<PAGE>
Registration No. 33-55121
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
_________________________
THE TIMKEN COMPANY
(Exact name of registrant as specified in its charter)
Ohio 34-0577130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1835 Dueber Avenue, S.W., Canton, Ohio 44706-2798
(Address of principal executive offices including zip code)
VOLUNTARY INVESTMENT PENSION PLAN
FOR HOURLY EMPLOYEES OF THE TIMKEN COMPANY
(Full title of the plan)
Larry R. Brown
Vice President and General Counsel
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
(Name and address of agent for service)
(330) 438-3000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered(1) registered share price fee
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
without par value 200,000 shares(2) (3) (3) (3)
============================================================================
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, the Registration
Statement also covers an indeterminate amount of interests to be offered
pursuant to the Voluntary Investment Pension Plan for Hourly Employees of
The Timken Company.
(2) Includes 100,000 shares of Common Stock originally registered pursuant to
the Registration Statement and 100,000 shares of Common Stock hereby
registered pursuant to Rule 416(b) under the Securities Act of 1933 in
connection with the registrant's stock dividend of one share of Common
Stock for each share of Common Stock outstanding on May 16, 1997.
(3) The registration fee was paid and the information relating to its
calculation was previously provided with the Registration Statement, as
filed with the Securities and Exchange Commission on August 18, 1994.
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to Registration Statement No. 33-
55121 (the "Registration Statement") of The Timken Company, an Ohio corporation
(the "Company"), is filed by the Company pursuant to Rule 416(b) under the
Securities Act of 1933 to reflect the increase in the number of shares of the
Company's common stock, without par value, registered under the Registration
Statement as the result of a two-for-one stock split effected pursuant to a
stock dividend of one share of common stock for each share of common stock
outstanding on May 16, 1997.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company or the
Voluntary Investment Pension Plan for Hourly Employees of The Timken Company, as
amended (the "Plan"), with the Securities and Exchange Commission are
incorporated herein by reference:
(1) Annual Report of the Company on Form 10-K for the year ended
December 31, 1996;
(2) Annual Report of the Plan on Form 11-K for the year ended
December 31, 1996;
(3) Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1997, and June 30, 1997;
(4) Current Report of the Company on Form 8-K dated April 15, 1997;
and
(5) The description of the Company's common stock, without par value,
contained in the Company's Registration Statement filed pursuant
to Section 12 of the Securities Exchange Act of 1934 and any
amendments and reports filed for the purpose of updating that
description.
All documents that shall be filed by the Company or the Plan pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
subsequent to the filing of this registration statement and prior to the filing
of a post-effective amendment indicating that all securities offered under the
Plan have been sold or deregistering all securities then remaining unsold
thereunder shall be deemed to be incorporated herein by reference and shall be
deemed to be a part hereof from the date of filing thereof.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1 of Article IV of the Company's Amended Code of Regulations
provides that the Company shall indemnify its directors, officers and employees,
and may indemnify its agents, to the fullest extent permitted by law under
prescribed conditions and subject to various qualifications. Article IV of the
Company's Amended Code of Regulations is set forth in Exhibit 4(b) hereto and is
incorporated herein by reference.
Reference is made to Section 1701.13(E) of the Ohio Revised Code
relating to indemnification of directors, officers, employees and agents of an
Ohio corporation.
The Company has entered into contracts with certain of its directors
and officers that indemnify them against many of the types of claims that may be
made against them. The company also maintains insurance coverage for the benefit
of directors and officers with respect to many types of claims that
II-1
<PAGE>
may be made against them, some of which may be in addition to those described in
Article IV of the Company's Amended Code of Regulations.
ITEM 8. EXHIBITS.
4(a) Amended Articles of Incorporation of the Company (filed as
Exhibit 4(a) to the Company's Registration Statement No. 333-
02553 on Form S-8 and incorporated herein by reference)
(b) Amended Code of Regulations of the Company (filed as Exhibit 3.1
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, and incorporated herein by reference)
(c) Voluntary Investment Pension Plan for Hourly Employees of The
Timken Company, as amended
5 Opinion of Counsel
23(a) Consent of Independent Auditors
(b) Consent of Counsel (included in Exhibit 5)
24 Power of Attorney (previously filed with the Registration
Statement on August 18, 1994)
UNDERTAKING:
The undersigned registrant has submitted the Plan, and will
submit any amendments thereto, to the Internal Revenue Service and has
made or will make, as the case may be, all changes required by the
Internal Revenue Service in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933; (ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
--------
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
- -------
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
II-2
<PAGE>
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Post-
Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Canton,
State of Ohio, on this 14th day of August 1997.
THE TIMKEN COMPANY
By: /s/ G. E. LITTLE
-----------------------------------------------
G. E. Little
Vice President - Finance
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*W. R. Timken, Jr. Chairman - Board of August 14, 1997
-------------------------
W. R. Timken, Jr. Directors; Director
*Joseph F. Toot, Jr. President and Chief August 14, 1997
-------------------------
Joseph F. Toot, Jr. Executive Officer;
Director (Principal
Executive Officer)
*G. E. Little Vice President - August 14, 1997
-------------------------
G. E. Little Finance (Principal
Financial and
Accounting Officer)
*Robert Anderson Director August 14, 1997
-------------------------
Robert Anderson
*Stanley C. Gault Director August 14, 1997
-------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director August 14, 1997
-------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director August 14, 1997
-------------------------
Robert W. Mahoney
Director
-------------------------
Jay A. Precourt
*John M. Timken, Jr. Director August 14, 1997
-------------------------
John M. Timken, Jr.
*Ward J. Timken Director August 14, 1997
-------------------------
Ward J. Timken
Director
-------------------------
Martin D. Walker
*Charles H. West Director August 14, 1997
-------------------------
Charles H. West
*Alton W. Whitehouse Director August 14, 1997
-------------------------
Alton W. Whitehouse
</TABLE>
II-4
<PAGE>
* This Post-Effective Amendment No. 1 to the Registration Statement has been
signed on behalf of the above-named directors and officers of the Company by
Gene E. Little, Vice President - Finance of the Company, as attorney-in-fact
pursuant to a power of attorney filed with the Securities and Exchange
Commission as Exhibit 24 to the Registration Statement.
DATED: August 14, 1997 By: /s/ G. E. LITTLE
---------------------------------------
G. E. Little, Attorney-in-Fact
II-5
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
--------
Plan has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Canton, State of Ohio, on this 14th day of August
1997.
