Re: Important information about your Retirement Annuity ...

August 19, 2015

Re: Important information about your Retirement Annuity Program (RAP)

Dear Lincoln Electric Retirees and Beneficiaries:

We are writing today to share important information about the way your Lincoln Electric Retirement Annuity Program (RAP) benefits will be paid in the future. In an effort to better manage exposure to financial risk while improving the security of ongoing benefits for our retirees, the RAP has committed to purchase a group annuity contract from The Principal Financial Group (The Principal) to cover future pension payments to you and approximately 1,900 other retirees and surviving beneficiaries.

This information generally affects RAP participants who are no longer employed by the Company and who are receiving monthly benefit payments as of June 1, 2015.

What Is Happening

The Lincoln Electric Company ? like many other organizations ? is continuously reviewing ways to manage its exposure to financial risk due to pension plan liabilities, or the benefits we are paying you and other plan participants. As a result of that review, the RAP has committed to purchase annuities from The Principal, which is expected to take over payment of your monthly pension effective November 1, 2015.

The Lincoln Electric Company has always been committed to meeting our pension obligations responsibly. Through the years, we have demonstrated ongoing stewardship of our pension assets and, since 2005, have contributed $375 million to fund our pension plans. The RAP is fully funded today. The favorable funding status provides the opportunity for the Company to take this step in an effort to further protect the value of these pension assets and your benefits going forward. The group annuity contract includes an irrevocable commitment by The Principal to make pension benefit payments to affected participants covered under the contract going forward. In selecting The Principal, the intent was to ensure your pension benefit was placed with a secure and reputable company who will be able to pay your pension benefits as prescribed under the RAP.

This letter provides additional information on the transition to The Principal and answers to many questions you may have. It also includes a Notification of State Guaranty Association Coverage of Annuities.

What You Can Expect

You will continue to receive your regular monthly pension payments as you do today, and you do not need to take any action to continue receiving your monthly benefit. The amount of your benefit will not change, just the entity that provides it. You do not pay any fees or transaction costs as a result of the purchase of the annuity contract.

The main difference will be that your pension benefit will no longer be paid by Northern Trust, the Trustee of the RAP, but instead will come from The Principal. All payments will be sent at the beginning of every month.

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We will be working with The Principal over the next several weeks to ensure you continue to receive your pension benefit as you do today. During this time we will provide The Principal with details related to your pension benefit, such as the amount of your benefit, beneficiary elections, your mailing address, electronic deposit information, and your tax withholding information that is currently in effect for the payment of your pension.

The Principal is expected to take over pension payments by November 1, 2015. Here are a few important details as this transition occurs:

Contact information will transfer. If you want to change any personal information such as your address, tax withholding, banking information, call Lincoln Electric Human Resources at 866-415-8365 by October 15, 2015.

The Principal will send you a "welcome packet" in October 2015. This packet will provide information on how to contact The Principal with questions or to make changes to your address, tax withholding, personal or banking information.

Early next year, The Principal will send you an annuity certificate. This certificate will describe your benefit and The Principal's obligations under the group annuity contract.

Please be sure to pay close attention to any correspondence from The Principal, and respond if you have questions or need to make changes to your address, tax withholding, personal or banking information.

Why Lincoln Electric Is Taking This Action

Lincoln Electric is committed to preserving the long-term sustainability of our organization ? for our employees, retirees, shareholders and customers. As a result, we continuously evaluate ways to reduce the financial risk and volatility of our benefit programs while managing costs involved.

While our Retirement Annuity Program is fully compliant with government funding requirements, factors such as low interest rates, a volatile investment marketplace and increased life expectancy have combined to make funding these benefits less predictable and more costly. We evaluated a number of options that would enable us to continue your payments while minimizing risk and maintaining the financial health of the Company.

After a thorough review, purchasing annuities for our retiree group through an insurance company proved to be the best and most efficient solution. By acting now, we have an opportunity to secure pension benefits for approximately 1,900 retirees and beneficiaries, while maintaining a fully-funded plan for future retirees.

