<PAGE> 1
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
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)
THE TIMKEN COMPANY
INTERNATIONAL STOCK OWNERSHIP PLAN
(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 registered share price fee
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock
without par value 500,000 shares(1) $33.91(2) $16,955,000(2) $5,001.73
======================== ====================== ====================== ====================== ======================
</TABLE>
(1) Such additional indeterminable number of shares of common stock,
without par value, is hereby registered as may be required by reason of
the antidilution provisions of The Timken Company International Stock
Ownership Plan.
(2) Pursuant to Rule 457(h) under the Securities Act of 1933, this estimate
is made solely for the purpose of calculating the amount of the
registration fee and is based on the average of the high and low prices
of the Common Stock on the New York Stock Exchange on December 30,
1997.
<PAGE> 2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by The Timken Company (the
"Company") 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) Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997, and September
30, 1997;
(3) Current Report of the Company on Form 8-K dated April 15, 1997;
and
(4) 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 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
Timken Company International Stock Ownership 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> 3
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) The Timken Company International Stock Ownership Plan
23 Consent of Independent Auditors
24 Power of Attorney
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.
II-2
<PAGE> 4
(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 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 this registration statement on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Canton, State of Ohio, on
this 6th day of January, 1998.
THE TIMKEN COMPANY
By: /s/ Gene E. Little
--------------------------------
Gene E. Little
Sr. Vice President - Finance
II-3
<PAGE> 5
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
*W. R. Timken, Jr. Chairman, President January 6, 1998
---------------------------- and CEO (Principal
W. R. Timken, Jr. Executive Officer);
Director
*Gene E. Little Sr. Vice President - January 6, 1998
---------------------------- Finance (Principal
Gene E. Little Financial and
Accounting Officer)
*Robert Anderson Director January 6, 1998
- -----------------------------
Robert Anderson
*Stanley C. Gault Director January 6, 1998
- -----------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director January 6, 1998
- -----------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director January 6, 1998
- -----------------------------
Robert W. Mahoney
*Jay A. Precourt Director January 6, 1998
- -----------------------------
Jay A. Precourt
*John M. Timken, Jr. Director January 6, 1998
- -----------------------------
John M. Timken, Jr.
*Ward J. Timken Director January 6, 1998
- -----------------------------
Ward J. Timken
*Joseph F. Toot, Jr. Director January 6, 1998
----------------------------
Joseph F. Toot, Jr.
*Martin D. Walker Director January 6, 1998
- -----------------------------
Martin D. Walker
*Charles H. West Director January 6, 1998
- -----------------------------
Charles H. West
*Alton W. Whitehouse Director January 6, 1998
- -----------------------------
Alton W. Whitehouse
II-4
<PAGE> 6
* This registration statement has been signed on behalf of the above-named
directors and officers of the Company by Gene E. Little, Sr. 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 this registration statement.
DATED: January 6, 1998 By: /s/ Gene E. Little
--------------------------------
Gene E. Little, Attorney-in-Fact
II-5
<PAGE> 7
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) The Timken Company International Stock Ownership Plan
23 Consent of Independent Auditors
24 Power of Attorney
II-6
<PAGE> 1
EXHIBIT 4(c)
THE TIMKEN COMPANY
INTERNATIONAL STOCK OWNERSHIP PLAN
RECITALS
WHEREAS, The Timken Company, an Ohio corporation (the "Company"), and
certain related international entities (the "International Employers") desire to
provide a long-term opportunity for designated Associates (as hereinafter
defined) of the International Employers to own shares of the Company's Common
Stock without par value (the "Common Stock");
WHEREAS, this International Stock Ownership Plan (this "Plan") shall be
maintained outside the United States;
WHEREAS, the Company intends to establish a trust (the "Trust") outside
the United States under a trust instrument (such instrument and any successor
trust instrument, the "Trust Agreement") with Hill Samuel (CI) Trust Company
Limited, a non-United States trustee (such trustee and any such successor
trustee, the "Trustee"), to acquire and hold shares of Common Stock for the
benefit of the Associates who participate as Participants (as hereinafter
defined) under this Plan;
WHEREAS, the Company and the International Employers desire to provide
Participants the opportunity to make Participant Contributions (as hereinafter
defined) to accounts under this Plan and the Trust toward the acquisition of
shares of Common Stock for the benefit of Participants; and
WHEREAS, the International Employers desire to make Matching
Contributions (as hereinafter defined), and may make Additional Employer
Contributions (as hereinafter defined), to accounts under this Plan and the
Trust toward the acquisition of shares of Common Stock for the benefit of
Participants in years when established performance objectives have been met.
NOW, THEREFORE, the Company hereby adopts and publishes this Plan,
which contains the following terms and conditions:
ARTICLE I
PREFACE
-------
SECTION 1.1. EFFECTIVE DATE. The effective date of this Plan is January
1, 1998, subject to such later effective date as may be specified in a
Participation Agreement with respect to the Associates covered by such
Participation Agreement.
SECTION 1.2. PURPOSE OF THE PLAN. The purpose of this Plan is to
provide designated Associates of the International Employers a savings and
investment opportunity
<PAGE> 2
2
aimed at stimulating Associates' savings capacity by providing a method for
Associates to become long-term owners of Common Stock.
SECTION 1.3. GOVERNING LAW. This Plan shall be governed exclusively by
and interpreted exclusively in accordance with the internal substantive laws of
the State of Ohio, USA, without giving effect to its principles of conflict of
laws.
SECTION 1.4. GENDER AND NUMBER. For purposes of interpreting the
provisions of this Plan, the masculine gender shall be deemed to include the
feminine, the feminine gender shall be deemed to include the masculine, and the
singular shall be deemed to include the plural unless otherwise clearly required
by the context.
SECTION 1.5. TIME. All references to time in this Plan shall be
construed in accordance with the Gregorian calendar.
SECTION 1.6. LANGUAGE. This Plan is written in the English language. In
the event of any inconsistency between the English language version and any
other version of this Plan, the English language version shall control.
SECTION 1.7. SEVERABILITY. If any provision of this Plan or the
application thereof in any jurisdiction(s) or to any circumstances(s) or
person(s) is held to be invalid by a court of competent jurisdiction, the
remainder of the Plan and the application of such provision to other
circumstances or persons shall not be affected thereby.
SECTION 1.8. CURRENCY. Participants' Accounts under this Plan shall,
except as otherwise provided in Sections 6.2 and 6.3, be denominated in Dollars.
All purchases of Common Stock in accordance with this Plan shall be made in
Dollars. Currency exchange to Dollars from the currency in which a Participants'
Base Compensation is paid, and from Dollars to the currency in which
distributions to a Participant or Beneficiary are made pursuant to Section 5.2,
shall be governed by Section 6.3.
SECTION 1.9. CONTINUATION OF PLAN AT COMPANY'S DISCRETION. This Plan
may be amended, modified, revoked or terminated by the Company at any time, in
its sole discretion, for any reason or no reason. No Participant will have a
right or otherwise be entitled to continued participation in this Plan and no
Associate or Beneficiary will have any right(s) or entitlement to continuation
of this Plan or the benefits, or benefits similar to the benefits, offered
hereunder. The Company may, in its sole discretion, offer participation in this
Plan to one or more or all Associates in one Plan Year or other measure of time
and decline to offer participation in this Plan to one or more or all Associates
in another Plan Year or other measure of time.
