losses on the disposal of assets.

In 2017, the Company recorded $6,590 ($6,198 after-tax) in charges primarily related to employee severance and asset impairment charges.

Refer to Note 7 to the consolidated financial statements 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 to the consolidated financial statements for additional details.

Bargain Purchase Gain:

In 2017, the Company recorded a bargain purchase gain of $49,650, which had no tax impact, related to the Air Liquide Welding acquisition. Refer to Note 4 to the consolidated financial statements for additional details.

Interest Expense, Net:

The decrease in 2018 as compared to 2017 was due to higher interest income on marketable securities in 2018.

The increase in 2017 as compared to 2016 was due to higher interest expense on higher borrowings in 2017.

Other Income (Expense):

The increase in 2018 as compared to 2017 was due to higher equity earnings in affiliates.

The decrease in 2017 as compared to 2016 was primarily due to higher net periodic pension cost.

Income Taxes:

The 2018 effective tax rate was lower than 2017 due to the U.S. Tax Act that reduced the U.S. federal corporate income tax rate to 21%, partially offset by rationalization charges in regions with low or no tax benefit. The 2017 rate reflects the higher U.S. federal tax rate and the one-time transition tax, offset by the non-taxable bargain purchase gain recorded in 2017 in connection with the Air Liquide Welding acquisition.

The effective income tax rate was higher in 2017 as compared to 2016 primarily due to the net impact of the U.S. Tax Act. The effective tax rate increase was partially offset by the nontaxable bargain purchase gain recorded in connection with the Air Liquide Welding acquisition and the change in the reporting of excess tax benefits from the exercise of stock based compensation awards.

Net Income:

As compared to the prior year, reported Net income for 2018 increased primarily due to higher Net sales and a lower effective tax rate, partially offset by higher SG&A costs, higher rationalization and asset impairment charges and the bargain purchase gain related to the Air Liquide Welding acquisition in the prior year.

As compared to the prior year, reported Net income for 2017 increased primarily due to higher volumes and the bargain purchase gain related to the Air Liquide Welding acquisition, offset by the net impact of the U.S. Tax Act, rising input costs, higher SG&A costs and higher interest expense.

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, 2018 :



			Change in Net Sales due to:
	Net Sales 2017		Volume ⁽¹⁾			Acquisitions ⁽²⁾			Price ⁽³⁾			Foreign Exchange ⁽⁴⁾			Net Sales 2018
Operating Segments
Americas Welding	$	1,609,779	$	82,258		$	11,644		$	111,038		$	(8,205	)	$	1,806,514
International Welding	724,024		(66,963		)	227,598			34,777			335			919,771
The Harris Products Group	290,628		12,497			—			378			(1,114		)	302,389

% Change
Americas Welding			5.1		%	0.7		%	6.9		%	(0.5		%)	12.2		%
International Welding			(9.2		%)	31.4		%	4.8		%	—			27.0		%
The Harris Products Group			4.3		%	—			0.1		%	(0.4		%)	4.0		%

(1) Increase for Americas Welding due to improving demand in a broad range of end markets. Decrease for International Welding due to a repositioning of the Company's channel strategy in the European market and restructuring activities. Increase for The Harris Products Group driven primarily by demand in the retail sector.

(2) Increase primarily due to the acquisition of Air Liquide Welding within Americas Welding and International Welding. Refer to Note 4 to the consolidated financial statements for a discussion of the Company's recent acquisitions.

(3) Increase in all segments due to increased product pricing as a result of higher input costs.

(4) Decrease in the Americas Welding segment due to a stronger U.S. dollar.

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, 2017 :



			Change in Net Sales due to:
	Net Sales 2016		Volume ⁽¹⁾			Acquisitions ⁽²⁾			Price ⁽³⁾			Foreign Exchange ⁽⁴⁾			Net Sales 2017
Operating Segments
Americas Welding	$	1,494,982	$	67,306		$	8,470		$	36,009		$	3,012		$	1,609,779
International Welding	507,289		12,503			173,430			18,327			12,475			724,024
The Harris Products Group	272,343		15,362			—			742			2,181			290,628

% Change
Americas Welding			4.5		%	0.6		%	2.4		%	0.2		%	7.7		%
International Welding			2.5		%	34.2		%	3.6		%	2.5		%	42.7		%
The Harris Products Group			5.6		%	—			0.3		%	0.8		%	6.7		%

(1) Increase for Americas and International Welding due to improving demand in a broad range of end markets. Increase for The Harris Products Group due to higher volumes.

(3) Increase in all segments due to increased product pricing as a result of higher input costs.

(4) Increase in the International Welding segment due to a weaker U.S. dollar.

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 measure being the Adjusted EBIT profit measure. 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) 2018 vs. 2017				Increase (Decrease) 2017 vs. 2016
	December 31,									Increase (Decrease) 2018 vs. 2017				Increase (Decrease) 2017 vs. 2016
	2018			2017			2016			$		%		$		%
Americas Welding:
Net sales	$	1,806,514		$	1,609,779		$	1,494,982		196,735		12.2	%	114,797		7.7	%
Inter-segment sales	118,936			97,382			93,612			21,554		22.1	%	3,770		4.0	%
Total Sales	$	1,925,450		$	1,707,161		$	1,588,594		218,289		12.8	%	118,567		7.5	%

Adjusted EBIT ⁽⁴⁾	$	340,744		$	291,866		$	266,633		48,878		16.7	%	25,233		9.5	%
As a percent of total sales ⁽¹⁾	17.7		%	17.1		%	16.8		%			0.6	%			0.3	%

International Welding:
Net sales	$	919,771		$	724,024		$	507,289		195,747		27.0	%	216,735		42.7	%
Inter-segment sales	18,576			18,860			15,975			(284	)	(1.5	%)	2,885		18.1	%
Total Sales	$	938,347		$	742,884		$	523,264		195,463		26.3	%	219,620		42.0	%

Adjusted EBIT ⁽⁵⁾	$	54,273		$	41,721		$	29,146		12,552		30.1	%	12,575		43.1	%
As a percent of total sales ⁽²⁾	5.8		%	5.6		%	5.6		%			0.2	%			—

The Harris Products Group:
Net sales	$	302,389		$	290,628		$	272,343		11,761		4.0	%	18,285		6.7	%
Inter-segment sales	6,969			8,190			8,709			(1,221	)	(14.9	%)	(519	)	(6.0	%)
Total Sales	$	309,358		$	298,818		$	281,052		10,540		3.5	%	17,766		6.3	%

Adjusted EBIT	$	36,564		$	36,442		$	32,380		122		0.3	%	4,062		12.5	%
As a percent of total sales ⁽³⁾	11.8		%	12.2		%	11.5		%			(0.4	%)			0.7	%

Corporate / Eliminations:
Inter-segment sales	$	(144,481	)	$	(124,432	)	$	(118,296	)	20,049		16.1	%	6,136		5.2	%
Adjusted EBIT ⁽⁶⁾	(8,887		)	309			564			(9,196	)	(2,976.1	%)	(255	)	45.2	%

Consolidated:
Net sales	$	3,028,674		$	2,624,431		$	2,274,614		404,243		15.4	%	349,817		15.4	%
Net income	$	287,066		$	247,503		$	198,399		39,563		16.0	%	49,104		24.8	%
As a percent of total sales	9.5		%	9.4		%	8.7		%			0.1	%			0.7	%
Adjusted EBIT ⁽⁷⁾	$	422,694		$	370,338		$	328,723		52,356		14.1	%	41,615		12.7	%
As a percent of total sales	14.0		%	14.1		%	14.5		%			(0.1	%)			(0.4	%)


(1)	2018 increase as compared to 2017 driven by stronger organic sales.

2017 increase as compared to 2016 driven by higher Net sales volumes, partially offset by rising input costs.


(2)	2018 increase as compared to 2017 driven by favorable sales mix.

2017 remained flat as compared to 2016 driven by higher Net sales volumes, offset by higher costs related to acquisitions.


(3)	2018 decrease as compared to 2017 driven by the impact of unfavorable price/cost.

2017 increase as compared to 2016 driven by higher Net sales volume.


(4)	2018 excludes pension settlement charges of $6,686 related to lump sum pension payments.

2017 excludes pension settlement charges of $8,150 related to lump sum pension payments, as well as non-cash charges of $1,091 related to the impairment of goodwill.


(5)	2018 excludes charges of $25,285 related to employee severance, asset impairments and other related costs.

2017 excludes amortization of step up in value of acquired inventories of $4,578 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements, as well as charges of $5,499 related to employee severance, asset impairments and other related costs.


(6)	2018 excludes acquisition transaction and integration costs of $4,498 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

2017 excludes a bargain purchase gain of $49,650 and acquisition transaction and integration costs of $15,002 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

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


(7)	See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.

Non-GAAP Financial Measures

The Company reviews Adjusted operating income, Adjusted EBIT, Adjusted net income, Adjusted effective tax rate, 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 following non-GAAP measures: Free cash flow ("FCF") 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); Cash conversion defined as FCF divided by Adjusted net income; Organic sales defined as sales excluding the effects of foreign currency and acquisitions.

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



	Year Ended December 31,
	2018		2017			2016
Operating income as reported	$	375,539	$	376,942		$	283,614
Special items (pre-tax):
Rationalization and asset impairment charges ⁽¹⁾	25,285		6,590			—
Loss on deconsolidation of Venezuelan subsidiary ⁽²⁾	—		—			34,348
Acquisition transaction and integration costs ⁽³⁾	4,498		15,002			—
Amortization of step up in value of acquired inventories ⁽³⁾	—		4,578			—
Bargain purchase gain ⁽³⁾	—		(49,650		)	—
Adjusted operating income	$	405,322	$	353,462		$	317,962

(1) Charges consist of employee severance, gains or losses on the disposal of assets and other related costs, non-cash goodwill impairment charges and net non-cash asset impairment charges.

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

(3) Acquisition-related c osts and a bargain purchase gain related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

The following table presents the reconciliations of Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share:



	Year Ended December 31,
	2018			2017			2016
Net income as reported	$	287,066		$	247,503		$	198,399
Special items:
Rationalization and asset impairment charges ⁽¹⁾	25,285			6,590			—
Loss on deconsolidation of Venezuelan subsidiary ⁽²⁾	—			—			34,348
Pension settlement charges ⁽³⁾	6,686			8,150			—
Acquisition transaction and integration costs ⁽⁴⁾	4,498			15,002			—
Amortization of step up in value of acquired inventories ⁽⁴⁾	—			4,578			—
Bargain purchase gain ⁽⁴⁾	—			(49,650		)	—
Tax effect of Special items ⁽⁵⁾	(6,896		)	20,536			(8,293		)
Adjusted net income	$	316,639		$	252,709		$	224,454
Non-controlling interests in subsidiaries’ earnings (loss)	$	(73	)	$	(28	)	$	(26	)
Interest expense, net	17,565			19,432			16,987
Income taxes as reported	81,667			118,761			79,015
Tax effect of Special items ⁽⁵⁾	6,896			(20,536		)	8,293
Adjusted EBIT	$	422,694		$	370,338		$	328,723
Effective tax rate as reported	22.2		%	32.4		%	28.5		%
Net special item tax impact	(0.3		)%	(4.4		)%	(0.5		)%
Adjusted effective tax rate	21.9		%	28.0		%	28.0		%
Diluted earnings per share as reported	$	4.37		$	3.71		$	2.91
Special items per share	0.45			0.08			0.38
Adjusted diluted earnings per share	$	4.82		$	3.79		$	3.29

(1) Charges consist of employee severance, gains or losses on the disposal of assets and other related costs, non-cash goodwill impairment charges and non-cash asset impairment charges.

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

(3) Charges related to lump sum pension payments.

(4) Acquisition-related c osts and a bargain purchase gain related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.


(5)	Includes the net tax impact of Special items recorded during the respective periods, including the net impact of the U.S. Tax Act of $399 and $28,616 in the years ended December 31, 2018 and 2017, respectively.

The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

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
	2018			2017			2016			2018 vs. 2017			2017 vs. 2016
Cash provided by operating activities ⁽¹⁾	$	329,152		$	334,845		$	312,557		$	(5,693	)	$	22,288
Cash provided by (used by) investing activities ⁽²⁾	20,841			(272,027		)	(159,946		)	292,868			(112,081		)
Capital expenditures	(71,246		)	(61,656		)	(49,877		)	(9,590		)	(11,779		)
Acquisition of businesses, net of cash acquired	(101,792		)	(72,468		)	(71,567		)	(29,324		)	(901		)
Purchase of marketable securities, net of proceeds	179,124			(140,204		)	(38,920		)	319,328			(101,284		)
Cash used by financing activities ⁽³⁾	(302,130		)	(135,037		)	(72,008		)	(167,093		)	(63,029		)
(Payments on) proceeds from long-term borrowings, net	(107		)	(5		)	349,780			(102		)	(349,785		)
Purchase of shares for treasury	(201,650		)	(43,164		)	(342,003		)	(158,486		)	298,839
Cash dividends paid to shareholders	(102,058		)	(92,452		)	(87,330		)	(9,606		)	(5,122		)
Increase (decrease) in Cash and cash equivalents ⁽⁴⁾	32,148			(52,478		)	74,996

(1) Cash provided by operating activities decreased for the twelve months ended December 31, 2018 compared with the twelve months ended December 31, 2017 due to increased investment in working capital, partially offset by improved Company performance. Cash provided by operating activities increased for the twelve months ended December 31, 2017 compared with the twelve months ended December 31, 2016 primarily due to improved Company performance.

(2) Cash provided by investing activities increased predominately due to the proceeds from marketable securities in 2018, partially offset by cash used in the acquisition of businesses. Cash used by investing activities increased in the twelve months ended December 31, 2017 compared with the twelve months ended December 31, 2016 predominantly due to the purchase of marketable securities in 2017. The Company currently anticipates capital expenditures of $70,000 to $80,000 in 2019. Anticipated capital expenditures include 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.

(3) Cash used by financing activities increased in the twelve months ended December 31, 2018 compared with the twelve months ended December 31, 2017 due to higher purchases of common shares for treasury. Cash used by financing activities increased in the twelve months ended December 31, 2017 compared with the twelve months ended December 31, 2016 due to higher proceeds from long-term borrowings in 2016 partially offset by higher purchases of common shares for treasury in 2016.

(4) Cash and cash equivalents increased 9.8% , or $32,148 , to $358,849 during the twelve months ended December 31, 2018 , from $326,701 as of December 31, 2017 . The increase was predominately due to cash provided by operating activities and proceeds from marketable securities, partially offset by purchases of common shares for treasury and cash dividends paid to shareholders. Cash and cash equivalents decreased 13.8%, or $52,478, to $326,701 during the twelve months ended December 31, 2017, from $379,179 as of December 31, 2016. This decrease was predominantly due to the purchase of marketable securities.

The Company paid $102,058 and $92,452 in cash dividends to its shareholders in the twelve months ended December 31, 2018 and 2017, respectively, reflecting a 10.4% increase in dividends paid. In January 2019, the Company paid a cash dividend of $0.47 per share, or $29,867, to shareholders of record on December 31, 2018.

Working Capital Ratios



	December 31,
	2018		2017		2016
Average operating working capital to net sales ⁽¹⁾	16.5	%	15.9	%	15.6	%
Days sales in Inventories	95.1		88.9		92.1
Days sales in Accounts receivable	52.7		52.4		47.7
Average days in Trade accounts payable	55.5		54.5		48.9

(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 7 to the consolidated financial statements for a discussion of the Company's rationalization plans. 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 4 to the consolidated financial statements for a discussion of the Company's recent acquisitions.

Debt

At December 31, 2018 and 2017 , the fair value of long-term debt, including the current portion, was approximately $649,714 and $687,428 , respectively, which was determined using available market information and methodologies requiring judgment. Since 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. 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. Interest on the notes are payable semi-annually. The proceeds were used for general corporate purposes. The 2015 Notes and 2016 Notes contain certain affirmative and negative covenants. As of December 31, 2018, the Company was in compliance with all of its debt covenants .

The Company's total weighted average effective interest rate and remaining weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 15 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”). 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. The Company amended and restated the Credit Agreement on June 30, 2017 , extending the maturity of the line of credit to June 30, 2022 . 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, 2018, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement.

Shelf Agreements

On November 27, 2018, the Company entered into seven uncommitted master note facilities (the "Shelf Agreements") that allow borrowings up to $700,000 in the aggregate. The Shelf Agreements have a five-year term and the average life of borrowings cannot exceed 15 years. The Company is required to comply with covenants similar to those contained in the 2015 Notes and 2016 Notes. As of December 31, 2018, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Shelf Agreements.

Short-term Borrowings

The Company had short-term borrowings included in Amounts due banks of $2,020 at December 31, 2017. Amounts due banks included the borrowings of subsidiaries at weighted average interest rates of 31.8% at December 31, 2017.

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, 2018 , 2017 and 2016 were as follows:



Return on Invested Capital	2018			2017			2016
Adjusted net income ⁽¹⁾	$	316,639		$	252,709		$	224,454
Plus: Interest expense (after-tax)	18,386			14,947			11,775
Less: Interest income (after-tax)	5,206			2,955			1,291
Net operating profit after taxes	329,819			264,701			234,938
Invested capital	1,590,252			1,638,720			1,417,799
Return on invested capital	20.7		%	16.2		%	16.6		%


(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, 2018 are as follows:



	Payments Due By Period
	Total		2019		2020 to 2021		2022 to 2023		2024 and Beyond
Long-term debt, including current portion	$	711,015	$	99	$	204	$	10,712	$	700,000
Interest on long-term debt	374,828		23,295		46,584		46,501		258,448
Operating leases	54,957		16,920		19,635		8,369		10,033
Purchase commitments ⁽¹⁾	184,202		183,211		991		—		—
Transition Tax ⁽²⁾	18,697		833		—		852		17,012
Total	$	1,343,699	$	224,358	$	67,414	$	66,434	$	985,493


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


(2)	Federal income taxes on the Company's transition tax pursuant to the U.S. Tax Act is payable over eight years. Amounts reflect the utilization of 2017 overpayments and foreign tax credits.

As of December 31, 2018 , there were $15,562 of tax liabilities related to unrecognized tax benefits and a $26,524 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 total fair values as of December 31, 2018 of $2,100 for contingent consideration arrangements. The amount of future cash flows associated with these liabilities will be contingent upon actual results of the acquired entities. Refer to Notes 14 and 16 to the 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, 2018 , there were 3,710,464 common shares available for future grant under all plans.

Under these plans, options, restricted shares and restricted stock units granted were 322,338 in 2018 , 341,770 in 2017 and 449,415 in 2016 . 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 2018 , 2017 and 2016 .

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 2018 , 2017 and 2016 was $18,554 , $12,698 and $10,332 , respectively, with a related tax benefit of $4,632 , $4,861 and $3,955 , respectively. As of December 31, 2018 , total unrecognized stock-based compensation expense related to non-vested stock options, restricted shares and restricted stock units was $21,223 , which is expected to be recognized over a weighted average period of approximately 2.0 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, 2018 was $22,411 and $23,714 , respectively. The total intrinsic value of awards exercised during 2018 , 2017 and 2016 was $4,779 , $19,328 and $30,967 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 2018 . 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, administrative 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 applied guidance in SAB 118 when accounting for the enactment-date effects of the U.S. Tax Act in 2017 and throughout 2018. At December 31, 2017, the Company had not completed its accounting related to the U.S. Tax Act. All provisional amounts were based on reasonable estimates using the best information available at the time. At December 31, 2018, the Company has now completed its accounting related to the U.S. Tax Act. The Company reports income taxes based upon the application of regulations and guidance around the provisions of the U.S. Tax Act, which could be further modified, clarified or restated by the Department of Treasury and Internal Revenue Service.

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. Refer to Note 14 to the consolidated financial statements for further discussion of uncertain income tax positions.

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. At December 31, 2017, the Company remeasured its deferred tax assets and liabilities as a result of passage of the U.S Tax Act. The provisional amount recorded for the remeasurement was a tax benefit of $14,532. The Company finalized the remeasurement of deferred tax assets and liabilities during 2018. The result was an increase of $329 to the December 31, 2017 provisional benefit.

The Company previously considered the earnings in non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. As a result of the U.S. Tax Act, at December 31, 2017 the Company determined that it would repatriate earnings for certain non-U.S. subsidiaries, which are subject to foreign withholding taxes. At December 31, 2017, the provisional amount recorded for such foreign withholding taxes was $6,667. Based on the Company’s final U.S. Tax Act transition tax calculations, an adjustment of $4,424 was recorded in 2018 to reduce the foreign withholding taxes associated with the planned repatriation set forth in 2017. The Company considers remaining earnings in all other non-U.S. subsidiaries to be indefinitely reinvested and has not recorded any deferred taxes as such estimate is not practicable.

At December 31, 2018 , the Company had approximately $116,296 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. 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, 2018 , a valuation allowance of $69,400 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.

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 plans. 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 12 to the consolidated financial statements for additional information.

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 4.9% and 5.8% at December 31, 2018 and 2017 , 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 2018 , investment returns were a loss of 3.8% compared with a return of 14.8% in 2017 . A 25 basis point change in the expected return on plan assets would increase or decrease pension expense by approximately $1,300 .

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 3.8% at December 31, 2018 and 4.1% at December 31, 2017 . A 10 basis point change in the discount rate would not have a significant impact to pension expense.

The Company's defined benefit plan expense was $3,068, $2,517 and $13,988 in 2018 , 2017 and 2016 , respectively. Pension expense includes $6,289 and $8,252 in settlement charges in 2018 and 2017, respectively. The Company's defined contribution plan expense was $26,477 , $25,285 and $8,361 in 2018 , 2017 and 2016 , respectively. Excluding the pension settlement charges in 2018, the Company expects total 2019 expense related to retirement plans to increase by a range of approximately $2,500 to $3,500. The increase is the result of lower expected return on assets. Refer to Note 12 to the consolidated financial statements for additional information.

The Accumulated other comprehensive loss, excluding tax effects, recognized on the Consolidated Balance Sheet was $111,771 as of December 31, 2018 and $116,690 as of December 31, 2017 . The decrease is primarily the result of the amortization of net losses and settlements in 2018.

The Company made contributions to its defined benefit plans of $2,777 , $1,739 and $21,373 in 2018 , 2017 and 2016 , respectively. The Company does not expect to make significant contributions to the defined benefit plans in 2019.

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 37% and 32% of total inventories at December 31, 2018 and 2017 , respectively. Cost of other inventories is determined by costing methods that approximate a 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 $79,626 at December 31, 2018 and $68,641 at December 31, 2017 .

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

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. For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized 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.

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 discount rates to value estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period.

Acquisitions

Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.

Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method, a form of the income approach supported by observable market data for peer companies. Acquired inventories are marked to fair value. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Refer to Note 4 to the consolidated financial statements for additional details.

Revenue Recognition

On January 1, 2018, the Company adopted ASU 2014-09 (“Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting.

Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for goods or services. 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. Taxes collected by the Company, including sales tax and value add tax, are excluded from Net sales. The Company recognizes freight billed as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less. These costs are recorded within Selling, general and administrative expenses in the Company's Consolidated Statements of Income.

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, 2018 and a 100 basis point increase in effective interest rates at December 31, 2018 . The derivative, borrowing and investment arrangements in effect at December 31, 2018 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, 2018 , the Company hedged certain third-party and intercompany purchases and sales. The gross notional amount of these foreign exchange contracts at December 31, 2018 was $45,909 . At December 31, 2018 , a hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $1,241 .

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, 2018 was $328,534 . A hypothetical 10% change in the year-end exchange rates would have resulted in an increase or decrease to Income before income taxes of $5,751 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 2018 .

Interest Rate Risk

At December 31, 2018 , the Company had various floating interest rate swaps used to convert $125,000 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, 2018 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 swaps. 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 at December 31, 2018 approximated cost due to the 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, 2018 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, 2018 .

The effectiveness of the Company's internal control over financial reporting as of December 31, 2018 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 2018 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 2019 proxy statement pursuant to Regulation 14A of the Exchange Act within 120 days after December 31, 2018 .

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 2019 proxy statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the 2019 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 2019 proxy statement.

For further information on the Company's equity compensation plans, see Note 1 and Note 10 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 2019 proxy statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference from the 2019 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 Statements of Income – Years ended December 31, 2018 , 2017 and 2016

Consolidated Statements of Comprehensive Income – Years ended December 31, 2018 , 2017 and 2016

Consolidated Balance Sheets – December 31, 2018 and 2017

Consolidated Statements of Equity – Years ended December 31, 2018 , 2017 and 2016

Consolidated Statements of Cash Flows – Years ended December 31, 2018 , 2017 and 2016

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).
3.3		Amended and Restated Articles of Incorporation of Lincoln Electric Holdings, Inc. as amended on February 18, 2019 (filed as Exhibit 3.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 21, 2019, 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 June 30, 2017, 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 July 6, 2017 SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.2		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).
10.3		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 as Exhibit 10.4 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2016, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).



Exhibit No.		Description
10.4		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., MetLife Investment Advisors, LLC and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.1, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.5		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., Voya Retirement Insurance and Annuity Company and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.2, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.6		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., State Farm Life Insurance Company and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.3, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.7		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., AIG Asset Management (U.S.), LLC and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.4, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.8		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., John Hancock Life Insurance Company (U.S.A.) and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.5, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.9		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., Thrivent Financial for Lutherans and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.6, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.10		Uncommitted Master Note Facility, dated as of November 27, 2018, 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., Allianz Life Insurance Company of North America and/or one or more of its affiliates or related funds, as purchasers thereunder (filed as Exhibit 10.7, to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 29, 2018, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.11*		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).
10.12*		Amendment No. 1 to Supplemental Executive Retirement Plan (As Amended and Restated as of December 31, 2008) dated November 29, 2016 (filed as Exhibit 10.6 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2016, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.13*		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).
10.14*		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).
10.15*		Non-Employee Directors' Deferred Compensation Plan (Amended and Restated as of January 1, 2019) (filed herewith).
10.16*		2005 Deferred Compensation Plan for Executives (Amended and Restated as of January 1, 2018) (filed as Exhibit 10.10 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).



Exhibit No.		Description
10.17*		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).
10.18*		The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2017 dated December 20, 2016 (filed as Exhibit 10.11 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2016, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.19*		Amendment No. 1 to The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2017 dated July 25, 2017 (filed as Exhibit 10.13 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.20*		The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2019 (filed herewith).
10.21*		Form of Change in Control Severance Agreement (as entered into by the Company and its executive officers) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 21, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.22*		2006 Equity and Performance Incentive Plan (Restated as of March 3, 2011) (filed as Annex A to 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).
10.23*		2006 Stock Plan for Non-Employee Directors (filed as Appendix C to 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).
10.24*		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).
10.25*		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).
10.26*		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).
10.27*		2015 Equity and Incentive Compensation Plan (filed as Appendix B to 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).
10.28*		2015 Stock Plan for Non-Employee Directors (filed as Appendix C to 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).
10.29*		Amendment No. 1 to the 2015 Stock Plan for Non-Employee Directors (filed as Appendix C to Lincoln Electric Holdings, Inc. proxy statement dated March 20, 2017, SEC File No. 0-1402 and incorporated by reference and made a part hereof).
10.30*		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).
10.31*		Form of Restricted Share Agreement for Non-Employee Directors (filed as Exhibit 10.24 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.32*		Form of Restricted Stock Unit Agreement for Non-Employee Directors (filed herewith).
10.33*		Form of Stock Option Agreement for Executive Officers (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).
10.34*		Form of Stock Option Agreement for Executive Officers (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).
10.35*		Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.27 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).



Exhibit No.		Description
10.36*		Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.28 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.37*		Form of Stock Option Agreement for Executive Officers (filed herewith).
10.38*		Form of Restricted Stock Unit Agreement for Executive Officers (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).
10.39*		Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.21 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.40*		Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.33 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.41*		Form of Restricted Stock Unit Agreement for Executive Officers (filed herewith).
10.42*		Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.22 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2015, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.43*		Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.35 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.44*		Form of Performance Share Award Agreement for Executive Officers (filed herewith).
10.45*		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).
10.46*		Form of Director Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.2 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, Strategy and Business Development (principal accounting officer) February 27, 2019

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 27, 2019		Vincent K. Petrella, Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer) February 27, 2019

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman, Senior Vice President, Strategy and Business Development (principal accounting officer) February 27, 2019		Geoffrey P. Allman as Attorney-in-Fact for Curtis E. Espeland, Director February 27, 2019

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Patrick P. Goris, Director February 27, 2019		Geoffrey P. Allman as Attorney-in-Fact for Stephen G. Hanks, Director February 27, 2019

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Michael F. Hilton, Director February 27, 2019		Geoffrey P. Allman as Attorney-in-Fact for G. Russell Lincoln, Director February 27, 2019

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Kathryn Jo Lincoln, Director February 27, 2019		Geoffrey P. Allman as Attorney-in-Fact for William E. MacDonald, III, Director February 27, 2019

/s/ GEOFFREY P. ALLMAN		/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Phillip J. Mason, Director February 27, 2019		Geoffrey P. Allman as Attorney-in-Fact for Ben Patel, Director February 27, 2019

/s/ GEOFFREY P. ALLMAN
Geoffrey P. Allman as Attorney-in-Fact for Hellene S. Runtagh, Director February 27, 2019

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Lincoln Electric Holdings, Inc. (the Company) as of December 31, 2018 and 2017 , the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2018 , and the related notes and the financial statement schedule listed in the Index as Item 15 (a) (2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 , in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018 , 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 27, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company's auditor since at least 1923, but we are unable to determine the specific year.