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About The Principal Life Insurance Company The Principal was chosen following a rigorous evaluation process. The Principal was selected by the RAP's fiduciary, with the advice of an independent expert, based on many factors, including the financial strength and rating of the insurance company, its ability to administer plan payments, and its customer service capabilities. The Principal ranks among the top-rated companies in North America. Its total assets as of June 30, 2015, were $539.9 billion with $9.7 billion in total equity. The Principal also provides benefit payments to more than 275,000 annuitants each month. For More Information Additional information about the annuity purchase is provided in the enclosed Frequently Asked Questions. However, if you have any questions or need more information, please call Lincoln Electric Human Resources at 866-415-8365 to speak with a Retirement Annuity Program representative. Representatives are available to help you from 8 a.m. ? 5 p.m. ET, Monday ? Friday, from now through October 31, 2015, excluding holidays. We appreciate your patience as we complete the annuity transfer process. Sincerely,

Christopher L. Mapes President and Chief Executive Officer

The information contained in this letter is a Summary of Material Modification (the "SMM") for the Retirement Annuity Program. This SMM is being distributed to all affected plan participants to reflect a recent amendment to the Plan relating to the purchase of these annuities. It is now part of your summary plan description for the Plan and should replace any information to the contrary. Please keep this SMM with your important Plan materials. If any conflict should arise between this SMM and the legal documents of the Plan, or if any point is not discussed in this SMM or is only partially discussed, the terms of the legal plan documents (as interpreted by the plan administrator) will govern in all cases. As always, The Lincoln Electric Company reserves the right to amend and/or terminate the Plan in its sole discretion.

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Frequently Asked Questions

1. Who is affected by the annuity purchase? This action affects Retirement Annuity Program retirees who were no longer employed by the Company as of November 1, 2014, and who are receiving pension plan benefit payments as of June 1, 2015, as well as their surviving beneficiaries and alternate payees, if applicable. Disabled participants who have yet to reach normal retirement age are not affected.

2. Why are annuities being purchased to pay our pension benefits? This change allows Lincoln Electric to better manage exposure to financial risk while improving the security of ongoing benefits for our retirees. We are transferring payments to an insurance company that specializes in paying annuities and managing the risks associated with it. It allows Lincoln Electric to focus more on managing its core business ? and less on managing pension plan assets.

3. Why is Lincoln Electric doing this now? Lincoln Electric is continuously reviewing ways to support its business strategy, which includes reducing financial risk across the Company. Our pension plan is fully compliant with government requirements and, through our ongoing stewardship, the RAP is fully funded. By acting now, Lincoln Electric has an opportunity to secure the pension benefit you've earned, while maintaining a fully funded plan for future retirees.

4. How was The Principal chosen? Bids from insurance carriers that offer annuity contracts to pension plans were solicited for the RAP. The annuity contract business is competitive and several insurance carriers were interested in the business. When making the carrier selection, the RAP's fiduciary, with the advice of an independent expert, considered many factors, including the financial strength and rating of the insurance company, their ability to administer plan payments, and their customer service capabilities. Based on a thorough and thoughtful process, the RAP's fiduciary determined that The Principal best suits the plan's needs, and it was therefore selected as the annuity contract provider.

5. How can I be sure that my pension benefit is secure once the annuity contract is purchased? The RAP is financially sound and fully compliant with government funding requirements. By transferring pension benefits for current retirees and beneficiaries to The Principal, The Lincoln Electric Company can better manage volatile costs long-term for current and former employees. When making the carrier selection, the RAP's fiduciary, with the advice of an independent expert, followed a diligent process to evaluate and select a fiscally strong insurance company who will be providing pension benefits to you in the future. In conducting this process, the intent was to ensure your pension benefit was placed with a secure and reputable insurance company who will be able to pay your pension benefits as prescribed under the Retirement Annuity Program. The Principal's total assets as of June 30, 2015, were $539.9 billion with $9.7 billion in total equity. The Principal also provides benefit payments to more than 275,000 annuitants each month.

After the purchase of the annuity contract, the Pension Benefit Guaranty Corporation's (PBGC) insurance coverage of your benefit will end. Instead, your pension benefit will be backed by the State Guaranty Association in the state where you live. You can learn more about this on the website of the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) at . A Notification of State Guaranty Association Coverage of Annuities with more information on State Guaranty Associations is enclosed in this packet.

6. Is there anything that I need to do right away to prepare for this annuity purchase? When will the transfer happen? You do not have to take any action. In October The Principal will send you a welcome package with more information. We expect that The Principal will begin making monthly payments on November 1. Until that time, your pension payments will continue to be paid by the RAP trustee as they are paid today.