<PAGE> 3
3
ARTICLE II
DEFINITIONS
-----------
SECTION 2.1. DEFINITIONS. The following words and phrases when used in
this Plan with initial capital letters shall have the following respective
meanings, unless otherwise clearly required by the context.
SECTION 2.1(A). "ACCOUNT" shall mean the record maintained in
accordance with Section 4.3 for each Participant's Plan Benefit.
SECTION 2.1(B). "ACT" shall mean the United States Securities Act of
1933, as amended from time to time.
SECTION 2.1(C). "ADDITIONAL EMPLOYER CONTRIBUTIONS" shall mean the
amounts credited to a Participant's Account pursuant to Section 4.3(c).
SECTION 2.1(D). "ADDITIONAL PARTICIPANT CONTRIBUTIONS" shall mean the
amounts credited to a Participant's Account pursuant to Section 4.1(b).
SECTION 2.1(E). "ASSOCIATE" shall mean an employee of an International
Employer.
SECTION 2.1(F). "BASE COMPENSATION" shall mean a Participant's regular
compensation (before withholdings and deductions for taxes or other purposes)
paid in cash or by check to the Participant by the International Employer that
has designated the Participant under this Plan.
SECTION 2.1(G). "BASIC PARTICIPANT CONTRIBUTIONS" shall mean the
amounts credited to a Participant's Account pursuant to Section 4.1(a).
SECTION 2.1(H). "BENEFICIARY" shall mean such natural person or natural
persons, not resident in the United States, as may be designated by the
Participant as his Beneficiary under this Plan. Such a designation may be made,
and may be revoked or changed (without the consent of any previously designated
Beneficiary), only by an instrument (in form acceptable to the Plan
Administrator) signed by the Participant and filed with the Plan Administrator
prior to the Participant's death. In the absence of such a designation and at
any other time when there is no existing Beneficiary designated by the
Participant to whom payment is to be made pursuant to his designation, his
Beneficiary shall be (subject to applicable law) his surviving spouse or, if
none, his estate. A person designated by a Participant as his Beneficiary who or
which ceases to exist shall not be entitled to any part of any payment
thereafter to be made to the Participant's Beneficiary unless the Participant's
designation specifically provides to the contrary. If two or more persons
designated as a Participant's Beneficiary are in existence, the amount of any
payment to the Beneficiary under this Plan shall be divided equally among such
persons unless the Participant's designation specifically provides to the
contrary. All Beneficiary designations shall be subject to applicable law. In
the event of a conflict between a Beneficiary designation and applicable law,
amounts will be paid as required by applicable law.
<PAGE> 4
4
SECTION 2.1(I). "CASH ACCOUNT" shall mean the account specified in
Section 6.2.
SECTION 2.1(J). "CASH BENEFIT" shall mean the benefit determined under
Section 4.5.
SECTION 2.1(K). "CAUSE" shall mean any of the following:
(1) unsatisfactory job performance on the part of a Participant;
(2) an act of fraud, embezzlement, dishonesty or theft in
connection with a Participant's duties or in the course of his
employment with the Controlled Group;
(3) intentional wrongful damage to property of the Controlled Group;
(4) intentional wrongful disclosure of secret processes or
confidential information of the Controlled Group;
(5) intentional wrongful engagement by a Participant in a
competitive activity (as determined by the Committee); or
(6) any other conduct on the part of the Participant that would be
incompatible with continuation of the Participant's
employment.
SECTION 2.1(L). "CLASS" shall mean the portion of a Participant's
Account, including credits thereto and charges thereon under Section 4.3,
attributable to the Matching Contributions and Additional Employer Contributions
made to such Account for a Class Year.
SECTION 2.1(M). "CLASS YEAR" shall mean any Plan Year during which this
Plan is in effect.
SECTION 2.1(N). "COMMITTEE" shall mean the international committee
described in Section 8.5(a) of this Plan.
SECTION 2.1(O). "COMMON STOCK" shall mean the Common Stock without par
value of the Company.
SECTION 2.1(P). "COMPANY" shall have the meaning stated in the recitals
to this Plan.
SECTION 2.1(Q). "COMPANY STOCK FUND" shall mean the fund designated
under this Plan as the fund in which Participant Contributions, Matching
Contributions and Additional Employer Contributions are invested and shall
consist of Common Stock.
SECTION 2.1(R). "CONTROLLED GROUP" shall mean the Company and each
Subsidiary together as a group.
<PAGE> 5
5
SECTION 2.1(S). "DISABILITY" shall mean a total and permanent
disability as a result of a condition of bodily injury or disease such that a
Participant is wholly unable to engage in any occupation or employment for wage
or profit and that is expected to be permanent and continuous during the
remainder of his life, as determined by the Committee, in its sole discretion.
In determining whether or not a Participant has a Disability, the Committee may
require the Participant to furnish such medical evidence or other relevant data
as the Committee deems necessary or desirable. A Participant who fails to
furnish such evidence or data when requested shall be conclusively presumed not
to have a Disability.
SECTION 2.1(T). "DOLLARS" shall mean lawful money of the United States
of America.
SECTION 2.1(U). "EXCHANGE RATE" shall mean, with respect to the
conversion into Dollars of amounts denominated in a currency other than Dollars
and the conversion into a currency other than Dollars of amounts denominated in
Dollars, an exchange rate determined by the Committee, in its sole discretion,
to be a fair market exchange rate at the time of conversion. The Committee may
specify, in its sole discretion, one or more publicly available currency
exchange quotations in determining the Exchange Rate.
SECTION 2.1(V). "INTERNATIONAL EMPLOYER(S)" shall mean any member of
the Controlled Group that employs Associates whose principal place of employment
is outside of the United States and that adopts this Plan pursuant to Section
8.4.
SECTION 2.1(W). "MATCHING CONTRIBUTIONS" shall mean the amounts
credited to a Participant's Account pursuant to Section 4.3(b).
SECTION 2.1(X). "MAXIMUM BASIC PARTICIPANT CONTRIBUTION" shall mean,
with respect to a Participant, the Maximum Basic Participant Contribution
specified in the Participation Agreement that covers such Participant.
SECTION 2.1(Y). "MINIMUM PARTICIPANT CONTRIBUTION" shall mean, with
respect to a Participant, the Minimum Participant Contribution specified in the
Participation Agreement that covers such Participant.
SECTION 2.1(Z). "PARTICIPANT" shall mean each Associate eligible under
Article III who is designated by an International Employer (with the consent of
the Company) as a Participant in this Plan and who, as a result of participation
in this Plan, is entitled to a Plan Benefit under this Plan. A Participant whose
active participation in the Plan terminates pursuant to Section 4.2(c) shall
remain as an inactive Participant in the Plan until all Plan Benefits (other
than any Plan Benefits forfeited under Section 5.1(a)(1)) have been paid to him
or his Beneficiary.
SECTION 2.1(AA). "PARTICIPANT CONTRIBUTIONS" shall mean a Participant's
Basic Participant Contributions and Additional Participant Contributions.
<PAGE> 6
6
SECTION 2.1(BB). "PARTICIPATION AGREEMENT" shall mean an Agreement
referred to in Section 8.4 by which an International Employer, among other
things, evidences its adoption of this Plan.