Cleveland, OH

February 27, 2019

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Lincoln Electric Holdings, Inc.'s internal control over financial reporting as of December 31, 2018 , 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). In our opinion, Lincoln Electric Holdings, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018 , based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017 , 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, 2018 , and the related notes and the financial statement schedule listed in the Index as Item 15 (a) (2), and our report dated February 27, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company's 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. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control Over Financial Reporting

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.

/s/ Ernst & Young LLP

Cleveland, Ohio

February 27, 2019

F-2

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)



	Year Ended December 31,
	2018			2017			2016
Net sales	$	3,028,674		$	2,624,431		$	2,274,614
Cost of goods sold	2,000,153			1,749,324			1,488,055
Gross profit	1,028,521			875,107			786,559
Selling, general & administrative expenses	627,697			541,225			468,597
Rationalization and asset impairment charges (Notes 5 and 7)	25,285			6,590			—
Loss on deconsolidation of Venezuelan subsidiary (Note 1)	—			—			34,348
Bargain purchase gain (Note 4)	—			(49,650		)	—
Operating income	375,539			376,942			283,614
Interest expense, net	17,565			19,432			16,987
Other income (expense) (Note 13)	10,686			8,726			10,761
Income before income taxes	368,660			366,236			277,388
Income taxes (Note 14)	81,667			118,761			79,015
Net income including non-controlling interests	286,993			247,475			198,373
Non-controlling interests in subsidiaries' loss	(73		)	(28		)	(26		)
Net income	$	287,066		$	247,503		$	198,399

Basic earnings per share	$	4.42		$	3.76		$	2.94
Diluted earnings per share	$	4.37		$	3.71		$	2.91

Cash dividends declared per share	$	1.64		$	1.44		$	1.31

See notes to these consolidated financial statements.

F-3

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)



	Year Ended December 31,
	2018			2017		2016
Net income including non-controlling interests	$	286,993		$	247,475	$	198,373
Other comprehensive income (loss), net of tax:
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax of $346 in 2018; $17 in 2017; $(21) in 2016	819			288		39
Defined pension plan activity, net of tax of $1,691 in 2018; $19,252 in 2017; $4,297 in 2016	3,228			10,662		3,837
Currency translation adjustment	(50,693		)	71,016		(36,752		)
Other comprehensive income (loss)	(46,646		)	81,966		(32,876		)
Comprehensive income	240,347			329,441		165,497
Comprehensive income (loss) attributable to non-controlling interests	(166		)	87		(132		)
Comprehensive income attributable to shareholders	$	240,513		$	329,354	$	165,629

See notes to these consolidated financial statements.

F-4

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



	December 31,
	2018			2017
ASSETS
Current Assets
Cash and cash equivalents	$	358,849		$	326,701
Accounts receivable (less allowance for doubtful accounts of $12,827 in 2018; $15,943 in 2017)	396,885			395,279
Inventories (Note 17)	361,829			348,667
Marketable securities	—			179,125
Other current assets	120,236			123,836
Total Current Assets	1,237,799			1,373,608
Property, plant and equipment, net (Note 1)	478,801			477,031
Intangibles, net (Note 5)	147,946			127,452
Goodwill (Note 5)	281,294			234,582
Deferred income taxes (Note 14)	20,395			15,937
Other assets	183,590			177,937
TOTAL ASSETS	$	2,349,825		$	2,406,547
LIABILITIES AND EQUITY
Current Liabilities
Amounts due banks (Note 9)	$	—		$	2,020
Trade accounts payable	268,600			269,763
Accrued employee compensation and benefits	94,202			91,902
Dividends payable	29,867			25,608
Customer advances	17,023			19,683
Other current liabilities	128,379			119,655
Current portion of long-term debt (Note 9)	111			111
Total Current Liabilities	538,182			528,742
Long-term debt, less current portion (Note 9)	702,549			704,136
Deferred income taxes (Note 14)	45,985			40,716
Other liabilities	175,517			200,500
Total Liabilities	1,462,233			1,474,094
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 2018 and 2017; outstanding – 63,545,878 shares in 2018 and 65,662,546 shares in 2017	9,858			9,858
Additional paid-in capital	360,308			334,309
Retained earnings	2,564,440			2,388,219
Accumulated other comprehensive loss	(293,739		)	(247,186		)
Treasury shares, at cost – 35,035,556 shares in 2018 and 32,918,888 shares in 2017	(1,753,925		)	(1,553,563		)
Total Shareholders' Equity	886,942			931,637
Non-controlling interests	650			816
Total Equity	887,592			932,453
TOTAL LIABILITIES AND EQUITY	$	2,349,825		$	2,406,547

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, 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 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
Net income							247,503									(28		)	247,475
Unrecognized amounts from defined benefit pension plans, net of tax										10,662									10,662
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax										288									288
Currency translation adjustment										70,901						115			71,016
Cash dividends declared – $1.44 per share							(95,355		)										(95,355		)
Stock-based compensation activity	470				24,892								4,433						29,325
Purchase of shares for treasury	(481	)											(43,164		)				(43,164		)
Balance at December 31, 2017	65,663		9,858		334,309		2,388,219			(247,186		)	(1,553,563		)	816			932,453
Net income							287,066									(73		)	286,993
Unrecognized amounts from defined benefit pension plans, net of tax										3,228									3,228
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax										819									819
Currency translation adjustment										(50,600		)				(93		)	(50,693		)
Cash dividends declared – $1.64 per share							(106,802		)										(106,802		)
Stock-based compensation activity	158				21,956								1,288						23,244
Purchase of shares for treasury	(2,275	)											(201,650		)				(201,650		)
Other					4,043		(4,043		)										—
Balance at December 31, 2018	63,546		$	9,858	$	360,308	$	2,564,440		$	(293,739	)	$	(1,753,925	)	$	650		$	887,592

See notes to these consolidated financial statements.

F-6

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



	Year Ended December 31,
	2018			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	287,066		$	247,503		$	198,399
Non-controlling interests in subsidiaries' loss	(73		)	(28		)	(26		)
Net income including non-controlling interests	286,993			247,475			198,373
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:
Rationalization and asset impairment net (gains) charges (Notes 5 and 7)	(5,978		)	1,441			—
Loss on deconsolidation of Venezuelan subsidiary (Note 1)	—			—			34,348
Bargain purchase gain (Note 4)	—			(49,650		)	—
Net impact of U.S. Tax Act (Note 14)	399			28,616			—
Depreciation and amortization	72,346			68,115			65,073
Equity earnings in affiliates, net	(3,034		)	(337		)	(261		)
Deferred income taxes (Note 14)	1,490			4,058			(9,805		)
Stock-based compensation (Note 10)	18,554			12,698			10,332
Pension expense, settlements and curtailments (Note 12)	3,068			2,517			13,988
Other, net	(11,002		)	1,402			(26,560		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Increase in accounts receivable	(4,061		)	(16,811		)	(12,314		)
(Increase) decrease in inventories	(23,904		)	19,448			14,601
Decrease (increase) in other current assets	1,324			(8,143		)	1,532
Increase in trade accounts payable	3,636			17,871			29,627
Decrease in other current liabilities	(13,657		)	(13		)	(9,286		)
Net change in other assets and liabilities	2,978			6,158			2,909
NET CASH PROVIDED BY OPERATING ACTIVITIES	329,152			334,845			312,557
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(71,246		)	(61,656		)	(49,877		)
Acquisition of businesses, net of cash acquired (Note 4)	(101,792		)	(72,468		)	(71,567		)
Proceeds from sale of property, plant and equipment	16,755			2,301			1,127
Purchase of marketable securities	(268,335		)	(205,584		)	(38,920		)
Proceeds from marketable securities	447,459			65,380			—
Other investing activities	(2,000		)	—			(709		)
NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES	20,841			(272,027		)	(159,946		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	—			—			1,892
Payments on short-term borrowings	—			—			(1,822		)
Amounts due banks, net	(835		)	(491		)	1,469
Proceeds from long-term borrowings	—			34			350,261
Payments on long-term borrowings	(107		)	(39		)	(481		)
Proceeds from exercise of stock options	4,690			16,627			25,049
Purchase of shares for treasury	(201,650		)	(43,164		)	(342,003		)
Cash dividends paid to shareholders	(102,058		)	(92,452		)	(87,330		)
Other financing activities	(2,170		)	(15,552		)	(19,043		)
NET CASH USED BY FINANCING ACTIVITIES	(302,130		)	(135,037		)	(72,008		)
Effect of exchange rate changes on cash and cash equivalents	(15,715		)	19,741			(5,607		)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	32,148			(52,478		)	74,996
Cash and cash equivalents at beginning of year	326,701			379,179			304,183
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	358,849		$	326,701		$	379,179

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 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.

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 $4,885 , $5,654 and $3,741 in 2018 , 2017 and 2016 , respectively.

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, 2018. 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.

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

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.

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 last-in, first-out (“ LIFO”) basis. At December 31, 2018 and 2017 , approximately 37% and 32% of total inventories, respectively, were valued using the LIFO method. Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Refer to Note 17 to the consolidated financial statements for additional details.

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 $24,502 and $27,544 at December 31, 2018 and 2017 , respectively.

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 $17,078 and $15,599 at December 31, 2018 and 2017 , respectively.

Equity Investments

Investments in businesses which the Company does not own a majority interest and does not have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. 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 $22,704 and $19,670 at December 31, 2018 and 2017 , respectively.

F-9

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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,
	2018		2017
Land	$	61,784	$	66,653
Buildings	414,698		421,722
Machinery and equipment	781,136		776,436
	1,257,618		1,264,811
Less accumulated depreciation	778,817		787,780
Total	$	478,801	$	477,031

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.

In performing the annual impairment test, 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. For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized 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.

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. Refer to Notes 5 and 7 to the consolidated financial statements for additional details.

F-10

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 following hierarchy is used to classify the inputs that 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 12 and 16 to the consolidated financial statements 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 20 to the consolidated financial statements for additional details.

Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09 (“Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting. The cumulative impact of adopting Topic 606 as of January 1, 2018 did not have a material impact to the consolidated financial statements. The Company does not expect the impact of the adoption of Topic 606 to be material to the consolidated financial statements on an ongoing basis.

The Company’s payment terms vary by the type and location of the customer and the products or services offered. The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Topic 606.

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 10 to the consolidated financial statements for additional details.

F-11

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 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 Net cash provided by 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. 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 Net 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. 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, 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 foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. 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. Refer to Note 15 to the consolidated financial statements for additional details.

Research and Development

Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled $54,168 , $47,899 and $44,720 in 2018 , 2017 and 2016 , 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 $123,799 , $97,392 and $83,620 in 2018 , 2017 and 2016 , respectively.

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.

Provisions of the U.S. Tax Cuts and Jobs Act ("U.S. Tax Act") became effective for the Company in 2018. The Foreign-Derived Intangible Income (“FDII”) provision generates a deduction against the Company’s U.S. taxable income for U.S. earnings derived offshore that utilize intangibles held by the Company in the U.S. Conversely, the Global Intangible Low-Taxed Income (“GILTI”) provision requires the Company to subject to U.S. taxation a portion of its foreign subsidiary earnings that exceed an allowable return. The Company has elected to treat any GILTI inclusion as a period expense in the year incurred. Refer to Note 14 to the consolidated financial statements for additional details.

Acquisitions

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.

F-13

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

New Accounting Pronouncements

The following section provides a description of new ASUs issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.

The following ASUs were adopted as of January 1, 2018 and did not have a significant financial impact on the Company's consolidated financial statements unless otherwise described within the table below:



Standard	Description
ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , issued August 2017.	ASU 2017-12 provides updated guidance to more closely align hedge accounting with a company's risk management strategy, to simplify the application of hedge accounting and to better portray the economic results of hedging instruments in the financial statements. The Company early adopted the ASU on January 1, 2018.
ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost , issued March 2017.	ASU 2017-07 requires an entity to report the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of the net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside of any subtotal of operating income. Additionally, only the service cost component will be eligible for capitalization in assets. The impact of the adoption resulted in the reclassification of the other components of net periodic benefit cost from Cost of goods sold and Selling, general and administrative expenses to Other income (expense). The reclassification resulted in a decrease in Operating income of $769 as a result of increases in Cost of goods sold of $5,219 and Selling, general & administrative expenses of $3,700 partially offset by a decrease in Pension settlement charges of $8,150 for the year ended December 31, 2017. The reclassification resulted in a decrease in Operating income of $4,660 as a result of a increases in Cost of goods sold of $2,739 and Selling, general and administrative expenses of $1,921 for the year ended December 31, 2016. Refer to Note 12 to the consolidated financial statements for further details.
ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, issued January 2017.	ASU 2017-01 provides updated guidance for evaluating whether certain transactions should be accounted for as an acquisition (or disposal) of an asset or a business.
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.
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.
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.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued May 2014 and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , issued August 2015.	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 standard 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. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective transition method applied to those contracts that were not completed as of that date. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 2 to the consolidated financial statements for further details.

F-14

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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



Standard	Description
ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) , issued August 2018.	ASU 2018-14 modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU also requires an entity to disclose the weighted-average interest crediting rates for cash balance plans and to explain the reasons for significant gains and losses related to changes in the benefit obligation. The ASU is effective January 1, 2020 and early adoption is permitted.
ASU No. 2018-13, Fair Value Measurement (Topic 944) , issued August 2018.	ASU 2018-13 eliminates, amends and adds disclosure requirements related to fair value measurements. The ASU impacts various elements of fair value disclosure, including but not limited to, changes in unrealized gains or losses, significant unobservable inputs and measurement uncertainty. The ASU is effective January 1, 2020 and early adoption is permitted.
ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , issued February 2018.	ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Act (as defined within Note 14 to the consolidated financial statements). The ASU only applies to the income tax effects of the U.S. Tax Act, all other existing guidance remains the same. The ASU is effective January 1, 2019, early adoption is permitted and the ASU should be applied retrospectively to each period impacted by the U.S. Tax Act.
ASU No. 2016-02, Leases (Topic 842) , issued February 2016	ASU 2016-02 ("Topic 842") aims to increase transparency and comparability among organizations by recognizing a right of use asset and lease liability on the balance sheet for all leases with a lease term greater than twelve months. Topic 842 also requires the disclosure of key information about leasing agreements. The Company adopted Topic 842 on January 1, 2019 using the modified retrospective transition option of applying the new standard at the adoption date. The Company also elected the package of practical expedients, which among other things, allows it to not reassess the identification, classification and initial direct costs of leases commencing before the effective date of Topic 842. Although the Company is finalizing its review of operating leases as of the adoption date, the Company expects to record a right of use asset and lease liability for its operating leases of less than three percent of Total assets. The Company also expects to provide additional disclosures in the periods subsequent to adoption. The Company does not expect Topic 842 to have a material impact to the Consolidated Statements of Income, Cash Flows or debt covenants.

F-15

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 2 — REVENUE RECOGNITION

The following table presents the Company's Net sales disaggregated by product line:



	Year Ended December 31,
	2018
Consumables	$	1,755,652
Equipment	1,273,022
Net sales	$	3,028,674

Consumable sales consist of electrodes, fluxes, specialty welding consumables and brazing and soldering alloys. Equipment sales consist of arc welding power sources, welding accessories, fabrication, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, CNC plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. Consumable and Equipment products are sold within each of the Company’s operating segments.

Substantially all of the Company's sales arrangements are short-term in nature involving a single performance obligation. The Company recognizes revenue when the performance obligation is satisfied and control of the product is transferred to the customer based upon shipping terms.

Within the Equipment product line, there are certain customer contracts related to automation products that may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin. In addition, certain customized automation performance obligations within the Equipment product line, are accounted for over time. Under this method, revenue recognition is primarily 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. Less than 10% of the Company's Net sales are recognized over time.

At December 31, 2018 , the Company recorded $17,023 related to advance customer payments and $17,013 related to billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the Condensed Consolidated Balance Sheets. At January 1, 2018, the balances related to advance customer payments and billings in excess of revenue recognized were $19,683 and $11,132 , respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services. At December 31, 2018 and January 1, 2018, $25,032 and $22,229 , respectively, related to these future customer receivables was included in Other current assets in the Condensed Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months.

NOTE 3 - EARNINGS PER SHARE

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



	Year Ended December 31,
	2018		2017		2016
Numerator:
Net income	$	287,066	$	247,503	$	198,399
Denominator:
Basic weighted average shares outstanding	64,886		65,739		67,462
Effect of dilutive securities - Stock options and awards	796		904		694
Diluted weighted average shares outstanding	65,682		66,643		68,156
Basic earnings per share	$	4.42	$	3.76	$	2.94
Diluted earnings per share	$	4.37	$	3.71	$	2.91

For the years ended December 31, 2018 , 2017 and 2016 , common shares subject to equity-based awards of 324,688 , 157,033 and 774,502 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

F-16

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 4 – ACQUISITIONS

During December 2018, the Company acquired the soldering business of Worthington Industries (“Worthington”). The Worthington business, based in Winston Salem, North Carolina, broadens the Harris Products Group’s portfolio of industry-leading consumables with the addition of premium solders and fluxes.

Also during December 2018, the Company acquired Coldwater Machine Company (“Coldwater”) and Pro Systems. Coldwater, based in Coldwater, Ohio, is a flexible automation integrator and precision machining and assembly manufacturer serving diverse end markets. Pro Systems, based in Churubusco, Indiana, is an automation systems designer and integrator serving automotive, industrial, electrical and medical applications. The acquisitions accelerate growth and expand the Company’s industry-leading portfolio of automated cutting and joining solutions.

Also during December 2018, the Company acquired Inovatech Engineering Corporation (“Inovatech”). Inovatech, based in Ontario, Canada, is a manufacturer of advanced robotic plasma cutting solutions for structural steel applications. The acquisition scales our automated cutting solutions and application expertise and supports long-term growth in that market.

During July 2017, the Company completed its acquisition of Air Liquide Welding, a subsidiary of Air Liquide. The agreed upon purchase price was $135,123 , which was adjusted for certain debt like obligations, for a net purchase price of $61,953 , net of cash acquired. The primary debt like obligation was a pension liability. The acquisition was accounted for as a business combination. The funding of the cash portion of the purchase price and acquisition costs was provided for with available cash.

The complementary business enhanced the Company’s global specialty consumables portfolio and extended its channel reach for equipment systems and cutting, soldering and brazing solutions in Europe. The acquisition also offered European customers more comprehensive welding solutions, greater technical application expertise and improved service levels.

The fair value of the net assets acquired exceeded the purchase consideration by $49,650 , resulting in a bargain purchase gain at acquisition, which is included in Bargain purchase gain in the Company’s Consolidated Statements of Income. The Company believes that the bargain purchase gain was primarily the result of the divestiture by Air Liquide of the welding business, which was outside Air Liquide’s core business, as part of an overall repositioning of its core business.

The following table summarizes the purchase price allocation for the Air Liquide Welding acquisition:



Assets acquired and liabilities assumed	As of July 31, 2017
Accounts receivable	$	89,442
Inventory ⁽¹⁾	97,803
Property, plant and equipment ⁽²⁾	73,056
Intangible assets ⁽³⁾	11,715
Accounts payable	(65,640		)
Pension liability	(67,563		)
Bargain purchase gain	(49,650		)
Net other assets and liabilities ⁽⁴⁾	(27,210		)
Total purchase price, net of cash acquired ⁽⁵⁾	$	61,953


(1)	Inventories acquired were sold in 2017 resulting in a $4,578 increase in cost of sales for the amortization of step up in the value of acquired inventories.


(2)	Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations.


(3)	$7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name ( 10 year weighted average useful life) and $3,433 was assigned to other intangible assets ( 9 year weighted average life).


(4)	Consists primarily of other accrued liabilities.

(5) Reflects a receivable from seller for an agreed upon purchase price adjustment. The payment of $10,983 was received in the first quarter of 2018.

In 2018 and 2017, the Company recognized $4,498 and $15,002 , respectively, in acquisition transaction and integration costs related to the acquisition of Air Liquide Welding. Such costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item in the Consolidated Statements of Income.

F-17

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Beginning August 1, 2017, the Company's Consolidated Statements of Income include the results of the Air Liquide Welding businesses, including sales revenue of $182 million through December 31, 2017. The impact on net income in the year ended December 31, 2017 from Air Liquide Welding businesses was immaterial.

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.

Pro forma information related to the acquisitions discussed above 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.

NOTE 5 – GOODWILL AND INTANGIBLES

The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2018 and 2017 were as follows:



	Americas Welding			International Welding			The Harris Products Group			Consolidated
Balance as of December 31, 2016	$	196,378		$	23,664		$	11,877		$	231,919
Additions and adjustments ⁽¹⁾	(76		)	—			(301		)	(377		)
Impairment charges ⁽²⁾	(1,091		)	—			—			(1,091		)
Foreign currency translation	2,048			2,003			80			4,131
Balance as of December 31, 2017	197,259			25,667			11,656			234,582
Additions and adjustments ⁽³⁾	44,408			1,224			6,525			52,157
Foreign currency translation	(2,452		)	(2,643		)	(350		)	(5,445		)
Balance as of December 31, 2018	$	239,215		$	24,248		$	17,831		$	281,294


(1)	Adjustments to Harris Products Group include the tax benefit attributable to the amortization of tax deductible goodwill in excess of goodwill recorded for financial reporting purposes.


(2)	The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income.


(3)	Additions to Americas Welding reflect goodwill recognized in the acquisitions of Coldwater, Pro Systems and Inovatech in 2018. Additions to The Harris Products Group reflect goodwill recognized in the acquisition of Worthington in 2018.

Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as follows:



	December 31, 2018				December 31, 2017
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets not subject to amortization
Trademarks and trade names	$	23,385			$	24,235
Intangible assets subject to amortization
Trademarks and trade names	$	50,458	$	26,357	$	41,203	$	24,147
Customer relationships	113,837		52,518		93,139		47,175
Patents	26,848		13,307		27,777		12,978
Other	60,373		34,773		57,351		31,953
Total intangible assets subject to amortization	$	251,516	$	126,955	$	219,470	$	116,253

F-18

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

During 2018, 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, 2018
	Purchase Price Allocation	Weighted Average Life
Acquired intangible assets subject to amortization
Trademarks and trade names	8,786	10
Customer relationships	21,493	10
Other	5,632	9
Total acquired intangible assets subject to amortization	35,911

Aggregate amortization expense was $15,744 , $15,671 and $14,525 for 2018 , 2017 and 2016 , respectively. Estimated annual amortization expense for intangible assets for each of the next five years is $17,316 in 2019 , $16,101 in 2020 , $15,264 in 2021 , $13,801 in 2022 and $12,441 in 2023 .

NOTE 6 – 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.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure. 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, 2018 , 2017 and 2016 approximately 37% , 32% and 40% , respectively, 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-19

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 ⁽¹⁾		International Welding ⁽²⁾		The Harris Products Group		Corporate / Eliminations ⁽³⁾			Consolidated
For the Year Ended December 31, 2018
Net sales	$	1,806,514	$	919,771	$	302,389	$	—		$	3,028,674
Inter-segment sales	118,936		18,576		6,969		(144,481		)	$	—
Total	$	1,925,450	$	938,347	$	309,358	$	(144,481	)	$	3,028,674
Adjusted EBIT	$	340,744	$	54,273	$	36,564	$	(8,887	)	$	422,694
Special items charge (gain)	6,686		25,285		—		4,498			$	36,469
EBIT	$	334,058	$	28,988	$	36,564	$	(13,385	)	$	386,225
Interest income										6,938
Interest expense										(24,503		)
Income before income taxes										$	368,660

Total assets	$	1,418,905	$	827,132	$	203,095	$	(99,307	)	$	2,349,825
Equity investments in affiliates	4,204		27,024		—		—			$	31,228
Capital expenditures	42,053		26,284		2,909		—			$	71,246
Depreciation and amortization	47,008		22,384		3,045		(91		)	$	72,346
For the Year Ended December 31, 2017
Net sales	$	1,609,779	$	724,024	$	290,628	$	—		$	2,624,431
Inter-segment sales	97,382		18,860		8,190		(124,432		)	$	—
Total	$	1,707,161	$	742,884	$	298,818	$	(124,432	)	$	2,624,431
Adjusted EBIT	$	291,866	$	41,721	$	36,442	$	309		$	370,338
Special items charge (gain)	9,242		10,076		—		(34,648		)	$	(15,330	)
EBIT	$	282,624	$	31,645	$	36,442	$	34,957		$	385,668
Interest income										4,788
Interest expense										(24,220		)
Income before income taxes										$	366,236

Total assets	$	1,253,411	$	919,995	$	175,151	$	57,990		$	2,406,547
Equity investments in affiliates	4,037		24,489		—		—			$	28,526
Capital expenditures	43,158		14,549		3,949		—			$	61,656
Depreciation and amortization	47,038		18,364		2,885		(172		)	$	68,115
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


(1)	Special items in 2018 reflect pension settlement charges of $6,686 in Americas Welding related to lump sum pension payments.

2017 special items reflect pension settlement charges of $8,150 related to lump sum pension payments, as well as non-cash charges of $1,091 related to the impairment of goodwill.

F-20

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


(2)	2018 special items reflect charges of $25,285 related to employee severance, asset impairments, gains or losses on disposal of assets and other related costs.

2017 special items reflect amortization of step up in value of acquired inventories of $4,578 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements, as well as charges of $5,498 related to employee severance, asset impairments and other related costs.


(3)	2018 special items reflect acquisition and acquisition transaction and integration costs of $4,498 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

2017 special items reflect a bargain purchase gain of $49,650 and acquisition transaction and integration costs of $15,002 related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

2016 special items reflect a loss of $34,348 related to the deconsolidation of the Company's Venezuelan subsidiary.

Export sales (excluding inter-company sales) from the United States were $160,064 in 2018 , $151,630 in 2017 and $134,216 in 2016 . No individual customer comprised more than 10% of the Company's total revenues for any of the three years ended December 31, 2018 .

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,
	2018		2017		2016
Net sales:
United States	$	1,554,688	$	1,388,816	$	1,308,635
Foreign countries	1,473,986		1,235,615		965,979
Total	$	3,028,674	$	2,624,431	$	2,274,614



	December 31,
	2018			2017			2016
Property, plant and equipment, net:
United States	$	214,943		$	194,491		$	176,041
Foreign countries	264,110			282,931			196,679
Eliminations	(252		)	(391		)	(343		)
Total	$	478,801		$	477,031		$	372,377

NOTE 7 – RATIONALIZATION AND ASSET IMPAIRMENTS

The Company recorded rationalization and asset impairment net charges of $25,285 and $6,590 for the years ended December 31, 2018 and 2017. The charges are primarily related to employee severance, asset impairments and gains or losses on the disposal of assets. A description of each restructuring plan and the related costs follows:

International Welding Plans:

During 2018, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the cost structures with economic conditions and operating needs. At December 31, 2018 , liabilities relating to the International Welding plans of $10,903 were recognized in Other current liabilities. The Company does not anticipate significant additional charges related to the completion of these plans.

During 2017, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the cost structures with economic conditions and operating needs. Liabilities related to these plans were substantially paid at December 31, 2018.

F-21

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:



	Consolidated
Balance at December 31, 2016	$	5,190
Payments and other adjustments	(3,536		)
Charged to expense	5,149
Balance at December 31, 2017	$	6,803
Payments and other adjustments	(26,874		)
Charged to expense	31,263
Balance at December 31, 2018	$	11,192

NOTE 8 – 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, 2018 and 2017 :



	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, 2016	$	587			$	(95,939	)		$	(233,685	)		$	(329,037	)
Other comprehensive income (loss) before reclassification	(2,074		)		2,736			⁽²⁾	70,901			⁽³⁾	71,563
Amounts reclassified from AOCI	2,362			⁽¹⁾	7,926			⁽²⁾	—				10,288
Net current-period other comprehensive income (loss)	288				10,662				70,901				81,851
Balance at December 31, 2017	$	875			$	(85,277	)		$	(162,784	)		$	(247,186	)
Other comprehensive income (loss) before reclassification	624				(4,396		)	⁽²⁾	(50,600		)	⁽³⁾	(54,372		)
Amounts reclassified from AOCI	195			⁽¹⁾	7,624			⁽²⁾	—				7,819
Net current-period other comprehensive income (loss)	819				3,228				(50,600		)		(46,553		)
Balance at December 31, 2018	$	1,694			$	(82,049	)		$	(213,384	)		$	(293,739	)


(1)	During 2018 , this AOCI reclassification is a component of Net sales of $(152) (net of tax of $(73) and Cost of goods sold of $43 (net of tax of $(40) ); during 2017 , the reclassification is a component of Net sales of $1,860 (net of tax of $693 ) and Cost of goods sold of $502 (net of tax of $93 ). Refer to Note 15 to the consolidated financial statements for additional details.


(2)	This AOCI component is included in the computation of net periodic pension costs (net of tax of $1,691 and $19,252 during the years ended December 31, 2018 and 2017 , respectively). Refer to Note 12 to the consolidated financial statements for additional details.


(3)	The Other comprehensive income before reclassifications excludes $(93) and $115 attributable to Non-controlling interests in the years ended December 31, 2018 and 2017 , respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. Refer to the Consolidated Statements of Equity for additional details.

F-22

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 9 – DEBT

At December 31, 2018 and 2017 , debt consisted of the following:



	December 31,
	2018		2017
Long-term debt
Senior Unsecured Notes due through 2045, interest at 2.8% to 4.0% (net of debt issuance costs of $1,392 and $1,491 at December 31, 2018 and 2017, respectively), swapped $125,000 to variable interest rates of 3.1% to 4.4%	$	691,877	$	693,424
Other borrowings due through 2023, interest up to 8.0%	10,783		10,823
	702,660		704,247
Less current portion	111		111
Long-term debt, less current portion	702,549		704,136
Short-term debt
Amounts due banks, interest at 31.8% in 2017	—		2,020
Current portion long-term debt	111		111
Total short-term debt	111		2,131
Total debt	$	702,660	$	706,267

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. 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. Interest on the notes are payable semi-annually. The proceeds were used for general corporate purposes. The 2015 Notes and 2016 Notes contain certain affirmative and negative covenants. As of December 31, 2018, the Company was in compliance with all of its debt covenants .

