UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 2015
LINCOLN ELECTRIC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
0-1402
(Commission
File
Number)
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Ohio |
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34-1860551 |
(State or other jurisdiction
of incorporation) |
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(I.R.S. Employer
Identification No.) |
22801 St Clair Avenue
Cleveland, Ohio 44117
(Address of principal executive offices, with zip code)
(216) 481-8100
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
On August 18, 2015, The Lincoln Electric Company (the
Company), a wholly-owned subsidiary of Lincoln Electric Holdings, Inc., entered into an agreement to purchase a group annuity contract from The Principal Financial Group (The Principal) to settle $425 million of the
Companys approximate $900 million in outstanding U.S. pension obligations under The Lincoln Electric Company Retirement Annuity Program (the Pension Plan). In connection with the agreement, The Principal will assume the obligation
to pay future pension benefits starting November 1, 2015 for specified U.S. retirees and surviving beneficiaries who retired on or before June 1, 2015 and are currently receiving payments from the Pension Plan. The Principal was selected
by the Pension Plans fiduciary, with the advice of an independent expert.
A copy of the press release issued by the Company related
to the purchase of the group annuity contract is attached hereto as Exhibit 99.1. The press release is also available on Lincoln Electrics website at www.lincolnelectric.com.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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99.1 |
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The Companys press release dated August 19, 2015 announcing the purchase of a group annuity contract. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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LINCOLN ELECTRIC HOLDINGS, INC. |
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Date: August 24, 2015 |
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By: |
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/s/ Vincent K. Petrella |
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Vincent K. Petrella, Executive Vice President, CFO & Treasurer |
LINCOLN ELECTRIC HOLDINGS, INC.
INDEX TO EXHIBITS
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Exhibit No. |
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Exhibit |
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99.1 |
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The Companys press release dated August 19, 2015 announcing the purchase of a group annuity contract. |
Exhibit 99.1
LINCOLN ELECTRIC TO PURCHASE GROUP ANNUITY CONTRACT FOR
RETIREE PENSION BENEFITS
Reduces U.S. Pension Plan Obligations by 47%
Cleveland, OH, Wednesday, August 19, 2015 The Lincoln Electric Company (Lincoln Electric, Company), a
subsidiary of Lincoln Electric Holdings, Inc. (NASDAQ: LECO), today announced that it has entered into an agreement to purchase a group annuity contract from The Principal Financial Group (The Principal) to settle $425 million of Lincoln
Electrics approximate $900 million in outstanding U.S. pension obligations. Under the agreement, The Principal will assume the obligation to pay future pension benefits starting November 1, 2015, for specified U.S. retirees and surviving
beneficiaries who retired on or before June 1, 2015 and are currently receiving payments from Lincoln Electrics U.S. Retirement Annuity Program (RAP).
Lincoln Electric has been committed to meeting its pension obligation responsibly. The Company has contributed $375 million to its pension
plans over the last ten years and its U.S. pension plans are fully funded. The purchase of this group annuity contract allows the Company to secure pension benefits for its approximate 1,900 retirees, reduce volatility in pension costs and funding
requirements, while maintaining a fully-funded plan for the remaining retiree obligations. The Principal was chosen by the RAP fiduciary with the advice of an independent expert after a rigorous evaluation process that reviewed several factors
including financial strength, rating of the insurance company, plan administration and customer service capabilities.
The annuity
purchase will not impact the monthly pension benefits Lincoln Electric retirees and surviving beneficiaries receive today. The group annuity contract includes an irrevocable commitment by The Principal to make annuity payments to affected retirees
covered under the contract. Lincoln Electric is notifying by mail those individuals who are affected by the forthcoming change and will provide a customer service number to address any questions that affected retirees may have.
Once finalized, this annuity purchase is expected to reduce Lincoln Electrics U.S. pension obligation by approximately $425 million, or
47 percent. The purchase will be funded by existing plan assets and requires no cash contribution. The Company expects to incur a non-cash pension settlement charge of approximately $132 million in the third quarter.
About The Principal Financial Group
The Principal Financial Group® (The Principal®)1 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers
businesses, individuals and institutional clients a wide range of financial products and services, including
1
retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and
a member of the FORTUNE 500®, the Principal Financial Group has $539.9 billion in assets under management2 and serves some
20.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit
www.principal.com.
[1] |
The Principal Financial Group and The Principal are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group. |
About Lincoln Electric
Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding
systems, plasma and oxy-fuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 47 manufacturing locations, including operations and joint ventures in 19
countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric and its products and services, visit the Companys website at www.lincolnelectric.com.
Forward Looking Statements
The
Companys expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect managements
current expectations and involve a number of risks and uncertainties. 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 Companys
operating results. The factors include, but are not limited to: general economic and market conditions; uncertainties inherent in regulatory reviews; and other factors that could affect the timing or the ability of the parties to close the
transactions referenced in this release. For additional discussion, see Item 1A. Risk Factors in the Companys Annual Report on Form 10-K.
Contacts
Lincoln Electric
Amanda Butler
Director, Investor Relations
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com
The Principal Financial Group
Jaime Naig
Tel: 515.247.0798
Email: naig.jaime@principal.com
2
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