SECTION 2.1(CC). "PLAN" shall mean The Timken Company International
Stock Ownership Plan, as described herein and as it may be amended from time to
time, and shall include, with respect to an Associate, Participant or
International Employer, the Participation Agreement covering such Associate or
Participant or to which such International Employer is a party.
SECTION 2.1(DD). "PLAN ADMINISTRATOR" shall mean the Plan Administrator
appointed by the Committee in accordance with Section 8.5(c) of this Plan,
except as otherwise designated in a Participation Agreement with respect to
Associates covered by such Participation Agreement.
SECTION 2.1(EE). "PLAN BENEFIT" shall mean the benefit determined under
Article IV, excluding the Cash Benefit.
SECTION 2.1(FF). "PLAN INTEREST" shall mean the participation interest
of a Participant in this Plan.
SECTION 2.1(GG). "PLAN YEAR" shall mean the year commencing on the
first day of March of a given calendar year and ending on the final day of
February of the next succeeding calendar year, subject to such other term as may
be specified in a Participation Agreement with respect to the Associates covered
by such Participation Agreement.
SECTION 2.1(HH). "SUBSIDIARY" shall mean each corporation, company or
other entity
(1) more than 50 percent of whose outstanding shares or securities
(representing the right to vote for the election of directors
or other managing authority) are, or
(2) that does not have outstanding shares or securities (as may be
the case in a partnership, joint venture or unincorporated
association), but more than 50 percent of whose ownership
interest representing the right generally to make decisions
for such other entity is,
now or hereafter, owned or controlled, directly or indirectly, by the Company.
SECTION 2.1(II). "TENDER OFFER" shall have the meaning stated in
Section 8.1(b).
SECTION 2.1(JJ). "TRUST" shall have the meaning stated in the recitals
to this Plan.
SECTION 2.1(KK). "TRUST AGREEMENT" shall have the meaning stated in the
recitals to this Plan.
<PAGE> 7
7
SECTION 2.1(LL). "TRUSTEE" shall have the meaning stated in the
recitals to this Plan.
SECTION 2.1(MM). "VALUATION DATE" shall mean the last day of each
calendar quarter, plus such additional date(s), if any, selected by the
Committee.
SECTION 2.1(NN). "VESTED."
(1) A Participant shall always be 100% Vested in the portion of
his Account attributable to his Participant Contributions,
subject to the provisions of Sections 4.3(d) and 4.3(e).
(2) A Participant shall become Vested in a Class if he remains
continuously employed by the Controlled Group until the first
day of the fifth Plan Year following the end of the Class Year
to which the Class corresponds.
(3) In addition, a Participant shall become Vested in a Class upon
the occurrence of any of the following events, irrespective of
the Class Year to which the Class corresponds:
(A) the Participant's death while employed by a member of
the Controlled Group; or
(B) the Participant's retirement from the Controlled
Group with the consent of a Controlled Group member;
or
(C) a termination of the Participant's employment with
the Controlled Group that is the result of:
(i) the Participant's Disability; or
(ii) a mutual agreement between the Participant
and a Controlled Group member that
specifically contemplates that the
Participant will become Vested upon such
termination of employment; or
(iii) a dismissal of the Participant without
Cause; or
(D) the Participant's transfer of employment to another
member of the Controlled Group by mutual agreement or
the assignment of the Participant to work in the
United States, but only if the Committee determines,
in its sole discretion, that the Participant should
become 100% Vested in the Class as a result of such
transfer or assignment(E.G., if the Committee
determines that continued participation in this Plan
is not viable or appropriate).
<PAGE> 8
8
ARTICLE III
ELIGIBILITY
SECTION 3.1. ASSOCIATES OF INTERNATIONAL EMPLOYERS. Any Associate of an
International Employer may participate in the Plan if each of the following
conditions is satisfied:
(a) his principal place of employment is located outside of the
United States and he is not a resident of the United States;
(b) he has been employed by the International Employer or another
member of the Controlled Group for six months or more
immediately preceding the date on which eligibility is
determined;
(c) he is not eligible to participate in another plan or
arrangement that (1) is sponsored by another member of the
Controlled Group and (2) offers benefits similar to the
benefits offered under this Plan, as determined in each case
by the Committee in its sole discretion; and
(d) he is at least eighteen years of age on the date on which
eligibility is determined.
An Associate who satisfies the conditions set forth in this Section may
participate regardless of whether the Associate is a full-time Associate, a
part-time Associate or an apprentice.
ARTICLE IV
PLAN BENEFIT
------------
SECTION 4.1. AMOUNT OF PARTICIPANT CONTRIBUTIONS. Each Participant may,
(x) within 30 days after this Plan becomes effective as to him and (y) on or
before the date specified by the Committee with respect to any Plan Year
commencing after the termination of such 30-day period, by written notice to the
Plan Administrator on a form provided by the Plan Administrator, direct the
International Employer of the Participant:
(a) to reduce (in accordance with rules established by the
Committee) the Participant's Base Compensation (determined
without regard to the provisions of this Section) for the
balance of the Plan Year in which the Plan becomes effective
as to him (but only Base Compensation payable for periods of
service commencing after the Participant so directs) or for
any following Plan Year by a specified amount per month (the
"Basic Participant Contribution"), provided that the aggregate
amount of the Participant's Basic Participant Contributions in
each Plan Year shall be not less than the Minimum Participant
Contribution and not greater than the Maximum Basic
Participant Contribution;
<PAGE> 9
9
(b) to reduce the Participant's Base Compensation by an additional
specified amount per month (to the extent permitted by the
Committee from time to time and in accordance with rules
established by the Committee) for the balance of the Plan Year
in which the Plan becomes effective as to him (but only Base
Compensation payable for periods of service commencing after
the Participant so directs) or for any following Plan Year
(the "Additional Participant Contributions");
(c) to convert to Dollars, at the Exchange Rate, the amount by
which the Participant's Base Compensation is reduced under
Sections 4.1(a) and (b) from the currency in which such Base
Compensation is regularly paid to the Participant; and
(d) to credit such amount denominated in Dollars to the
Participant's Account described in Section 4.3 promptly after
the time at which such amount would otherwise have been paid
to such Participant.
SECTION 4.2. EFFECT AND DURATION OF DIRECTION PURSUANT TO SECTION 4.1.
(a) Any direction by a Participant to have his Base Compensation
reduced in accordance with Section 4.1 shall be effective with
respect to the Base Compensation otherwise payable to the
Participant during the period to which the direction relates,
and the Participant shall not be eligible to receive such Base
Compensation. Instead, the amounts of such Base Compensation
subject to such direction shall be credited to the
Participant's Account as provided in Section 4.3. A
Participant's direction under Section 4.1 may be changed once
during a Plan Year at any time upon written notice by the
Participant to the Plan Administrator on a form provided by
the Plan Administrator (but only with respect to Base
Compensation payable for periods commencing after the
Participant so notifies the Plan Administrator). Any direction
made in accordance with Section 4.1 or superseding direction
made under this Section 4.2(a) shall remain in effect only
until the last day of the Plan Year with respect to which it
is made. Each Participant shall make a new direction in
accordance with Section 4.1 on or before the date specified by
the Committee with respect to any subsequent Plan Year in
order to be eligible to make Participant Contributions and
have Matching Contributions and Additional Employer
Contributions, if any, credited to his Account in such Plan
Year.