The maturity and interest rates of the 2015 Notes and 2016 Notes are as follows:



	Amount		Maturity Date	Interest Rate
2015 Notes
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, 2035	4.02	%
2016 Notes
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 remaining weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 15 years, respectively.

Revolving Credit Agreement

F-23

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. The Company amended and restated the Credit Agreement on June 30, 2017 , extending the maturity of the line of credit to June 30, 2022 . 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, 2018, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement.

Shelf Agreements

On November 27, 2018, the Company entered into seven uncommitted master note facilities (the "Shelf Agreements") that allow borrowings up to $700,000 in the aggregate. The Shelf Agreements have a five -year term and the average life of borrowings cannot exceed 15 years. The Company is required to comply with covenants similar to those contained in the 2015 Notes and 2016 Notes. As of December 31, 2018, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Shelf Agreements.

Other

Maturities of long-term debt, including payments for amounts due banks, for the five years succeeding December 31, 2018 are $111 in 2019 , $114 in 2020 , $110 in 2021 , $107 in 2022 , $10,607 in 2023 and $700,000 thereafter. Total interest paid was $23,790 in 2018 , $23,820 in 2017 and $15,332 in 2016 . 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 swap contract discussed in Note 16 to the consolidated financial statements.

NOTE 10 – STOCK PLANS

Stock Options

The following table summarizes stock option activity for the year ended December 31, 2018 under all Plans:



	Number of Options		Weighted Average Exercise Price
Balance at beginning of year	1,362,448		$	58.45
Options granted	171,843		90.70
Options exercised	(101,272	)	46.20
Options canceled	(1,981	)	58.79
Balance at end of year	1,431,038		63.19
Exercisable at end of year	1,070,594		56.70

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 2018 . In 2018 , 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

F-24

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

historical volatility. The weighted average assumptions for each of the three years ended December 31 were as follows:



	2018			2017			2016
Expected volatility	25.36		%	25.77		%	28.86		%
Dividend yield	1.92		%	1.62		%	1.70		%
Risk-free interest rate	2.69		%	1.90		%	1.27		%
Expected option life (years)	4.6			4.5			4.5
Weighted average fair value per option granted during the year	$	18.97		$	17.50		$	12.55

The following table summarizes non-vested stock options for the year ended December 31, 2018 :



	Number of Options		Weighted Average Fair Value at Grant Date
Balance at beginning of year	409,559		$	15.47
Granted	171,843		18.97
Vested	(220,958	)	15.75
Balance at end of year	360,444		17.21

The following table summarizes information about awards outstanding as of December 31, 2018 :



	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	447,315	$	39.78	3.0	447,315	$	39.79	3.0
$50.00 - $59.99	217,143	58.12		7.1	144,768	58.11		7.1
Over $60.00	766,580	78.28		7.0	478,511	72.09		5.9
	1,431,038			5.8	1,070,594			4.9

Restricted Share Awards ("RSAs")

The following table summarizes restricted share award activity for the year ended December 31, 2018 under all Plans:



	Number of Shares		Weighted Average Grant Date Fair Value
Balance at beginning of year	47,856		$	71.54
Shares granted	1,662		91.02
Shares vested	(32,922	)	82.48
Shares forfeited	(4,158	)	78.65
Balance at end of year	12,438		80.98

RSAs are valued at the quoted market price on the grant date. The majority of RSAs vest over a period of one to three years. The Company issued common shares from treasury upon the granting of RSAs in 2018 . Restricted shares issued in 2018 were under the 2015 Director Plan. The remaining weighted average vesting period of all non-vested RSAs is 1 year as of December 31, 2018 .

F-25

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

The following table summarizes RSU and PSU activity for the year ended December 31, 2018 under all Plans:



	Number of Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	418,966		$	69.98
Units granted	148,833		89.51
Units vested	(49,653	)	69.24
Units forfeited	(12,116	)	74.16
Balance at end of year	506,030		75.69

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 1,980 RSUs to common shares in 2018 were deferred as part of the 2005 Deferred Compensation Plan for Executives (the "2005 Plan"). As of December 31, 2018 , 99,801 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 2018 , 117,073 RSUs were issued under the Employee Plan and the 2015 Director Plan. The remaining weighted average vesting period of all non-vested RSUs is 1.4 years as of December 31, 2018 .

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 the vesting of PSUs and any earned dividend equivalents. In 2018 , the Company issued 31,760 PSU's and has 107,045 PSUs outstanding under the Employee Plan at a weighted average fair value of $76.20 per share. The remaining weighted average vesting period of all non-vested PSUs is 1 year as of December 31, 2018 .

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 2018 , 2017 and 2016 was $18,554 , $12,698 and $10,332 , respectively. The related tax benefit for 2018 , 2017 and 2016 was $4,632 , $4,861 and $3,955 , respectively. As of December 31, 2018 , total unrecognized stock-based compensation expense related to non-vested stock options, RSAs, RSUs and PSUs was $21,223 , which is expected to be recognized over a weighted average period of approximately 2 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 8,324 in 2018 , 10,458 in 2017 and 15,827 in 2016 .

NOTE 11 – 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, 2018 , the Company purchased a total of 2.3 million shares at an average cost per share of $88.84 . As of December 31, 2018 , 6.2 million shares remained available for repurchase under the stock repurchase program. The treasury shares have not been retired.

F-26

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 12 – 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.

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,
	2018						2017
	U.S. pension plans			Non-U.S. pension plans			U.S. pension plans			Non-U.S. pension plans
Change in benefit obligations
Benefit obligations at beginning of year	$	507,075		$	193,523		$	484,758		$	79,972
Service cost	139			3,252			608			2,678
Interest cost	18,084			3,703			19,497			3,253
Plan participants' contributions	—			196			—			176
Acquisitions & other adjustments ⁽¹⁾	—			(5,322		)	—			100,551
Actuarial (gain) loss	(46,924		)	(5,674		)	46,144			4,926
Benefits paid	(7,973		)	(9,723		)	(6,409		)	(4,909		)
Settlements/curtailments ⁽²⁾	(31,456		)	(1,886		)	(37,523		)	(700		)
Currency translation	—			(9,258		)	—			7,576
Benefit obligations at end of year	438,945			168,811			507,075			193,523

Change in plan assets
Fair value of plan assets at beginning of year	568,388			113,344			528,744			70,341
Actual return on plan assets	(23,012		)	(2,855		)	82,732			5,770
Employer contributions	690			2,087			55			1,684
Plan participants' contributions	—			196			—			176
Acquisitions ⁽¹⁾	—			586			—			32,599
Benefits paid	(7,047		)	(5,904		)	(5,620		)	(3,196		)
Settlements ⁽²⁾	(26,941		)	(1,455		)	(37,523		)	(22		)
Currency translation	—			(5,812		)	—			5,992
Fair value of plan assets at end of year	512,078			100,187			568,388			113,344

Funded status at end of year	73,133			(68,624		)	61,313			(80,179		)
Unrecognized actuarial net loss	85,624			25,581			90,679			25,987
Unrecognized prior service cost	—			534			—			(11		)
Unrecognized transition assets, net	—			32			—			35
Net amount recognized	$	158,757		$	(42,477	)	$	151,992		$	(54,168	)


(1)	Acquisitions in 2017 relate to acquisition of Air Liquide Welding as discussed in Note 4 to the consolidated financial statements.

F-27

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


(2)	Settlements in 2018 and 2017 resulting from lump sum pension payments.

In October 2016, The Lincoln Electric Company amended the plan to freeze all benefit accruals for participants under the Lincoln Electric Retirement Annuity Program ("RAP") effective as of December 31, 2016. The RAP includes approximately 1,500 domestic employees who fully transitioned 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 did not make significant contributions to the defined benefit plans in the United States in 2018 or 2017.

The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition assets included in Accumulated other comprehensive loss at December 31, 2018 were $81,580 , $446 and $23 , 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 2019 are $3,924 , $59 and $3 , respectively.

Amounts Recognized in Consolidated Balance Sheets



				December 31,
	2018						2017
	U.S. pension plans			Non-U.S. pension plans			U.S. pension plans			Non-U.S. pension plans
Prepaid pensions ⁽¹⁾	$	87,786		$	77		$	81,485		$	368
Accrued pension liability, current ⁽²⁾	(786		)	(2,996		)	(5,332		)	(3,483		)
Accrued pension liability, long-term ⁽³⁾	(13,867		)	(65,705		)	(14,840		)	(77,064		)
Accumulated other comprehensive loss, excluding tax effects	85,624			26,147			90,679			26,011
Net amount recognized in the balance sheets	$	158,757		$	(42,477	)	$	151,992		$	(54,168	)

(1) I ncluded in Other 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,
	2018						2017						2016
	U.S. pension plans			Non-U.S. pension plans			U.S. pension plans			Non-U.S. pension plans			U.S. pension plans			Non-U.S. pension plans
Service cost	$	139		$	3,252		$	608		$	2,678		$	15,474		$	2,215
Interest cost	18,084			3,703			19,497			3,253			20,676			2,902
Expected return on plan assets	(27,052		)	(5,057		)	(31,530		)	(4,270		)	(31,682		)	(4,034		)
Amortization of prior service cost	—			1			—			15			(412		)	18
Amortization of net loss ⁽¹⁾	1,498			2,211			2,133			1,881			7,717			2,176
Settlement/curtailment loss (gain) ⁽²⁾	6,686			(397		)	8,150			102			(1,062		)	—
Pension cost for defined benefit plans ⁽³⁾	$	(645	)	$	3,713		$	(1,142	)	$	3,659		$	10,711		$	3,277

(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.


(2)	Pension settlement charges for the years ended December 31, 2018 and 2017 resulting from lump sum pension payments.


(3)	The decrease in pension cost for defined benefit plans for the years ended December 31, 2018 and 2017 was due to the U.S. plan freeze effective December 31, 2016.

The components of Pension cost for defined benefit plans, other than service cost, are included in Other income (expense) in the Company's Consolidated Statements of Income.

F-28

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets



	December 31,
	2018				2017
	U.S. pension plans		Non-U.S. pension plans		U.S. pension plans		Non-U.S. pension plans
Projected benefit obligation	$	14,653	$	158,746	$	26,149	$	182,512
Accumulated benefit obligation	14,406		152,724		25,870		174,667
Fair value of plan assets	—		90,076		5,977		102,107

The total accumulated benefit obligation for all plans was $600,998 as of December 31, 2018 and $691,827 as of December 31, 2017 .

Benefit Payments for Plans

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



	U.S. pension plans		Non-U.S. pension plans
Estimated Payments
2019	$	28,101	$	8,278
2020	31,581		8,243
2021	26,998		8,513
2022	28,754		8,055
2023	30,593		7,966
2024 through 2028	137,369		42,925

Assumptions

Weighted average assumptions used to measure the benefit obligation for the Company's significant defined benefit plans as of December 31, 2018 and 2017 were as follows:



	December 31,
	2018				2017
	U.S. pension plans		Non-U.S. pension plans		U.S. pension plans		Non-U.S. pension plans
Discount Rate	4.4	%	2.3	%	3.7	%	2.0	%
Rate of increase in compensation	2.5	%	2.6	%	2.5	%	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 were as follows:



	December 31,
	2018				2017				2016
	U.S. pension plans		Non-U.S. pension plans		U.S. pension plans		Non-U.S. pension plans		U.S. pension plans		Non-U.S. pension plans
Discount rate	3.7	%	2.0	%	4.2	%	2.2	%	4.5	%	3.9	%
Rate of increase in compensation	2.5	%	2.7	%	2.5	%	2.5	%	2.6	%	3.7	%
Expected return on plan assets	5.0	%	4.6	%	6.0	%	4.5	%	6.2	%	5.7	%

To develop the discount rate assumptions, 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.

F-29

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 10% to 20% equity securities and 80% to 90% debt securities.

The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2018 :



	Pension Plans' Assets at Fair Value as of December 31, 2018
	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	$	13,029	$	—	$	—	$	13,029
Equity securities ⁽¹⁾	3,851		—		—		3,851
Fixed income securities ⁽²⁾
U.S. government bonds	16,743		—		—		16,743
Corporate debt and other obligations	—		392,090		—		392,090
Investments measured at NAV ⁽³⁾
Common trusts and 103-12 investments ⁽⁴⁾							151,153
Private equity funds ⁽⁵⁾							35,399
Total investments at fair value	$	33,623	$	392,090	$	—	$	612,265

The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2017 :



	Pension Plans' Assets at Fair Value as of December 31, 2017
	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	$	8,922	$	—	$	—	$	8,922
Equity securities ⁽¹⁾	4,566		—		—		4,566
Fixed income securities ⁽²⁾
U.S. government bonds	33,205		—		—		33,205
Corporate debt and other obligations	—		398,578		—		398,578
Investments measured at NAV ⁽³⁾
Common trusts and 103-12 investments ⁽⁴⁾							199,066
Private equity funds ⁽⁵⁾							37,395
Total investments at fair value	$	46,693	$	398,578	$	—	$	681,732


(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.

F-30

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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.

Supplemental Executive Retirement Plan

The Company maintained 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 $1,268 , $772 and $2,113 in 2018 , 2017 and 2016 , respectively. The projected benefit obligation associated with this plan is also included in the pension disclosure shown above and was $12,183 , $17,047 and $16,738 at December 31, 2018 , 2017 and 2016 , 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”) 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, 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 was effective January 1, 2017. The Savings Plan provides that eligible employees receive up to 6% of employees' annual compensation 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 are also 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 $26,477 , $25,285 and $8,361 in 2018 , 2017 and 2016 , 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-31

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 13 — OTHER INCOME (EXPENSE)

The components of Other income (expense) were as follows:



	Year Ended December 31,
	2018		2017	2016
Equity earnings in affiliates	$	5,481	2,742	$	2,928
Other components of net periodic pension (cost) income ⁽¹⁾	502		769	4,660
Other income	4,703		5,215	3,173
Total Other income (expense)	$	10,686	8,726	$	10,761

(1) Other components of net periodic pension (cost) income includes pension settlements and curtailments. Refer to Note 12 to the consolidated financial statements for details.

NOTE 14 – INCOME TAXES

The components of income before income taxes for the three years ended December 31, 2018 were as follows:



	Year Ended December 31,
	2018		2017		2016
U.S.	$	255,088	$	213,171	$	209,409
Non-U.S.	113,572		153,065		67,979
Total	$	368,660	$	366,236	$	277,388

The components of income tax expense (benefit) for the three years ended December 31, 2018 were as follows:



	Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	45,521		$	89,182		$	57,090
Non-U.S.	28,894			25,746			23,344
State and local	10,515			7,640			8,386
	84,930			122,568			88,820
Deferred:
Federal	(691		)	(4,391		)	(1,716		)
Non-U.S.	(3,121		)	(82		)	(8,261		)
State and local	549			666			172
	(3,263		)	(3,807		)	(9,805		)
Total	$	81,667		$	118,761		$	79,015

F-32

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The U.S. Tax Act was enacted on December 22, 2017. The U.S. Tax Act reduced the U.S. federal corporate income tax rate to 21% from 35% , required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. The SEC staff issued SAB 118 related to the U.S. Tax Act, which provided for a one-year measurement period and guidance for the application of ASC Topic 740, Income Taxes . At December 31, 2017, the Company had not completed its accounting related to the U.S. Tax Act. All provisional amounts were based on reasonable estimates using the best information available at the time. At December 31, 2018, the Company has completed its accounting related to the U.S. Tax Act. In 2018, the Company recognized a net adjustment of $399 to provisional amounts recorded at December 31, 2017, resulting in an increase to income tax expense. As described in more detail below, the net adjustment includes additional transition tax expense, offset by a tax benefit from the remeasurement of deferred tax assets and liabilities and a reduction of foreign withholding taxes.

The one-time transition tax is based on total post-1986 earnings and profits for which the Company had previously deferred from U.S. income taxes. At December 31, 2017, the Company recorded a provisional amount of $36,387 for the one-time transition tax resulting in an increase to income tax expense. The transition tax is based partially on the earnings and profits held in cash and partially on the earnings and profits invested in assets. Considering all additional guidance and regulations proposed and issued during the year, the Company finalized calculations of the transition tax liability during 2018. The result was an increase of $5,152 to the December 31, 2017 provisional amount. The Company has elected to pay the transition tax liability over the eight-year period provided in the U.S. Tax Act.

At December 31, 2017, the Company recorded a provisional tax benefit of $14,532 related to the remeasurement of deferred tax assets and liabilities as a result of the U.S. Tax Act. The Company finalized the remeasurement of deferred tax assets and liabilities during 2018. The result was an increase of $329 to the December 31, 2017 provisional benefit.

At December 31, 2017, the provisional amount recorded for taxes on the planned repatriation of certain earnings and profits subject to the transition tax was $6,667 . This additional tax pertains to foreign withholding taxes associated with the repatriation of earnings that are not indefinitely reinvested in the foreign operations. Based on the Company’s final transition tax calculations, an adjustment of $4,424 was recorded in 2018 to reduce the foreign withholding taxes associated with the planned repatriation set forth in 2017.

Other provisions of the U.S. Tax Act became effective for the Company in 2018. The Foreign-Derived Intangible Income (“FDII”) provision generates a deduction against the Company’s U.S. taxable income for U.S. earnings derived offshore that utilize intangibles held by the Company in the U.S. Conversely, the Global Intangible Low-Taxed Income (“GILTI”) provision requires the Company to subject to U.S. taxation a portion of its foreign subsidiary earnings that exceed an allowable return. The Company has elected to treat any GILTI inclusion as a period expense in the year incurred.

F-33

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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, 2018 were as follows:



	Year Ended December 31,
	2018			2017			2016
Statutory rate applied to pre-tax income	$	77,419		$	128,182		$	97,086
State and local income taxes, net of federal tax benefit	8,844			5,671			5,554
Excess tax benefits resulting from exercises of stock-based compensation	(1,094		)	(6,276		)	—
Net impact of the U.S. Tax Act	4,823			21,949			—
Foreign withholding taxes	(4,424		)	6,667			—
Intangible and asset impairments/(write-off)	—			—			(4,438		)
Foreign rate variance	(4,560		)	(13,929		)	(8,128		)
Venezuela deconsolidation/devaluation	—			—			5,192
Bargain purchase gain	—			(17,556		)	—
Valuation allowances	5,596			102			(8,525		)
Manufacturing deduction	—			(5,922		)	(5,190		)
Research and development credit	(3,859		)	(2,688		)	(2,748		)
Other	(1,078		)	2,561			212
Total	$	81,667		$	118,761		$	79,015
Effective tax rate	22.2		%	32.4		%	28.5		%

The 2018 effective tax rate is impacted by the reduced corporate income tax rate associated with the U.S. Tax Act, rationalization charges in regions with low or no tax benefit, as well as the incremental adjustments recognized in 2018 related to the U.S. Tax Act provisional amounts, as discussed in the paragraphs above. Total income tax payments, net of refunds, were $85,805 in 2018 , $81,691 in 2017 and $72,965 in 2016 .

Deferred Taxes

Significant components of deferred tax assets and liabilities at December 31, 2018 and 2017 , were as follows:



	December 31,
	2018			2017
Deferred tax assets:
Tax loss and credit carry-forwards	$	60,756		$	60,454
Inventory	3,544			2,501
Other accruals	13,172			14,873
Employee benefits	22,963			18,468
Pension obligations	12,122			12,363
Other	3,739			4,923
Deferred tax assets, gross	116,296			113,582
Valuation allowance	(69,400		)	(68,694		)
Deferred tax assets, net	46,896			44,888
Deferred tax liabilities:
Property, plant and equipment	28,606			21,427
Intangible assets	10,950			10,729
Inventory	4,814			5,891
Pension obligations	19,346			16,137
Other	8,770			15,483
Deferred tax liabilities	72,486			69,667
Total deferred taxes	$	(25,590	)	$	(24,779	)

F-34

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

At December 31, 2018 , certain subsidiaries had net operating loss carry-forwards of approximately $61,931 that expire in various years from 2019 through 2034, plus $214,438 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, 2018 , a valuation allowance of $69,400 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.

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 benefits of $1,277 for the year ended December 31, 2018 and expense of $1,079 for the year ended December 31, 2017 for interest and penalties. For those same years, the Company's accrual for interest and penalties related to unrecognized tax benefits totaled $6,655 and $8,135 , respectively.

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



	2018			2017
Balance at beginning of year	$	28,449		$	18,499
Increase related to current year tax provisions	1,431			1,448
Increase related to prior years' tax positions	4,917			1,460
Increase related to acquisitions	—			8,223
Decrease related to settlements with taxing authorities	(111		)	(522		)
Resolution of and other decreases in prior years' tax liabilities	(1,501		)	(1,734		)
Other	(4,381		)	1,075
Balance at end of year	$	28,804		$	28,449

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $25,069 at December 31, 2018 and $25,024 at December 31, 2017 .

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 2014. The Company is currently subject to U.S. federal, various 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 $1,759 in prior years' unrecognized tax benefits in 2019 .

NOTE 15 – 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, 2018.

F-35

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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, 2018 . 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 $45,909 at December 31, 2018 and $35,489 at December 31, 2017 .

Fair value hedges

Certain interest rate swap agreements were qualified and designated as fair value hedges. At December 31, 2018 , the Company had interest rate swap agreements outstanding that effectively convert notional amounts of $125,000 of debt from a fixed interest rate to a variable interest rate based on three-month LIBOR plus a spread of between 0.5% and 1.8% . The variable rates reset every three months, at which time payment or receipt of interest will be settled.

Net investment hedges

From time to time, the Company executes foreign currency forward contracts that qualify and are designated as net investment hedges. No such contracts were outstanding at December 31, 2018 and December 31, 2017 .

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 $328,534 at December 31, 2018 and $340,884 at December 31, 2017 .

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



	December 31, 2018								December 31, 2017
Derivatives by hedge designation	Other Current Assets		Other Current Liabilities		Other Assets		Other Liabilities		Other Current Assets		Other Current Liabilities		Other Liabilities
Designated as hedging instruments:
Foreign exchange contracts	$	647	$	404	$	—	$	—	$	519	$	604	$	—
Interest rate swap agreements	—		—		302		7,033		—		—		5,085
Not designated as hedging instruments:
Foreign exchange contracts	6,375		829		—		—		2,257		3,747		—
Total derivatives	$	7,022	$	1,233	$	302	$	7,033	$	2,776	$	4,351	$	5,085

The effects of undesignated derivative instruments on the Company's Consolidated Statements of Income for the years ended December 31, 2018 and 2017 consisted of the following:



		Year Ended December 31,
Derivatives by hedge designation	Classification of gains	2018		2017
Not designated as hedges:
Foreign exchange contracts	Selling, general & administrative expenses	$	7,452	$	17,590

The effects of designated cash flow hedges on AOCI and the Company's Consolidated Statements of Income for the years ended December 31, 2018 and 2017 consisted of the following:



	December 31,
Total gain (loss) recognized in AOCI, net of tax	2018		2017
Foreign exchange contracts	$	173	$	(224	)
Net investment contracts	1,521		1,099

The Company expects a gain of $173 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.

F-36

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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



		Year Ended December 31,
Derivative type	Gain (loss) reclassified from AOCI to:	2018			2017
Foreign exchange contracts	Net sales	$	(225	)	$	1,860
	Cost of goods sold	(3		)	502

NOTE 16 – FAIR VALUE

The following table provides a summary of fair value assets and liabilities as of December 31, 2018 measured at fair value on a recurring basis:



Description	Balance as of December 31, 2018		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	$	7,022	$	—	$	7,022	$	—
Interest rate swap agreements	302		—		302		—
Total assets	$	7,324	$	—	$	7,324	$	—
Liabilities:
Foreign exchange contracts	$	1,233	$	—	$	1,233	$	—
Interest rate swap agreements	7,033		—		7,033		—
Contingent considerations	2,100		—		—		2,100
Deferred compensation	26,524		—		26,524		—
Total liabilities	$	36,890	$	—	$	34,790	$	2,100

The following table provides a summary of fair value assets and liabilities as of December 31, 2017 measured at fair value on a recurring basis:



Description	Balance as of December 31, 2017		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	$	2,776	$	—	$	2,776	$	—
Marketable securities	179,125		—		179,125		—
Total assets	$	181,901	$	—	$	181,901	$	—
Liabilities:
Foreign exchange contracts	$	4,351	$	—	$	4,351	$	—
Interest rate swap agreements	5,085		—		5,085		—
Contingent considerations	7,086		—		—		7,086
Deferred compensation	25,397		—		25,397		—
Total liabilities	$	41,919	$	—	$	34,833	$	7,086

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. During the year ended December 31, 2018 , 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 consideration liabilities, which will be paid 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-37

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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, 2018 and December 31, 2017 . Refer to Note 9 to the consolidated financial statements for the fair value estimate of debt.

NOTE 17 – INVENTORY

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



	December 31,
	2018		2017
Raw materials	$	103,820	$	97,577
Work-in-process	53,950		50,695
Finished goods	204,059		200,395
Total	$	361,829	$	348,667

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, 2018 and 2017 , approximately 37% and 32% of total inventories, respectively, were valued using the LIFO method. The excess of current cost over LIFO cost was $79,626 at December 31, 2018 and $68,641 at December 31, 2017 .

NOTE 18 – 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 $25,720 in 2018 , $20,450 in 2017 and $16,897 in 2016 .

At December 31, 2018 , total future minimum lease payments for noncancelable operating leases were $16,920 in 2019 , $11,915 in 2020 , $7,720 in 2021 , $4,744 in 2022 , $3,625 in 2023 and $10,033 thereafter.

F-38

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 19 – 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. For claims or litigation that are material, if an unfavorable outcome is determined to be reasonably possible and the amount of loss can be reasonably estimated, or if an unfavorable outcome is determined to be probable and the amount of loss cannot be reasonably estimated, disclosure would be provided. 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 20 – PRODUCT WARRANTY COSTS

The changes in product warranty accruals for 2018 , 2017 and 2016 were as follows:



	December 31,
	2018			2017			2016
Balance at beginning of year	$	22,029		$	21,053		$	19,469
Accruals for warranties	8,897			9,901			13,058
Settlements	(11,403		)	(11,500		)	(11,434		)
Foreign currency translation and other adjustments ⁽¹⁾	255			2,575			(40		)
Balance at end of year	$	19,778		$	22,029		$	21,053

(1) At December 31, 2017 , Foreign currency translation and other adjustments includes $2,299 for an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements.

F-39

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

NOTE 21 – QUARTERLY FINANCIAL DATA (UNAUDITED)



	First ⁽¹⁾		Second ⁽²⁾		Third ⁽³⁾		Fourth ⁽⁴⁾
2018
Net sales	$	757,696	$	790,052	$	737,099	$	743,827
Gross profit	256,554		270,116		251,552		250,299
Income before income taxes	84,198		94,263		95,744		94,455
Net income	60,824		68,864		70,539		86,839
Basic earnings per share ⁽⁵⁾	$	0.93	$	1.05	$	1.09	$	1.36
Diluted earnings per share ⁽⁵⁾	$	0.92	$	1.04	$	1.07	$	1.35
2017
Net sales	$	580,897	$	626,858	$	669,491	$	747,185
Gross profit	202,663		216,311		217,881		238,252
Income before income taxes	77,900		83,966		130,642		73,728
Net income	55,844		61,352		106,126		24,181
Basic earnings per share ⁽⁵⁾	$	0.85	$	0.93	$	1.61	$	0.37
Diluted earnings per share ⁽⁵⁾	$	0.84	$	0.92	$	1.59	$	0.36


(1)	2018 includes special item charges of $758 ( $569 after-tax) for pension settlement charges, $10,175 ( $7,870 after-tax) for rationalization and asset impairment charges, an adjustment to taxes on unremitted foreign earnings related to the U.S. Tax Act of $2,500 and $1,907 ( $1,520 after-tax) for acquisition transaction and integration costs.

2017 includes special item charges of $3,615 ( $2,734 after-tax) related to acquisition transaction costs.


(2)	2018 includes special item charges of $11,542 ( $10,362 after-tax) for rationalization and asset impairment charges and $788 ( $675 after-tax) for acquisition transaction and integration costs.

2017 includes special item charges of $4,498 ( $3,494 after-tax) related to acquisition transaction and integration costs.


(3)	2018 includes special item charges of $4,232 ( $3,176 after-tax) for pension settlement charges, $2,636 ( $2,575 after-tax) for rationalization and asset impairment charges, an adjustment to taxes on unremitted foreign earnings related to the U.S. Tax Act of $2,323 and acquisition-related items including $970 ( $797 after-tax) for acquisition transaction and integration costs.

2017 includes special item charges of $5,283 ( $3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ( $1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ( $2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain.


(4)	2018 includes special item charges of $1,696 ( $1,272 after-tax) for pension settlement charges, $932 ( $841 gain after-tax) for rationalization and asset impairment charges and gains or losses on the disposal of assets, a $4,424 credit related to the U.S. Tax Act and acquisition-related items including $833 ( $690 after-tax) for acquisition transaction and integration costs.

2017 includes special item charges of $2,867 ( $1,770 after-tax) for pension settlement charges, $6,590 ( $6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ( $1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ( $3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain.