VOLUNTARY INVESTMENT PENSION PLAN FOR HOURLY
EMPLOYEES OF THE TIMKEN COMPANY
By: /s/ G. E. LITTLE
---------------------------------------
G. E. Little
Vice President - Finance
of The Timken Company
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
- -------- -------------------
4(a) Amended Articles of Incorporation of the Company
(filed as Exhibit 4(a) to the Company's
Registration Statement No. 333-02553 on Form S-8
and incorporated herein by reference)
4(b) Amended Code of Regulations of the Company (filed as Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, and incorporated herein by reference)
4(c) Voluntary Investment Pension Plan for Hourly
Employees of The Timken Company, as amended
5 Opinion of Counsel
23(a) Consent of Independent Auditors
23(b) Consent of Counsel (included in Exhibit 5 hereto)
24 Power of Attorney (previously filed with the
Registration Statement on August 18, 1994)
II-7
<PAGE>
EXHIBIT 4(c)
1997 401(K) AGREEMENT
BETWEEN
THE TIMKEN COMPANY
AND
UNITED STEELWORKERS OF AMERICA
AFL-CIO
THIS 401(k) AGREEMENT, dated as of June 2, 1997, is between THE TIMKEN
COMPANY, hereinafter referred to as the "Company", and UNITED STEELWORKERS OF
AMERICA, AFL-CIO on behalf of itself and Local Unions 1123, 2173, and 2730, said
International Unions and Local Unions collectively being referred to as the
"Union", and shall be known as the 1997 401(k) Agreement.
1
<PAGE>
PREAMBLE
WHEREAS, the parties have agreed to establish a 401(k) Plan under a 401(k)
Agreement and to provide for the payment of Benefits from the trust to be
established.
IT IS HEREBY AGREED, between the parties as follows:
2
<PAGE>
ARTICLE I - DEFINITIONS
Wherever used herein, the terms hereinafter referred to in this 401(k)
Agreement shall be understood to have the following meaning:
1. The terms "Company", "Union", and "Employee", shall have the same
meanings as ascribed to such words in the 1997 Basic Labor Agreement between the
parties dated June 2, 1997, in respect of rates of pay, hours of work, and
conditions of employment.
a. "Company" shall mean THE TIMKEN COMPANY;
b. "Union" shall mean UNITED STEELWORKERS OF AMERICA,
AFL-CIO, on behalf of itself and LOCAL UNIONS NO. 1123, 2173, and 2730, said
International Union and Local Unions collectively being referred to hereinafter
as the "Union";
c. "Employee" shall mean all production and maintenance workers in
the bearing, steel and tube plants at Canton, Ohio, the steel and tube plant and
bearing plant at Gambrinus (just outside of the City of Canton), the steel plant
on Faircrest Street, S.W., Stark County, Ohio, and the plants at Wooster and
Columbus, Ohio, of the Company, excluding supervisors, assistant supervisors, or
supervisors in charge of any class of labor, bricklayers, watchmen, guards,
factory clerks, or other clerical workers and salaried employees.
2. The terms "Continuous Service" and "Hour of Service" shall have the
same meanings as ascribed to such words in the 1997 Pension Agreement between
the parties dated June 2, 1997.
a. Except as otherwise provided, the Continuous Service of any
Participant for determining his eligibility for and the amount of any 401(k)
Benefit hereunder shall be the time from the first
3
<PAGE>
employment of said Participant by the Company until the time of his voluntary
retirement, except that such Continuous Service shall be broken and credit for
previous service lost by:
(1) Voluntarily quitting the service of the Company. (An
unauthorized absence of seven (7) consecutive scheduled working days
shall be considered a voluntary quit. Absence for military or naval
service, other than temporary training programs of the State Guard or
Reserve Forces, shall be considered a voluntary quit, unless otherwise
provided by law or by the applicable collective bargaining agreement.)
(2) Discharge for proper cause from the service of the Company.
(3) (a) Layoff for a continuous period of time as produces a
break in his accumulated Continuous Service record under the Basic
Labor Agreement in effect at the time of a layoff but not to exceed a
continuous period of two (2) years.
(b) Any employee on layoff for reduction in force or
physical disability who returns to work after September 21, 1997,
whose Continuous Service was broken while laid off due to reduction in
force after July 21, 1980, pursuant to Paragraph 3 of Section K of
Article VIII of the 1980, 1983, 1986, 1989, or 1993 Basic Labor
Agreement shall, after the date of the employee's return to work, have
his Continuous Service adjusted so that his Continuous Service, after
the date of his return to work, shall be increased by the
4
<PAGE>
excess, if any, of his layoff over two (2) years, up to a maximum
increase of two (2) years.
(c) Any active employee as of September 21, 1997, whose
Continuous Service was broken while laid off for physical disability
after July 21, 1980, pursuant to Paragraph 3 of Section K of Article
VIII of the 1980, 1983, 1986, 1989, or 1993 Basic Labor Agreement
shall have his Continuous Service adjusted so that his Continuous
Service, as of September 21, 1997, shall be increased by the excess,
if any, of his layoff over two (2) years, up to a maximum increase of
two (2) years. Any employee on layoff for reduction in force or
physical disability who returns to work after September 21, 1997,
whose Continuous Service was broken while laid off due to physical
disability after July 21, 1980, pursuant to Paragraph 3 of Section K
of Article VIII of the 1980, 1983, 1986, 1989, or 1993 Basic Labor
Agreement shall, after the date of the employee's return to work, have
his Continuous Service adjusted so that his Continuous Service, after
the date of his return to work, shall be increased by the excess, if
any, of his layoff over two (2) years, up to a maximum increase of two
(2) years.
(d) A break in Continuous Service shall not occur during a
layoff because of physical disability resulting from an injury or
disease for which Workers' Compensation Benefits are payable, provided
the Participant returns to work within thirty (30) calendar days after
the end of the period for which Total Disability Benefits are payable
and
5
<PAGE>
provided the total continuous period of his absence from work does not
exceed five (5) years. A Participant who receives Workers'
Compensation Total Disability Benefits for the entire five (5)-year
period or who retires from disability while receiving Workers'
Compensation Total Disability Benefits within the five (5)-year period
shall receive credit for Continuous Service until the earlier of the
termination of the five (5)-year period or retirement. Any laid off
Participant who has extended recall rights as provided in Article
VIII, Section H, of the then current Basic Labor Agreement may make an
application for a pension during the period in which he has such
extended recall rights; provided, however, that if the President, Vice
President, Financial Secretary, Treasurer, or Recording Secretary of
any Local Union who has been or is an employee of the Company and has
been or may hereafter be given a leave of absence on the condition
stated in Article VIII of the then current Basic Labor Agreement, such
leave of absence shall not constitute a break in such a Participant's
record of Continuous Service for the purpose of this 401(k) Agreement.
(e) The adjustment of a Participant's Continuous Service
under Subparagraphs (a), (b), (c), or (d) above shall not result in
duplicating credit for Continuous Service for the same period of
layoff.
b. The term "Hour of Service" means each hour (1) for which a
Participant is paid, or entitled to payment for the
6
<PAGE>
performance of duties, for the Company or for which he is paid, or entitled to
payment, by the Company 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; (2) for
which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by the Company; or (3) for which a Participant is credited pursuant to
Sections 410(a)(5)(E) and 411(a)(6)(E) of the Internal Revenue Code, solely for
the purpose of determining whether a one (1) year break in service has occurred.
Hours of Service shall be determined by dividing the payments received or due
for reasons other than the performance of duties by the lesser of (I) the
Participant's most recent hourly rate of compensation for the performance of
duties or (ii) the Participant's average hourly rate of compensation for the
performance of duties for the most recent computation period in which the
Participant completed more than five hundred (500) Hours of Service. Hours of
Service shall be computed and credited in accordance with Department of Labor
Regulation 2530.200(b).