(b) Notwithstanding the foregoing, a Participant's direction to
have his Base Compensation reduced pursuant to Section 4.1 may
be terminated during a Plan Year at any time upon written
notice by the Participant to the Plan Administrator (but only
with respect to Base Compensation payable for periods of
service commencing after the Participant so notifies the Plan
Administrator). A Participant who so elects to terminate
Participant Contributions during a Plan Year shall not be
eligible to recommence such Participant Contributions until
the earlier of (1) the expiration of three months after the
time at which such
<PAGE> 10
10
termination becomes effective or (2) the first day of the
following Plan Year, upon making a timely direction in
accordance with Section 4.1.
(c) A Participant's direction pursuant to Section 4.1 and the
Participant's active participation in the Plan shall
automatically terminate on (1) the date the Participant ceases
employment with the International Employer that designated him
as a Participant in the Plan unless the Committee, in its sole
discretion, determines that the Participant's continued active
participation in the Plan is viable and appropriate under the
existing direction pursuant to Section 4.1 to such
International Employer, or (2) the date the Plan is terminated
pursuant to Article IX.
SECTION 4.3. PARTICIPANTS' ACCOUNTS. The Plan Administrator shall
establish and maintain on its books, or cause the Trustee to establish and
maintain on the Trustee's books, an Account for each Participant. Each Account
shall be denominated in Dollars (except as otherwise provided in Sections 6.2
and 6.3) and shall contain the following entries:
(a) Credits for the amount of Participant Contributions credited
to the Participant's Account pursuant to Section 4.1 from time
to time;
(b) Subject to Section 4.4, credits (hereinafter referred to as
"Matching Contributions") contributed by the International
Employer of the Participant and equal to 100% of the amount of
the Basic Participant Contributions credited to the
Participant's Account, which Matching Contributions shall be
credited to the Participant's Account at the same time as the
underlying Basic Participant Contributions are credited
thereto;
(c) To the extent specified by an International Employer in
writing from time to time, with respect to a particular
Participant or group of Participants, credits (hereinafter
referred to as "Additional Employer Contributions")
contributed by the International Employer of such Participant
or group and equal to an amount specified by the International
Employer, which shall be credited to such Participant's
Account on the date so specified;
(d) Credits or charges (including income, expenses, gains and
losses) equal to the amounts that are attributable to the
Participant's Participant Contributions, Matching
Contributions and Additional Employer Contributions in the
Company Stock Fund and the Cash Account; and
(e) Charges for (1) any distributions made from the Account
pursuant to Article V and (2) if applicable, an amount
determined by the Company or the International Employer of the
Participant each Plan Year equal to the Company's or such
International Employer's aggregate income tax liability
resulting from any taxable earnings on the actual investment
of contributions hereunder.
<PAGE> 11
11
The entries provided for in Sections 4.3(d) and 4.3(e) shall continue to be made
until the Participant's entire Account has been distributed pursuant to Article
V.
SECTION 4.4. CONDITION TO AVAILABILITY OF MATCHING CONTRIBUTIONS. Each
Plan Year each International Employer shall determine whether Matching
Contributions will be available during such Plan Year to the Participants
employed by such International Employer, and if Matching Contributions will be
available, the amount of such Matching Contributions, in each case based upon
such criteria as the International Employer, in its sole discretion, may
determine.
SECTION 4.5. CASH BENEFIT. An International Employer may, in its sole
discretion, pay directly to a Participant, or a group of Participants, a cash
benefit (the "Cash Benefit") in order to offset, in full or in part, the
additional tax liability of such Participant or group incurred as a result of
the credit of Matching Contributions and/or Additional Employer Contributions,
if any, to the Account(s) of such Participant or group under Section 4.3. An
International Employer may pay such Cash Benefit, if any, at the time at which
the Matching Contributions and/or Additional Employer Contributions, if any, are
made to the Participant's or group's Account(s) under Section 4.3, or at any
other time the International Employer may deem appropriate, in its sole
discretion. No Cash Benefit, if any, shall be credited to a Participant's
Account.
ARTICLE V
DISTRIBUTION OF PLAN BENEFITS
-----------------------------
SECTION 5.1. TIME OF DISTRIBUTION.
(a) DISTRIBUTIONS TO PARTICIPANTS.
(1) A Participant whose employment with his International
Employer has terminated, whether by reason of
retirement, Disability, mutual agreement with the
International Employer or for any other reason, and
who is not employed by any other member of the
Controlled Group, shall receive, upon termination of
his employment, the Vested portion of his Account
(including, without limitation, the net amount of any
gains credited to Participant Contributions, Matching
Contributions and Additional Employer Contributions,
if any, in accordance with Section 4.3(d)) and the
portion of such Participant's Account that is not
Vested on the effective date of the termination of
his employment shall be forfeited.
(2) A Participant who is assigned to work in the United
States or whose employment is transferred to another
member of the Controlled Group by mutual agreement,
in either case under circumstances making his
continued participation in this Plan not viable or
appropriate, as determined by the Committee, in its
sole discretion, shall receive, effective as of the
time of his assignment to the United States or
transfer to another
<PAGE> 12
12
member of the Controlled Group, respectively, the
Vested portion of his Account (including, without
limitation, the net amount of any gains credited to
Participant Contributions, Matching Contributions and
Additional Employer Contributions, if any, in
accordance with Section 4.3(d)).
(3) A Participant shall be entitled to receive, upon
notice to the Plan Administrator, all or any part of
the Vested portion of his Account (including, without
limitation, the net amount of any gains credited to
Participant Contributions, Matching Contributions and
Additional Employer Contributions, if any, in
accordance with Section 4.3(d)), without forfeiting
any portion of his Account that is then not Vested.
Notwithstanding the immediately preceding sentence, a
Participant shall not be entitled to receive more
than two distributions under this Section 5.1(a)(3)
in any Plan Year and the Committee may limit the
times during which Participants may receive such
distributions to one or more periods during the Plan
Year, the length and timing of which shall be
determined by the Committee, in its sole discretion.
(b) DISTRIBUTIONS TO BENEFICIARIES. The Beneficiary of a deceased
Participant shall be entitled to receive the Vested portion of
the Account of the Participant upon the death of the
Participant.
(c) PAYMENT DATE. Subject to the restrictions contained in Section
5.2(a), the Vested portion of a Participant's Account shall be
distributed to the Participant or Beneficiary entitled thereto
pursuant to Section 5.1(a) or (b) promptly following:
(1) the date on which the Beneficiary becomes entitled to
such distribution, in the case of a distribution to a
Beneficiary;
(2) the effective date of the termination of the
Participant's employment, in the case of a
distribution under Section 5.1(a)(1);
(3) the determination by the Committee, in its sole
discretion, that a Participant's continued
participation in the Plan is not viable or
appropriate, in the case of a distribution under
Section 5.1(a)(2); or
(4) the date on which the Participant gives notice to the
Plan Administrator with respect to the distribution
(except that such a distribution may be made only
during a period specified by the Committee, if the
Committee has so limited the times during which
Participants may receive such distributions), in the
case of a distribution under Section 5.1(a)(3).
(d) DISPOSITION OF FORFEITURES. The portion of any Participant's
Account that is forfeited under this Plan shall be applied
toward the satisfaction of the obligations
<PAGE> 13
13
under this Plan of the International Employer who employed the
Participant at the time of such forfeiture. If such
International Employer ceases to have any Associates who are
Participants before the time at which the total amount of such
forfeiture is so applied, the remaining amount of such
forfeiture shall be applied toward the satisfaction of the
obligations under this Plan of the other International
Employers who then have Associates who are Participants in
such proportion as the Committee may determine, in its sole
discretion.