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7. What if I want to change withholding, have the check from the insurance company sent to a different location or have the funds deposited to a different bank account? If you want to change any personal information such as your address, tax withholding, banking information, call Lincoln Electric Human Resources at 866-415-8365 by October 15, 2015. Starting November 1, 2015, you can contact The Principal with questions or to make changes to your address, tax withholding, personal or banking information.

8. What happens to my pension benefit if I have a Qualified Domestic Relations Order (QDRO)? If your pension benefit is already subject to a QDRO, nothing will change other than the source of payment. Your monthly pension payments will continue as they do today. If you have a pending QDRO that will not become effective until The Principal takes over payments, The Principal will administer your benefit in accordance with the QDRO stipulations. So for example, if the QDRO stipulates that 50 percent of your pension benefit should go to your former spouse, The Principal will be sure that your benefit is paid accordingly.

9. Where can I get more information about the amount of coverage provided by State Guaranty Associations? You can look at the website of the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) at . NOLHGA's members include the 52 life and health insurance guaranty associations representing the 50 states, Washington, D.C., and Puerto Rico. The website provides information on how State Guaranty Associations work and the coverage provided by each state. Keep in mind that rules of the states are complex, vary and may be subject to an overall benefit cap.

10. What is Lincoln Electric doing to support affected retirees? Lincoln Electric will be working with The Principal over the next few months to ensure a smooth transition of your pension benefits. In October, you will receive a welcome packet in the mail from The Principal with more information, including a new customer support number for questions. After the transition is completed, you will receive an individual annuity certificate from The Principal, which is estimated to occur in February 2016. The Principal will take over your pension payments beginning in November 2015. Per the agreement with The Principal, there will be no interruption in pension payment timing, amount or method for those affected by this transaction. If you have any questions or need more information, please call Lincoln Electric Human Resources at 866-415-8365 to speak with a Retirement Annuity Program representative. Representatives are available to help you from 8 a.m. ? 5 p.m. ET, Monday ? Friday. The representatives will be available from now through October 31, 2015, excluding holidays.

11. Can I transfer my pension benefit to a different insurance company that provides annuities? No. Your pension benefit must remain with the insurance company that the committee selected. It is part of a group contract (similar in concept to other benefits like medical coverage) that the Company has arranged on behalf of participants.

12. Can I get a lump-sum payment of my pension benefit instead of having my benefit administered by an insurance company? No. Whatever form of annuity payment you chose when you retired is the form of payment that will continue once The Principal takes over the payment of your monthly benefit. Recently, the IRS implemented rules that prohibit retirees from taking a lump-sum payment of a pension benefit.

13. Can I change my beneficiary for my annuity? Your beneficiary named under any of the Joint and Survivor Annuity options offered under the plan cannot be changed once payments begin. Beneficiaries named under the Years Certain Option (with 60, 120, 180 or 240 monthly payments) or the Five Year Annual Payments Option may be changed at any time by completing a new beneficiary designation form.

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NOTICE OF STATE GUARANTY ASSOCIATION COVERAGE OF ANNUITIES

Your pension plan may pay your pension benefit in the form of an annuity purchased from a licensed insurance company. Once the plan purchases an annuity for you, the insurance company will be responsible for paying your benefit. All states, Puerto Rico and the District of Columbia have "guaranty associations." The purpose of a guaranty association is to protect policyholders, up to specified limits, in the event the insurance company is financially unable to meet its obligations. If you receive your pension benefits in the form of an annuity and the insurance company becomes unable to pay, a guaranty association may be responsible for all, part or none of your annuity. Generally, where you live at the time the insurance company is unable to pay determines which guaranty association is responsible. In certain circumstances, other factors, such as where the insurance company is licensed to do business, determine which guaranty associations may be responsible. Each guaranty association has dollar limits on the extent of its coverage. In most states, guaranty association coverage limits are $250,000 (including Ohio) for individual annuities with an overall benefit "cap" for an individual life of $300,000. However, state laws vary and can change over time, and different states may calculate the value of annuities differently. This notice is to help you understand the general nature of the guaranty association protection of the annuity you may receive. It is only a summary. If you need information now or in the event the insurance company fails, a list of the addresses and telephone numbers of guaranty association offices is available by contacting PBGC's Customer Contact Center, PO Box 151750, Alexandria, VA 223151750; telephone: 1-800-400-7242; or go to PBGC's website at (at the "Workers & Retirees" page, click on "Benefits" on the left menu bar and look for "State Life and Health Insurance Guaranty Association Offices").

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