3. The term "Beneficial Interest" shall mean the proportionate allocation
of assets held by the Plan in the name of the Trust on behalf of each
Participant, which allocation is determined each business day for each
Participant by the ratio of total contributions to the Plan made by the
Participant compared to the total contributions to the Plan made by all
Participants.
4. Beneficial Loan Interest - The market value of the assets representing
the Participant's Beneficial Interest in the Trust in the
7
<PAGE>
custody of the Trustee as of any valuation date, determined for Company stock by
the market price for such common stock, as reported by the New York Stock
Exchange, on any valuation date and for other investment options by the market
value on the most recent valuation date immediately preceding the date of the
loan.
5. The term "Gross Earnings" shall mean an Employee's regular wages paid
(including any overtime or premium payments and any cost-of-living adjustments)
during his or her period of participation in the Plan, but excluding any special
types of payments, such as, but not limited to, suggestion awards, vacation pay,
or retirement benefits. For purposes of this Plan, and in accordance with
Section 401(A)(17) of the Internal Revenue Code, gross earnings cannot exceed
$150,000 (as adjusted) for a Plan Year. For purposes of applying this
limitation, the family unit of an Employee who either is a five percent (5%)
owner or is both a Highly Compensated Employee and one of the ten (10) most
Highly Compensated Employees will be treated as a single Employee with one (1)
compensation. If, as a result of the application of these compensation limits,
the limitation is exceeded, then the limitation shall be prorated among the
affected Employees in the proportion to each individual's compensation as
determined under the Plan prior to the application of this limitation. For this
purpose, a family unit is an Employee who is a five percent (5%) owner or one of
the ten (10) most Highly Compensated Employees, the Employee's spouse, and the
Employee's lineal descendants who have not attained age nineteen (19) before the
close of the Plan Year.
6. The term "Highly Compensated Employee" shall mean any employee who,
during the current Plan Year or the preceding Plan Year:
8
<PAGE>
a. was at any time a five percent (5%) or more owner of the Company's
outstanding common stock,
b. received compensation from the Company in excess of $100,000 (or,
if greater, the dollar limitation in effect under Section 414(q)(1)(C)
of the Internal Revenue Code),
c. received compensation from the Company in excess of $66,000 (or, if
greater, the dollar limitation in effect under Section 414(q)(1)(C) of
the Internal Revenue Code) and was in the top-paid group (the top
twenty percent (20%) of Employees ranked on the basis of compensation
received during the year, but excluding any Employee described in
Section 414(q)(8) and Q&A 9(b) of Section 1.414(q)-IT of the Treasury
Regulations) of employees for such year, or
d. was at any time an officer and received compensation greater than
$60,000 [or, if greater, fifty percent (50%) of the amount in effect
under Section 415(b)(1)(A) for such year, with the number of officers
being limited to fifty (50) (or, if lesser, the greater of three (3)
Employees or ten percent (10%) of Employees excluding those who may be
excluded in determining the top-paid group), and where no officer has
compensation in excess of fifty percent (50%) of the Section
415(b)(1)(A) limit, the highest paid officer is treated as highly
compensated.
For purposes of this definition, compensation is compensation
within the meaning of Section 415(c)(3) of the Internal Revenue Code,
including elective or wage reduction
9
<PAGE>
contributions to a cafeteria plan, cash, or deferred arrangement or
tax-sheltered annuity.
A Highly Compensated Employee who is either a five percent (5%)
owner or one of the ten (10) most Highly Compensated Employees is
subject to the family aggregation rules. In such case, the family
member and five percent (5%) owner or top ten (10) Highly Compensated
Employee shall be treated as a single Employee receiving compensation
and Plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family member and
the five percent (5%) owner or top ten (10) Highly Compensated
Employee. Family member includes the spouse, lineal ascendants and
descendants of the Employee, and the spouses of such lineal ascendants
and descendants.].
In the case of the year for which the relevant determination is being made,
an employee described in Subparagraph b., c., or d. for the current year only,
and not described in Subparagraph a. for either the current or the preceding
year, shall not be treated as a Highly Compensated Employee, unless such
employee is a member of the group consisting of the one hundred (100) employees
paid the greatest compensation during the year for which such determination is
being made.
7. The term "Participant" shall mean any Employee who meets the
requirements of Article II below.
8. The term "Plan" shall mean the 401(k) Plan established by this
Agreement.
9. The term "Plan Administrator" shall mean the Company.
10
<PAGE>
10. The term "Plan Year" shall mean a period which includes all pay
periods for which payment is made in a calendar year.
11. The term "the 401(k) Trust" or "the Trust" shall mean the Trust
established in connection with the Plan which holds and invests the Participant
contributions.
12. The term "Trustee" shall mean a trust company selected by the Company
and any successors thereto.
11
<PAGE>
ARTICLE II - 401(K) BENEFITS
A. ELIGIBILITY AND PARTICIPATION
1. Participation in this Plan shall be available only to Employees of the
Company in the United States, who have completed the eligibility requirements to
be participants under the 1997 Insurance Agreement, that is the completion of
the probationary period of one hundred twenty (120) days worked in the employ of
the Company.
2. Eligible Employees electing to participate in this Plan for the first
time or following a return to active employment with the Company must elect to
participate in this Plan by filing a written election to do so, which election
will be effective with the first available pay period. Any other election to
participate or reparticipate may be accomplished by utilizing the interactive
voice response system, which election will be effective with the first available
pay period.
3. An Employee's election to participate in this Plan shall designate the
amount of wage reduction elected by the Employee to be contributed to this Plan,
as provided in Section B of this Article II. Such election shall become
effective with the first available pay period.
4. An Employee's election to participate in this Plan shall continue in
effect until the Employee utilizes the interactive voice response system to
terminate his or her participation or until such Employee ceases to be eligible
to participate in this Plan.
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<PAGE>
B. WAGE REDUCTION CONTRIBUTIONS
1. At any time, in accordance with Section A above, a Participant may
elect to have his or her wages reduced and the subsequent reduction contributed
to this Plan, in an amount equal to any whole percent between one percent (1%)
and fifteen percent (15%) of his or her Gross Earnings to be deducted from his
or her wages payable for each pay period; provided however, that the percent
reduction selected cannot result in more than a $9500 wage reduction
contribution on behalf of a Participant in a Plan Year (or, if greater, the
dollar limitation in effect under Section 402(g)(1) of the Internal Revenue
Code).
2. A Participant's election as to the rate of his or her wage reduction
contributions to this Plan will remain in effect until the Participant changes
his or her election, ceases to be eligible to participate, or utilizes the
interactive voice response system to terminate his or her participation in this
Plan.
3. A Participant may change his or her election as to the rate of wage
reduction contributions to this Plan by utilizing the interactive voice response
system on any business day. Any change made on the appropriate form will be
effective for the first available pay period and for all succeeding pay periods,
unless changed again by the same procedure.