SECTION 5.2. FORM OF DISTRIBUTIONS.
(a) Distributions under the Plan may be made in the form of cash
in the currency in which the Participant's Base Compensation
is paid or in Common Stock, or any combination thereof, as
elected by the Participant or Beneficiary at the time of
distribution. Unless otherwise determined by the Company, all
certificates representing Common Stock being distributed shall
bear an appropriate legend indicating that such shares have
not been registered under the Act or any other securities law
and may not be resold except pursuant to an exemption
therefrom, together with such other legend or legends as may
be necessary or advisable under laws applicable to the
International Employer, the Participant or the Beneficiary.
(b) Each distribution shall be made to the Participant or his
Beneficiary in the form of a single lump sum payment or
transfer of Common Stock, or both, as applicable.
SECTION 5.3. VALUATION; EXCHANGE.
(a) To the extent that shares of Common Stock held in the Trust
for the benefit of the Participant or Beneficiary receiving a
distribution under this Article V must be converted into cash
in order to make such distribution, the value of such shares
of Common Stock shall be the fair market value on the date of
such conversion as determined by the Committee, in its sole
discretion.
(b) To the extent that a distribution under this Article V is made
in cash, the conversion of such amount from an amount
denominated in Dollars to an amount denominated in the
currency in which the Participant's Base Compensation is paid
shall be made at the Exchange Rate.
(c) Any necessary valuation of Common Stock under Section 5.3(a)
in connection with a distribution shall be made before an
exchange conversion under Section 5.3(b) is made with respect
to such distribution.
<PAGE> 14
14
ARTICLE VI
INVESTMENT OF ACCOUNTS
----------------------
SECTION 6.1. COMPANY STOCK FUND.
(a) All Participant Contributions, Matching Contributions and
Additional Employer Contributions, if any, shall be invested
in the Company Stock Fund, except for any temporary cash
investments necessary or appropriate for the administration of
the Plan. The Company Stock Fund shall consist solely of
Common Stock.
(b) All dividends on Common Stock held in the Company Stock Fund
shall be reinvested in additional Common Stock regardless of
whether such dividends are paid on Common Stock that is
attributable to the Vested portion of a Participant's Account
or the portion of a Participant's Account that is not Vested.
(c) The Trustee shall invest each Participant's Participant
Contributions, Matching Contributions, and Additional Employer
Contributions, if any, in the Company Stock Fund promptly, but
in no event more than 45 days after receipt of such
contributions by the Trustee. Such contributions shall be
combined with funds from the Accounts of other Participants to
purchase Common Stock on the open market.
SECTION 6.2. CASH ACCOUNT. The Trustee shall hold all amounts under the
Trust not invested in the Company Stock Fund in a cash account (the "Cash
Account"), which may be an interest-bearing account or an account that does not
bear interest, as determined by the Committee, in its sole discretion. To the
extent the Trustee receives contributions or makes distributions from the Trust
in a currency other than Dollars, the Trustee shall maintain a separate
subaccount within the Cash Account for funds denominated in Dollars and for each
other currency in which funds held within the Cash Account are denominated and
shall hold funds in the subaccount for cash of the currency in which such funds
are denominated.
SECTION 6.3. CURRENCY EXCHANGE. The Trustee shall convert all
Participant Contributions, Matching Contributions and Additional Employer
Contributions, if any, that are not denominated in Dollars when received by the
Trustee into Dollars at the Exchange Rate promptly, but in no event more than 45
days after receipt of such contributions not denominated in Dollars by the
Trustee. The conversion into Dollars of all contributions not denominated in
Dollars and the conversion of all distributions into a currency other than
Dollars shall be made, in each case, at the Exchange Rate.
<PAGE> 15
15
ARTICLE VII
THE TRUST
------------
SECTION 7.1. ESTABLISHMENT OF TRUST.
(a) The Company intends to establish the Trust pursuant to the
Trust Agreement with the Trustee pursuant to which all of the
Plan Benefits under the Plan are expected to be paid. The
Trust shall be maintained outside the United States and the
Trustee shall not be a United States entity.
(b) In the event of conflict between the provisions of the Plan
and of the Trust Agreement, the Trust Agreement shall prevail,
except that no provision of the Trust Agreement shall cause
any provision of the Plan to be construed in accordance with
the laws of any jurisdiction other than the State of Ohio,
USA. By execution of a Participation Agreement in accordance
with Section 8.4, each International Employer agrees to be
bound by the terms of the Trust Agreement and to fulfill its
obligations as an International Employer thereunder. Each
International Employer shall file with the Trustee the
Participation Agreement executed by such International
Employer and the form of election form used by the Associates
of such International Employer to elect participation in the
Plan.
SECTION 7.2. OBLIGATION TO FUND THE TRUST.
(a) Upon the establishment of the Trust, each International
Employer, with respect to the Participants employed by such
International Employer, shall (1) cause Participant
Contributions, Matching Contributions and Additional Employer
Contributions to be deposited in the Trust promptly after the
time at which the Participant Contributions would otherwise
have been paid to Participants if no direction under Section
4.1 were made, and (2) make, or cause to be made, any
adjustments necessary to reflect the credits or charges
described in Section 4.3(d) promptly after such credits or
charges accrue.
(b) Subject to the provisions of this Section and the Trust
Agreement, all contributions to the Trust shall be irrevocable
and neither the Company nor any International Employer shall
have the right or power to direct the Trustee to return to any
International Employer, or to divert to others, any of the
assets of the Trust allocable to the Account of any
Participant until after satisfaction of all liabilities under
the Plan to all Participants and their Beneficiaries. After
satisfaction of all such liabilities, any excess assets
remaining in the Trust shall revert to each International
Employer in proportion to the contributions made to the Trust
by such International Employer and the Participants employed
by it.
<PAGE> 16
16
Notwithstanding the foregoing, upon the request of the Company
or an International Employer, the Trustee shall distribute to
the Company or such International Employer from the Trust an
amount equal to the Company's or such International Employer's
aggregate income tax liability resulting from any taxable
earnings on Trust assets.
SECTION 7.3. EFFECT OF PAYMENTS TO TRUST. Each International
Employer's sole obligation with respect to payment of the Plan Benefit is the
deposit by the International Employers, in accordance with Section 7.2, of
Participant Contributions, Matching Contributions and Additional Employer
Contributions, if any, in the Trust. All Plan Benefits shall be paid from the
Trust and neither the Company nor any International Employer shall be
responsible for the payment of Plan Benefits other than as indicated in the
immediately preceding sentence. No liability for the payment of benefits under
the Plan shall be imposed upon any officer, director, Associate, employee or
stockholder of the Company or any International Employer.
ARTICLE VIII
MISCELLANEOUS
-------------
SECTION 8.1. VOTING OF COMMON STOCK; TENDER OFFERS.