(5)	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-40

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, 2018	$	15,943	$	1,743	$	(1,037	)	$	3,822		$	12,827
Year Ended December 31, 2017	7,768		1,172		9,501			2,498			15,943
Year Ended December 31, 2016	7,299		1,657		72			1,260			7,768

Deferred tax asset valuation allowance:
Year Ended December 31, 2018	$	68,694	$	1,891	$	2,437		$	(3,622	)	$	69,400
Year Ended December 31, 2017	47,849		16,222		4,854			(231		)	68,694
Year Ended December 31, 2016	51,294		3,704		3,923			(11,072		)	47,849


(1)	Currency translation adjustment, additions from acquisitions 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-41

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 10.15

LINCOLN ELECTRIC HOLDINGS, INC.
NON-EMPLOYEE DIRECTORS’
DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2019)

THE LINCOLN ELECTRIC HOLDINGS, INC.
NON-EMPLOYEE DIRECTORS’
DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2019)

ARTICLE I

PURPOSE

The Lincoln Electric Company Non-Employee Directors’ Compensation Plan (the “ Original Plan ”) was established by The Lincoln Electric Company effective as of May 24, 1995 to allow directors of the Corporation to defer a portion of their Directors’ Fees. As of June 2, 1998, the date of the reorganization of The Lincoln Electric Company, the name of the Original Plan was changed to the Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan. This Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan (the “ Plan ”) is hereby amended and restated effective, except as otherwise provided herein, as of January 1, 2019. To the extent required by Section 409A of the Code, this amendment and restatement shall only apply to Deferral Commitments made for Deferral Periods commencing on or after January 1, 2019 and for Deferral Commitments made for 2018 RSU Deferrals.

The Plan is intended to comply with Section 409A of the Code, and shall be construed and interpreted in accordance with such intent.

It is intended that the Plan will aid in attracting and retaining Directors of exceptional ability by providing this benefit. The terms and conditions of the Plan are set forth below.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

Section 2.1 Definitions . Whenever the following terms are used in this Plan they shall have the meanings specified below unless the context clearly indicates to the contrary:

(a) “Account”: The bookkeeping account maintained for each Director showing his or her interest under the Plan.

(b) “Accounting Date”: The first business day of each calendar quarter.

(c) “Accounting Period”: The period beginning on an Accounting Date and ending on the day immediately preceding the next following Accounting Date.

(d) “Administrator”: The committee established pursuant to the provisions of Section 7.1.

(e) “Annual Retainer”: The annual cash retainer earned by a Director for services as a Director of the Corporation.

(f) “Award Agreement”: The evidence of award under the Stock Plan that relates to an award to a Director of RSUs.

(g) “Beneficiary”: The person or persons (natural or otherwise), within the meaning of Section 6.5, who are entitled to receive distribution of the Director’s Account balance in the event of the Director’s death.

(h) “Board”: The Board of Directors of the Corporation.

(i) “Code”: The Internal Revenue Code of 1986, as amended from time to time, and any rules and regulations promulgated thereunder. Any reference to a provision of the Code shall also include any successor provision that modifies, replaces or supersedes it.

(j) “Committee”: The Nominating and Corporate Governance Committee of the Board, or its delegate hereunder.

(k) “Common Shares”: Shares of common stock of the Corporation.

(l) “Corporation”: Lincoln Electric Holdings, Inc., an Ohio corporation or any successor or successors thereto.

(m) “Deemed Investment Sub-account”: The portion of a Director’s Account other than the Director’s Deferred RSU Sub-account.

(n) “Deferral Commitment”: An agreement by a Director (i) to have a specified percentage or dollar amount of his or her Fees and/or (ii) to have a specified percentage of his or her RSUs deferred under the Plan.

(o) “Deferral Period”:

(i) In the case of Fees, the Plan Year in which a Director performs the services that related to such Fees.

(ii) In the case of an RSU, the period that commences on the first day of the Plan Year in which a Director first performs services in respect of such RSU and ends at the time that the amount payable under such RSU would be paid to the Director but for the Director’s Deferral Commitment with respect to such RSU.

(p) “Deferred RSU Sub-account”: The bookkeeping sub-account maintained for each Director who elects to defer the delivery of Common Shares payable to the Director under the applicable Award Agreement relating to RSUs.

(q) “Director”: An individual duly elected or chosen as a director of the Corporation who is not also an employee of the Corporation or its subsidiaries.

(r) “Effective Date”: This Plan was originally established effective May 24, 1995 and has been amended from time to time. This amended and restated Plan shall be effective as of January 1, 2019.

(s) “Fees”: The Annual Retainer and Other Compensation.

(t) “Investment Funds”: Has the meaning set forth in Section 5.3.

(u) “Investment Request”: An investment preference request filed by a Director which (i) shall apply with respect to contributions credited to the Director’s Deemed Investment Sub-account until the timely filing of a subsequent Investment Request and (ii) shall determine the manner in which such credited contributions shall be initially allocated by the Director among the various Investment Funds within the Deemed Investment Sub-account. A subsequent Investment Request may be submitted in writing (or in another format, including electronic format, prescribed by the Administrator) to the Administrator by the Director. Such Investment Request will be effective as soon as practicable following receipt by the Administrator of such Investment Request.

(v) “Investment Re-Allocation Request”: An investment preference request filed by a Director which (i) shall re-direct the manner in which all earlier credited amounts to a Director’s Deemed Investment Sub-account, as well as any appreciation (or depreciation) to-date, are invested within the deemed Investment Funds available in the Plan. An Investment Re-Allocation Request may be submitted in writing (or in another format, including electronic format, prescribed by the Administrator) to the Administrator by the Director. Such Investment

- 2 -

Re-Allocation Request will be effective as soon as practicable following receipt by the Administrator of such Investment Re-Allocation Request.

(w) “Other Compensation”: The meeting and other cash fees earned by a Director for services as a Director of the Corporation, other than the Annual Retainer.

(x) “Participation Agreement”: The Agreement submitted by a Director to the Administrator with respect to one (1) or more Deferral Commitments.

(y) “Plan”: The Plan set forth in this instrument as it may, from time to time, be amended.

(z) “Plan Year”: The twelve (12)-month period beginning January 1 through December 31; provided that the first plan year began on May 24, 1995 and ended on December 31, 1995.

(aa) “RSUs”: An award of Restricted Stock Units under the Stock Plan, representing the right to receive Common Shares (and dividend equivalents with respect thereto) in accordance with the terms of the Stock Plan and an applicable Award Agreement.

(bb) “Section 409A”: Section 409A of the Code and any proposed, temporary or final regulations, and any notices or other guidance, promulgated with respect to Section 409A.

(cc) “Settlement Date”: Except with respect to a distribution election under Section 6.3, the date on which a Director separates from service (within the meaning of Section 409A) as a Director. With respect to a distribution election under Section 6.3, Settlement Date means the date selected by the Director pursuant to Section 6.3.

(dd) “Stock Plan”: The Lincoln Electric Holdings, Inc. 2015 Stock Plan for Non-Employee Directors, as amended, or any similar or successor plan.

(ee) “Subsequent Deferral Rule”:

(i) For Deferral Commitments made with respect to Deferral Periods commencing before January 1, 2019 (other than Deferral Commitments with respect to 2018 RSU Deferrals (as defined in Section 3.1(d)), any subsequent deferral election that alters the payment form or the date of distribution designated in the Director’s original Participation Agreement (A) may not take effect for at least twelve (12) months; (B) if the subsequent deferral election relates to an election pursuant to Section 6.3, must be made at least twelve (12) months prior to the due date of the payment under the Director’s original Participation Agreement; (C) in the case of a subsequent deferral election that does not relate to a payment on account of death, must extend the payment at least five (5) years from the due date of the payment under the Director’s original Participation Agreement; and (D) must be submitted by the Director to the Administrator in a form prescribed by the Administrator.

(ii) For Deferral Commitments with respect to Deferral Periods commencing on or after January 1, 2019 and for Deferral Commitments with respect to 2018 RSU Deferrals, any subsequent deferral election that alters the payment form or the date of distribution designated in the Director’s original Participation Agreement (A) may not take effect for at least twelve (12) months; (B) if the subsequent deferral election relates to an election pursuant to Section 6.3, must be made at least twelve (12) months prior to the due date of the first payment under the Director’s original Participation Agreement; (C) in the case of a subsequent deferral election that does not relate to a payment on account of death, must extend the payment at least five (5) years from the due date of the first payment under the Director’s original Participation Agreement; and (D) must be submitted by the Director to the Administrator in a form prescribed by the Administrator.

Section 2.2 Construction . The masculine or feminine gender, where appearing in the Plan, shall be deemed to include the opposite gender, and the singular may include the plural, unless the context clearly indicates to the contrary. The words “hereof,” “herein,” “hereunder,” and other similar compounds of the word “here” shall mean and refer to the entire Plan, and not to any particular provision or Section.

- 3 -

ARTICLE III

PARTICIPATION AND DEFERRALS

Section 3.1 Eligibility and Participation .

(a) Eligibility . Eligibility to participate in the Plan for any Deferral Period is limited to Directors.

(b) Participation . A Director may elect to participate in the Plan with respect to any Deferral Period by submitting a Participation Agreement to the Administrator by the last business day immediately preceding the applicable Deferral Period. A Participation Agreement must be submitted with respect to each Deferral Period for which a Director elects a Deferral Commitment. Elections made in a Participation Agreement for a specific Deferral Period shall not carry over to subsequent Deferral Periods.

(c) Initial Year of Participation . In the event that an individual first becomes a Director during a Plan Year and wishes to elect a Deferral Commitment with respect to the Fees or RSUs earned in respect of services performed during such Plan Year, a Participation Agreement that complies with the following provisions of this Section 3.1(c) must be submitted to the Administrator no later than thirty (30) days following such individual’s becoming a Director. Any Deferral Commitments elected in such Participation Agreement shall be effective only with regard to Fees earned following the submission of the Participation Agreement to the Administrator. With respect to RSUs, any Deferral Commitments elected in such Participation Agreement shall be effective only with regard to RSUs that begin vesting based solely on services performed following the submission of the Participation Agreement to the Administrator. If a Director does not submit a Participation Agreement within such period of time, such individual will not be eligible to participate in the Plan until the first day of a Deferral Period subsequent to the Deferral Period in which the individual became a Director.

(d) 2018 RSU Deferral . Notwithstanding the foregoing provisions of this Section 3.1, effective December 1, 2018 a Director may elect to defer the delivery of Common Shares payable to the Director under the Award Agreement dated December 13, 2018 (a “2018 RSU Deferral”) by submitting a Participation Agreement to the Administrator at such time and in such form as the Administrator shall prescribe.

(e) Other Deferrals . The Administrator may establish procedures from time to time under which a Director may elect to defer amounts of compensation under the Plan other than pursuant to the preceding provisions of this Section 3.1 (including deferrals that constitute "subsequent deferrals" under Section 409A). Any such deferred amount shall be allocated by the Administrator to such sub-account or sub-accounts under the Plan as is determined to be appropriate by the Administrator, provided that (i) only amounts payable under an RSU award may be allocated to the Director’s Deferred RSU Sub-account and (ii) no amount may be allocated to the Director’s Deferred RSU Sub-account earlier than the date on which the RSU vests by its terms. Any deferral pursuant to this Section 3.1(d) shall be made in compliance with Section 409A.

(f) Termination of Participation . Participation in the Plan shall continue as long as the Director is eligible to receive benefits under the Plan.

Section 3.2 Amount of Deferral . With respect to each Deferral Period, a Director may elect to defer a specified dollar amount or percentage of his or her Fees. With respect to each Deferral Period, a Director may elect to defer a specified percentage of his or her RSUs. Such amount to be deferred shall be indicated in the Director’s Participation Agreement applicable to such Deferral Period. A Director may choose to have amounts deferred under this Plan deducted from his or her Fees and/or RSUs, which shall also be indicated in the Director’s Participation Agreement applicable to such Deferral Period.

- 4 -

ARTICLE IV

DIRECTORS’ ACCOUNTS

Section 4.1 Establishment of Accounts . The Corporation, through its accounting records, shall establish an Account for each Director who elects to participate in the Plan. In addition, the Corporation may establish one (1) or more sub-accounts of a Director’s Account, if the Corporation determines that such sub-accounts are necessary or appropriate in administering the Plan, including, but not limited to, a Deemed Investment Sub-account and a Deferred RSU Sub-account.

Section 4.2 Crediting of Deferred Fees and RSUs . A Director’s Fees and RSUs that are deferred pursuant to a Deferral Commitment shall be credited to the Director’s Account as follows:

(a) W ith respect to Fees, as of the date such Fees would have been paid to the Director but for the Director’s Deferral Commitment with respect to such Fees.

(b) With respect to RSUs:

(i) With respect to Common Shares payable under the applicable Award Agreement (including Common Shares that relate to dividend equivalents in respect of dividends paid in Common Shares), to the Director’s Deferred RSU Sub-account as of the date such Common Shares would have been delivered to the Director but for the Director’s Deferral Commitment with respect to such RSUs (but in no event earlier than the date on which the RSU vests by its terms); and

(ii) With respect to dividend equivalent amounts payable in cash under the applicable Award Agreement, to the Director’s Deemed Investment Sub-account at such time as the cash would have been paid to the Director but for the Director’s Deferral Commitment with respect to such RSUs.

(c) Any withholding of taxes or other amounts with respect to deferred Fees or RSUs that is required by state, federal or local laws shall be withheld from the Director’s non-deferred Fees or RSUs, or if none, then the Director’s Deferral Commitment shall be reduced by the amount of such withholding.

Section 4.3 Determination of Accounts.

(a) Determination of Accounts . The amount credited to each Director’s Account as of a particular date shall equal the deemed balance of such Account as of such date. The balance in the Account shall equal the amount credited pursuant to Section 4.2, and shall be adjusted in the manner provided in Section 4.4.

(b) Accounting . The Corporation, through its accounting records, shall maintain a separate and distinct record of the amount in each Account as adjusted to reflect income, gains, losses, withdrawals and distributions.

Section 4.4 Adjustments to Accounts.

(a) On each Accounting Date, each Director’s Account and applicable sub-accounts shall be debited with the amount of any distributions under the Plan to or on behalf of the Director or, in the event of his or her death, his or her Beneficiary during the immediately preceding Accounting Period.

(b) The Director’s Deemed Investment Sub-account shall next be credited or debited, as the case may be, on a daily basis with the performance of each deemed Investment Fund based on the manner in which the balance of such Director’s Account has been allocated among the deemed Investment Funds provided for in Article V. The performance of each deemed Investment Fund (either positive or negative) will be determined by the Administrator, in its sole discretion.

(c) Earnings on any amounts deemed to have been invested in the Deemed Investment Sub-Account will be deemed to have been reinvested as the Committee so determines.

- 5 -

(d) Each Director’s Deferred RSU Sub-account shall be deemed invested solely in Common Shares, including fractions of a Common Share.

(e) Common Shares deemed held in the Director’s Deferred RSU Sub-account will be credited with dividend equivalent rights, in respect of any dividends paid on its Common Shares by the Corporation in cash or in Common Shares. Such dividend equivalent rights shall be credited on the date of the payment of such dividend by the Corporation. Dividend equivalent rights in respect of dividends paid in Common Shares shall be credited to the Director’s Deferred RSU Sub-account. Dividend equivalent rights in respect of dividends paid in cash shall not be credited to such Sub-accounts but instead shall be credited to the Director’s Deemed Investment Sub-account and invested in accordance with Article V in the same manner as the remainder of the Director’s Deemed Investment Sub-account.

Section 4.5 Statement of Accounts . As soon as practicable after the end of each Plan Year, a statement shall be furnished to each Director or, in the event of his or her death, to his or her Beneficiary showing the status of his or her Account as of the end of the Plan Year, any changes in his or her Account since the end of the immediately preceding Plan Year, and such other information as the Administrator shall determine.

Section 4.6 Vesting of Accounts . Subject to Section 5.1 and 8.6, each Director shall at all times have a nonforfeitable interest in his or her Account balance.

ARTICLE V

FINANCING OF BENEFITS

Section 5.1 Financing of Benefits . Benefits payable under the Plan to a Director or, in the event of his or her death, to his or her Beneficiary shall be paid by the Corporation from its general assets or, with respect to the Deferred RSU Sub-account, from treasury shares. The payment of benefits under the Plan represents an unfunded, unsecured obligation of the Corporation. Notwithstanding the fact that the Directors’ Deemed Investment Sub-account may be adjusted by an amount that is measured by reference to the performance of any deemed Investment Funds as provided in Section 5.3, no person entitled to payment under the Plan shall have any claim, right, security interest or other interest in any fund, trust, account, insurance contract or asset of the Corporation.

Section 5.2 Security For Benefits . Notwithstanding the provisions of Section 5.1, nothing in this Plan shall preclude the Corporation from setting aside amounts in trust (the “ Trust ”) pursuant to one (1) or more trust agreements between a trustee and the Corporation. However, no Director or Beneficiary shall have any secured interest or claim in any assets or property of the Corporation or the Trust and all funds contained in the Trust shall remain subject to the claims of the Corporation’s general creditors.

Section 5.3 Deemed Investments . The Committee may designate one (1) or more separate investment funds or vehicles or measures for crediting earnings on amounts allocated to the Deemed Investment Sub-account, including, without limitation, certificates of deposit, mutual funds, money market accounts or funds, limited partnerships, or debt or equity securities, in which the amount credited to a Director’s Deemed Investment Sub-account will be deemed to be invested (collectively, the “ Investment Funds ”). The amount credited to a Director’s Deferred RSU Sub-account will be deemed invested solely in Common Shares. An Investment Request or Investment Re-Allocation Request will advise the Administrator as to the Director’s preference with respect to Investment Funds for all or some portion of the amounts credited to a Director’s Deemed Investment Sub-account in specified multiples of one percent (1%), consistent with the definitions of Investment Request and Investment Re-Allocation Request set forth in Sections 2.1(u) and 2.1(v), respectively.

Section 5.4 Change of Investment Request Election .

(a) A Director may change his or her Investment Request prospectively by giving the Administrator prior written or electronic notice by filing an Investment Request, which shall apply to contributions credited to the Director’s Deemed Investment Sub‑account after such Investment Request is filed.

- 6 -

(b) A Director may make an Investment Re-Allocation Request prospectively by giving the Administrator prior written or electronic notice by filing an Investment Re-Allocation Request, with respect to all or a portion of the Director’s Deemed Investment Sub-account, consistent with the definitions of Investment Request and Investment Re-Allocation Request set forth in Sections 2.1(u) and 2.1(v), respectively.

(c) The Administrator may, but is under no obligation to, deem the amounts credited to a Director’s Deemed Investment Sub-account to be invested in accordance with the Investment Request or Investment Re-Allocation Request made by the Director, or the Committee may, instead, in its sole discretion, deem such Account to be invested in any deemed Investment Funds selected by the Committee.

(d) Notwithstanding any provision of the Plan to the contrary:

(i) The Administrator, in its sole and absolute discretion (but subject to the requirements of applicable law) may temporarily suspend, in whole or in part, certain Plan transactions, including without limitation, the right to change investment preference allocation elections and/or the right to receive a distribution or withdrawal from a Director’s Account in the event of any conversion, change in recordkeepers, change in Investment Funds and/or Plan merger, spin-off or similar corporate change.

(ii) In the event of a change in Investment Funds and/or a Plan merger, spin-off or similar corporate change, the Administrator, in its sole and absolute discretion may decide to map investments from a Director’s prior investment preference allocation elections to the then available Investment Funds under the Plan. In the event that investments are mapped in this manner, the Director will be permitted to reallocate funds among the Investment Funds (in accordance with this Section 5.4) after the suspension period described in Section 5.4(d)(i), if any, has ended.

(e) The Common Shares deemed allocated to the Director’s Deferred RSU Sub-account shall remain subject to adjustment pursuant to Section 10 of the Stock Plan.

ARTICLE VI

DISTRIBUTION OF BENEFITS

Section 6.1 Settlement Date . A Director or, in the event of his or her death, his or her Beneficiary will be entitled to distribution of the balance of his or her Account, as provided in this Article VI, following his or her Settlement Date or Dates.

Section 6.2 Amount to be Distributed . The amount to which a Director or, in the event of his or her death, his or her Beneficiary is entitled in accordance with the following provisions of this Article shall be based on the Director’s adjusted account balance determined as of the Accounting Date coincident with or next following his or her Settlement Date or Dates.

Section 6.3 Specific Date Distribution . A Director may elect to receive a distribution of the total of his or her deferred Fees for any Deferral Period in a single lump sum payment on a specified date which is the first day of a calendar quarter and is at least one (1) year after the end of such Deferral Period. A Director’s election of a distribution pursuant to this Section shall be filed in writing with the Administrator at the same time as is filed his or her election to participate as provided in Section 3.1. Any benefits paid to the Director pursuant to this Section shall be paid on or as soon as practicable after the specified date selected by the Director (but in no event later than seventy-five (75) days following such date) and shall reduce the Director’s Account. Any changes to the foregoing election shall be subject to the Subsequent Deferral Rule.

Section 6.4 Form of Distribution.

(a) As soon as practicable after the end of the Accounting Period in which a Director’s Settlement Date (other than a Settlement Date selected by the Director pursuant to Section 6.3) occurs, but in no event later than seventy-five (75) days following the end of such Accounting Period, the Corporation shall commence distribution or cause distribution to be commenced, to the Director or, in the event of his or her death, to

- 7 -

his or her Beneficiary, of the balance of the Director’s Account, as determined under Section 6.2, under one (1) of the forms provided in this Section.

(b) Notwithstanding Section 6.4(a), if elected by the Director in his or her Participation Agreement,

(i) For Deferral Commitments made with respect to Deferral Periods commencing before January 1, 2019 (other than Deferral Commitments with respect to 2018 RSU Deferrals), the distribution of the Director’s Account may be made or commence (under one (1) of the forms provided in this Section 6.4, as specified in the Director’s Participation Agreement) at the beginning of the first or second calendar year (as elected by the Director in his or her Participation Agreement) commencing after the Director’s separation from service as a Director or death.

(ii) For Deferral Commitments made with respect to Deferral Periods commencing on or after January 1, 2019 and for Deferral Commitments with respect to 2018 RSU Deferrals, the distribution of the Director’s Account may be made or commence (under one (1) of the forms provided in this Section 6.4, as specified in the Director’s Participation Agreement) on the Accounting Date immediately following the first or second anniversary (as elected by the Director in his or her Participation Agreement) of the end of the Accounting Period in which the Director’s separation from service as a Director or death occurs.

(c) Distribution of a Director’s Account following his or her separation from service as a Director or death shall be made in cash (or, in the case of a Director’s Deferred RSU Sub-account, in Common Shares) in one (1) of the following forms as elected by the Director in his or her Participation Agreement applicable to each of his or her Deferral Commitments:

(i) in five (5) annual installments; or

(ii) in ten (10) annual installments; or

(iii) in fifteen (15) annual installments; or

(iv) in a single lump sum;

provided , however , that in the event of a Director’s death, if the balance in his or her Account is then less than $35,000, such balance shall be distributed in a single lump sum payment. For Deferral Commitments made with respect to Deferral Periods commencing before January 1, 2019 (other than Deferral Commitments with respect to 2018 RSU Deferrals), each installment described in clause (i), (ii) or (iii) of this section 6.4(b) shall be designated as a “separate payment” as described in Treasury Regulation §1.409A-2(b)(2)(iii). For Deferral Commitments made with respect to Deferral Periods commencing on or after January 1, 2019 and for Deferral Commitments with respect to 2018 RSU Deferrals, each series of annual installments described in clause (i), (ii) or (iii) of this Section 6.4(b) shall be treated as the entitlement to a single payment as described in Treasury Regulation §1.409A-2(b)(2)(iii). If the Director fails to select a form of distribution with respect to any Deferral Commitment, such amount shall be paid in a lump sum at the time of such Director’s separation from service or death.

(d) The Director’s election of the form and date of distribution shall be provided for in the Director’s Participation Agreement applicable to each of his or her Deferral Commitments. A Director may change the payment form or the date of distribution provided in a Participation Agreement of the Director only in compliance with the Subsequent Deferral Rule.

(e) The amount of each installment shall be equal to the quotient obtained by dividing the Director’s Account balance as of the date of such installment payment by the number of installment payments remaining to be made to or in respect of such Director at the time of calculation, and, with respect to a Director’s Deferred RSU Sub-account, rounded up to the next whole share.

(f) Any fraction of a Common Share payable from a Director’s Deferred RSU Sub-account shall be distributed in cash.

- 8 -

Section 6.5 Beneficiary Designation . As used in the Plan the term “ Beneficiary ” means:

(a) The last person designated as Beneficiary by the Director in a written notice on a form prescribed by the Administrator;

(b) If there is no designated Beneficiary or if the person so designated shall not survive the Director, such Director’s spouse; or

(c) If no such designated Beneficiary and no such spouse is living upon the death of a Director, or if all such persons die prior to the full distribution of the Director’s Account balance, then the legal representative of the last survivor of the Director and such persons, or, if the Administrator shall not receive notice of the appointment of any such legal representative within one (1) year after such death, the heirs-at-law of such survivor (in the proportions in which they would inherit his or her intestate personal property) shall be the Beneficiaries to whom the then remaining balance of the Director’s Account shall be distributed.

Prior to the Director’s death, any Beneficiary designation may be changed from time to time by like notice similarly delivered. No notice given under this Section shall be effective unless and until the Administrator actually receives such notice.

Section 6.6 Facility of Payment . Whenever and as often as any Director or his or her Beneficiary entitled to payments hereunder shall be under a legal disability or, in the sole judgment of the Administrator, shall otherwise be unable to apply such payments to his or her own best interests and advantage, the Administrator in the exercise of its discretion may direct all or any portion of such payments to be made in any one (1) or more of the following ways: (i) directly to him; (ii) to his or her legal guardian or conservator; or (iii) to his or her spouse or to any other person, to be expended for his or her benefit; and the decision of the Administrator, shall in each case be final and binding upon all persons in interest.

Section 6.7 Change in Control. Notwithstanding any of the preceding provisions of this Plan, as soon as possible following a “change in the ownership” or the “effective control” of the Corporation or a “change in the ownership of a substantial portion of the Corporation’s assets” (each within the meaning of Section 409A), but in no event later than 30 days following such event, a lump sum payment shall be made, in cash (or, in the case of a Director’s Deferred RSU Sub-account, in Common Shares), of the entire portion of a Director’s Account hereunder that is attributable to Deferral Commitments made for Deferral Periods commencing on or after January 1, 2019 and Deferral Commitments with respect to 2018 RSU Deferrals.

ARTICLE VII

ADMINISTRATION, AMENDMENT AND TERMINATION

Section 7.1 Administration . The Plan shall be administered by an Administrator consisting of one (1) or more persons who shall be appointed by and serve at the pleasure of the Board. The Administrator shall have such powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, to construe and interpret the Plan and determine the amount and time of payment of any benefits hereunder. The Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who may be counsel to the Corporation. The Administrator shall have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided under the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan. No member of the Administrator shall act in respect of his or her own Account. All decisions and determinations by the Administrator shall be final and binding on all parties. All decisions of the Administrator shall be made by the vote of the majority, including actions in writing taken without a meeting. All elections, notices and directions under the Plan by a Director shall be made on such forms as the Administrator shall prescribe.

- 9 -

Section 7.2 Amendment and Termination.

(a) In General . The Plan may be amended from time to time or may be terminated at any time by the Board. Except as provided in Section 7.2(b), no amendment or termination of the Plan, however, may adversely affect the amount or timing of payment of any person’s benefits accrued under the Plan to the date of amendment or termination without such person’s written consent.

(b) Compliance with Section 409A . (1) It is intended that the Plan comply with the provisions of Section 409A, so that the income inclusion provisions of Section 409A do not apply to the Directors. The Plan and each Participation Agreement and Deferral Commitment shall be administered in a manner consistent with this intent.

(2) Neither a Director nor any of a Director’s creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under the Plan to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to a Director or for a Director’s benefit under the Plan may not be reduced by, or offset against, any amount owing by a Director to the Corporation or any of its affiliates.

(c) Notwithstanding any provision of the Plan and Participation Agreements and Deferral Commitments to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, the Corporation reserves the right to make amendments to the Plan and Participation Agreements and Deferral Commitments as the Corporation deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, a Director shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Director or for a Director’s Account in connection with the Plan (including any taxes and penalties under Section 409A), and neither the Corporation nor any of its affiliates shall have any obligation to indemnify or otherwise hold a Director harmless from any or all of such taxes or penalties.

Section 7.3 Successors . The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Corporation expressly to assume and to agree to perform this Plan in the same manner and to the same extent the Corporation would be required to perform if no such succession had taken place. This Plan shall be binding upon and inure to the benefit of the Corporation and any successor of or to the Corporation, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Corporation whether by sale, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “ Corporation ” for the purposes of this Plan), and the heirs, beneficiaries, executors and administrators of each Director.

Section 7.4 Expenses . All expenses of the Plan shall be paid by the Corporation from funds other than those deemed Investment Funds as provided in Section 5.3, except that brokerage commissions and other transaction fees and expenses relating to the investment of deemed assets and investment fees attributable to commingled investment of such assets shall be paid from or charged to such assets or earnings thereon.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 No Continuing Right as Director . Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any Director any right to continue as a Director of the Corporation or any subsidiary of the Corporation.

Section 8.2 Applicable Law . All questions arising in respect of the Plan, including those pertaining to its validity, interpretation and administration, shall be governed, controlled and determined in accordance with the applicable provisions of federal law and, to the extent not preempted by federal law, the laws of the State of Ohio. All legal actions or proceedings relating to the Plan shall be brought exclusively in the U.S. District Court for the

- 10 -

Northern District of Ohio, Eastern Division or the Cuyahoga County Court of Common Pleas, located in Cuyahoga County, Ohio.