C. LIMITS ON CONTRIBUTIONS
1. In no event shall the annual addition to a Participant's account under
this Plan and any other contributions to qualified defined contribution plans
maintained by the Company exceed the lesser
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<PAGE>
of $30,000 (or, if greater, one-fourth (1/4) of the dollar limitation in effect
under Section 415(b)(1)(A) of the Internal Revenue Code) or twenty-five percent
(25%) of the Participant's total compensation from the Company less the amount
of wage reduction contributions. The annual addition shall be a Participant's
wage reduction contributions and amounts allocated after March 31, 1984, to an
individual medical account, as defined in Section 415(c)(2) of the Internal
Revenue Code, which is a part of a pension or annuity plan maintained by the
Company. Amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to post-
retirement medical benefits, allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in Section 419(e) of the Code, maintained by the Company are
also treated as annual additions. For purposes of this Section C, Paragraph 1,
compensation shall include all amounts received by a Participant from the
Company during a calendar year for the performance of personal services to the
extent that such amounts are includable in taxable income. In no event shall the
amount of Participant wage reduction contributions to a Participant's account
exceed $9500 for any Plan Year (or, if greater, the dollar limitation in effect
under Section 402(g)(1) of the Internal Revenue Code).
2. If the annual addition limitation for any Participant would be
exceeded by the amounts contributed to this Plan and any other defined
contribution plans maintained by the Company, the contributions to the
Participant's account made under this Plan shall be reduced as necessary.
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3. a. If the Participant is also a participant in a defined benefit
plan maintained by the Company, the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Plan Year may not exceed 1.0.
b. The defined benefit plan fraction is a fraction, the numerator of
which is the sum of the Participant's projected annual benefits under all
defined benefit plans (whether or not terminated) maintained by the Company, and
the denominator of which is the lesser of (1) 1.25 times the dollar limitation
of Section 415(b)(1)(A) of the Internal Revenue Code in effect for the
limitation year or (2) 1.4 times the Participant's average compensation for the
three (3)-consecutive years that produce the highest average.
c. The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all defined contribution plans maintained by the Company (whether
or not terminated) for the current and all prior limitation years, and the
denominator of which is the sum of the lesser of the following amounts
determined for such year and for each prior year of service with the Company:
(1) 1.25 times the dollar limitation in effect under Section 415(c)(1)(A) of the
Internal Revenue Code for such year or (2) 1.4 times the amount which may be
taken into account under Section 415(c)(1)(B) of the Internal Revenue Code.
4. If the annual addition which would otherwise be made to a
Participant's account exceeds the permissible amount, the Company's contribution
to the defined benefit plan shall be reduced accordingly.
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D. INTERESTS NON-FORFEITABLE
Participants shall have an immediate fully vested and non-forfeitable right
to Participant contributions properly credited to their respective accounts and
the income attributable thereto.
E. VETERANS' RIGHTS
1. A Participant who is reemployed by the Company pursuant to the
provisions of the Uniformed Services Employment and Reemployment Rights Act of
1994 shall be treated as not having incurred a break in service with the Company
by reason of such Participant's period or periods of service in the armed forces
of the United States. Each period served by a Participant in the armed forces
shall, upon reemployment, be deemed to constitute service with the Company for
purposes of determining and non-forfeitability of benefits and the accrual of
benefits under the Plan.
2. A Participant so reemployed shall be entitled to accrued benefits that
are contingent on the making of, or derived from, Wage Reduction Contributions
only to the extent such Participant makes payment to the Plan with respect to
such Wage Reduction Contributions. No such payment may exceed the amount the
Participant would have been permitted to contribute had the Participant remained
continuously employed by the Company through the period of service in the armed
forces. Any payment of Wage Reduction Contributions to the Plan shall be made
during the period beginning with the date of reemployment and whose duration is
three (3) times the period of the Participant's service in the armed forces, not
to exceed a maximum duration of five (5) years.
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3. For purposes of computing Wage Reduction Contributions under Section
E, Paragraph 2, above, the Participant's compensation during the period of
service in the armed forces shall be computed at the rate the Participant would
have received, but for the period of service in the armed forces, or, in the
case that the determination of such rate is not reasonably certain, on the basis
of the Participant's average compensation during the twelve (12)-month period
immediately preceding such period of service in the armed forces, or if shorter,
the period of employment immediately preceding such period.
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ARTICLE III - OPERATION OF THE TRUST
A. INVESTMENT OF FUNDS
1. A Participant will be able to invest his Wage Reduction Contributions
in the investment options offered by the Trustee, which options shall be
selected by the Plan Administrator. The Plan Administrator will offer four (4)
basic investment options to Participants and may offer additional investment
options. There will be no investment fees for Participants for the four (4)
basic options, but investment fees on the additional options will be charged to
the account of any Participant electing them. At the time the Participant
enrolls or re-enrolls in the Plan, he or she may elect what percentage, if any,
of his Wage Reduction Contributions, in increments of five percent (5%), he
wishes to place in each investment option.
2. Each business day, the Trustee or its designee shall, by appropriate
accounting procedures, determine the Beneficial Interest of each Participant in
the assets then held in the Trust.
3. As soon as possible following the end of each calendar quarter, each
Participant shall receive a statement showing the details of the Participant's
Beneficial Interest in the Trust.
4. A Participant can request fund transfers on any business day of his
prior Wage Reduction Contributions from one (1) investment option to another by
utilizing the interactive voice response system. The Participant may elect what
percentage, if any, of those assets in the Participant's investment accounts
will be reallocated in five percent (5%) increments to the investment options
chosen by the Participant.
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B. DISTRIBUTIONS FROM THE TRUST
1. a. The shares held in the Trust for the benefit of a Participant
shall be distributed to the Participant upon retirement at or after normal
retirement age sixty-five (65), upon early retirement as provided under the then
current Pension Agreement, upon a break in Continuous Service with the Company,
or to the Participant's beneficiary upon the death of the Participant, except as
hereinafter provided.
b. Early retirement shall include retirement at any age under sixty-
five (65) years with not less than thirty (30) years of continuous service,
retirement at the age of sixty (60) years with the not less than twenty-five
(25) years of continuous service, retirement at the age of sixty-two (62) years
with not less than fifteen (15) years of continuous service, retirement with an
actuarially reduced Pension Benefit between the ages of sixty (60) and sixty-two
(62) with not less than fifteen (15) years of continuous service, retirement due
to shutdown or layoff, and retirement due to disability.