(a) VOTING OF COMMON STOCK. Each Participant shall have the
authority to direct the exercise of voting rights as to whole
shares of Common Stock held for the benefit of the Participant
(whether part of the Vested portion of the Participant's
Account or otherwise) in the Trust as of the most current
Valuation Date available preceding the record date for the
shareholders' meeting. Except as otherwise may be determined
by the Company with respect to any group of Participants, the
Company shall furnish the Company's Annual Report, Notice of
Annual Meeting, Proxy Statement, Proxy Card and other
shareholder information to each Participant and shall solicit
each Participant's vote. The Company reserves the option to
retain the Trustee, the Plan Administrator or other agent to
perform these services. All other shares of Common Stock held
in the Trust, including shares not voted by Participants or
not yet allocated to Participants, shall be voted by the
Trustee in the same ratio for the election of directors and
for or against each issue as the applicable votes directed by
Participants with respect to whole shares of Common Stock.
(b) TENDER OFFERS.
(1) In the event a tender offer (as determined by the
Board of Directors of the Company) for shares of
Common Stock is commenced, then, notwithstanding any
other provision of the Plan or the Trust Agreement,
each Participant and each Beneficiary who has
succeeded to the interest of a Participant ("Affected
Participants and Beneficiaries") shall, in accordance
with the following provisions of this Section 8.1(b),
have the
<PAGE> 17
17
right to decide if Common Stock held for his benefit
in the Trust shall be tendered.
(2) In the event of a tender offer described in Section
8.1(b)(1) (a "Tender Offer"), the Company shall cause
to be sent to each Affected Participant and
Beneficiary who at any time during the effective
period of the tender offer has any Common Stock held
for his benefit in the Trust all information
pertinent to the Tender Offer, including all the
terms and conditions thereof, together with written
material pursuant to which the Affected Participant
and Beneficiary may direct the Trustee to tender or
sell pursuant to the Tender Offer all or part of the
Common Stock held for his benefit in the Trust.
Affected Participants and Beneficiaries also shall
have the right, to the extent the terms of the Tender
Offer so permit, to direct the withdrawal of such
shares from the tender. The Trustee shall tender or
sell only those shares of Common Stock as to which
valid and timely directions to tender or sell are
received and not validly and timely revoked, and all
other shares of Common Stock held under the Trust
shall continue to be held by the Trustee. If in the
course of a Tender Offer an issue shall arise on
which Affected Participants and Beneficiaries are
required to have an opportunity to alter their
directions, the Company shall solicit the directions
of such Affected Participants and Beneficiaries with
respect to each such issue and act in response to
such direction. The Trustee shall adopt a deadline,
after which directions to tender (or to withdraw from
tender) Common Stock will not be accepted,
sufficiently in advance of any applicable deadline
under the terms of the Tender Offer to allow the
Trustee to implement directions received from
Affected Participants and Beneficiaries.
(3) To the extent that a Tender Offer is for cash,
proceeds from the sale of any shares of Common Stock
pursuant to such Tender Offer shall be held by the
Trustee in the Cash Account. To the extent that a
Tender Offer is for property other than cash,
property received by the Trustee from the sale of any
shares of Common Stock pursuant to such Tender Offer
shall be held by the Trustee in a general investment
fund established by the Trustee upon the receipt of
any such property.
SECTION 8.2. NONTRANSFERABILITY. No right or interest of a Participant
or his Beneficiary under this Plan or the Trust shall be transferred,
anticipated, assigned (either at law or in equity) or alienated by the
Participant or his Beneficiary, nor shall any such right or interest be subject
to attachment, garnishment, levy, execution or other legal or equitable process
or in any manner be liable for or subject to the debts of any Participant or
Beneficiary.
SECTION 8.3. EMPLOYMENT RIGHTS. Under no circumstances shall the Plan
be construed to grant any Associate an employment contract of fixed duration,
and employment rights shall not be enlarged or affected hereby. To the extent
consistent with applicable law, the
<PAGE> 18
18
International Employers shall continue to have the right to discharge or retire
a Participant, with or without cause. Under no circumstances shall the Plan be
construed to create any employment relationship between an Associate and the
Company or between an Associate and any International Employer that does not
otherwise exist.
SECTION 8.4. ADOPTION OF PLAN BY INTERNATIONAL EMPLOYERS.
(a) Any member of the Controlled Group that has Associates whose
principal place of employment is outside of the United States
may become an International Employer hereunder with the
written consent of the Company if it executes a "Participation
Agreement" evidencing its adoption of the Plan and designation
of all or certain of its Associates in a particular country as
Plan Participants and files a copy thereof with the Company.
Such Participation Agreement shall be subject to such terms
and conditions as the Company requires or approves and shall
be subject to amendment from time to time by the Company and
the International Employer, without the consent of any
Associate, Participant or Beneficiary. In addition, with the
consent of the Company, such Participation Agreement may
contain specific provisions that apply to all or certain of
the Associates of the particular International Employer in a
particular country and, to the extent such provisions are
supplemental or contrary to the provisions contained in the
Plan, the provisions contained in the Participation Agreement
shall control with respect to the specified Associates of that
International Employer. An International Employer that ceases
to exist or ceases to be a member of the Controlled Group
shall automatically cease to be a participating International
Employer hereunder.
(b) Each Participation Agreement shall specify, with respect to
the Associates covered by such Participation Agreement, (1)
the country in which such Associates reside and work, (2) when
the Plan becomes effective with respect to such Associates,
(3) the Minimum Participant Contribution, (4) the Maximum
Basic Participant Contribution, and (5) such other provisions
as the Company and the International Employer may require.
(c) Each Participation Agreement may specify, among other matters,
with respect to the Associates covered by such Participation
Agreement, (1) eligibility requirements of Participants, if
different from those otherwise specified in Section 3.1, (2)
when a Participant shall become Vested in any portion of his
Account, if different from the time when the Participant would
otherwise become Vested under the Plan, (3) an alternative
method under which Participants may or shall make Participant
Contributions, if different from the method otherwise
specified in Section 4.1, (4) whether Matching Contributions
shall be greater than 100% of the Basic Participant
Contributions, (5) the designation of the Plan Administrator,
if other than the Plan Administrator appointed by the
Committee generally under this Plan, (6) the period that
constitutes the Plan Year, if different than the period
otherwise specified by the Plan, (7) the applicability of
Sections 8.1(a) and (b),
<PAGE> 19
19
and (8) such other provisions as the Company and the
International Employer may require.
SECTION 8.5. ADMINISTRATION OF PLAN.
(a) This Plan shall be administered by an international committee
composed of not less than 3 individuals appointed by the
Company. A majority of the Committee shall constitute a
quorum, and the acts of the members of the Committee who are
present (in person or by other means of interactive
communication) at any meeting of the Committee at which a
quorum is so present, or acts approved by a majority of the
Committee in writing, shall be the acts of the Committee. The
Committee may establish, in its sole discretion, other rules
regulating its meetings and operations. All meetings of the
Committee shall be outside the United States and the Committee
shall be headquartered outside the United States.
(b) The Committee shall be responsible for the general
administration of the Plan and for carrying out the provisions
hereof. The Committee shall have all powers necessary (1) to
interpret where necessary, in its reasonable and good faith
judgment, the provisions of the Plan, (2) to make findings of
fact, (3) to adopt, amend and rescind rules and regulations
for the administration of the Plan, and (4) except as
otherwise provided in the Plan, to determine the rights and
status of Participants and Beneficiaries hereunder (including,
without limitation, the amount of any Plan Benefit or Cash
Benefit to which a Participant or Beneficiary may be entitled
under the Plan). All such actions of the Committee shall be
conclusive and binding upon all Participants and
Beneficiaries.