Section 8.3 Interests Not Transferable . No person shall have any right to commute, encumber, pledge or dispose of any interest herein or right to receive payments hereunder, nor shall such interests or payments be subject to seizure, attachment or garnishment for the payments of any debts, judgments, alimony or separate maintenance obligations or be transferable by operation of law in the event of bankruptcy, insolvency or otherwise, all payments and rights hereunder being expressly declared to be nonassignable and nontransferable.

Section 8.4 Severability . Each section, subsection and lesser section of this Plan constitutes a separate and distinct undertaking, covenant and/or provision hereof. Whenever possible, each provision of this Plan shall be interpreted in such manner as to be effective and valid under applicable law. In the event that any provision of this Plan shall finally be determined to be unlawful, such provision shall be deemed severed from this Plan, but every other provision of this Plan shall remain in full force and effect, and in substitution for any such provision held unlawful, there shall be substituted a provision of similar import reflecting the original intention of the parties hereto to the extent permissible under law.

Section 8.5 Withholding of Taxes . The Corporation may withhold or cause to be withheld from any amounts payable under this Plan all federal, state, local and other taxes as shall be legally required.

Section 8.6 Accounts Subject to the Corporation’s Recovery of Funds Policy. Notwithstanding anything in this Plan to the contrary, the Directors’ Accounts shall be subject to the Corporation’s Recovery of Funds Policy, as it may be in effect from time to time, including, without limitation, the provisions of such Policy required by Section 10D of the Securities and Exchange Act of 1934 and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which Common Shares may be traded.

- 11 -

IN WITNESS WHEREOF , Lincoln Electric Holdings, Inc. has caused this amendment and restatement of the Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan to be executed in its name effective as of the time provided herein.

LINCOLN ELECTRIC HOLDINGS, INC.

By: /s/ Jennifer I. Ansberry

Name: Jennifer I. Ansberry

Title: Executive Vice President, General Counsel and Secretary

Date: December 13, 2018

- 12 -

Exhibit 10.20

THE LINCOLN ELECTRIC COMPANY

EMPLOYEE SAVINGS PLAN

As Amended and Restated Effective January 1, 2019

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 2


(4)	Automatic Salary Reduction Agreement 2


(5)	Base Compensation 2


(6)	Before-Tax Contributions 2


(7)	Beneficiary 3


(8)	Board 3


(9)	Bonus Compensation 3


(10)	Break in Service and 1-Year Break in Service 3


(11)	Code 4


(12)	Company 4


(13)	Compensation 4


(14)	Controlled Group 4


(15)	Controlled Group Member 4


(16)	Covered Employee 4

___________________________

^* TOC will be revised in final version



	i

TABLE OF CONTENTS

(continued)

Page


(17)	Death Beneficiary 4


(18)	Disability 5


(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 7


(26)	Employment Severance and Employment Severance Date 7


(27)	Enrollment Date 7


(28)	ERISA 7


(29)	ESOP 7


(30)	Former Harris Plan Participant 8


(31)	Former Weartech Plan Participant 8


(32)	FSP Contributions 8


(33)	FSP Participant 8


(34)	Fiduciary 8



	ii

TABLE OF CONTENTS

(continued)

Page


(35)	Hardship 8


(36)	Harris Plan 9


(37)	Harris Prior Employer Contributions 9


(38)	Highly Compensated Employee 9


(39)	Holdings Stock 10


(40)	Holdings Stock Fund 10


(41)	Hour of Service 10


(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 Contribution Percentage 11


(48)	Member 12


(49)	Named Fiduciaries 12


(50)	Nonelective Contribution Participant 12


(51)	Nonelective Employer Contributions 12


(52)	Non-ESOP Account 12



	iii

TABLE OF CONTENTS

(continued)

Page


(53)	Normal Retirement Date 12


(54)	Plan 13


(55)	Plan Year 13


(56)	Prior ESOP Contributions 13


(57)	Qualified Nonelective Contributions 13


(58)	Reemployment Commencement Date 13


(59)	Retirement Annuity Program 13


(60)	Retirement Choice 13


(61)	Rollover Contributions 14


(62)	Salary Reduction Agreement 14


(63)	Self-Directed Investment Account 14


(64)	Spouse 14


(65)	Transitional Contribution Participant 14


(66)	Transitional Employer Contributions 14


(67)	Trust 14


(68)	Trust Agreement 14


(69)	Trustee 15


(70)	Trust Fund 15



	iv

TABLE OF CONTENTS

(continued)

Page


(71)	Valuation Date 15


(72)	Vested Interest 15


(73)	Vesting Service 17


(74)	Weartech Plan 18


(75)	Weartech Prior Matching Contributions 18


(76)	Year of Eligibility Service 18


(77)	Year of Vesting Service 19


1.2	Construction 19


ARTICLE II -	ELIGIBILITY AND MEMBERSHIP 21


2.1	Eligible Employees 21


2.2	Commencement of Membership 21


2.3	Enrollment Pursuant to an Automatic Salary Reduction Agreement 22


2.4	Duration of Membership 23


2.5	Matching Contribution Participation 24


2.6	Nonelective Contribution Participation 24


2.7	Transitional Contribution Participation 25


2.8	Re-Employed Employees 26


2.9	Transferred Employees 27



	v

TABLE OF CONTENTS

(continued)

Page


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 28


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 36


3.12	Classification of Article III 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



	vi

TABLE OF CONTENTS

(continued)

Page


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 40


4.9	Allocation of Transitional Employer Contributions 41


4.10	Return of Contributions to Employers 41


4.11	Maximum Additions 42


4.12	Definitions 43


4.13	FSP and FSP Plus Contributions 44


4.14	Classification of Article IV Contributions 44


ARTICLE V -	INVESTMENTS; ACCOUNTS; ESOP PROVISIONS; LOANS 45


5.1	Investment Funds 45


5.2	Account; Sub-Account 45


5.3	Reports 46


5.4	Valuation of Investment Funds 46


5.5	Investment of Contributions/Liquidations 47


5.6	ESOP Account/Non-ESOP Account 49


5.7	Directions to Trustee 49



	vii

TABLE OF CONTENTS

(continued)

Page


5.8	Loans to Members 49


5.9	Dividends on Holdings Stock 53


ARTICLE VI -	DISTRIBUTIONS 54


6.1	Distributions 54


6.2	Distributions on Death While an Employee 54


6.3	Distributions on Employment Severance 54


6.4	Distributions on Death after Employment Severance 58


6.5	Distributions Pursuant to a QDRO 58


6.6	Latest Time of Distribution 58


6.7	Withdrawals 64


6.8	Effect of Five Consecutive 1-Year Breaks in Service on Vesting Service 65


6.9	Transfers of Eligible Rollover Distributions 66


6.10	Distribution of Holdings Stock 67


6.11	Transfers of Assets from this Plan to Other Plans 68


6.12	Distributions to Certain Individuals Performing Military Service 68


ARTICLE VII -	ADMINISTRATION OF THE TRUST FUND 69


7.1	The Trust Fund 69


7.2	No Guarantee Against Loss 69



	viii

TABLE OF CONTENTS

(continued)

Page


7.3	Payment of Benefits 70


7.4	No Diversion of Trust Fund 70


ARTICLE VIII -	COMMITTEES 71


8.1	Composition of Committees 71


8.2	Certification of Members 71


8.3	Formalities of Committee Action 71


8.4	Administrative Committee Rules/Actions 72


8.5	Functions and Duties of Administrative Committee 72


8.6	Reliance on Records 73


8.7	Revocability of Administrative Committee Action 73


8.8	Responsibilities of Investment Committee 74


8.9	Compensation and Expenses 74


ARTICLE IX -	CLAIMS PROCEDURES 75


9.1	Method of Filing Claim 75


9.2	Notification to Claimant 75


9.3	Review Procedure 75


9.4	Disability Claims and Review Procedure for Former Weartech Plan Participants 76


ARTICLE X -	ADMINISTRATION OF THE PLAN AND FIDUCIARY RESPONSIBILITIES 82



	ix

TABLE OF CONTENTS

(continued)

Page


10.1	Responsibility for Administration 82


10.2	Named Fiduciaries 82


10.3	Delegation of Fiduciary Responsibilities 82


10.4	Immunities 82


10.5	Limitation on Exculpatory Provisions 83


ARTICLE XI -	MISCELLANEOUS 84


11.1	Spendthrift Provisions 84


11.2	Facility of Payment 84


11.3	No Enlargement of Employment Rights 84


11.4	Merger or Transfer of Assets 85


11.5	Action by Company 85


11.6	Severability Provision 85


11.7	Correction of Errors 85


11.8	Military Service 85


11.9	Recovery of Overpayments 86


11.10	Limitations on Investments and Transactions/Conversions 86


11.11	Electronic Media 87


11.12	Recipients Who Cannot be Located 87



	x

TABLE OF CONTENTS

(continued)

Page


ARTICLE XII -	OTHER EMPLOYERS 88


12.1	Adoption by Other Employers 88


12.2	Costs and Expenses 88


12.3	Withdrawal of Employer 89


ARTICLE XIII -	AMENDMENT OR TERMINATION 90


13.1	Right to Amend or Terminate 90


13.2	Procedure for Termination or Amendment 90


13.3	Distribution Upon Termination 90


13.4	Amendment Changing Vesting Schedule 90


13.5	Nonforfeitable Amounts 91


13.6	Prohibition on Decreasing Accrued Benefits 91


ARTICLE XIV -	RULES REGARDING HOLDINGS STOCK 92


14.1	Voting Holdings Stock 92


14.2	Sale of Holdings Stock 92


14.3	Tender Offer for Holdings Stock 92


ARTICLE XV -	TOP-HEAVY PLAN REQUIREMENTS 94


15.1	Definitions 94


(1)	Aggregation Group 94



	xi

TABLE OF CONTENTS

(continued)

Page


(2)	Compensation 94


(3)	Defined Benefit Plan 94


(4)	Defined Contribution Plan 94


(5)	Determination Date 94


(6)	Former Key Employee 94


(7)	Key Employee 94


(8)	Non-Key Employee 94


(9)	Permissive Aggregation Group 94


(10)	Required Aggregation Group 95


(11)	Top-Heavy Account Balance 95


(12)	Top-Heavy Group 95


(13)	Top-Heavy Plan 95


15.2	Determination of Top-Heavy Status 96


15.3	Top-Heavy Plan Requirements 96


15.4	Minimum Vesting Requirement 96


15.5	Minimum Contribution Requirement 97


15.6	Coordination With Other Plans 98



	xii

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, 2019, except for any provision with an earlier effective date provided herein. 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 “Prior ESOP”). On July 1, 1997, the Prior ESOP was merged into the Plan and all participant accounts in the Prior ESOP were transferred to the Plan. These assets are reflected in the Prior ESOP Contributions Sub-Account under the Plan.

Effective December 20, 2001, the Plan was amended to provide that the “Holdings Stock Fund” was 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-Account held under the Plan will continue to reflect only amounts relating to the Prior ESOP.

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.

Effective as of August 1, 2017, pursuant to an Instrument of Merger entered into by The Lincoln Electric Company and J.W. Harris Co., Inc., the J.W. Harris Co., Inc. Profit Sharing/ 401(k) Plan (the “Harris Plan”) was merged with and into the Plan and all accounts held under the Harris Plan were transferred to the Plan.

Effective January 1, 2019, the Plan is hereby amended to divide the Holdings Stock Fund into (1) the “ESOP Holdings Stock Sub-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 and (2) the “Non-ESOP Holdings Stock Sub-Fund” which is intended to be a stock bonus plan as defined in Treasury Regulation Section 1.401-1(b)(1)(iii).

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. A Member’s Account shall be divided into (a) an ESOP Account and (b) a Non-ESOP Account.

(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. 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.



	2

(6) Before-Tax Contributions : The contributions made pursuant to Section 3.1 of the Plan, elective deferral contributions made to the Weartech Plan on behalf of Former Weartech Plan Participants and elective deferral contributions made to the Harris Plan on behalf of Former Harris Plan Participants. Except as otherwise specifically provided in the Plan, the term “Before-Tax 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



	3

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 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) 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(21)) of an Employer, (b) any Disabled Employee and (c) any Employee classified by an Employer as either an intern or a Co-Op Employee.

(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



	4

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 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.



	5

(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 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 or FSP Contributions and FSP Plus Contributions as described in Section 4.13.



	6

(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, (a) 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; (b) 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; (c) 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; and (d) in the case of a Former Harris Plan Participant who is an Employee on August 1, 2017, Employment shall include periods of regular, full-time employment with J.W. Harris Co., Inc. prior to August 1, 2017.

(25) Employment Commencement Date : The date on which an Employee first performs an Hour of Service for a Controlled Group Member.

(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 Account : The ESOP Holdings Stock Sub-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



	7

employee stock ownership plan satisfying the requirements of sections 401(a), 409(e), (h) and (o), and 4975(e)(7) of the Code. The ESOP Account shall consist of the following amounts, plus allocated earnings thereto: (a) amounts invested in the Holdings Stock Fund prior to January 1, 2019 and not thereafter transferred to an Investment Fund other than the Holdings Stock Fund; (b) amounts invested in the Holdings Stock Fund from any of the following Sub-Accounts at any time: (i) Rollover Contributions; (ii) Prior ESOP Contributions; (iii) FSP Contributions; (iv) FSP Plus Contributions; (v) Weartech Prior Matching Contributions or (vi) Harris Prior Employer Contributions; (c) solely to the extent designated in any applicable Instrument of Merger or similar document, amounts invested in the Holdings Stock Fund from amounts transferred to the Plan on behalf of a Member from another qualified plan pursuant to Section 3.10 hereof for the current Plan Year; (d) amounts annually transferred from the Non-ESOP Holdings Stock Sub-Fund and the Non-ESOP Account in accordance with Section 5.6; and (e) amounts transferred by a Member from an Investment Fund other than the Holdings Stock Fund to the Holdings Stock Fund pursuant to Section 5.5(2) at any time after the Plan Year in which the contribution to which the amount is attributable was made to the Plan.

(30) Former Harris Plan Participant . Any person who immediately prior to the effective time of the merger of the Harris Plan into this Plan had amounts held on his behalf in one or more accounts maintained under the Harris Plan.

(31) 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.

(1) FSP Contributions : Employer Contributions described in Section 4.13.

(2) FSP Participant or FSP Plus Participant : An Employee who prior to January 1, 2017 was an “FSP Participant” or an “FSP Plus Participant” as such terms were defined under the Plan as in effect prior to January 1, 2017.

(3) 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 to do so, or (c) has any discretionary authority or discretionary responsibility in the administration



	8

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.

(4) 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 the limitations in section 213(a) of the Code);

(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 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 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 section 165(h)(5) of the Code and whether the loss exceeds 10% of adjusted gross income); or

(g) to the extent determined by the Administrative Committee, 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.

(5) Harris Plan : The J.W. Harris Co., Inc. Profit Sharing/401(k) Plan, as in effect immediately prior to its merger into the Plan effective as of August 1, 2017.



	9

(6) Harris Prior Employer Contributions : Matching employer contributions and nonelective employer contributions, if any, made to the Harris Plan on behalf of Former Harris Plan Participants who are not Employees on August 1, 2017.

(1) 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 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 an Employee’s compensation under Section 4.11(3).

(2) Holdings Stock : Stock that constitutes “qualifying employer securities,” including voting or non-voting common stock of Lincoln Electric Holdings, 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.

(3) Holdings Stock Fund : The Investment Funds within the Trust in which are held Holdings Stock allocated to a Member’s Account (or Sub-Account). The Holdings Stock Fund is divided into (a) the ESOP Holdings Stock Sub-Fund which is intended to be invested primarily in Holdings Stock and (b) the Non-ESOP Holdings Stock Sub-Fund.

(4) Hour of Service :



	10

(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 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.

(5) Instrument of Adoption : The instrument referred to in Section 12.1.

(6) Investment Committee : The committee provided for in Section 8.1 which shall have the responsibilities specified in Section 8.8.

(7) Investment Funds : Any of the investment funds established by the Investment Committee under Section 5.1.



	11

(8) Matching Contribution Participant : An Employee who has become and continues to be a Matching Contribution Participant in accordance with the provisions of Article II.

(9) Matching Employer Contributions : The contributions made pursuant to Section 4.1 of the Plan (or pursuant to any Instrument of Adoption), employer matching contributions made to the Weartech Plan on behalf of Former Weartech Plan Participants who were Employees on August 29, 2016 and matching employer contributions made to the Harris Plan on behalf of Former Harris Plan Participants who were Employees on August 1, 2017.

(10) 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. 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.

(11) Member : An Employee who has become and continues to be a Member of the Plan in accordance with the provisions of Article II.

(12) Named Fiduciaries : The persons designated in or pursuant to Section 10.2.

(13) Nonelective Contribution Participant : An Employee who has become and continues to be a Nonelective Contribution Participant in accordance with the provisions of Article II.

(14) Nonelective Employer Contributions : The contributions made pursuant to Section 4.6 of the Plan and nonelective employer contributions made to the Harris Plan on behalf of Former Harris Plan Participants who were Employees on August 1, 2017.

(52) Non-ESOP Account : The Non-ESOP Account shall consist of the following amounts, plus allocated earnings thereto: (a) Before-Tax Contributions, Matching Employer Contributions, Qualified Nonelective Contributions, Nonelective Employer Contributions and Transitional Employer Contributions, in each case that are made for the current Plan Year and invested in the Holdings Stock Fund; (b) all contributions invested in any Investment Fund other than the Holdings Stock Fund and (c) solely to the extent designated in any applicable Instrument of Merger or similar



	12

document, amounts transferred to the Plan on behalf of a Member from another qualified plan pursuant to Section 3.10 hereof; provided that the Non-ESOP Account shall not include any portion of such contributions that are transferred to the Participant’s ESOP Account pursuant to Section 5.6 of the Plan. In furtherance of, but without limiting the foregoing, the Non-ESOP Holdings Stock Sub-Fund, which is intended to be a stock bonus plan as defined in Treasury Regulation Section 1.401-1(b)(1)(iii), is also part of the Non-ESOP Account.

(1) Normal Retirement Date : The date on which a Member attains age 60.

(2) 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 Account and the remainder of the Plan which is a profit sharing plan (with a portion consisting of a stock bonus plan).

(3) Plan Year : A calendar year.

(4) 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.

(5) 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 is prescribed by law for the filing by an Employer of its federal income tax return (including extensions thereof).

(6) 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.

(7) Retirement Annuity Program : The Lincoln Electric Company Retirement Annuity Program.

(8) 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



	13

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 was irrevocable.

(9) 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.

(10) 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.

(11) Self-Directed Investment Account : A self-directed investment account, as described in Section 5.1, that is an Investment Fund within the Trust.

(12) 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).

(13) 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 2.7(1)(b)(i) are also referred to herein as a “Transitional RAP Participants,” and Transitional Contribution Participants described in Section 2.7(1)(b)(ii) are also referred to herein as “Transitional Kaliburn Participants.”



	14

(14) Transitional Employer Contributions : The contributions made pursuant to Section 4.8 of the Plan.

(15) Trust : The trust created by the Trust Agreement and known as The Lincoln Electric Company Savings Plan Trust.

(16) 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.

(17) Trustee : The trustee or trustees under the Trust Agreement or its or their successor or successors in trust under such Trust Agreement.

(18) 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.

(19) Valuation Date : Each day on which the New York Stock Exchange is open for trading.

(20) 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 Manufacturing Solutions, Inc. and Lincoln Global, Inc. (but in the case of Members employed by J.W. Harris Co., Inc., Smart Force, LLC or the Seal Seat Division of Lincoln Global, Inc., only with respect to Members who are Employees on or after August 1, 2017 or who were Covered Employees prior to August 1, 2017 under the provisions of the Plan then in effect) is 100% nonforfeitable at all times, or (ii) in the case of all other Members



	15

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, provided, however, that in the case of a Member who was an Employee on January 1, 2017, the portion of such Member’s Account that is derived from FSP Contributions and FSP Plus Contributions was 100% nonforfeitable on January 1, 2017.

Notwithstanding the foregoing, in the case of a Former Weartech Plan Participant who was 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 was 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:



	16



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%

Further notwithstanding the foregoing, but subject to section 6.3(8), in the case of a Former Harris Plan Participant who was not an Employee on August 1, 2017, the portion of such Former Harris Plan Participant’s Account that is derived from Harris Prior Employer Contributions shall be 0% nonforfeitable prior to the Member’s completion of three Years of Vesting Service and 100% nonforfeitable on and after the Member’s completion of three Years of Vesting Service.

(21) 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.



	17

(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 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 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, (i) 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; (ii) with respect to any Former Weartech Plan Participant, (A) 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 (B) for the Plan Year commencing January 1, 2016, Vesting Service shall be credited in accordance with Treasury Regulation section 1.410(a)-7(g); and (iii) with respect to any Former Harris Plan Participant, Years of Vesting Service shall include service credited for vesting purposes under the Harris Plan immediately prior to August 1, 2017 (excluding any service that is disregarded under the terms of the Harris Plan).



	18

(22) 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.

(23) 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.

(24) 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.” 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, 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, (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, and (c) in the case of a Former Harris Plan Participant, Years of Eligibility Service shall include any service credited for eligibility purposes under the Harris Plan immediately prior to August 1, 2017.

(25) Year of Vesting Service : As defined in Section 1.1(73).



	19

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 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, 2019. 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, 2019 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.



	20

(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, 2019 (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, 2019 apply to such individual as a result of applicable law or the context clearly requires the application of such provision to such individual.

(8) The benefits payable to a Former Harris Plan Participant under the Harris Plan whose employment with the Controlled Group terminated, including by reason of death, before August 1, 2017 (and who is not rehired by a Controlled Group Member on or after August 1, 2017) shall be determined by and paid in accordance with the terms and provisions of the Harris Plan as in effect at the date of such termination, except to the extent otherwise specifically provided in this Plan.



	21

ARTICLE II - ELIGIBILITY AND MEMBERSHIP

2.1 Eligible Employees . Each Covered Employee who is an Eligible Employee under the Plan on January 1, 2019 shall continue to be an Eligible Employee under the Plan after January 1, 2019 so long as he remains a Covered Employee. Each other Employee who is classified by an Employer as a full-time Employee shall become an Eligible Employee under the Plan on the first Enrollment Date on which he is a Covered Employee. Each other Employee who is not classified by an Employer as a full-time Employee shall become an Eligible Employee under the Plan on the first Enrollment Date on which he meets the following requirements:

(1) he is a Covered Employee, and

(2) he has been credited with one Year of Eligibility Service.

Notwithstanding the preceding provisions of this Section, the terms and provisions of the Plan in effect prior to January 1, 2019 contained special eligibility rules for certain classes of Eligible Employees.

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 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 preceding provisions of this Section, the terms and provisions of the Plan in effect prior to January 1, 2019 contained special membership rules for certain classes of Eligible Employees.



	22

(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 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.

2.3 Enrollment Pursuant to an Automatic Salary Reduction Agreement .



	23

(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 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 2.6(1). An Employee shall cease to be a Transitional Contribution Participant upon the date described in Section 2.7(2). An Employee shall cease to be a Matching Contribution Participant when he ceases



	24

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 Matching Contribution Participation .

(1) An Employee shall be eligible to become a Matching Contribution Participant under this Plan on January 1, 2019 if he was an Eligible Employee under the Plan immediately prior to January 1, 2019. 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.

(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).

2.6 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



	25

(b) he has been in Employment for at least six consecutive months, or has been credited with one Year of Eligibility Service.

(2) An Employee who satisfies the requirements of Subsection (1) of this Section on January 1, 2019 shall become a Nonelective Contribution Participant and a Member (if he is not otherwise a Member under the Plan) on January 1, 2019. 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).

2.7 Transitional Contribution Participation .

(1) Only an Employee who met the following requirements shall be classified as a Transitional Contribution Participant under this Plan:

(a) he was a Covered Employee under the Plan on January 1, 2017 and was 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 first 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.



	26

2.8 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 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) 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 2.5.

(3) 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 2.6.

(4) 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.



	27

2.9 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) 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 2.5

(3) 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 2.6.

(4) 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.



	28

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.



	29

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 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 gross income for the



	30

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



	31

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 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 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.



	32

(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.

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, 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



	33

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, 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 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



	34

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.

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.

(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),



	35

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) 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 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



	36

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 . 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. The amounts so transferred shall be allocated to such current or new Sub-Accounts established and maintained for the applicable Members under Section 5.2, as determined by the Company.

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



	37

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, 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.

3.12 Classification of Article III Contributions .

(1) When transmitted to the Plan pursuant to this Article III, Before-Tax Contributions (including Catch-Up Before-Tax Contributions) shall be held in the Non-ESOP Account and, if invested in Holdings Stock, shall be held in the Non-ESOP Holdings Stock Sub-Fund. As provided in Section 5.6, such Before-Tax Contributions that remain invested in Holdings Stock shall later be transferred to the ESOP Holdings Stock Sub-Fund within the ESOP Account.

(2) To the extent invested in Holdings Stock, Rollover Contributions shall be transmitted to and held in the ESOP Account and invested in the ESOP Holdings Stock Sub-Fund.

(3) At the time of the transfer, the Company shall designate what portion of the transfer contributions described in Section 3.10 are to be transmitted to and held in the ESOP Account and/or the Non-ESOP Account. To the extent that any such amounts are held in the Non-ESOP Account and invested in Holdings Stock, such amounts shall be held in the Non-ESOP Holdings Stock Sub-Fund. As provided in Section 5.6, such amounts that remain invested in Holdings Stock shall later be transferred to the ESOP Holdings Stock Sub-Fund within the ESOP Account.



	38

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 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 Participant, who is entitled to receive Matching Employer Contributions and for whom Before-Tax



	39

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 . 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. 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



	40

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 . 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.

4.8 Transitional Employer Contributions . 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”). 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”). 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



	41

for the filing by each such Employer of its federal income tax return (including extensions thereof). Transitional Employer Contributions shall be made in cash.

4.9 Allocation of Transitional Employer Contributions .

(1) 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) 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



	42

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,



	43

(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) (other than Treasury Regulation Section 1.415(c)-2(e)(2)), but shall not include any amount in excess of the limitation under section 401(a)(17) of the Code in effect for the year. 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. 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.

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.



	44

(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 and FSP Plus Contributions . For Plan Years commencing prior to January 1, 2017, in accordance with the terms of the Plan as then in effect, certain Employers contributed to the Trust on account of Plan Years in effect prior to January 1, 2017 (a) FSP Contributions on behalf of Members who were FSP Participants and (b) FSP Plus Contributions on behalf of Members who were FSP Plus Participants. No further FSP Contributions or FSP Plus Contributions shall be contributed to the Trust on account of any Plan Year commencing on or after January 1, 2017.

4.14 Classification of Article IV Contributions .

(1) When transmitted to the Plan pursuant to this Article IV, Matching Employer Contributions, Qualified Nonelective Contributions, Nonelective Employer Contributions and Transitional Employer Contributions shall be held in the Non-ESOP Account and, if invested in Holdings Stock, shall be held in the Non-ESOP Holdings Stock Sub-Fund. As provided in Section 5.6, such contributions that remain invested in Holdings Stock shall later be transferred to the ESOP Holdings Stock Sub-Fund within the ESOP Account.

(2) To the extent invested in Holdings Stock, FSP Contributions and FSP Plus Contributions shall be held in the ESOP Account and invested in the ESOP Holdings Stock Sub-Fund.



	45

ARTICLE V - INVESTMENTS; ACCOUNTS; ESOP PROVISIONS; LOANS

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 amounts contributed to the Plan 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 (or investment manager, if applicable) 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 5.9, dividends, interest and other distributions received 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.

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



	46

Employer Contributions, (5) Qualified Nonelective Contributions, (6) Nonelective Employer Contributions, (7) Transitional Employer Contributions, (8) FSP Contributions, (9) FSP Plus Contributions, (10) Weartech Prior Matching Contributions and (11) Harris Prior Employer Contributions. The Company shall also establish and maintain an ESOP Account and a Non-ESOP Account for each Member. The Company may establish such other Sub-Accounts, to the extent deemed necessary or desirable, in order to separately account for contribution and/or investment sources.

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, (a) the transfer of funds to or from an Investment Fund pursuant to Section 5.5, (b) contributions allocated to an Investment Fund,



	47

(c) payments, distributions and withdrawals from an Investment Fund to pay Plan related fees or provide loans, distributions or benefits under the Plan for Members or Beneficiaries and (d) the transfer of amounts from a Member’s Non-ESOP Account to the ESOP Account pursuant to Section 5.6 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/Liquidation .

(1) Subject to Sections 3.12, 4.14 and 5.6, each Member may, pursuant to rules and procedures adopted by the Administrative Committee, direct that all amounts contributed to the Plan by or for him shall be invested in any or all of the Investment Funds (subject to the limitations on Self-Directed Investment Accounts and managed accounts described in this Section). 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.

(2) Subject to Sections 3.12, 4.14 and 5.6, 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 (a) 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,



	48

(b) only amounts attributable to a Member’s Vested Interest and no less than a minimum amount designated by the Investment Committee may be transferred to a Self-Directed Investment Account, and (c) 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.

(3) Default Investment Funds . In the absence of an effective investment direction and/or an effective investment change, (i) Prior ESOP Contributions shall be invested in the ESOP Holdings Stock Sub-Fund (or in such other Investment Fund as the Investment Committee shall designate for such purpose) and (ii) all other 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.