2. a. A Participant's beneficiary shall be his or her spouse or, if the
Participant has no spouse or the Participant's spouse consents (in the manner
described in this Paragraph) to the designation of another person or persons,
such other person or persons as is designated by the Participant as his or her
beneficiary. A Participant may elect at any time during the applicable election
period, which begins on the first day of the Plan Year in which the Participant
becomes a Participant in the Plan and ends on the date of the Participant's
death, to waive the surviving spouse as beneficiary and may revoke any such
election at any time during the applicable
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election period. The Plan shall provide to each Participant, within the
applicable period with respect to such Participant (and consistent with such
regulations as the Secretary of the Treasury may prescribe) a written
explanation of: (1) the terms and conditions of the death benefit; (2) the
Participant's right to make, and the effect of, an election to waive the spouse
as beneficiary; (3) the rights of the Participant's spouse; and (4) the right to
make, and the effect of, a revocation of an election. The term "applicable
period" means, with respect to a Participant, whichever of the following periods
ends last: (i) a period beginning with the first day of the Plan Year in which
the Participant attains age thirty-two (32) and ending with the close of the
Plan Year preceding the Plan Year in which the Participant attains age thirty-
five (35); (ii) a reasonable period after the individual becomes a Participant;
(iii) a reasonable period ending after Section 417(a)(5) of the Internal Revenue
Code ceases to apply to the Participant; (iv) a reasonable period ending after
Section 401(a)(11) of the Internal Revenue Code applies to the Participant; and
(v) a reasonable period after separation from service in case of a Participant
who separates before attaining age thirty-five (35).
b. Such an election shall not take effect unless the spouse of the
Participant consents in writing to such election, such election designates a
beneficiary (or a form of benefits) which may not be changed without spousal
consent (or the consent of the spouse expressly permits designations by the
Participant without any requirement of further consent by the spouse) and the
spouse's consent acknowledges the effect of such election and is witnessed by a
Plan
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representative or a notary public, or it is established to the satisfaction of
the Plan Administrator that the consent required may not be obtained because
there is no spouse, because the spouse cannot be located, or because of such
other circumstances as the Secretary of the Treasury may by regulations
prescribe. Any consent by a spouse (or establishment that the consent of a
spouse may not be obtained) shall be effective only with respect to such spouse.
c. In order to elect to waive his spouse as beneficiary, a
Participant also must affirmatively elect that the payment of his benefits not
be in the form of a life annuity, and with respect to such Participant, this
Plan may not be a transferee of a defined benefit plan or an individual account
plan subject to the funding standards of the Internal Revenue Code or any other
plan required to provide a mandatory qualified joint and survivor annuity
provision.
d. If a Participant has no spouse, if the spouse has consented in
the manner described above to not being the designated beneficiary, if the
spouse cannot be located, or because of circumstances prescribed by the
Secretary of the Treasury, the Participant may, by written notice delivered to
the Plan Administrator, designate or change the designation of a beneficiary to
whom payments of benefits may be paid in the event of his death. In the absence
of such notice, such benefits shall, to the extent permitted by law, be paid at
the discretion of the Company to the deceased Participant's surviving spouse,
child or children, parent or parents, and/or the executor or administrator of
his estate.
3. a. Such distributions shall be made in a lump sum or in installments
as soon as possible after the Participant retires, the
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Participant's death occurs, or Continuous Service is broken. If the distribution
exceeds $3500 or if the account balance of the Participant ever exceeded $3500
at the time of a prior distribution, it cannot be distributed without the
written consent of the Participant and the Participant's spouse, if any, or in
cases where the Participant is dead, the Participant's surviving spouse or
beneficiary (if the surviving spouse is not the beneficiary).
b. For distributions made after December 31, 1992, the appropriate
tax withholdings will be made, unless the Participant instructs the Plan
Administrator, pursuant to procedures to be implemented by the Plan
Administrator, to roll over directly his eligible rollover distribution to an
eligible retirement plan. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the Participant. An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the Participant, except that an eligible rollover distribution does
not include (1) 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 Participant or the joint lives (or joint life expectancies)
of the Participant and the Participant's designated beneficiary, or for a
specified period of ten (10) years or more; (2) any distribution to the extent
such distribution is required under Section 401(a)(9) of the Internal Revenue
Code; and (3) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities). An eligible retirement plan
is an individual retirement account
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described in Section 408(a) of the Internal Revenue Code, an individual
retirement annuity described in Section 408(b) of the Internal Revenue Code, an
annuity plan described in Section 403(a) of the Internal Revenue Code, or a
qualified trust described in Section 401(a) of the Internal Revenue Code, that
accepts the Participant's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity. For purposes of this provision, a Participant includes an Employee or
former Employee, a Participant's surviving spouse, and a Participant's spouse or
former spouse who is the alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Internal Revenue Code.
c. A Participant or beneficiary electing to receive a distribution
in installments shall elect the frequency of the distribution which may be
monthly, quarterly, or annually over a period not to exceed the recipient's life
expectancy according to procedures established by the Company.
4. Unless the Participant otherwise elects, the payment of benefits to a
Participant shall begin not later than the 60th day after the latest of the
close of the year in which (a) the Participant attains age sixty-five (65), (b)
the Participant completes ten (10) years of Continuous Service, or (c) the
Participant terminates his service with the Company. The election to postpone
the payment of benefits beyond the time specified above shall be made by
submitting to the Plan Administrator a written statement, signed by the
Participant, which describes the benefit and the date on which the
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payment of such benefit shall commence. Such an election may not b made if the
exercise of such election will cause benefits payable under this Agreement in
the event of the death of the Participant to be more than incidental. In no
event shall payment of such benefits be deferred beyond April 1 of the calendar
year following the calendar year in which the Participant attains (or, in the
case of a deceased Participant, would have attained) age seventy and one-half
(70-1/2). If distributions are required to be made under this Section B,
Paragraph 4, they shall be made in a lump sum payment or in installments. The
requirements of this Section B, Paragraph 4, shall apply to any distribution of
a Participant's interest and will take precedence over any inconsistent
provisions of this Plan. All distributions required under this Section B,
Paragraph 4, shall be determined and made in accordance with the proposed
regulations under Section 401(a)(9) of the Internal Revenue Code, including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the proposed regulations.
5. A Participant or beneficiary otherwise entitled to a distribution from
the Plan may elect to retain said distribution in the Plan until such time as
the Participant or beneficiary shall direct the Trustee to make said
distribution, provided that such distribution must be made not later than the
time specified in Section B, Paragraph 4, above. Upon written notice from the
Participant or beneficiary, such distribution shall be made in a lump sum or in
installments as soon as possible after the notice is received.
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6. a. Partial or total distributions of his wage reduction
contributions may also be made to a Participant, upon application to the
Trustee, in cases of hardship. If a Participant elects a withdrawal prior to the
date he retires, becomes disabled, or terminates his service with the Company,
such withdrawal will require the consent of the Trustee and such consent shall
be given only if, under uniform rules and regulations, and in conformance with
procedures established by the Company, the Trustee determines that the purpose
of the withdrawal is to meet immediate and heavy financial needs of the
Participant, the amount of the withdrawal does not exceed such financial need,
and the amount of the withdrawal is not reasonably available from the resources
of the Participant. If the Participant is married, a distribution in excess of
$3500 cannot be distributed without the written consent of the Participant's
spouse.
b. The determination of whether a Participant has an immediate and
heavy financial need will be made on the basis of all relevant facts and
circumstances. Financial needs which will be deemed immediate and heavy
financial need are the purchase of a primary residence (excluding mortgage
payments) of the Participant, payment of post-secondary educational tuition for
a year for the Participant or his dependents, health care expenses incurred by a
Participant or his dependents, and the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of a
Participant's principal residence.