(c) The Committee shall appoint a Plan Administrator, which shall
provide day-to-day processing, record keeping and
communications services for the benefit of Participants and
perform the other functions of the Plan Administrator
specified in this Plan.
(d) The Committee may retain auditors, accountants, actuaries and
legal counsel and such other persons as it deems appropriate
in connection with administering the Plan. The Committee
and/or employees of any member of the Controlled Group may act
in any such capacity except that of auditor or actuary, and
any such auditors, accountants, actuaries and legal counsel
may be persons acting in a similar capacity for any member of
the Controlled Group. To the extent permitted by law, the
opinion of any such auditor, accountant, actuary or legal
counsel shall be full and complete authority and protection,
in respect of any action taken, suffered or omitted by the
Committee in good faith and in accordance with such opinion.
(e) The Committee may, from time to time, delegate all or part of
the administrative powers, duties and authorities delegated to
it under this Plan to the Trustee, the
<PAGE> 20
20
Plan Administrator or such other person or persons, office or
committee as it may select.
(f) The Company and the International Employers shall indemnify
each member of the Committee and each officer and employee of
any member of the Controlled Group involved in administering
the Plan against any liabilities or expenses, including
attorneys' fees, reasonably incurred by him in connection with
any actual or threatened legal action to which he might become
a party by reason of the Plan, except to the extent that he
shall be adjudged in such action to be liable for gross
negligence or willful misconduct in the performance of his
duties.
SECTION 8.6. CLAIMS PROCEDURE. Whenever there is denied, whether in
whole or in part, a claim for benefits under the Plan filed by any person
(herein referred to as the "Claimant"), the Plan Administrator shall transmit a
written notice of such decision to the Claimant, which notice shall be written
in a manner calculated to be understood by the Claimant and shall contain a
statement of the specific reasons for the denial of the claim and advise the
Claimant that, within 60 days of the date on which he receives such notice, he
may obtain review of such decision in accordance with the procedures hereinafter
set forth. Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing with the
Committee a written request for such review, which request shall contain the
following information:
(a) the specific portions of the denial of his claim that the
Claimant requests the Committee to review;
(b) a statement by the Claimant setting forth the basis upon which
he believes the Committee should reverse the previous denial
of his claim for benefits and accept his claim as made; and
(c) any written material (offered as exhibits) that the Claimant
desires the Committee to examine in its consideration of his
position as stated pursuant to Section 8.6(b).
Within 60 days of the date the Claimant files the written request for review,
the Committee shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits. Within 60 days of the date of such review, the
Committee shall render its written decision on review. Such decision shall be
written in a manner calculated to be understood by the Claimant, specifying the
reasons and Plan provisions upon which its decision was based.
SECTION 8.7. EFFECT ON OTHER BENEFITS. Benefits payable to or with
respect to a Participant under any other plan sponsored by the Company, any
International Employer or any Controlled Group member, if any, are in addition
to those provided under this Plan unless such other plan clearly provides
otherwise. Except as otherwise required by applicable law or as specifically
provided by any plan or arrangement described in this Section, (a) the benefits
payable to or with respect to a Participant under this Plan shall not be taken
into account in determining a Participant's wages, salary or other compensation
for purposes of any other plan or
<PAGE> 21
21
arrangement sponsored by the Company, any International Employer or any
Controlled Group member, if any; and (b) the benefits payable to or with respect
to a Participant under this Plan shall not be treated as wages, salary or
compensation or otherwise be taken into account in determining a Participant's
severance pay, termination indemnity or other benefits payable upon termination,
if any.
SECTION 8.8. PAYMENT TO GUARDIAN. If a benefit payable hereunder is
payable to a minor, to a person declared incompetent or to a person incapable of
handling the disposition of his property, the Plan Administrator may direct
payment of such benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or person. The Plan
Administrator may require such proof of incompetency, minority, incapacity or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company and the International
Employers from all liability with respect to such benefit.
SECTION 8.9. INFORMATION ABOUT PARTICIPANTS. A Participant's
participation in the Plan shall be deemed to constitute the Participant's
agreement that any information about the Participant, including without
limitation the Participant's salary, income or other compensation or employment
benefits, may be disclosed to the Committee, the Plan Administrator, the
Company, the Trustee or any other person for any appropriate purpose in
connection with the administration or operation of the Plan.
SECTION 8.10. STATEMENT OF ACCOUNTS. The Plan Administrator shall
deliver to each Participant a written statement of his Account not less
frequently than annually at such time or times as the Committee, in its sole
discretion, may determine.
SECTION 8.11. EXPENSES. Subject to Section 4.3(e) and the Trust
Agreement, the costs and expenses incurred in connection with the administration
of the Plan and Trust shall be paid by the International Employers. Each
International Employer shall be responsible for paying such costs and expenses
in proportion to the number of Participants employed by such International
Employer, as determined by the Committee. Such costs and expenses shall include,
but not be limited to, expenses incurred in the functioning of the Committee,
fees of accountants, actuaries, counsel and other specialists, and any other
costs of administering the Plan and Trust.
SECTION 8.12. OFFERING AND OTHER RESTRICTIONS ON PLAN INTERESTS. All
offers and sales of Plan Interests shall be made only (a) in accordance with the
provisions of Rule 903 or Rule 904 promulgated under the Act, (b) pursuant to
registration of the Plan Interests under the Act, or (c) pursuant to an
available exemption from the registration requirements of the Act. No Plan
Interests shall be transferred and if such a transfer is attempted it shall be
null and void and of no effect.
<PAGE> 22
22
ARTICLE IX
AMENDMENT AND TERMINATION
-------------------------
SECTION 9.1. COMPANY'S DISCRETION IN OFFERING PLAN BENEFIT. The Company
has voluntarily offered this Plan, and the Plan Benefit for which it provides,
to International Employers and certain of their Associates. The Company may, in
its sole discretion, without the consent of any International Employer or any
Associate, Participant, Beneficiary or any other person, offer or decline to
offer the Plan Benefit, the Cash Benefit and/or the Plan to any or all
Participants in any year.
SECTION 9.2. AMENDMENT. The Company reserves the right to amend, at any
time, any or all of the provisions of the Plan for any or all International
Employers, Associates or Participants, without the consent of any International
Employer or any Associate, Participant, Beneficiary or any other person. Any
such amendment shall be expressed in an instrument executed by the Company and
shall become effective as of the date designated in such instrument or, if no
such date is specified, on the date of its execution. Any such amendment may
alter the terms of any Participation Agreement.
SECTION 9.3. TERMINATION.
(a) The Company reserves the right to terminate the Plan at any
time, in its sole discretion, for any or all International
Employers, Associates or Participants, without the consent of
any International Employer or any Associate, Participant,
Beneficiary or any other person. Such termination shall be
expressed in an instrument executed by the Company and shall
become effective as of the date designated in such instrument,
or if no date is specified, on the date of its execution. Any
International Employer that has adopted the Plan with respect
to a particular country may, with the written consent of the
Company, elect separately to withdraw from the Plan with
respect to all or a specified group of its Associates, and
such withdrawal shall constitute a termination of the Plan as
to it with respect to such Associates, but it shall continue
to be a participating International Employer for the purposes
hereof as to Participants or Beneficiaries to whom it owes
obligations hereunder. Any such withdrawal and termination
shall be expressed in an instrument executed by the
terminating International Employer and shall become effective
as of the date designated in such instrument or, if no date is
specified, on the date of its execution.