(4) Diversification of ESOP Account . 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 their ESOP Account 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) Managed Account Service . For purposes of this Section, effective as of October 1, 2018, a Member may act individually or utilize a managed account service, under which investment directions for the selection of investment options from the available Investment Funds (other than the Self-Directed Investment Account) will be provided by a registered investment manager on behalf of the Member appointed under the Plan for this purpose, in accordance with rules and procedures established by the Investment Committee. Elections shall be subject to such additional rules or restrictions imposed by the Trustee or investment manager, and the Trustee and investment manager may decline to implement any election it deems inappropriate in light of such rules or restrictions

(6) Liquidation of Investment Funds . Except as expressly provided otherwise in the Plan, loans, withdrawals, forfeitures and other distributions from a Member’s Account shall first be allocated among the Investment Funds (other than the Self-Directed Investment Account) in the same proportion as the value (determined as of the Valuation Date that is the effective date of such



	49

distribution) 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. In the event that additional funds are needed to fund such distributions, the Member’s investments in his Self-Directed Investment Account shall be liquidated in accordance with the methodology and hierarchy determined by the Administrative Committee as in effect from time to time.

5.6 ESOP Account and Non-ESOP Account .

(1) Amounts that Members choose to invest in any Investment Fund other than the Holdings Stock Fund shall be held in the Member’s Non-ESOP Account.

(2) As described in Section 3.12 and 4.14, certain amounts held in the Member’s Non-ESOP Account that are invested in Holdings Stock shall initially be invested in the Non-ESOP Holdings Stock Sub-Fund, subject to transfer to the Member’s ESOP Account. Any amount of the Participant’s Non-ESOP Account invested in Holdings Stock as of the first day of the Plan Year immediately succeeding the Plan Year in which the contributions comprising such amounts were contributed to the Plan shall automatically be transferred to the Member’s ESOP Account and the ESOP Holdings Stock Sub-Fund effective as of such date.

5.7 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 loans, distributions and withdrawals pursuant to Section 5.8 and Article VI.

5.8 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 Nonelective Contributions Sub-Account, if any; fourth, to the extent necessary, against the



	50

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; tenth, to the extent necessary, against the Member’s FSP Plus Contributions Sub-Account and eleventh, to the extent necessary, against the Member’s Harris Prior Employer Contributions Sub-Account, if any.

(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)



	51

establish and maintain a separate recordkeeping account within the Member’s Account (the “Loan 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:



	52

(A) with respect to a Member who is an Employee, the loan will be repaid pursuant to authorization by the Member of equal payroll 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



	53

(b) in the case of any other Member, immediately upon such default.

(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)).

(8) Loans outstanding under the Harris Plan on July 31, 2017 were transferred to the Plan and shall continue to be governed by the terms in effect for such loans under the Harris Plan on July 31, 2017. Further, the limitation set forth in Subsection (3) of this Section on the number of loans that a Member may have outstanding at any one time shall not apply to a Former Harris Plan Participant who on July 31, 2017 had more than three loans outstanding under the Harris Plan, provided, however, that such Former Harris Plan Participant shall not be eligible obtain a loan under this Plan until he has less than three loans outstanding under the Plan, and thereafter shall be subject to the limitation set forth in Subsection (3).

5.9 Dividends on Holdings Stock . Notwithstanding any other provision of the Plan, cash dividends paid on shares of Holdings Stock that are held in the ESOP Account and the ESOP Holdings Stock Sub-Fund 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 Holdings, Inc. in cash to the Member or Beneficiary, or, at the discretion of the Administrator, paid by Lincoln Electric Holdings, 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 ESOP Holdings Stock Sub-Fund.

In the absence of an effective election under this Section, dividends on Holdings Stock shall be paid to the Plan and reinvested in the ESOP Holdings Stock Sub-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, (i) the election to receive a cash payment of dividends on



	54

shares of Holdings Stock shall not apply to shares of Holdings Stock held in the Non-ESOP Holdings Stock Sub-Fund and (ii) all dividends reinvested in either the Non-ESOP Holdings Stock Sub-Fund or the ESOP Holdings Stock Sub-Fund shall be 100% vested and nonforfeitable at all times.



	55

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, 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 value of the Member’s Vested Interest in his Account on the Valuation Date immediately



	56

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(72), 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 Service. Amounts, if any, forfeited pursuant to this Subsection shall be used to pay expenses of



	57

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 Weartech Plan prior to August 29, 2016 is reemployed as an Eligible Employee on or after August



	58

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.

(8) If a Former Harris Plan Participant who forfeited all or a portion of his interest under the Harris Plan on account of a distribution to him from the Harris Plan prior to August 1, 2017 is reemployed as an Eligible Employee under this Plan on or after August 1, 2017 but prior to incurring five consecutive 1-Year Breaks in Service, such Former Harris 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 Harris 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 Harris Plan Participant is reemployed. If a Former Harris Plan Participant who received a deemed distribution from the Harris Plan prior to August 1, 2017 is reemployed as an Eligible Employee on or after August 1, 2017 but prior to incurring five consecutive 1-Year Breaks in Service, such Former Harris 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 Harris Plan Participant’s Years of Vesting Service to which such payment related shall be reinstated and an Account shall be established for such Former Harris Plan Participant with a value that is not less



	59

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 Harris Plan Participant’s Account that is derived from Harris Prior Employer Contributions shall be 100% nonforfeitable. The sources for restoration of the Former Harris 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 Harris Plan, any forfeitures arising under the provisions of the Harris Plan that have not been allocated or applied as of August 1, 2017 shall be used to reduce subsequent Employer Contributions.

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(72) shall be forfeited as of the date of his death and such forfeited amount shall be applied as provided in Section 6.3(5).

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)



	60

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, 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 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 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



	61

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 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



	62

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, 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).

(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.



	63

(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.

(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



	64

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 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



	65

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.

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 dividends from his ESOP Account under section 404(k) of the Code but not Hardship distributions) then available under all plans maintained by the Controlled Group 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 (including earnings thereon): Rollover Contributions Sub-Account, Before-Tax Contributions Sub-Account, Matching Employer Contributions Sub-Account, Transitional Employer Contributions Sub-Account, Prior ESOP Contributions Sub-Account, Weartech Prior Matching Contributions Sub-Account and Harris Prior Employer 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, as of January 1, 2019, a Member’s Before-Tax Contributions were suspended for a period of six months following receipt of a withdrawal on account of Hardship, such suspension will cease to apply effective January 1, 2019 and a Member who desires to resume having Before-Tax Contributions made for him may do so, as of any Valuation Date on or after January 1, 2019, if he is then an Eligible Employee and he again enrolls as a contributing Member pursuant to Sections 2.2(1) and 3.1.



	66

(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 his Account. Any such partial withdrawal shall be charged pro-rata to the Sub-Accounts maintained under the Member’s Account.

(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 incurrence of a 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 his Account. Any such partial withdrawal shall be charged pro- rata to the Sub-Accounts maintained under the Member’s Account. For purposes of this Section, a Member is disabled on the date the Committee determines the Member satisfies the definition of Disability. The Committee may require a Member who is a Former Weartech Plan Participant to submit to a physical examination in order to confirm the Member’s Disability.

(5) Withdrawals by Certain Former Employees . A Member, who is a former Employee and a Former Harris Plan Participant, may request, on a form provided by and filed with the Committee, a withdrawal of a portion of his Vested Interest in his Account. Any such withdrawal shall be charged pro-rata to the Sub-Accounts maintained under the Member’s Account.

(6) 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 Administrative Committee.

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, Weartech Prior Matching Contributions or Harris Prior Employer Contributions allocated to his Account before such five‑year period.



	67

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.

(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, a Roth IRA described in section 408A(b) of the Code, or any other type of plan that is included within the definition of



	68

“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 a Hardship withdrawal 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. This distribution option applies to Holdings Stock held in either a Member’s ESOP Account or in the Non-ESOP Account.

(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.



	69

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 shall have his Before-Tax Contributions suspended for a period of 6 months beginning on the date of distribution.

(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.



	70

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 .

(1) Neither the Trustee, the Administrative Committee, the Investment Committee, any investment manager 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.

(2) Neither the Company, the Investment Committee, the Administrative Committee, any Employer, the Trustee, nor any officer or employee of any of them is authorized to advise a Member or Beneficiary as to the manner in which contributions to the Plan and income thereon should be invested or reinvested. The selection of the Investment Fund(s) in which a Member or Beneficiary participates is his sole responsibility (or, to the extent that a Member or Beneficiary participates in the managed account service under Section 5.5(5), the responsibility of the investment manager) and the fact that designated Investment Funds are made available under the Plan shall not be construed as a recommendation for the investment of contributions hereunder in all or any of such Funds.

(3) Any decision by a Member or Beneficiary to invest in any Investment Fund or to request a loan shall constitute an exercise of control over the assets allocated to his Account (to the extent of such exercise of control) within the meaning of ERISA Section 404(c) and each Member



	71

or Beneficiary who so exercises such control shall, by such exercise, release and agree, on his behalf and on behalf of his heirs and beneficiaries, to indemnify and hold harmless the Company, Trustee, each Employer, the Investment Committee and the Administrative Committee, and any officer or employee of any of the them, from and against any claim, demand, loss, liability, costs or expense (including reasonable attorney’s fees) caused by or arising out of such exercise, including without limitation, any diminution in value or losses incurred from such exercise.

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, any investment manager nor the Trustee shall be otherwise liable for any benefits payable under the Plan.

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.



	72

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 procedures



	73

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 Administrative Committee Rules/Actions . 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. All action taken by the Administrative Committee under the Plan shall treat all persons similarly situated in a uniform and consistent manner.

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



	74

accordance with the terms of the Plan (as interpreted, to the extent necessary, by the Administrative Committee):

(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 procedures specified in Sections 9.3 and 9.4.

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, 9.3 and 9.4. 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



	75

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.

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, the Trustee or an investment manager) 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.



	76

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.

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 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,



	77

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.

9.4 Disability Claims and Review Procedure for Former Weartech Plan Participants . Notwithstanding any other provision of this Article IX to the contrary, in the case of a determination of Disability (other than pursuant to the Federal Social Security Act) involving a Former Weartech Plan Participant the following claims procedures and review procedures shall apply on or after April 1, 2018:



	78

(a) In the case of such a Disability determination, if a claim is wholly or partially denied by the Administrative Committee, the Administrative Committee shall, within a reasonable period of time, but not later than 45 days (unless such period is extended as provided in the following paragraph) after receipt of the claim by the Plan, notify the claimant in writing of such denial. Such notice shall be written in a manner calculated to be understood by the claimant and shall (1) state the specific reason(s) for the denial of the claim; (2) make references to the specific provisions of the Plan and/or Trust Agreement on which the denial of the claim is based; (3) contain a description of any additional material or information necessary for the claimant to perfect his claim and an explanation of why it is necessary; (4) contain a description of the Plan’s review procedures, and the time limits applicable to such procedures, including a statement of the claimant’s rights to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review; (5) include either the specific internal rules, guidelines, protocols, standards or other similar criteria of the Plan relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of the Plan do not exist; (6) include a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (i) the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, (ii) the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, and (iii) a disability determination made by the Social Security Administration regarding the claimant and presented by the claimant to the Plan; (7) if the adverse benefit determination is based on medical necessity or experimental treatment or a similar exclusion or limit, include either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge to the claimant upon request; and (8) contain a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access



	79

to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

(b) The 45-day period set forth above may be extended by the Administrative Committee for up to 30 days, provided that the Administrative Committee determines that such an extension is necessary due to matters beyond the control of the Administrative Committee and notifies the claimant, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which the Administrative Committee expects to render a decision. Additionally, if, prior to the end of the first 30-day extension period, the Administrative Committee determines that, due to matters beyond the control of the Administrative Committee, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional 30 days, provided that the Administrative Committee notifies the claimant, prior to the expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the Administrative Committee expects to render a decision. In the event of any extension under this Section, the notice of extension shall specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve the issues. The claimant shall be afforded at least 45 days within which to provide the specified information. Additionally, in the event that a period of time is extended due to a claimant’s failure to submit information necessary to decide a claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

(c) Notices will be provided to the claimant under this Section in a culturally and linguistically appropriate manner by (1) providing services that include answering questions and providing assistance with filing claims and appeals in any applicable non-English language; (2) providing, upon request, a notice in any applicable non-English language; and (3) including in the English versions of all notices, a statement in any applicable non-English language indicating how to access the language services. With respect to an address in any county to which notice is sent, a non-English language is an



	80

“applicable non-English language” if 10% or more of the population residing in the county is literate only in that non-English language, as determined in guidance published by the Secretary of the Department of Labor.

(d) Within 180 days after receipt of a notification of a denial of a 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 claim. If such an appeal is so filed within 180 days, 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 (1) 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 benefit determination; (2) not afford deference to the initial adverse benefit determination; (3) be conducted by a Named Fiduciary who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual; (4) provide that, in deciding any appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, the Named Fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment and who is neither the individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual; and (5) provide for the identification of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the initial benefit determination. Decisions regarding hiring, compensation, termination, promotion or other similar matters with respect to any claims personnel shall not be made based upon the likelihood that the individual will support the denial of benefits.



	81

(e) Before the Plan can issue a denial of an appealed claim, as soon as possible and sufficiently in advance of the date of the notice of final adverse benefit determination, the Named Fiduciary will provide the claimant, free of charge, (1) with any new or additional evidence considered, relied upon, or generated by the Plan (or at its direction) in connection with the claim; and (2) with any new or additional rationale on which the final adverse benefit determination is based, to give the claimant a reasonable opportunity to respond prior to the date the final adverse benefit determination is issued.

(f) The decision of the Named Fiduciary shall be made in a writing delivered to the claimant within a reasonable time, but in no event later than 45 days after the receipt of the request for review unless special circumstances require an extension of time for processing. If the Named Fiduciary 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 on review, and shall be furnished prior to the termination of the initial 45-day period. In no event shall such extension exceed a period of 45 days from the end of the initial 45-day period.

(g) In the case of an adverse benefit determination on review, the notice of the determination shall (1) state the specific reasons for the determination; (2) make reference(s) to specific provisions of the Plan and/or Trust Agreement on which the determination is based; (3) contain a statement that the claimant is entitled to receive, upon request, and free of charge, reasonable access to, and copies of all documents, records, and other information relevant to the claimant’s claim for benefits; (4) contain a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures and a statement of the claimant’s right to bring an action under section 502(a) of ERISA, as well as a description of any applicable contractual limitations period that applies to the claimant’s right to bring such an action, including the calendar date on which the contractual limitations period expires for the claim; (5) include either the specific internal rules, guidelines, protocols, standards, or other similar criteria of the Plan relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards, or other similar criteria of the Plan do not exist; (6) include



	82

a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (i) the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, (ii) the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, and (iii) a disability determination made by the Social Security Administration regarding the claimant and presented by the claimant to the Plan; and (7) if the adverse benefit determination is based on medical necessity or experimental treatment or a similar exclusion or limit, include either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request.

(h) To the extent permitted by applicable law, the determination on review shall be final and binding on all interested persons. The Plan generally must strictly comply with its claims and appeals procedures; provided, however, that this strict compliance requirement will not be violated, and the claims and appeals process will not be deemed exhausted, if the violation of such procedures: (1) is de minimis; (2) does not cause, and is not likely to cause, prejudice or harm to the claimant; (3) was for good cause or due to matters beyond the control of the Plan; and (4) occurred in the context of an ongoing, good faith exchange of information between the Plan and the claimant (the “de minimis exception”). The claimant may request a written explanation of the violation from the Named Fiduciary, and the Named Fiduciary must provide such explanation within 10 days, describing why the violation should not cause the internal claims and appeals process to be deemed exhausted. If a court rejects the claimant’s request for immediate review on the basis that the standards for the de minimis exception were satisfied, the claim shall be considered as re-filed on appeal upon the Plan’s receipt of the court’s decision. Within a reasonable time after receipt of the court’s decision, the Plan will notify the claimant of the resubmission of the claim.



	83

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, the Trustee and the investment manager(s), if any. 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.



	84

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.



	85

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 (“QDRO”) 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 Administrative 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



	86

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.

11.4 Merger or Transfer of Assets . The Company reserves the right to merge or consolidate this Plan with, and/or to transfer all or part of the assets of the Plan to, any other Plan, without the consent of any other Employer. However, 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.



	87

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.

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



	88

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.

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.

11.12 Recipients Who Cannot Be Located . In the event that the Administrative Committee is unable to locate a person entitled to payment of a benefit hereunder after sending a registered mail (or equivalent communication) to such person’s address last known to his Employer and taking such other reasonable steps to locate such person (e.g., using electronic search tools and locater services), then such benefits shall be forfeited. Any such forfeitures shall not be applied to increase the benefits which Members might otherwise receive under the Plan, but shall be used to reduce the future Employer contributions to, or the administrative expenses of, the Plan. Notwithstanding the foregoing, in the event that any missing person who would have been entitled to receive benefits forfeited under this Section should subsequently make a claim for such benefits, then the forfeited benefits shall be reinstated and payment of the benefits which had previously been forfeited shall be made (without interest) to the party entitled to such benefits as soon as practicable after the missing person makes a claim therefor.



	89

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 (including, without limitation, expenses incurred by the Administrative Committee and Investment Committee), net of any revenue sharing that reimburses or pays directly such costs and expenses, shall be paid from the Trust Fund; provided, however, that (1) the Company, in its absolute discretion, may elect at any time to pay (or have the Employers 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 and/or (2) the Administrative Committee and/or Investment Committee may direct that some or all of such administrative costs are to be paid directly by the Members. In furtherance of, but without limiting the foregoing, the Administrative and/or Investment Committee may direct that recordkeeping and other fees be deducted directly from the Accounts of all Members, or, in the sole discretion of the Administrative and/or Investment Committee, solely from the accounts of specified



	90

Members who utilize certain services and/or solely from the accounts of terminated Members (subject to the limitations of Code Section 411(a)(11) and the regulations thereunder).

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 all contributions of or for Employees of such former Employer shall cease.



	91

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, (1) 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 (2) 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, all 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



	92

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 (1) eliminating or reducing an early retirement benefit or a retirement‑type subsidy (as defined in regulations of the Secretary of the Treasury) or (2) 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.



	93

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 ESOP Account and/or Non-ESOP 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



	94

who has shares of Holdings Stock credited to his ESOP Account and/or Non-ESOP Account to be advised in writing of the terms of 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.



	95

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), (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:

(a) the plans in the Required Aggregation Group; plus



	96

(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 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.



	97

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.



	98

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.



	99

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 Cleveland, Ohio, this 26 ^th day of December, 2018.

THE LINCOLN ELECTRIC COMPANY

By: /s/ Gabriel Bruno

Title: Executive Vice President, Chief Human Resources Officer



	100

EXHIBIT A

Participating Employers
as of January 1, 2019

The Lincoln Electric Company

J.W. Harris Co

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.

Exhibit 10.32

LINCOLN ELECTRIC HOLDINGS, INC.

2015 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

Restricted Stock Unit Agreement

WHEREAS , Lincoln Electric Holdings, Inc. maintains the Company’s 2015 Stock Plan for Non-Employee Directors, as amended by the First Amendment thereto, and as may be further amended from time to time (the “Plan”), pursuant to which the Company may award Restricted Stock Units (“RSUs”) to non-employee Directors of the Company;

WHEREAS , «Name» (the “Grantee”) is a non-employee Director of the Company;

WHEREAS , the Grantee was awarded RSUs under the Plan by the Nominating and Corporate Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company on [grant date] (the “Date of Grant”), and the execution of the award agreement substantially in the form hereof (this “Agreement”) has been authorized by a resolution of the Committee duly adopted on such date.


1.	Definitions . Unless otherwise defined in this Agreement (including on Exhibit A hereto), terms used in this Agreement with initial capital letters will have the meanings assigned to them in the Plan. Certain terms used herein with initial capital letters will have the meanings set forth on Exhibit A hereto.

Issuance of RSUs . The RSUs covered by this Agreement shall be issued to the Grantee effective upon the Date of Grant. Each RSU constitutes the right of the Grantee to receive one Common Share (and dividend equivalents with respect thereto) (or to have one Common Share (and dividend equivalents with respect thereto) credited to Grantee’s account under the Deferred Compensation Plan, if elected) upon the Grantee’s Distribution Date. The Grantee shall not have the rights of a shareholder with respect to such RSUs, except as provided in Section 9, provided that such RSUs, together with any additional RSUs that the Grantee may become entitled to receive by virtue of a share dividend, a merger or a reorganization in which Lincoln Electric Holdings, Inc. is the surviving corporation or any other change in the capital structure of Lincoln Electric Holdings, Inc., shall be subject to the restrictions hereinafter set forth.


3.	Restrictions on Transfer of RSUs . Subject to Section 14 of the Plan, the RSUs subject to this grant may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise

disposed of by the Grantee, except to the Company, until the Distribution Date; provided , however , that the Grantee’s rights with respect to such RSUs may be transferred by will or pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in violation of the provisions of this Section 3 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such RSUs or the underlying Common Shares or dividend equivalents. The Company in its sole discretion, when and as permitted by the Plan, may waive the restrictions on transferability with respect to all or a portion of the RSUs subject to this Agreement.


4.	Vesting of RSUs . Subject to the terms and conditions of Sections 5 and 6 hereof, all of the RSUs covered by this Agreement shall vest immediately after one full year from the Date of Grant (on [vesting date]) if the Grantee shall have served continuously as a Director for that entire period.


5.	Effect of Change in Control . In the event a Change in Control occurs after the Date of Grant but before the RSUs covered by the Agreement vest pursuant to Section 4 or 6 of this Agreement, the vesting provisions set forth in this Section 5 shall apply in addition to those set forth in Sections 4 and 6 of this Agreement:

(a)

If (i) a Replacement Award is not provided to the Grantee to replace, adjust or continue the award of RSUs covered by this Agreement (the “Replaced Award”), (ii) the Grantee serves as an Eligible Director of the Company throughout the period beginning on the Date of Grant and ending on the date of the Change in Control, and (iii) such Change in Control is a “change in control event” as defined in Treasury Regulation § 1.409A-3(i)(5), the RSUs covered by this Agreement will vest in full immediately prior to the Change in Control.


(b)	If a Replacement Award is provided, references to RSUs in this Agreement shall be deemed to refer to the Replacement Award after the Change in Control.


6.	Effect of Death or Disability; Forfeiture .


(a)	If the Grantee’s service as a Director of the Company should terminate because of the Grantee's death prior to the vesting otherwise provided for in Section 4 or 5 hereof, the RSUs subject to this Agreement shall immediately vest in full.


(b)	If (i) the Grantee shall suffer a Disability prior to the vesting otherwise provided for in Section 4 or 5 hereof and (ii) such Disability is a disability as defined in Treasury Regulation § 1.409A-3(i)(4), the RSUs subject to this Agreement shall immediately vest in full.


(c)	All RSUs that remain unvested upon the termination of the Grantee’s service as a Director of the Company (other than a termination by reason of the Grantee’s death) shall be forfeited upon such termination of service.


7.	Time of Payment of RSUs . Payment of the RSUs shall be made within 60 days of the date on which such RSUs become vested and in all events within the short-term deferral period specified in Treasury Regulation § 1.409A-1(b)(4).


8.	Deferral of RSUs . The Grantee may elect to defer receipt of the Common Shares underlying the RSUs subject to this Agreement (and dividend equivalents with respect thereto) beyond the Distribution Date, pursuant to and in accordance with the terms of the Deferred Compensation Plan.


9.	Dividend Equivalents and Other Rights .

(a)

Except as provided in this Section, the Grantee shall not have any of the rights of a shareholder with respect to the RSUs covered by this Agreement; provided , however , that any additional Common Shares, share rights or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same restrictions as the RSUs covered by this Agreement.

(b)

The Grantee shall have the right to receive dividend equivalents with respect to the Common Shares underlying the RSUs on a deferred basis and contingent on vesting of the RSUs. Dividend equivalents on the RSUs covered by this Agreement shall be sequestered by the Company from and after the Date of Grant until the Distribution Date, whereupon such dividend equivalents shall be paid to the Grantee in the form of cash (or credited to the Grantee’s account under the Deferred Compensation Plan, if elected), to the extent such dividend equivalents are attributable to RSUs that have become vested as of or prior to the Distribution Date. No interest shall be payable with respect to any such dividend equivalents.


(c)	Under no circumstances will the Company distribute or credit dividend equivalents with respect to the Common Shares underlying the RSUs as described in Section 9(b) until the Grantee’s Distribution Date. The Grantee will not be entitled to vote the Common Shares underlying the RSUs until the Grantee receives such Common Shares on or after the Distribution Date.

(d)

Notwithstanding anything to the contrary in this Section 9, to the extent that any of the RSUs become vested pursuant to this Agreement and the Grantee elects pursuant to Section 8 to defer receipt of the Common Shares underlying the RSUs (and dividend equivalents with respect thereto) beyond the Distribution Date in accordance with the terms of the Deferred Compensation Plan, then the right to receive dividend equivalents thereafter will be governed by the Deferred Compensation Plan from and after the Distribution Date.


10.	No Right to Continued Service . The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of service as a Director of the Company.


11.	Agreement Subject to the Plan . The RSUs evidenced by this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.


12.	Amendments . Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided , however , that subject to Section 10 of the Plan and Section 15 of this Agreement, no such amendment shall adversely affect the rights of the Grantee with respect to the RSUs without the Grantee’s consent.


13.	Severability . In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.


14.	Governing Law/Venue . This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. All legal actions or proceedings relating to this Agreement shall be brought exclusively in the U.S. District Court for the Northern District of Ohio, Eastern Division or the Cuyahoga County Court of Common Pleas, located in Cuyahoga County, Ohio.

15.

RSUs Subject to the Company’s Recovery of Funds Policy . Notwithstanding anything in this Agreement to the contrary, (a) the RSUs covered by this Agreement shall be subject to the Company’s Recovery of Funds Policy (or similar clawback policy), as it may be in effect from time to time, including, without limitation, to implement Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded (the “Compensation Recovery Policy”), and (b) the Grantee acknowledges and agrees that any and all applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof.

16.

Code Section 409A . To the extent applicable, it is intended that this Agreement be designed and operated within the requirements of Section 409A of the Code (including any applicable exemptions) and, in the event of any inconsistency between any provision of this Agreement or the Plan and Section 409A of the Code, the provisions of Section 409A of the Code shall control. Any provision in the Plan or this Agreement that is determined to violate the requirements of Section 409A of the Code shall be void and without effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any provision that is required by Section 409A of the Code to appear in the Agreement that is not expressly set forth herein shall be deemed to be set forth herein, and the Agreement shall be administered in all respects as if such provision was expressly set forth herein. Any reference in the Agreement to Section 409A of the Code or a Treasury Regulation section shall be deemed to include any similar or successor provisions thereto.

17.

Electronic Delivery . The Company may, in its sole discretion, deliver any documents related to the RSUs and Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

The Grantee hereby acknowledges receipt of this Agreement and accepts the RSUs evidenced hereby subject to the terms and conditions of the Plan and the terms and conditions herein above set forth and represents that he or she understands the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed this Agreement.



Date:

THIS AGREEMENT is executed in the name and on behalf of the Company as of this ___ day of ________, ______.



	LINCOLN ELECTRIC HOLDINGS, INC.

	Name: Title:

EXHIBIT A

For purposes of this Agreement, the following terms shall have the following meanings:


1.	“ Deferred Compensation Plan ” means the Lincoln Electric Holdings, Inc. Non-Employee Directors’ Deferred Compensation Plan, in effect from time to time.


2.	“ Distribution Date ” means the date on which the Common Shares represented by vested RSUs shall be distributed to the Grantee as specified in Section 7 (or would have been so distributed absent an election under the Deferred Compensation Plan);

“ Incumbent Directors ”: For purposes of applying the definition of Change in Control in the Plan, “Incumbent Directors” means the individuals who, as of the Effective Date, are Directors and any individual becoming a Director subsequent to the Effective Date whose election, nomination for election by the Company’s shareholders, or appointment, was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination); provided , however , that an individual will not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of (including the settlement of) an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

“ Replacement Award ” means an award: (a) of the same type ( e.g. , time-based restricted stock units) as the Replaced Award; (b) that has a value at least equal to the value of the Replaced Award; (c) that relates to publicly traded equity securities of the Company or another entity that is affiliated with the Company following the Change in Control; (d) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award; and (e) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Exhibit A, Section 4 are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

Exhibit 10.37

LINCOLN ELECTRIC HOLDINGS, INC.

2015 EQUITY AND INCENTIVE COMPENSATION PLAN

Stock Option Agreement

WHEREAS, Lincoln Electric Holdings, Inc. maintains the Company’s 2015 Equity and Incentive Compensation Plan, as may be amended from time to time (the “Plan”), pursuant to which the Company may grant Option Rights to officers and certain key employees of the Company and its Subsidiaries (as defined in the Plan);

WHEREAS, the Optionee, whose name is set forth on the “Dashboard” tab on the Morgan Stanley StockPlan Connect portal, a secure third-party vendor website used by the Company (to be referred to herein as the “Grant Summary”), is an employee of the Company or one of its Subsidiaries; and

WHEREAS, the Optionee was granted an Option Right under the Plan by the Compensation and Executive Development Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company on the Date of Grant in 2019 as set forth on the Grant Summary (the “Date of Grant”), and the Evidence of Award in the form hereof (the “Agreement”) has been authorized by a resolution of the Committee duly adopted on such date.

NOW, THEREFORE, pursuant to the Plan and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to the Optionee the grant of an Option Right (“Option”) to purchase the number of Common Shares of the Company set forth on the Grant Summary, at the exercise price per Common Share set forth on the Grant Summary, which exercise price is the closing price of a Common Share as reported on the NASDAQ Global Market on the trading day next preceding the Date of Grant (the “Option Price”).

1. Definitions . Unless otherwise defined in this Agreement (including on Exhibit A hereto), terms used in this Agreement with initial capital letters will have the meanings assigned to them in the Plan. Certain terms used herein with initial capital letters will have the meaning set forth on Exhibit A hereto.

2. Grant of Option . The Company has granted to the Optionee the Option, which represents the right of the Optionee to purchase the number of Common Shares set forth on the Grant Summary at the Option Price set forth on the Grant Summary. The Option shall become exercisable in accordance with Section 4, Section 5, or Section 6 hereof.