c. The determination of whether a distribution is necessary to
satisfy an immediate and heavy financial need shall be made on the basis of all
relevant facts and circumstances. A
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distribution will be deemed to satisfy an immediate and heavy financial need if
it is not in excess of the amount of the immediate and heavy financial need of
the Participant (grossed up to reflect the income taxes that will be assessed on
the distribution), the Participant has obtained all distributions (other than
hardship distributions) under all plans maintained by the Company, the
Participant agrees that all wage reduction contributions and all other
Participant contributions to all plans maintained by the Company will be
suspended until twelve (12) months after receipt of the hardship distribution,
and the Participant agrees that any wage reduction contributions made in the
taxable year following the taxable year of the hardship distribution shall not
exceed the maximum limit under Section 402(g) of the Internal Revenue Code less
the amount of the Participant's wage reduction contributions for the taxable
year of the hardship distribution.
d. Such election may be made at any time, but not more frequently
than once a year. All withdrawal elections shall be made by a Participant on
written forms supplied by the Trustee for that purpose. Such distributions
shall be processed immediately following the completion of the application
procedure.
7. a. A Participant may obtain a loan from the Trust upon proper
application to the Trust pursuant to procedures established by the Plan
Administrator. The nature and amount of the loan must conform to the following
rules and limits:
(1) The minimum loan amount is $1000.
(2) The maximum loan amount is fifty percent (50%) of the
Participant's Beneficial Loan Interest, provided, that
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<PAGE>
no loan may be greater than $50,000, reduced by the excess, if any, of
(a) the highest outstanding loan balance from the Plan during the one
(1)-year period ending on the day before the date on which such loan
is made over (b) the outstanding loan balance from the Plan on the
date on which such loan is made. The Trustee will accept only the
Participant's accrued benefit as collateral for loans.
(3) The term of the loan cannot exceed four (4) years.
(4) A Participant may have only one (1) loan from this Plan in
effect at any one time and may apply for only one (1) loan within each
twelve (12)-month period.
(5) The Plan Administrator will establish the rate of interest to
be charged on all loan balances. This rate of interest will be one
percent (1%) in excess of the prime rate as published in the Wall
Street Journal the first business day of the month in which the loan
is granted.
(6) The loan shall be repaid by the Participant, if the
Participant is an active Employee, through payroll deduction as
established by the loan agreement. If the Participant is not an
active Employee, the Participant and the Company shall agree to a
repayment schedule which shall be incorporated in the loan agreement.
The loan may be repaid in full at a date earlier than provided in the
loan agreement with no penalty. Interest paid by the Participant will
be credited directly to the Participant's account. The loan fee of
$50.00 per loan will be paid by the Participant from funds other than
those in the Trust.
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(7) The loan amount will be taken on a pro-rata basis from the
Beneficial Loan Interest in all investment options at the time of the
loan. Repayments will be redeposited into the Participant's current
investment options and contributions using the current ratio.
(8) If a Participant does not repay a loan which he or she may
have from the Plan, the Trustee will declare such loan to be in
default when the loan is in arrears of repayment for more than ninety
(90) days. The Trustee may take steps to preserve Plan assets, if
necessary, in the event of such default. Once default has been
established, the amount of the loan in default (unpaid principal and
the interest accrued thereon) shall be treated as a distribution from
the Plan in the Plan Year in which the default occurs. The amount of
the default will not constitute part of subsequent distributions from
the Trust.
(9) The proceeds of the loan cannot be applied toward the
purchase of any securities.
b. Loans may be applied for on any business day. Loan application
shall be made through the interactive voice response system.
8. a. When a Participant has satisfied the eligibility requirements of
the Plan, the Company may transfer the Participant's account balance under
another qualified defined contribution plan or a conduit individual retirement
account which authorizes such transfers to the Plan. Transferred accounts shall
be subject to such rights, restrictions, and features (including vesting
provisions) applicable
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<PAGE>
to assets in similar accounts contributed to and held under the Plan. The Plan
Administrator may establish such non-discriminatory restrictions and rules
applicable to such transfers from the Plan and transfers to the Plan as it may
determine to be necessary or desirable to maintain the qualified status of the
Plan. In no event shall any amount be transferred to the Trust from a defined
benefit pension plan or a money purchase pension plan.
b. The Company may transfer a Participant's account under the Plan
to another qualified defined contribution plan maintained by the Company, when
the Participant transfers employment from an employee group covered by the Plan
to an employee group not so covered, provided that the other plan accepts such
transfers. Accounts so transferred shall be subject to such rights,
restrictions, and features (including vesting provisions) applicable to assets
in similar accounts contributed to and held under the other plan. The Plan
Administrator may establish such non-discriminatory restrictions and rules
applicable to such transfers as it may determine to be necessary or desirable to
maintain the qualified status of the Plan (and any other plan sponsored by it)
under the Code.
C. EQUITY DETERMINATION
1. The Company may amend or revoke the wage reduction election of any
Participant at any time, if the Company determines that such revocation or
amendment is necessary to ensure that the annual addition to a Participant's
account for any Plan Year will not exceed the limitations of Section C,
Paragraph 1, of Article II or to ensure that the discrimination tests of Section
401(k) or 401(m) of the
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Internal Revenue Code are met for such Plan Year. The discrimination tests shall
be (a) that the Employees eligible to benefit under this Plan shall satisfy the
non-discrimination provisions of Section 410(b)(1) of the Internal Revenue Code,
(b) that the actual deferral percentage for Highly Compensated Employees for
such Plan Year meets the tests of Section 401(k)(3) of the Internal Revenue
Code, and (c) that the actual contribution percentage for Highly Compensated
Employees for such Plan Year meets the tests of Section 401(m) of the Internal
Revenue Code.
2. In the event that the Plan should fail to meet the tests referred to
in Section C, Paragraph 1, of this Article III, the amount of excess
contributions for a Highly Compensated Employee for a Plan Year will be
determined in the following manner. The actual deferral ratio of the Highly
Compensated Employee with the highest actual deferral ratio will be reduced to
the extent necessary to satisfy the actual deferral percentage test or cause
such ratio to equal the actual deferral ratio of the Highly Compensated Employee
with the next highest ratio. This process will be repeated for each Highly
Compensated Employee until the actual deferral percentage test is satisfied.
The amount of excess contributions for a Highly Compensated Employee is equal to
the total of Wage Reduction Contributions taken into account for the actual
deferral percentage test minus the product of the Employee's reduced deferral
ratio as determined above and the Employee's compensation. The distribution of
any excess contributions will include the income allocable thereto. The income
allocable to excess contributions includes income for the Plan Year for which
the excess contributions were made. The amount of
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excess contributions for a Highly Compensated Employee for a Plan Year will be
distributed to that Highly Compensated Employee after the close of the Plan Year
in which the excess contribution occurred and within twelve (12) months after
the close of the following Plan Year. In the case of a Highly Compensated
Employee whose actual deferral ratio is determined under the family aggregation
rules, the determination of the amount of excess contributions shall be made in
the following manner: The actual deferral ratio will be reduced in accordance
with the "leveling" method described in Section 1.401(k)-l)f)(2) of the Treasury
Regulations and the excess contributions will be allocated among the family
members in proportion to the contributions of each family member that have been
combined.