3. Form of Option . The Option evidenced by this Agreement is intended to be a nonqualified stock option and shall not be treated as an “incentive stock option” within the meaning of that term under Section 422 of the Code.

4. Vesting of Option . Subject to the terms and conditions of Sections 5, 6 and 8 hereof, the Option shall become exercisable as follows:

(a) the Option shall become exercisable with respect to one-third (1/3) of the Common Shares underlying the Option on the first anniversary of the Date of Grant, if the Optionee shall have remained in the continuous employ of the Company or a Subsidiary until such anniversary; and

(b) the Option shall become exercisable with respect to an additional one-third (1/3) of the Common Shares underlying the Option on the second and third anniversaries of the Date of Grant, if the Optionee shall have remained in the continuous employ of the Company or a Subsidiary on each such anniversary; and

(c) In calculating one-thirds, the total shall be rounded down to the nearest whole Common Share on each of the first two anniversaries of the Date of Grant, and the remaining Common Share(s) shall be included with those Common Shares for which the Option is exercisable on the third anniversary of the Date of Grant.

5. Effect of Change in Control . In the event a Change in Control occurs prior to the third anniversary of the Date of Grant, any portion of the Option that is not exercisable at the time of the Change in Control shall become exercisable to the extent provided in this Section 5.

(a) The Option covered by this Agreement will become exercisable in full immediately prior to the Change in Control (to the extent not already exercisable) if (i) (A) a Replacement Award is not provided to the Optionee in connection with the Change in Control to replace, adjust or continue the Option (the “Replaced Award”) and (B) the Optionee remains in the continuous employ of the Company or a Subsidiary throughout the period beginning on the Date of Grant and ending on the date of the Change in Control, or (ii) (A) the Optionee was a party to a severance agreement with the Company providing benefits in connection with a Change in Control (a “Severance Agreement”) at the time of the Optionee’s termination of employment and (B) the Optionee’s employment was terminated by the Company (x) other than for Cause or pursuant to an individually negotiated arrangement after the Date of Grant, (y) following the commencement of any discussion with a third person that results in a Change in Control and (z) within twelve months prior to the Change in Control. If a Replacement Award is provided, references to the Option in this Agreement shall be deemed to refer to the Replacement Award after the Change in Control.

(b) If a Replacement Award is provided to the Optionee to replace, adjust or continue the Replaced Award, and if, upon or after receiving the Replacement Award and within a period of two years after the Change in Control, the Optionee experiences a termination of employment with the Company or a Subsidiary of the Company by reason of the Optionee terminating employment for Good Reason or the Company terminating Optionee’s employment other than for Cause, the Replacement Award shall become exercisable in full upon such termination (to the extent not already exercisable).

6. Effects of Death, Disability or Retirement .

(a) The entire Option subject to this Agreement shall become immediately exercisable in full (to the extent not already exercisable) (i) upon the death of the Optionee while

in the employment of the Company or any Subsidiary, or (ii) if the Optionee’s employment with the Company or any Subsidiary should terminate as a result of the Optionee becoming Disabled.

(b) If the Optionee terminates employment with the Company or any Subsidiary after the Optionee attains age 60 and completes five years of continuous employment (“Retirement”) and the Option is not then fully exercisable, only a pro rata portion of the one-third installment of the Option subject to this Agreement scheduled to become exercisable on the next anniversary of the Date of Grant pursuant to Section 4 hereof (the “Applicable Installment”) shall become exercisable upon such Retirement. Such pro rata portion shall be determined by multiplying the number of Common Shares covered by the Applicable Installment by a fraction, the numerator of which is the number of days from the previous anniversary of the Date of Grant, or if no previous anniversary of the Date of Grant has occurred, the Date of Grant, through the date of Retirement, and the denominator of which is 365 (rounded down to the nearest whole Common Share).

7. Exercise of Option .

(a) To the extent that the Option shall have become exercisable in accordance with the terms of this Agreement, it may be exercised in whole or in part from time to time thereafter as described in this Agreement and will be settled in Common Shares.

(b) To exercise an Option, the Optionee shall give notice (in a manner prescribed by the Company), specifying the number of Common Shares as to which the Option is to be exercised and the date of exercise, and shall provide payment of the Option Price and any applicable taxes, along with any other documentation that may be required by the Company.


(i)	by certified or bank check or other cash equivalent acceptable to the Company;


(ii)	by transfer to the Company of nonforfeitable, unrestricted Common Shares of the Company that have been owned by the Optionee for at least six (6) months prior to the date of exercise;


(iii)	pursuant to a net exercise arrangement as described in the Plan; or


(iv)	by any combination of these methods.

Nonforfeitable, unrestricted Common Shares that are transferred by the Optionee or Common Shares that are withheld in payment of all or any part of the Option Price shall be valued on the basis of their Market Value per Share on the date of exercise.

8. Termination of Option . The Option shall terminate on the earliest of the following dates as provided below:

(a) automatically and without further notice three (3) months after the date upon which the Optionee ceases to be an employee of the Company or a Subsidiary, unless (i) the cessation of employment is a result of the death or Retirement of the Optionee, (ii) the Optionee is Disabled, (iii) the cessation of employment occurs as described in Section 5(a)(ii) or Section 5(b) of this

Agreement, or (iv) the cessation of employment occurs in a manner described in Section 8(d) or the last paragraph of this Section 8 below;

(b) automatically and without further notice three (3) years after the date of the death of the Optionee or the date that the Optionee became Disabled, in each case while an employee of the Company or a Subsidiary, or ten (10) years after the Date of Grant in the case of any portion of the Option that becomes exercisable by reason of the Retirement of the Optionee;

(c) automatically and without further notice one (1) year after death of the Optionee, if the Optionee dies after the termination of employment with the Company or a Subsidiary and prior to the termination of the Option;

(d) automatically and without further notice upon the termination of the Optionee’s employment for Cause; or

(e) automatically and without further notice ten years after the Date of Grant.

Notwithstanding anything in this Agreement to the contrary, unless otherwise determined by the Company, if the Optionee, either during employment by the Company or a Subsidiary or within six (6) months after termination of such employment, (i) shall become an employee of a competitor of the Company or a Subsidiary or (ii) shall engage in any other conduct that is competitive with the Company or a Subsidiary, in each case as reasonably determined by the Company (“Competition”), then the Option shall terminate automatically and without further notice at the time of such Company determination. In addition, if the Company shall so determine, the Optionee shall, promptly upon notice of such determination, (x) return to the Company, in exchange for payment by the Company of the Option Price paid therefor, all the Common Shares that the Optionee has not disposed of that were purchased pursuant to this Agreement within a period of one (1) year prior to the date of the commencement of such Competition, and (y) with respect to any Common Shares so purchased that the Optionee has disposed of, pay to the Company in cash the difference between (i) the Option Price and (ii) the Market Value per Share of the Common Shares on the date of exercise, in each case as reasonably determined by the Company. To the extent that such amounts are not promptly paid to the Company, the Company may set off the amounts so payable to it against any amounts (other than amounts of non-qualified deferred compensation as so defined under Section 409A of the Code) that may be owing from time to time by the Company or a Subsidiary to the Optionee, whether as wages or vacation pay or in the form of any other benefit or for any other reason.

9. Compliance with Law . Notwithstanding any other provision of this Agreement, the Option shall not be exercisable if the exercise thereof or the issuance of Common Shares pursuant thereto would result in a violation of any law. The Company will make reasonable efforts to comply with all applicable federal and state securities laws.

10. Transferability and Exercisability . Subject to Section 15 of the Plan, the Option, including any interest therein, shall not be transferable by the Optionee except by will or the laws of descent and distribution, and the Option shall be exercisable during the lifetime of the Optionee only by him or her or, in the event of his or her legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Optionee in a fiduciary capacity under state law and court supervision.

11. Withholding Taxes . No later than the date as of which an amount first becomes includible in the gross income of the Optionee for applicable income and employment tax and other required withholding purposes with respect to the Option evidenced by this Agreement, the Optionee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. The Optionee agrees that any required minimum withholding obligations shall be settled by the withholding of a number of Common Shares required to be delivered to the Optionee upon exercise of the Option with a value equal to the amount of such required minimum withholding. The obligations of the Company under this Agreement shall be conditional on such payment or arrangements.

12. No Right to Employment . This Option award is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. This Option award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. The Plan and this Agreement will not confer upon the Optionee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Optionee at any time. For purposes of this Agreement, the continuous employment of the Optionee with the Company or a Subsidiary shall not be deemed interrupted, and the Optionee shall not be deemed to have ceased to be an employee of the Company or any Subsidiary, by reason of (A) the transfer of his or her employment among the Company and its Subsidiaries or (B) an approved leave of absence.

13. Relation to the Other Benefits . Any economic or other benefit to the Optionee under this Agreement or the Plan will not be taken into account in determining any benefits to which the Optionee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.

14. Agreement Subject to Plan . The Option evidenced by this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.

15. Data Privacy .

(a) The Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Optionee’s personal data as described in this document by and among, as applicable, the Optionee’s employer (the “Employer”), and the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Optionee’s participation in the Plan.

(b) The Optionee understands that the Company, its Subsidiaries and the Employer hold certain personal information about the Optionee, including, but not limited to, name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of all Options or any other entitlement to Common Shares awarded, canceled,

purchased, exercised, vested, unvested or outstanding in the Optionee’s favor for the purpose of implementing, managing and administering the Plan (“Data”).

(c) The Optionee understands that the Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Optionee’s country or elsewhere (in particular the United States), including outside the European Economic Area (if applicable), and that the recipient country ( e.g. , the United States) may have different data privacy laws and protections than the Optionee’s country. The Optionee understands that the Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting the local human resources representative. The Optionee authorizes the Company, Morgan Stanley Smith Barney, LLC and any other possible recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan, including any requisite transfer of such Data, as may be required to a broker or other third party with whom the Optionee may elect to deposit any Common Shares acquired under the Plan. The Optionee understands that Data will be held only as long as is necessary to implement, administer and manage participation in the Plan. The Optionee understands that he or she may, at any time, view Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein, in any case without cost, by contacting the local human resources representative in writing. The Optionee understands that refusing or withdrawing consent may affect the Optionee’s ability to participate in the Plan. For more information on the consequences of refusing to consent or withdrawing consent, the Optionee understands that he or she may contact his or her local human resources representative.

16. Amendments . Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided , however , that subject to Section 11 of the Plan and Section 20 of this Agreement, no such amendment will adversely affect the rights of the Optionee with respect to the Option without the Optionee’s consent.

17. Severability . In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

18. Governing Law/Venue . This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. All legal actions or proceedings relating to this Agreement shall be brought exclusively in the U.S. District Court for the Northern District of Ohio, Eastern Division or the Cuyahoga County Court of Common Pleas, located in Cuyahoga County, Ohio.

19. Restrictive Covenant Agreement . The grant of the Option under this Agreement is contingent upon the Optionee having executed the most recent version of the Company’s Proprietary Information, Inventions and Restrictive Covenant Agreement and having returned it to the Company.

20. Option Subject to the Company’s Recovery of Funds Policy . Notwithstanding anything in this Agreement to the contrary, (a) this Option shall be subject to the Company’s Recovery of Funds Policy (or similar clawback policy), as it may be in effect from time to time, including, without limitation, to implement Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national

securities exchange or national securities association on which the Common Shares may be traded (the “Compensation Recovery Policy”), and (b) the Optionee acknowledges and agrees that any and all applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof.

21. Electronic Delivery . The Company may, in its sole discretion, deliver any documents related to the Option and Optionee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request Optionee’s consent to participate in the Plan by electronic means. Optionee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

22. Appendix . Notwithstanding any provisions in this Agreement, the grant of Option is also subject to the special terms and conditions set forth in Appendix A to this Agreement for Optionee’s country. Moreover, if Optionee relocates to one of the countries included in Appendix A , the special terms and conditions for such country will apply to Optionee, to the extent the Company determines that the application of such terms and conditions are necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix A constitutes part of this Agreement.

The Optionee hereby acknowledges receipt of this Agreement and accepts the right to receive the Options evidenced hereby subject to the terms and conditions of the Plan and the terms and conditions herein above set forth and represents that he or she understands the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed this Agreement.

THIS AGREEMENT is executed by the Company on the Date of Grant.

LINCOLN ELECTRIC HOLDINGS, INC.

Christopher L. Mapes

President and Chief Executive Officer

EXHIBIT A

For purposes of this Agreement, the following terms shall have the following meanings:


1.	“ Cause ”: For an Optionee who is a party to a Severance Agreement, a termination for “Cause” (or similar term) shall have the meaning set forth in such agreement. For all other Optionees, a termination for “Cause” shall mean that, prior to termination of employment, the Optionee shall have:


(a)	committed a criminal violation involving fraud, embezzlement or theft in connection with the Optionee’s duties or in the course of the Optionee’s employment with the Company or any Subsidiary;


(b)	committed an intentional violation of the Lincoln Electric Code of Corporate Conduct and Ethics, or any successor document, in effect at the relevant time;


(c)	committed intentional wrongful damage to property of the Company or any Subsidiary;


(d)	committed intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or


(e)	committed intentional wrongful engagement in any of the activities set forth in any confidentiality, non-competition or non-solicitation arrangement with the Company to which the Optionee is a party;

and, in each case, any such act shall have been demonstrably and materially harmful (including financially or reputationally harmful) to the Company. For purposes of this Agreement, no act or failure to act on the part of the Optionee will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by the Optionee not in good faith and without reasonable belief that the Optionee’s action or omission was in the best interest of the Company.

“ Disabled ” means that the Optionee is disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, the Optionee at the relevant time. In the event that the Company does not maintain a long-term disability plan at any relevant time, the Committee shall determine, in its sole discretion, that an Optionee is “Disabled” if the Optionee meets one of the following requirements: (i) the Optionee is unable 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 can be expected to last for a continuous period of not less than 12 months, (ii) the Optionee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under the Company’s accident and health or long-term disability plan or any similar plan maintained by a third party, but excluding governmental plans, or (iii) the Social Security Administration determines the Optionee to be totally disabled.

“ Good Reason ”: For an Optionee who is a party to a Severance Agreement, a termination “for Good Reason” (or similar term) shall have the meaning set forth in such agreement. For all other Optionees, “for Good Reason” shall mean the Optionee’s termination of employment with the Company as a result of the initial occurrence, without the Optionee’s consent, of one or more of the following events:


(a)	A material diminution in the Optionee’s base compensation;


(b)	A material diminution in the Optionee’s authority, duties, or responsibilities;

(c)

A material reduction in the Optionee’s opportunity regarding annual bonus, incentive or other payment of compensation, in addition to base compensation, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company;


(d)	A material change in the geographic location at which the Optionee must perform the services, which adds fifty (50) miles or more to the Optionee’s one-way daily commute; and


(e)	Any other action or inaction that constitutes a material breach by the Company of the Optionee’s employment agreement, if any, under which the Optionee provides services, or Optionee’s Severance Agreement, if any.

Notwithstanding the foregoing, a termination of employment by the Optionee for one of the reasons set forth in clauses (a) through (e) above will not constitute “Good Reason” unless the Optionee provides, within 90 days of the initial occurrence of such condition or conditions, written notice to the Optionee’s employer of the existence of such condition or conditions and the Optionee’s employer has not remedied such condition or conditions within 30 days of the receipt of such notice.

“ Replacement Award ” means an award: (i) of the same type (time-based stock option) as the Replaced Award; (ii) that has a value at least equal to the value of the Replaced Award; (iii) that relates to publicly traded equity securities of the Company or another entity that is affiliated with the Company following a Change in Control; (iv) if the Optionee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences

of which to such Optionee under the Code are not less favorable to such Optionee than the tax consequences of the Replaced Award; and (v) the other terms and conditions of which are not less favorable to the Optionee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Exhibit A, Section 5 are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

Exhibit 10.41

LINCOLN ELECTRIC HOLDINGS, INC.

2015 EQUITY AND INCENTIVE COMPENSATION PLAN

Restricted Stock Unit Agreement

WHEREAS , Lincoln Electric Holdings, Inc. maintains the Company’s 2015 Equity and Incentive Compensation Plan, as may be amended from time to time (the “Plan”), pursuant to which the Company may award Restricted Stock Units (“RSUs”) to officers and certain key employees of the Company and its Subsidiaries;

WHEREAS , the Grantee, whose name is set forth on the “Dashboard” tab on the Morgan Stanley StockPlan Connect portal, a secure third-party vendor website used by the Company (to be referred to herein as the “Grant Summary”), is an employee of the Company or one of its Subsidiaries; and

WHEREAS , the Grantee was awarded RSUs under the Plan by the Compensation and Executive Development Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company on the Date of Grant in 2019, as set forth on the Grant Summary (the “Date of Grant”), and the execution of an Evidence of Award in the form hereof (this “Agreement”) has been authorized by a resolution of the Committee duly adopted on such date.


1.	Definitions . Unless otherwise defined in this Agreement (including on Exhibit A hereto), terms used in this Agreement with initial capital letters will have the meanings assigned to them in the Plan. Certain terms used herein with initial capital letters will have the meanings set forth on Exhibit A hereto.

Issuance of RSUs . The RSUs covered by this Agreement shall be issued to the Grantee effective upon the Date of Grant. Each RSU entitles the Grantee to receive one Common Share (or to have one Common Share credited to Grantee’s account under the Deferred Compensation Plan, if elected) upon the Grantee’s Distribution Date. The Grantee shall not have the rights of a shareholder with respect to such RSUs, except as provided in Section 10, provided that such RSUs, together with any additional RSUs that the Grantee may become entitled to receive by virtue of a share dividend, a merger or a reorganization in which Lincoln Electric Holdings, Inc. is the surviving corporation or any other change in the capital structure of Lincoln Electric Holdings, Inc., shall be subject to the restrictions hereinafter set forth.


3.	Restrictions on Transfer of RSUs . Subject to Section 15 of the Plan, the RSUs subject to this grant may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of by the Grantee, except to the Company, until the Distribution Date; provided , however , that the Grantee’s rights with respect to such RSUs may be transferred by will or

pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in violation of the provisions of this Section 3 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such RSUs or the underlying Common Shares. The Company in its sole discretion, when and as permitted by the Plan, may waive the restrictions on transferability with respect to all or a portion of the RSUs subject to this Agreement.


4.	Vesting of RSUs . Subject to the terms and conditions of Sections 5, 6 and 7 hereof, all of the RSUs covered by this Agreement shall become nonforfeitable upon the Grantee remaining in the continuous employment of the Company or a Subsidiary until the third anniversary of the Date of Grant (the period of time from the Date of Grant to the third anniversary, the “Restriction Period”).


5.	Effect of Change in Control . In the event a Change in Control occurs during the Restriction Period, the RSUs covered by this Agreement shall become nonforfeitable to the extent provided in this Section 5.

(a)

The RSUs covered by this Agreement will become nonforfeitable in full immediately prior to the Change in Control if (i) (A) a Replacement Award is not provided to the Grantee in connection with the Change in Control to replace, adjust or continue the award of RSUs covered by this Agreement (the “Replaced Award”) and (B) the Grantee remains in the continuous employ of the Company or a Subsidiary throughout the period beginning on the Date of Grant and ending on the date of the Change in Control, or (ii) (A) the Grantee was a party to a severance agreement with the Company providing benefits in connection with a Change in Control (a “Severance Agreement”) at the time of the Grantee’s termination of employment and (B) the Grantee’s employment was terminated by the Company (x) other than for Cause or pursuant to an individually negotiated arrangement after the Date of Grant, (y) following the commencement of any discussion with a third person that results in a Change in Control and (z) within twelve months prior to the Change in Control. If a Replacement Award is provided, references to the RSUs in this Agreement shall be deemed to refer to the Replacement Award after the Change in Control.

(b)


(c)	If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be nonforfeitable at the time of such Change in Control

and will be paid within 15 days of the Change in Control; provided , however , that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code and the regulations thereunder, and where Section 409A of the Code applies to such distribution, payment will be made on the date that would have otherwise applied pursuant to Section 8.


6.	Effect of Death, Disability or Retirement .


(a)	The RSUs subject to this Agreement shall become immediately nonforfeitable in full (i) upon the death of the Grantee while in the employment of the Company or any Subsidiary, or (ii) if the Grantee’s employment with the Company or any Subsidiary should terminate as a result of the Grantee becoming Disabled.

(b)

If the Grantee terminates employment with the Company or any Subsidiary after the Grantee attains age 60 and completes five years of continuous employment, but prior to the end of the Restriction Period, only a pro rata portion of the RSUs (rounded down to the nearest whole Common Share) subject to this Agreement, based on the Grantee’s length of employment during the Restriction Period, shall become immediately nonforfeitable.


7.	Effect of Termination of Employment and Effect of Competitive Conduct .


(a)	In the event that the Grantee’s employment shall terminate, the Grantee shall forfeit any RSUs that have not become nonforfeitable prior to or at the time of such termination as follows:


(i)	except as described in the following clause (ii), at the time of such termination, or

(ii)

on the twelve-month anniversary of the Grantee’s termination of employment if (A) at the time of such termination of employment the Grantee is a party to a Severance Agreement and the Grantee’s employment is terminated by the Company other than for Cause or pursuant to an individually negotiated arrangement and (B) the RSUs do not become nonforfeitable on or prior to such twelve-month anniversary;

provided , however , that the Board upon recommendation of the Committee may order that part or all of such RSUs become nonforfeitable.

(b)

Notwithstanding anything in this Agreement to the contrary, unless otherwise determined by the Company, if the Grantee, either during employment by the Company or a Subsidiary or within six (6) months after termination of such employment, (i) shall become an employee of a competitor of the Company or a Subsidiary or (ii) shall engage in any other conduct that is competitive with the Company or a Subsidiary, in each case as reasonably determined by the Company (“Competition”), then, at the time of such Company determination, the Grantee shall forfeit any RSUs that have not become nonforfeitable. In addition, if the Company shall so determine, the Grantee

shall, promptly upon notice of such determination, (x) return to the Company all the Common Shares that the Grantee has not disposed of that were issued in payment of RSUs that became nonforfeitable pursuant to this Agreement and an amount in cash equal to any related dividend equivalents awarded under Section 10(b) hereof, including amounts the Grantee elected to defer under Section 9 hereof, within a period of one (1) year prior to the date of the commencement of such Competition if the Grantee is an employee of the Company or a Subsidiary, or within a period of one (1) year prior to termination of employment with the Company or a Subsidiary if the Grantee is no longer an employee of the Company or a Subsidiary, and (y) with respect to any Common Shares so issued in payment of RSUs pursuant to this Agreement that the Grantee has disposed of, including amounts the Grantee elected to defer under Section 9 hereof, pay to the Company in cash the aggregate Market Value per Share of those Common Shares on the Distribution Date plus an amount in cash equal to any related dividend equivalents awarded under Section 10(b) hereof, in each case as reasonably determined by the Company. To the extent that such amounts are not promptly paid to the Company, the Company may set off the amounts so payable to it against any amounts (other than amounts of non-qualified deferred compensation as so defined under Section 409A of the Code) that may be owing from time to time by the Company or a Subsidiary to the Grantee, whether as wages or vacation pay or in the form of any other benefit or for any other reason.


8.	Time of Payment of RSUs .

(a)

With respect to RSUs (or any portion of RSUs) that constitute deferred compensation within the meaning of Section 409A of the Code (after taking into account any applicable exemptions from Section 409A of the Code), payment for such RSUs, if any, that are vested as of such date as determined in accordance with Section 409A of the Code (less any RSUs which became vested and were paid on an earlier date) shall be made on (or within 15 days after) the earliest of the following dates that follows the date on which the RSUs become vested:


(i)	the last day of the Restriction Period specified in Section 4;


(ii)	the date of the Grantee’s death;

(iii)

the date the Grantee experiences a separation from service with the Company (determined in accordance with Section 409A of the Code); provided, however, that if the Grantee on the date of separation from service is a “specified employee” (within the meaning of Section 409A of the Code determined using the identification methodology selected by the Company from time to time), payment for the RSUs will be made on the tenth business day of the seventh month after the date of the Grantee’s separation from service or, if earlier, the date of the Grantee’s death; and


(iv)	the date of a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company (each within the meaning of Section 409A of the Code).

(b)

With respect to RSUs (or any portion of RSUs) that do not constitute deferred compensation within the meaning of Section 409A of the Code (after taking into account any applicable exemptions from Section 409A of the Code), payment for such RSUs shall be made within 60 days of the date on which such RSUs become nonforfeitable and in all events within the short-term deferral period specified in Treasury Regulation § 1.409A-1(b)(4).


9.	Deferral of RSUs . The Grantee may elect to defer receipt of the Common Shares underlying the RSUs subject to this Agreement beyond the Distribution Date, pursuant to and in accordance with the terms of the Deferred Compensation Plan.


10.	Dividend Equivalents and Other Rights .

(a)

Except as provided in this Section, the Grantee shall not have any of the rights of a shareholder with respect to the RSUs covered by this Agreement; provided , however , that any additional Common Shares, share rights or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of Lincoln Electric Holdings, Inc. shall be subject to the same restrictions as the RSUs covered by this Agreement.

(b)

The Grantee shall have the right to receive dividend equivalents with respect to the Common Shares underlying the RSUs on a deferred basis and contingent on vesting of the RSUs. Dividend equivalents on the RSUs covered by this Agreement shall be sequestered by the Company from and after the Date of Grant until the Distribution Date, whereupon such dividend equivalents shall be paid to the Grantee in the form of cash (or credited to the Grantee’s account under the Deferred Compensation Plan, if elected), to the extent such dividend equivalents are attributable to RSUs that have become nonforfeitable. To the extent that RSUs covered by this Agreement are forfeited pursuant to Section 7 hereof, all the dividend equivalents sequestered with respect to such RSUs shall also be forfeited. No interest shall be payable with respect to any such dividend equivalents.


(c)	Under no circumstances will the Company distribute or credit dividend equivalents paid on RSUs as described in Section 10(b) until the Grantee’s Distribution Date. The Grantee will not be entitled to vote the Common Shares underlying the RSUs until the Grantee receives such Common Shares on or after the Distribution Date.


(d)	Notwithstanding anything to the contrary in this Section 10, to the extent that any of the RSUs become nonforfeitable pursuant to this Agreement and the Grantee elects pursuant to Section 9 to defer receipt of the Common Shares underlying the RSUs beyond the Distribution Date in accordance with the terms of the Deferred

Compensation Plan, then the right to receive dividend equivalents thereafter will be governed by the Deferred Compensation Plan from and after the Distribution Date.

11.

Withholding Taxes . No later than the date as of which an amount first becomes includible in the gross income of the Grantee for applicable income and employment tax and other required withholding purposes with respect to the RSUs evidenced by this Agreement, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state local or foreign taxes of any kind required by law to be withheld with respect to such amount. The Grantee agrees that any required minimum withholding obligations shall be settled by the withholding of a number of Common Shares that are payable to Grantee upon vesting of RSUs under this Agreement with a value equal to the amount of such required minimum withholding. The obligations of the Company under this Agreement shall be conditional on such payment or arrangements.

12.

No Right to Employment . This award of RSUs is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. This award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Grantee at any time. For purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary shall not be deemed interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or any Subsidiary, by reason of (A) the transfer of his or her employment among the Company and any Subsidiary or (B) an approved leave of absence.

13.

Relation to Other Benefits . Any economic or other benefit to the Grantee under this Agreement or the Plan will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.


14.	Agreement Subject to the Plan . The RSUs evidenced by this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.


15.	Data Privacy .

(a)

The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this document by and among, as applicable, the Grantee’s employer (the “Employer”), and the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.

(b)

The Grantee understands that the Company, its Subsidiaries and the Employer hold certain personal information about the Grantee, including, but not limited to, name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of all RSUs or any other entitlement to Common Shares awarded, canceled, purchased, exercised, vested, unvested or outstanding in the Grantee’s favor for the purpose of implementing, managing and administering the Plan (“Data”).

(c)

The Grantee understands that the Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee’s country or elsewhere (in particular the United States), including outside the European Economic Area (if applicable), and that the recipient country ( e.g. , the United States) may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting the local human resources representative. The Grantee authorizes the Company, Morgan Stanley Smith Barney, LLC and any other possible recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data, as may be required to a broker or other third party with whom the Grantee may elect to deposit any Common Shares acquired under the Plan. The Grantee understands that Data will be held only as long as is necessary to implement, administer and manage participation in the Plan. The Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein, in any case without cost, by contacting the local human resources representative in writing. The Grantee understands that refusing or withdrawing consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of refusing to consent or withdrawing consent, the Grantee understands that he or she may contact his or her local human resources representative.


16.	Amendments . Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided , however , that subject to Section 11 of the Plan and Section 20 of this Agreement, no such amendment shall adversely affect the rights of the Grantee with respect to the RSUs without the Grantee’s consent.


17.	Severability . In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.


18.	Governing Law/Venue . This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. All legal actions or proceedings

relating to this Agreement shall be brought exclusively in the U.S. District Court for the Northern District of Ohio, Eastern Division or the Cuyahoga County Court of Common Pleas, located in Cuyahoga County, Ohio.


19.	Restrictive Covenant Agreement . The grant of the RSUs under this Agreement is contingent upon the Grantee having executed the most recent version of the Company’s Proprietary Information, Inventions and Restrictive Covenant Agreement and having returned it to the Company.

20.

21.

22.

23.

Appendix . Notwithstanding any provisions in this Agreement, the grant of RSUs is also subject to the special terms and conditions set forth in Appendix A to this Agreement for Grantee’s country. Moreover, if Grantee relocates to one of the countries included in Appendix A , the special terms and conditions for such country will apply to Grantee, to the extent the Company determines that the application of such terms and conditions are necessary or

advisable in order to comply with local law or facilitate the administration of the Plan. Appendix A constitutes part of this Agreement.