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ARTICLE IV -
GENERAL CONDITIONS CONCERNING THE 401(K) AGREEMENT
A. MERGER, CONSOLIDATION, OR TRANSFER
In case of any merger or consolidation with, or transfer of assets or
liabilities to, any other plan, the benefits which would be paid to each
Participant in this Plan (if this Plan terminated immediately after the merger,
consolidation, or transfer) shall be equal to or greater than the benefit each
Participant would have been entitled to receive immediately before the merger,
consolidation, or transfer, (if this Plan had then terminated).
B. NON-ALIENATION OF PARTICIPANTS' INTERESTS
1. No right to the monies contributed by a Participant under this Plan,
nor in any assets held by the Trustee, shall be subject in any manner to
alienation, assignment, encumbrance, pledge, sale, or transfer of any kind prior
to being distributed to the Participant as provided in the Plan. However, the
Trustee is granted in the Trust Agreement a lien on Trust assets for the payment
of Trustee fees and expenses. If at any time prior thereto a Participant shall
attempt to alienate, assign, encumber, pledge, sell, or otherwise transfer his
or her right to any shares or monies held by the Trustee, such attempted
alienation, assignment, encumbrance, pledge, sale, or transfer shall be of no
effect. To the extent permitted by law, the interest of a Participant shall
also be protected from involuntary attachment, garnishment, or levy. In the
event of an attempted attachment,
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garnishment, or levy of the Participant's interest in the Trust, the Participant
will be promptly notified; but the Trustee shall have no obligation to resist
such action. In no event shall any person be entitled to the distribution of
shares or the payment of monies held by the Trustee prior to the time when
distribution is to be made to the Participant as provided in the Plan.
2. Section B, Paragraph 1, above shall not apply if the attachment or
garnishment of the Participant's interest in the Trust is to be made pursuant to
a qualified domestic relations order, as determined under the procedures of this
Plan. A domestic relations order is a judgment, decree, or order that relates
to the provision of child support, alimony payments, or marital property rights
to a spouse, former spouse, child, or other dependent of a Participant and is
made pursuant to a state domestic relations law. A domestic relations order is
qualified if it creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive all or a
portion of the benefits payable to a Participant under the Plan, specifies (a)
the name and last known mailing address of the Participant and of each alternate
payee covered under the order, (b) the amount or percentage of the Participant's
benefits to be paid to any alternate payee or the manner in which such amount or
percentage is to be determined, (c) the number of payments or the period to
which the order applies, and (d) each plan to which the order relates. Such
order cannot require the Plan to provide any type or form of benefits, or any
option, not otherwise provided under the Plan; it cannot require the Plan to
provide increased benefits
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(determined on the basis of actuarial value), and it cannot require the payment
of benefits to an alternate payee which are required to be paid to another
alternate payee under another order previously determined to be a qualified
domestic relations order.
3. Each alternate payee under a qualified domestic relations order shall
have the right from time to time to file with the Company a written request
regarding the time and manner of payment of the alternate payee's interest in
the Plan pursuant to such qualified domestic relations order. Provided such
qualified domestic relations order complies with the Internal Revenue Code, such
request shall be considered by the Company and shall be acted upon in accordance
with the terms of such qualified domestic relations order. The options
available to an alternate payee shall be those set forth in Section B, Paragraph
3, of Article III, unless otherwise modified by the qualified domestic relations
order, provided that said qualified domestic relations order cannot enlarge the
options available under Section B, Paragraph 3, of Article III. If an alternate
payee so desires, distribution of an alternate payee's interest in the Trust may
be distributed to such alternate payee, as soon as such qualified domestic
relations order is approved by the Company and by the court.
C. CONDITIONS TO THE EFFECTIVENESS AND CONTINUANCE OF THE PLAN
1. The Company will not be required to make any contributions (wage
reduction contributions) to the 401(k) Trust required to be established under
this Plan or to place any part of the Plan into operation, unless and until it
shall have received from the Internal Revenue Service a currently effective
ruling or rulings, satisfactory
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to the Company, that such Trust is a qualified Trust under Sections 401(a),
401(k), and 401(m), Internal Revenue Code, and exempt from Federal Income Tax
under Section 501(a) of the Internal Revenue Code. Continued contributions to
the Trust and operation of the Plan shall be conditioned upon retaining such
favorable ruling or rulings from the Internal Revenue Service.
2. The Company will not be required to make any contributions (wage
reduction contributions) to the Trust required to be established under this Plan
or to place any part of the Plan into operation, unless and until it shall have
received from the United States Department of Labor a currently effective ruling
or rulings, satisfactory to the Company that no part of the contributions to
such Trust shall be included in the regular rate of pay of any Employee.
Continued contributions to the Trust and operation of the Plan shall be
conditioned upon retaining such favorable ruling or rulings.
3. The Company will not be required to make any contributions (wage
reduction contributions) to the 401(k) Trust required to be established under
this Plan or to place any part of the Plan into operation, unless and until it
shall have determined that no action will be taken by the Securities and
Exchange Commission concerning such Trust or any information contained or
omitted in a registration statement for the Plan. Continued contributions to
the Trust and operation of the Plan shall be conditioned upon further
determinations by the Company that the Securities and Exchange Commission will
take no action concerning the Trust or any information contained or omitted in a
registration statement for the Plan.
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4. In the event the Plan fails to qualify under the applicable provisions
of the Internal Revenue Code, initially or as amended, the contributions shall
be returned to the Company and the Participants.
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ARTICLE V - ADMINISTRATION OF THE PLAN
A. PLAN ADMINISTRATION
1. The Company, which shall be the Plan Administrator, shall have
responsibility for the administration of this Plan, including power to construe
said Plan, to select the investment options to be available to Participants, to
determine all questions that shall arise thereunder, including particular
questions on eligibility and participation of Employees and all matters
necessary for it properly to discharge its duties, powers, and obligations and
to apply its established policies concerning the employment status of
Participants. The decision of the Company made in good faith upon any manner
within the scope of its authority shall be final, but the Company at all times
in carrying out its decisions shall act in a uniform and non-discriminatory
manner and may from time to time set down uniform rules of interpretation and
administration, which rules may be modified from time to time in the light of
its experience.
2. The Plan established by this Agreement is maintained for the exclusive
benefit of Participants and beneficiaries, and the Plan's terms, including those
relating to coverage and benefits, are legally enforceable. The Plan shall be
administered in accordance with all applicable state and federal laws and
regulations.
B. INFORMATION AS TO 401(K) PLAN
1. The Company agrees to furnish the following additional items of
information to the Union:
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Information shall be furnished (a) to the District Director at Columbus,
Ohio, in five (5) copies, (b) effective as of December 31 of the years in which
this Agreement is in effect, and (c) within one hundred twenty (120) days from
the 31st day of December of the years in which this Agreement is in effect.
a. Information
(1) Name of Trustee.