The Grantee hereby acknowledges receipt of this Agreement and accepts the right to receive the RSUs evidenced hereby subject to the terms and conditions of the Plan and the terms and conditions herein above set forth and represents that he or she understands the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed this Agreement.

THIS AGREEMENT is executed in the name and on behalf of the Company on the Date of Grant as set forth in the Grant Summary.



	LINCOLN ELECTRIC HOLDINGS, INC.

	Christopher L. Mapes Chairman, President and Chief Executive Officer

EXHIBIT A

For purposes of this Agreement, the following terms shall have the following meanings:


1.	“ Cause ”: For a Grantee who is a party to a Severance Agreement, a termination for “Cause” (or similar term) shall have the meaning set forth in such agreement. For all other Grantees, a termination for “Cause” shall mean that, prior to termination of employment, the Grantee shall have:


(a)	committed a criminal violation involving fraud, embezzlement or theft in connection with the Grantee’s duties or in the course of the Grantee’s employment with the Company or any Subsidiary;


(b)	committed an intentional violation of the Lincoln Electric Code of Corporate Conduct and Ethics, or any successor document, in effect at the relevant time;


(c)	committed intentional wrongful damage to property of the Company or any Subsidiary;


(d)	committed intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or


(e)	committed intentional wrongful engagement in any of the activities set forth in any confidentiality, non-competition or non-solicitation arrangement with the Company to which the Grantee is a party;

and, in each case, any such act shall have been demonstrably and materially harmful (including financially or reputationally harmful) to the Company. For purposes of this Agreement, no act or failure to act on the part of the Grantee will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by the Grantee not in good faith and without reasonable belief that the Grantee’s action or omission was in the best interest of the Company.


2.	“ Deferred Compensation Plan ” means the Lincoln Electric Holdings, Inc. 2005 Deferred Compensation Plan for Executives, in effect from time to time.

“ Disabled ” means that the Grantee is disabled within the meaning of, and begins actually to receive disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, the Grantee at the relevant time. In the event that the Company does not maintain a long-term disability plan at any relevant time, the Committee shall determine, in its sole discretion, that a Grantee is “Disabled” if the Grantee meets one of the following requirements: (i) the Grantee is unable 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 can be expected to last for a continuous period of not less than 12 months, (ii) the Grantee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under the Company’s accident and health or long-term disability plan or any similar plan maintained

by a third party, but excluding governmental plans, or (iii) the Social Security Administration determines the Grantee to be totally disabled.


4.	“ Distribution Date ” means the date on which the Common Shares represented by nonforfeitable RSUs shall be distributed to the Grantee as specified in Section 8 (or would have been so distributed absent an election under the Deferred Compensation Plan);

“ Good Reason ”: For a Grantee who is a party to a Severance Agreement, a termination “for Good Reason” (or similar term) shall have the meaning set forth in such agreement. For all other Grantees, “for Good Reason” shall mean the Grantee’s termination of employment with the Company as a result of the initial occurrence, without the Grantee’s consent, of one or more of the following events:


(a)	A material diminution in the Grantee’s base compensation;


(b)	A material diminution in the Grantee’s authority, duties, or responsibilities;

(c)

A material reduction in the Grantee’s opportunity regarding annual bonus, incentive or other payment of compensation, in addition to base compensation, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company;


(d)	A material change in the geographic location at which the Grantee must perform the services, which adds fifty (50) miles or more to the Grantee’s one-way daily commute; and


(e)	Any other action or inaction that constitutes a material breach by the Company of the Grantee’s employment agreement, if any, under which the Grantee provides services, or Grantee’s Severance Agreement, if any.

Notwithstanding the foregoing, a termination of employment by the Grantee for one of the reasons set forth in clauses (a) through (e) above will not constitute “Good Reason” unless the Grantee provides, within 90 days of the initial occurrence of such condition or conditions, written notice to the Grantee’s employer of the existence of such condition or conditions and the Grantee’s employer has not remedied such condition or conditions within 30 days of the receipt of such notice.

in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

“ Replacement Award ” means an award: (i) of the same type (time-based restricted stock units) as the Replaced Award; (ii) that has a value at least equal to the value of the Replaced Award; (iii) that relates to publicly traded equity securities of the Company or another entity that is affiliated with the Company following a Change in Control; (iv) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award; and (v) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Exhibit A, Section 7 are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

“ Separation from Service ” shall have the meaning given in Code Section 409A, and references to employment termination or termination of employment in this Agreement shall be deemed to refer to a Separation from Service. In accordance with Treasury Regulation §1.409A-1(h)(1)(ii) (or any similar or successor provisions), a Separation from Service shall be deemed to occur, without limitation, if the Company and the Grantee reasonably anticipate that the level of bona fide services the Grantee will perform after a certain date (whether as an employee or as an independent contractor) will permanently decrease to less than fifty percent (50%) of the average level of bona fide services provided in the immediately preceding thirty-six (36) months.

Exhibit 10.44

LINCOLN ELECTRIC HOLDINGS, INC.

2015 EQUITY AND INCENTIVE COMPENSATION PLAN

Performance Share Agreement

WHEREAS , Lincoln Electric Holdings, Inc. maintains the Company’s 2015 Equity and Incentive Compensation Plan, as may be amended from time to time (the “Plan”), pursuant to which the Company may award Performance Shares (the “Performance Shares”) to officers and certain key employees of the Company and its Subsidiaries;

WHEREAS , the Grantee was granted Performance Shares under the Plan by the Compensation and Executive Development Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company on the Date of Grant in 2019, as set forth on the Grant Summary (the “Date of Grant”), and the execution of an Evidence of Award in the form hereof (this “Agreement”) has been authorized by a resolution of the Committee duly adopted on such date.

NOW, THEREFORE , pursuant to the Plan and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to the Grantee the award of the target number of Performance Shares set forth on the Grant Summary. Subject to the achievement of the Management Objectives described in Section 4 of this Agreement, the Grantee may earn from 0% to 200% of the Performance Shares.


1.	Definitions . Unless otherwise defined in this Agreement (including on Exhibit A hereto), terms used in this Agreement with initial capital letters will have the meanings assigned to them in the Plan. Certain terms used herein with initial capital letters will have the meanings set forth on Exhibit A hereto.

Earnings of Performance Shares . If the Performance Shares covered by this Agreement become nonforfeitable and payable (“Vest,” or similar terms), the Grantee will be entitled to settlement of the Vested Performance Shares as specified in Section 8 of this Agreement. The Grantee shall not have the rights of a shareholder with respect to such Performance Shares, except as provided in Section 10, provided that such Performance Shares, together with any additional Performance Shares that the Grantee may become entitled to receive by virtue of a share dividend, a merger or a reorganization in which Lincoln Electric Holdings, Inc. is the surviving corporation or any other change in the capital structure of Lincoln Electric Holdings, Inc., shall be subject to the restrictions hereinafter set forth.

- 1 -

Restrictions on Transfer of Performance Shares . Subject to Section 15 of the Plan, the Performance Shares subject to this grant may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of by the Grantee, except to the Company, until the Distribution Date; provided , however , that the Grantee’s rights with respect to such Performance Shares may be transferred by will or pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in violation of the provisions of this Section 3 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Performance Shares or the underlying Common Shares. The Company in its sole discretion, when and as permitted by the Plan, may waive the restrictions on transferability with respect to all or a portion of the Performance Shares subject to this Agreement.


4.	Vesting of Performance Shares . Subject to the terms and conditions of Sections 5, 6 and 7 hereof, the Performance Shares covered by this Agreement shall Vest based on the achievement of the Management Objectives for the Performance Period as follows:


(a)	The applicable percentage of the Performance Shares that shall be earned by the Grantee for the Performance Period shall be determined by reference to the Statement of Management Objectives if the Grantee remains continuously employed by either the Company or any Subsidiary until the end of the Performance Period;

(b)

In the event that achievement with respect to one of the Management Objectives is between the performance levels specified in the Statement of Management Objectives, the applicable percentage of the Performance Shares that shall be earned by the Grantee for the Performance Period for that particular Management Objective shall be determined by the Committee using straight-line mathematical interpolation; and

(c)

To the extent the Management Objectives are not achieved by the end of the Performance Period, then the Performance Shares evidenced by this Agreement (including Performance Shares subject to Section 6(b) following the Grantee’s Retirement, as described therein) will be forfeited without compensation or other consideration. The Vesting of the Performance Shares pursuant to this Section 4 shall be contingent upon a determination of the Committee that the Management Objectives have been satisfied.


5.	Effect of Change in Control . In the event a Change in Control occurs during the Performance Period, the Performance Shares covered by this Agreement shall become Vested to the extent provided in this Section 5.


(a)	If either:


(i)	(A) a Replacement Award is not provided to the Grantee in connection with the Change in Control to replace, adjust or continue the award of Performance Shares covered by this Agreement (the “Replaced Award”) and (B) the Grantee remains in the continuous employ of the Company or a Subsidiary

- 2 -

throughout the period beginning on the Date of Grant and ending on the date of the Change in Control; or

(ii)

(A) the Grantee was a party to a severance agreement with the Company providing benefits in connection with a Change in Control (a “Severance Agreement”) at the time of the Grantee’s termination of employment and (B) the Grantee’s employment was terminated by the Company (x) other than for Cause or pursuant to an individually negotiated arrangement after the Date of Grant, (y) following the commencement of any discussion with a third person that results in a Change in Control and (z) within twelve months prior to a Change in Control,

a pro rata amount of Performance Shares (rounded down to the nearest whole Common Share), based on Grantee’s length of employment during the Performance Period, shall become Vested immediately prior to the Change in Control at the greater of (A) the target level or (B) actual performance level, as determined by the Committee as constituted immediately prior to the Change in Control based on actual performance through the most recent date prior to the Change in Control for which achievement can be reasonably determined. If a Replacement Award is provided, references to the Performance Shares in this Agreement shall be deemed to refer to the Replacement Award after the Change in Control.

(b)

If a Replacement Award is provided to the Grantee to replace, adjust or continue the Replaced Award, and if, upon or after receiving the Replacement Award and within a period of two years after the Change in Control but prior to the end of the Performance Period, the Grantee experiences a termination of employment with the Company or a Subsidiary of the Company by reason of the Grantee terminating employment for Good Reason or the Company terminating Grantee’s employment other than for Cause, a pro rata amount of the Replacement Award (rounded down to the nearest whole Common Share) shall become Vested based on Grantee’s length of employment during the Performance Period, at the greater of (i) the target level or (ii) the actual performance level, as determined by the Committee as constituted immediately prior to the Change in Control based on actual performance through the most recent date prior to the termination for which achievement can be reasonably determined. Performance Shares that Vest in accordance with this Section 5(b) will be paid in accordance with Section 8(a) of this Agreement.

(c)

If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding Performance Shares that at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control and will be paid in accordance with Section 8(a) of this agreement.


6.	Effect of Death, Disability or Retirement .

- 3 -

(a)

If, during the Performance Period, (i) the Grantee should die or (ii) the Grantee’s employment with the Company or any Subsidiary should terminate as a result of the Grantee becoming Disabled while in the employment of the Company or any Subsidiary, then, in either such case, the Performance Shares shall become Vested upon such event at the target level. Performance Shares that Vest in accordance with this Section 6(a) will be paid as provided for in Section 8(b)(ii) of this Agreement.

(b)

If the Grantee terminates employment with the Company or any Subsidiary after the Grantee attains age 60 and completes five years of continuous employment (“Retirement”), but prior to the end of the Performance Period, then the Grantee shall Vest in only a pro rata portion of the Performance Shares, based on the Grantee’s length of employment during the three-year Performance Period, in which the Grantee would have Vested in accordance with the terms and conditions of Section 4 if the Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, reduced by the number of Performance Shares that were otherwise Vested on the date of such Retirement. Performance Shares that Vest in accordance with this Section 6(b) will be paid as provided for in Section 8(a) of this Agreement.


7.	Effect of Termination of Employment and Effect of Competitive Conduct .


(a)	In the event that the Grantee’s employment shall terminate in a manner other than as specified in Section 6(b) hereof, the Grantee shall forfeit any Performance Shares that have not become Vested prior to or at the time of such termination; as follows:


(i)	except as described in the following clause (ii), at the time of such termination, or

(ii)

on the twelve-month anniversary of the Grantee’s termination of employment, if (A) at the time of such termination of employment the Grantee is a party to a Severance Agreement and the Grantee’s employment is terminated by the Company other than for Cause or pursuant to an individually negotiated arrangement and (B) the Performance Shares do not become Vested on or prior to such twelve-month anniversary.

(b)

Notwithstanding anything in this Agreement to the contrary, unless otherwise determined by the Company, if the Grantee, either during employment by the Company or a Subsidiary or within six (6) months after termination of such employment, (i) shall become an employee of a competitor of the Company or a Subsidiary or (ii) shall engage in any other conduct that is competitive with the Company or a Subsidiary, in each case as reasonably determined by the Company (“Competition”), then, at the time of such Company determination, the Grantee shall forfeit any Performance Shares that have not become Vested. In addition, if the Company shall so determine, the Grantee shall, promptly upon notice of such

- 4 -

determination, (x) return to the Company all the Common Shares that the Grantee has not disposed of that were issued in payment of Performance Shares that became Vested pursuant to this Agreement and an amount in cash equal to any related dividend equivalents awarded under Section 10(b) hereof, including amounts the Grantee elected to defer under Section 9 hereof, within a period of one (1) year prior to the date of the commencement of such Competition if the Grantee is an employee of the Company or a Subsidiary, or within a period of one (1) year prior to termination of employment with the Company or a Subsidiary if the Grantee is no longer an employee of the Company or a Subsidiary, and (y) with respect to any Common Shares so issued in payment of Performance Shares pursuant to this Agreement that the Grantee has disposed of, including amounts the Grantee elected to defer under Section 9 hereof, pay to the Company in cash the aggregate Market Value per Share of those Common Shares on the Distribution Date plus an amount in cash equal to any related dividend equivalents awarded under Section 10(b) hereof, in each case as reasonably determined by the Company. To the extent that such amounts are not promptly paid to the Company, the Company may set off the amounts so payable to it against any amounts (other than amounts of non-qualified deferred compensation as so defined under Section 409A of the Code) that may be owing from time to time by the Company or a Subsidiary to the Grantee, whether as wages or vacation pay or in the form of any other benefit or for any other reason.


8.	Form and Time of Payment of Performance Shares .


(a)	General . Subject to Section 7(a) and Section 8(b), payment for Vested Performance Shares will be made in Common Shares (rounded down to the nearest whole Common Share) between January 1, 2022 and March 15, 2022.


(b)	Other Payment Events . Notwithstanding Section 8(a), to the extent that the Performance Shares are Vested on the dates set forth below, payment with respect to the Performance Shares will be made as follows:

(i) Change in Control . Upon a Change in Control, Grantee is entitled to receive payment for Vested Performance Shares in Common Shares (rounded down to the nearest whole Common Share) on the date of the Change in Control; provided , however , that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code and the regulations thereunder, and where Section 409A of the Code applies to such distribution, Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Sections 8(a) or 8(b)(ii) as though such Change in Control had not occurred.

(ii) Death or Disability . On the date of Grantee’s death or the date Grantee becomes Disabled, Grantee is entitled to receive payment for Vested Performance Shares in Common Shares on such date.

- 5 -


9.	Deferral of Performance Shares . The Grantee may elect to defer receipt of the Common Shares underlying the Vested Performance Shares subject to this Agreement beyond the Distribution Date, pursuant to and in accordance with the terms of the Deferred Compensation Plan.


10.	Dividend Equivalents and Other Rights .

(a)

Except as provided in this Section, the Grantee shall not have any of the rights of a shareholder with respect to the Performance Shares covered by this Agreement; provided , however , that any additional Common Shares, share rights or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of Lincoln Electric Holdings, Inc. shall be subject to the same restrictions as the Performance Shares covered by this Agreement.

(b)

The Grantee shall have the right to receive dividend equivalents with respect to the Common Shares underlying the Performance Shares on a deferred basis and contingent on vesting of the Performance Shares. Dividend equivalents on the Performance Shares covered by this Agreement shall be sequestered by the Company from and after the Date of Grant until the Distribution Date, whereupon such dividend equivalents shall be paid to the Grantee in the form of cash (or credited to the Grantee’s account under the Deferred Compensation Plan, if elected) to the extent such dividend equivalents are attributable to Performance Shares that have become Vested. To the extent that Performance Shares covered by this Agreement are forfeited pursuant to Section 7 hereof, all the dividend equivalents sequestered with respect to such Performance Shares shall also be forfeited. No interest shall be payable with respect to any such dividend equivalents.


(c)	Under no circumstances will the Company distribute or credit dividend equivalents paid on Performance Shares as described in Section 10(b) until the Grantee’s Distribution Date. The Grantee will not be entitled to vote the Common Shares underlying the Performance Shares until the Grantee receives such Common Shares on or after the Distribution Date.

(d)

Notwithstanding anything to the contrary in this Section 10, to the extent that any of the Performance Shares Vest pursuant to this Agreement and the Grantee elects pursuant to Section 9 to defer receipt of the Common Shares underlying the Performance Shares beyond the Distribution Date in accordance with the terms of the Deferred Compensation Plan, then the right to receive dividend equivalents thereafter will be governed by the Deferred Compensation Plan from and after the Distribution Date.


11.	Withholding Taxes . No later than the date as of which an amount first becomes includible in the gross income of the Grantee for applicable income and employment tax and other

- 6 -

required withholding purposes with respect to the Performance Shares evidenced by this Agreement, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. The Grantee agrees that any required minimum withholding obligations shall be settled by the withholding of a number of Common Shares that are payable to Grantee upon vesting of Performance Shares under this Agreement with a value equal to the amount of such required minimum withholding. The obligations of the Company under this Agreement shall be conditional on such payment or arrangements.

12.

No Right to Employment . This award of Performance Shares is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. This award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Grantee at any time. For purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary shall not be deemed interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or any Subsidiary, by reason of (a) the transfer of his or her employment among the Company and any Subsidiary or (b) an approved leave of absence.

13.


14.	Agreement Subject to the Plan . The Performance Shares evidenced by this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.


15.	Data Privacy .

(a)


(b)	The Grantee understands that the Company, its Subsidiaries and the Employer hold certain personal information about the Grantee, including, but not limited to, name,

- 7 -

home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of all Performance Shares or any other entitlement to Common Shares awarded, canceled, purchased, exercised, vested, unvested or outstanding in the Grantee’s favor for the purpose of implementing, managing and administering the Plan (“Data”).

(c)


16.	Amendments . Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided , however , that subject to Section 11 of the Plan and Section 20 of this Agreement, no such amendment shall adversely affect the rights of the Grantee with respect to the Performance Shares without the Grantee’s consent.


17.	Severability . In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.


18.	Governing Law/Venue . This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. All legal actions or proceedings

- 8 -


19.	Restrictive Covenant Agreement . The grant of the Performance Shares under this Agreement is contingent upon the Grantee having executed the most recent version of the Company’s Proprietary Information, Inventions and Restrictive Covenant Agreement and having returned it to the Company.

20.

Performance Shares Subject to the Company’s Recovery of Funds Policy . Notwithstanding anything in this Agreement to the contrary, (a) the Performance Shares covered by this Agreement shall be subject to the Company’s Recovery of Funds Policy (or similar clawback policy), as it may be in effect from time to time, including, without limitation, to implement Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded (the “Compensation Recovery Policy”), and (b) the Grantee acknowledges and agrees that any and all applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof.

21.

22.

Electronic Delivery . The Company may, in its sole discretion, deliver any documents related to the Performance Shares and Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.


23.	Appendix . Notwithstanding any provisions in this Agreement, the grant of Performance Shares is also subject to the special terms and conditions set forth in Appendix A to this Agreement for Grantee’s country. Moreover, if Grantee relocates to one of the countries

- 9 -

included in Appendix A , the special terms and conditions for such country will apply to Grantee, to the extent the Company determines that the application of such terms and conditions are necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix A constitutes part of this Agreement.

The Grantee hereby acknowledges receipt of this Agreement and accepts the right to receive the Performance Shares evidenced hereby subject to the terms and conditions of the Plan and the terms and conditions herein above set forth and represents that he or she understands the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed this Agreement.

THIS AGREEMENT is executed in the name and on behalf of the Company on the Date of Grant as set forth in the Grant Summary.



	LINCOLN ELECTRIC HOLDINGS, INC.

	Christopher L. Mapes Chairman, President and Chief Executive Officer

EXHIBIT A

For purposes of this Agreement, the following terms shall have the following meanings:


1.	“ Cause ”: For a Grantee who is a party to a Severance Agreement, a termination for “Cause” (or similar term) shall have the meaning set forth in such agreement. For all other Grantees, a termination for “Cause” shall mean that, prior to termination of employment, the Grantee shall have:


(a)	committed a criminal violation involving fraud, embezzlement or theft in connection with the Grantee’s duties or in the course of the Grantee’s employment with the Company or any Subsidiary;


(b)	committed an intentional violation of the Lincoln Electric Code of Corporate Conduct and Ethics, or any successor document, in effect at the relevant time;


(c)	committed intentional wrongful damage to property of the Company or any Subsidiary;

- 10 -


(d)	committed intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary; or


(e)	committed intentional wrongful engagement in any of the activities set forth in any confidentiality, non-competition or non-solicitation arrangement with the Company to which the Grantee is a party;

and, in each case, any such act shall have been demonstrably and materially harmful (including financially or reputationally harmful) to the Company. For purposes of this Agreement, no act or failure to act on the part of the Grantee will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by the Grantee not in good faith and without reasonable belief that the Grantee’s action or omission was in the best interest of the Company.


2.	“ Deferred Compensation Plan ” means the Lincoln Electric Holdings, Inc. 2005 Deferred Compensation Plan for Executives, in effect from time to time.


4.	“ Distribution Date ” means the date on which the Common Shares represented by Vested Performance Shares shall be distributed to the Grantee as specified in Section 8 (or would have been so distributed absent an election under the Deferred Compensation Plan);


(a)	A material diminution in the Grantee’s base compensation;


(b)	A material diminution in the Grantee’s authority, duties, or responsibilities;

- 11 -

(c)


(d)	A material change in the geographic location at which the Grantee must perform the services, which adds fifty (50) miles or more to the Grantee’s one-way daily commute; and


(e)	Any other action or inaction that constitutes a material breach by the Company of the Grantee’s employment agreement, if any, under which the Grantee provides services, or Grantee’s Severance Agreement, if any.


7.	“ Management Objectives ” means the threshold, target and maximum goals (as set forth in the Statement of Management Objectives) established by the Committee on the Date of Grant for the Performance Period with respect to both Net Income Growth and ROIC.


8.	“ Net Income Growth ” has the meaning set forth in the Statement of Management Objectives.


9.	“ Performance Period ” means the three-year period commencing January 1, 2019 and ending on December 31, 2021.


10.	“ Replacement Award ” means an award: (a) of the same type (performance shares) as the Replaced Award; (b) that has a value at least equal to the value of the Replaced Award; (c) that relates to publicly traded equity securities of the Company or another entity that is

- 12 -

affiliated with the Company following a Change in Control; (d) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award; and (e) the other terms and conditions of which are not less favorable to the Grantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Exhibit A, Section 10 are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.


11.	“ Return on Invested Capital ” or “ROIC” has the meaning set forth in the Statement of Management Objectives.

12.


13.	“ Statement of Management Objectives ” means the Statement of Management Objectives for the Performance Period approved by the Committee on the Date of Grant and communicated to the Grantee in writing.

- 13 -

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
8775648 Canada Inc.	Canada
A. B. Arriendos S.A.	Chile
Arc Products, Inc.	United States
Burlington Automation Corporation	Canada
CMC North Second Street, LLC	United States
Coldwater Machine Company, LLC	United States
Comptoir Lyonnais de Soudage	France
Ductil SA	Romania
Easom Automation Systems, Inc.	United States
Europaische Holding Intercito GmbH	Switzerland
Hangzhou SAF Oerlikon Welding & Cutting Co., LTD. (China)	China
Harris Calorific GmbH	Germany
Harris Calorific International Sp. z o.o.	Poland
Harris Calorific S.r.l.	Italy
Harris Euro, S.L.	Spain
Harris-Euro Corp.	United States
Inovatech Engineering Corporation	Canada
Inversiones LyL S.A.	Chile
ISAF Drahtwerk GMBH	Germany
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
LE Torreon BCS, S. de R.L. de C.V.	Mexico
Lincoln Canada Finance ULC	Canada
Lincoln Canada Holdings ULC	Canada
Lincoln Canada International Holdings LP	Canada
Lincoln Electric Belgium S.A.	Belgium
Lincoln Electric Bester Sp. z o.o.	Poland
Lincoln Electric Company of Canada GP Limited	Canada
Lincoln Electric Company of Canada LP	Canada
Lincoln Electric Company (India) Private Limited	India
Lincoln Electric Cutting Systems, Inc.	United States
Lincoln Electric Cyprus Holdings LLC	United States
Lincoln Electric Cyprus Limited	Cyprus
Lincoln Electric CZ s.r.o.	Czech Republic
Lincoln Electric do Brasil Indústria e Comércio Ltda.	Brazil
Lincoln Electric Dutch Holdings B.V.	The Netherlands
Lincoln Electric Europe B.V.	The Netherlands
Lincoln Electric Europe, S.L.	Spain
Lincoln Electric Finance LP	United Kingdom
Lincoln Electric France S.A.S.	France



Name	Country of Incorporation
Lincoln Electric Henan Investment Holdings LLC	United States
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 International Holdings GmbH	Germany
Lincoln Electric Italia S.r.l.	Italy
Lincoln Electric Japan K.K.	Japan
Lincoln Electric Luxembourg Holdings S.ar.l	Luxembourg
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
Lincoln Electric Middle East FZE	United Arab Emirates
Lincoln Electric North America, Inc.	United States
Lincoln Electric Novo Holdings LLC	United States
Lincoln Electric Polska sp.zo.o	Poland
Lincoln Electric Portugal, S.A.	Portugal
Lincoln Electric S.A.	Argentina
Lincoln Electric Slovakia s.r.o.	Slovak Republic
Lincoln Electric (Tangshan) Welding Materials Co., Ltd.	China
Lincoln Electric (Thailand) Ltd.	Thailand
Lincoln Electric (U.K.) Ltd.	United Kingdom
Lincoln Electric UK Holdings Limited	United Kingdom
Lincoln Electric Welding UK Limited	United Kingdom
Lincoln Global Holdings LLC	United States
Lincoln Global, Inc.	United States
Lincoln Luxembourg Holdings S.ar.l.	Luxembourg
Lincoln Maquinas Holdings LLC	United States
Lincoln Mexico Holdings LLC	United States
Lincoln Nanjing Holdings LLC	United States
Lincoln Singapore Holdings LLC	United States
Lincoln Smitweld B.V.	The Netherlands
Lincoln Soldadura, Lda.	Portugal
Lincoln Soldaduras de Colombia Ltda.	Colombia
Metrode Products Limited	United Kingdom
MGM Holdings	Russia
OAO Mezhgosmetiz – Mtsensk	Russia
Oerlikon Egypt for Electrodes and Welding Equipment Company S.A.E	Egypt
Oerlikon Kaynak Elektrodlari Ve Sanayi Anonim Sirketi	Turkey
Oerlikon Schweisstechnik GMBH	Germany
Oerlikon Skandinavien AB	Sweden



Name	Country of Incorporation
OOO Severstal - metiz: Welding Consumables	Russia
OOO Torgovyi Dom Mezhgosmetiz	Russia
Orion Custom Metal Fabrication Corporation	Canada
Pro-Systems, LLC	United States
PT Lincoln Electric Indonesia	Indonesia
PT Lincoln Indoweld	Indonesia
Rimrock Corporation	United States
Rimrock Holdings Corporation	United States
Robolution GmbH	Germany
SAF-OERLIKON MALAYSIA SWDN BHD	Malaysia
Smart Force, LLC	United States
Specialised Welding Products Pty. Ltd.	Australia
SSM RP Holding B.V.	The Netherlands
SWP N.Z. Limited	New Zealand
Techalloy, Inc.	United States
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 Luxembourg	Luxembourg
The Lincoln Electric Company (New Zealand) Limited	New Zealand
The Lincoln Electric Company of South Africa (Pty) Ltd.	South Africa
The Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.	China
The Lincoln Electric Welding Technology & Training Center, LLC	United States
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 Limited	United Kingdom
Weartech International, Inc.	United States
Welding, Cutting, Tools & Accessories, LLC	United States
Welding Industries Oerlikon AG	Switzerland
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),

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), and

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 27, 2019 , with respect to the consolidated financial statements and schedule of Lincoln Electric Holdings, Inc. and the effectiveness of internal control over financial reporting of Lincoln Electric Holdings, Inc. included in this Annual Report (Form 10-K) of Lincoln Electric Holdings, Inc. for the year ended December 31, 2018 .

/s/ Ernst & Young LLP

Cleveland, Ohio

February 27, 2019

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, Jennifer I. Ansberry 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, 2018 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/ Patrick P. Goris
Christopher L. Mapes, Director	Curtis E. Espeland, Director	Patrick P. Goris, Director
February 18, 2019	February 18, 2019	February 18, 2019

/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 18, 2019	February 18, 2019	February 18, 2019

/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 18, 2019	February 18, 2019	February 18, 2019

	/s/ Hellene S. Runtagh
Ben Patel, Director	Hellene S. Runtagh, Director
February 18, 2019	February 18, 2019

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 27, 2019
		/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 27, 2019
		/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, 2018 , 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 27, 2019
		/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