(2) Number of employees making contributions to the Plan.
(3) List of distributions made during preceding year showing:
(a) Social Security number, clock number, name, and address
of recipient.
(b) Date hired.
(c) Amount of distribution.
(4) Financial information.
(a) Assets of funds at beginning of year.
(b) Participant contributions during year.
(c) Net amount of income for year.
(d) Net amount of disbursements.
(e) Assets of funds at end of year.
C. SETTLEMENT OF DISPUTES
1. If any dispute shall arise between any Participant or beneficiary
applying for a benefit and the Administrator or between any Participant or
beneficiary applying for a benefit and the Company, as to such Participant's or
beneficiary's entitlement to a benefit or
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the amount of his benefit, such dispute may be disposed of in the manner
provided for in the Adjustment of Grievances commencing with the last step in
the grievance procedure preceding arbitration of the collective bargaining
agreement in effect at the time such action is taken. Any Participant or
beneficiary who wishes to submit such a dispute to such step of the grievance
procedure must have a notice of his intention to do so filed by the
Representative of the International Union with the Administrator postmarked
within sixty (60) days from the date of the notice to him of the action to which
he objects. The Participant or beneficiary shall state clearly and concisely, in
such notice of his intention to submit such dispute to such step of the
grievance procedure, all facts which are the basis of his grievance; and if he
claims that any Article or Articles of this Agreement are involved, he shall
specify such Article or Articles. The notice from the Administrator shall advise
such Participant or beneficiary of his right to submit such dispute to such step
of the grievance procedure within said time. The arbitrator, in deciding any
such dispute and only insofar as necessary to decide such dispute, shall have
authority only to interpret and apply the provisions of this Agreement to the
facts as presented in evidence to him, but he shall not have the authority to
add to or subtract from or, in any way, to alter or amend any of such
provisions. The decision of the arbitrator on such dispute, which shall properly
have been referred to him, shall be final and binding upon the Company, the
Union, Participant or beneficiary, and the Administrator, unless said decision
was procured or induced by corruption, fraud, or undue means or was beyond the
scope of the arbitrator's authority herein provided.
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2. If no appeal to arbitration is taken in accordance with Section C
hereof from any decision of the Administrator either awarding or denying a
benefit under this Agreement, or modifying or reversing any earlier decision
awarding or denying such benefit, such decision of the Administrator shall be
final and binding upon said Participant or beneficiary or any person on his
behalf and upon the Union.
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ARTICLE VI - EFFECTIVE AND TERMINATION DATES
A. This 1997 401(k) agreement shall be effective on june 1, 1997, at 12:01
a.m., except as hereinafter provided.
B. No provision in this agreement shall be considered as having any
retroactive effect, unless it is clearly so stated.
C. This agreement shall continue in full force and effect until 12:01 a.m.,
January 1, 2001, and for yearly periods thereafter, unless either party shall
notify the other party in writing not less than sixty (60) days before any
termination date of the 1997 Basic Labor Agreement between the parties of such
party's desire to commence negotiations for a new Agreement.
D. Negotiations for a new 401(k) Agreement shall be carried on concurrently
with negotiations for a Basic Labor Agreement to replace the 1997 Basic Labor
Agreement.
E. In the event of a strike at the termination of the 1997 Basic Labor
Agreement, the operation of this 401(k) Agreement shall not be suspended during
the period of such strike until the termination date of this 401(k) Agreement.
F. In the event that no agreement is reached on a new 401(k) Agreement by
12:01 a.m., September 25, 2000, the Union shall not
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be bound by its no-strike pledge contained in the basic labor agreement then in
effect between the parties.
G. The no-strike clause contained in the Basic Labor Agreement between the
parties then in effect shall be applicable to this 401(k) Agreement, except as
hereinabove provided.
H. Except as provided above, there shall be no strikes by reason of disputes
under this 401(k) Agreement during the term of this Agreement.
THE TIMKEN COMPANY UNITED STEELWORKERS OF AMERICA, AFL-CIO
________________________ __________________________________
Donald W. Simonson George Becker
Director - International President
Industrial Relations
__________________________________
Leo W. Gerard
International Secretary-Treasurer
__________________________________
Richard Davis
International Vice President -
Administration
__________________________________
Leon Lynch
International Vice President -
Human Affairs
__________________________________
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Frank Vickers
Director - District 1
__________________________________
Robert Andrews
Staff Representative
__________________________________
Frank Buzaki, Jr.
Staff Representative
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UNITED STEELWORKERS OF AMERICA, AFL-CIO
__________________________________
Ron Stokes
President - Local Union 1123
__________________________________
Art Maurer
Vice President - Local Union 1123
__________________________________
Stan Jasionowski - Local Union 1123
__________________________________
Jerry Wright - Local Union 1123
__________________________________
Pat Eslich - Local Union 1123
__________________________________
Sam Vorhies - Local Union 1123
__________________________________
Tom Wilkinson - Local Union 1123
__________________________________
Gerald Withrow
President - Local Union 2173
__________________________________
Richard Egan
Vice President - Local Union 2173
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UNITED STEELWORKERS OF AMERICA, AFL-CIO
__________________________________
Harold Carpenter
President - Local Union 2730
__________________________________
Rex Marmet
Vice President - Local Union 2730
__________________________________
Joseph V. Kostic
President - Local Union 1123
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EXHIBIT 5
August 14, 1997
The Timken Company
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
Re: Voluntary Investment Pension Plan for Hourly
Employees of The Timken Company, as Amended
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to The Timken Company, an Ohio corporation
(the "Company"), in connection with the filing of Post-Effective Amendment No. 1
(the "Post-Effective Amendment") to Registration Statement No. 33-55121 on Form
S-8 to register pursuant to Rule 416(b) under the Securities Act of 1933, as
amended, an additional 100,000 shares of the Company's common stock without par
value ("Common Stock") to be issued or transferred and sold under the Voluntary
Investment Pension Plan for Hourly Employees of The Timken Company, as amended
(the "Plan"), as the result of a two-for-one stock split effected pursuant to a
stock dividend of one share of Common Stock for each share of Common Stock
outstanding on May 16, 1997. We have examined such documents, records and
matters of law as we have deemed necessary for the purposes of this opinion, and
based thereon, we are of the opinion that the shares of Common Stock that may be
issued or transferred and sold by the Company to the Trustee (as defined in the
Plan) pursuant to the Plan will be, when issued or transferred and sold in
accordance with the Plan, duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Post-Effective Amendment.
Very truly yours,
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Post-Effective Amendment No.
1 to the Registration Statement (Form S-8 No. 33-55121) pertaining to the
Voluntary Investment Pension Plan for Hourly Employees of The Timken Company of
our reports (a) dated February 6, 1997, with respect to the consolidated
financial statements and schedule of The Timken Company included in its Annual
Report (Form 10-K) and (b) dated June 9, 1997, with respect to the financial
statements and schedules of the Voluntary Investment Pension Plan for Hourly
Employees of The Timken Company included in the Plan's Annual Report (Form 11-
K), both for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
August 11, 1997