(b) Upon any termination of the Plan, each affected Participant's
Plan Benefit shall be 100% Vested and shall be distributed to
him (or his Beneficiary) at the time and as otherwise provided
in Article V, unless the International Employers or the
Committee decide, in their sole discretion, to make payment of
the Plan Benefits, or to cause such Plan Benefits to be paid,
to the affected Participants at some earlier time.
<PAGE> 23
23
SECTION 9.4. LIMITATIONS ON AMENDMENT AND TERMINATION. Notwithstanding
the foregoing provisions of this Article, no amendment or termination of the
Plan shall, without the consent of the Participant (or, in the case of his
death, his Beneficiary), adversely affect the amount of the Vested Plan Benefit
under the Plan of any Participant or Beneficiary at the time of such amendment
or termination of the Plan.
IN WITNESS WHEREOF, The Timken Company has executed this International
Stock Ownership Plan this _____ day of _________________, 199__.
THE TIMKEN COMPANY
By:_______________________
Title:
And:______________________
Title:
<PAGE> 24
ELECTION FORM
FOR
THE TIMKEN COMPANY
INTERNATIONAL STOCK OWNERSHIP PLAN
----------------------------------
I elect to participate in The Timken Company International Stock Ownership Plan
(the "Plan") as adopted by my employer, ______________ (my "International
Employer"), for its Associates in _______________, on the terms and subject to
the conditions described in this election form. I understand that capitalized
terms used in this election form and not otherwise defined in this election form
have the meanings stated in the Plan.
I. DEFERRAL ELECTION. I understand that these elections will remain in
effect until February 2_, ____ unless they are modified or terminated
by me before that time, in accordance with the terms of the Plan.
A. BASIC PARTICIPANT CONTRIBUTIONS (MATCHED).
Pursuant to the terms of the Plan, I hereby elect to
participate in the Plan effective ________ __, ____, and
direct my International Employer to reduce my Base
Compensation by _______ (insert amount) per month, to convert
such amount to Dollars and to credit such amount denominated
in Dollars to my Account under the Plan.
B. ADDITIONAL PARTICIPANT CONTRIBUTIONS (UNMATCHED).
Pursuant to the terms of the Plan, I hereby direct my
International Employer to reduce my Base Compensation by an
additional _______ (insert amount) per month, to convert such
amount to Dollars and to credit such amount denominated in
Dollars to my Account under the Plan.
II. BENEFICIARY DESIGNATION. I hereby designate the person(s) indicated
below as my Beneficiary(ies) under the Plan to receive any portion of
my Vested Plan Benefit that remains unpaid at my death (Attach other
forms if necessary). I understand that this Beneficiary designation is
subject to applicable law and that, in the even of a conflict between
this Beneficiary designation and applicable law, amounts will be paid
as required by applicable law. I further understand that each
Beneficiary must be a living person and may not be resident in the
United States.
PRIMARY BENEFICIARY(IES):
Name: _______________________________________________
Relationship:________________________________________
<PAGE> 25
2
Percentage of Account:_______________________________
Name:________________________________________________
Relationship:________________________________________
Percentage of Account: ______________________________
CONTINGENT BENEFICIARY(IES): (Will receive payment only in the event of the
death or disqualification of all primary Beneficiaries unless designation
specifically provides to the contrary).
Name: ______________________________________________
Relationship:_______________________________________
Percentage of Account:______________________________
Name:_______________________________________________
Relationship:_______________________________________
Percentage of Account:______________________________
III. CERTIFICATION. I certify that I am outside of the United States at the
time of making the elections under this form and that I was outside of
the United States at the time I received the materials offering
participation in the Plan to me. I further certify that I am not
resident in the United States and am participating in the Plan for my
own account and not for the account or benefit of any other person,
other than my Beneficiary(ies) designated above, none of whom is
resident in the United States.
IV. ACKNOWLEDGMENT. I understand that my participation in the Plan is
subject to the terms and conditions contained in the Plan. Accordingly,
I understand that:
(i) I may terminate the compensation reduction elections in Part I
of this Form during a Plan Year at any time and that I will
not be permitted to recommence Participant Contributions (and
will not be eligible to have Matching Contributions or
Additional Employer Contributions, if any, credited to my
Account) after such a termination until the earlier of
(a) the expiration of three months after the time at
which such termination becomes effective or
(b) the first day of the following Plan Year;
<PAGE> 26
3
(ii) this election form will remain in effect only for the Plan
Year to which it relates and I must make a new election on or
before the date specified by the Committee in order to make
Participant Contributions (and to be eligible to have Matching
Contributions and Additional Employer Contributions, if any,
credited to my Account) in any subsequent Plan Year;
(iii) I may change my Participant Contribution election only once
each Plan Year; and
(iv) I may change a beneficiary designation at any time by filing a
subsequent designation with the Plan Administrator.
I further understand that my participation in the Plan will be deemed to
constitute my agreement that any information about me, including without
limitation my salary, income or other compensation or employment benefits, may
be disclosed to the Committee, the Plan Administrator, the Company, the Trustee
or any other person for any appropriate purpose in connection with the
administration or operation of the Plan.
I further understand that my Account will be denominated in Dollars and that I
bear the risk of currency fluctuations in connection with the exchange of
contributions into my Account from the currency in which my Base Compensation is
paid into Dollars and in connection with the exchange of distributions from my
Account from Dollars into the currency in which my Base Compensation is paid.
I further understand that the certificates representing any shares of stock of
the Company distributed to me pursuant to the Plan will, unless otherwise
determined by the Company, bear an appropriate legend indicating that such
shares have not been registered under the United States Securities Act of 1933
or any other securities law and may not be resold except pursuant to an
exemption therefrom, together with such other legend or legends as may be
necessary or advisable under laws applicable to my International Employer, me or
my Beneficiary(ies).
I FURTHER UNDERSTAND THAT MY PARTICIPATION INTEREST IN THE PLAN MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED AND AGREE NOT TO SELL OR OTHERWISE TRANSFER SUCH
PARTICIPATION INTEREST.
- -------------- -------------------------------
Date Signature of Associate
<PAGE> 27
PARTICIPATION AGREEMENT
UNDER
THE TIMKEN COMPANY
INTERNATIONAL STOCK OWNERSHIP PLAN
The undersigned, (the "International Employer"), hereby
adopts, effective as of __________ __, ____, The Timken Company International
Stock Ownership Plan (the "Plan"), in accordance with Section 8.4 of the Plan,
for the benefit of each Associate of the International Employer who is eligible
under the Plan to participate in the Plan and who resides and works in
___________________.
1. DEFINITIONS. Capitalized terms used in this Participation
Agreement and not otherwise defined in this Participation Agreement shall have
the meanings stated in the Plan.
2. COUNTRY COVERED BY THIS PARTICIPATION AGREEMENT. This
Participation Agreement relates only to, and is effective only with respect to,
the Associates of the International Employer who reside and work in ____________
and who are eligible under the Plan to participate in the Plan (the "Local
Associates").
3. EFFECTIVE DATE. The effective date of the Plan with respect
to the Local Associates is _________ __, ____.
4. MINIMUM PARTICIPANT CONTRIBUTION. The Minimum Participant
Contribution that a Participant who is covered by this Participation Agreement
(a "Local Participant") may make under the Plan per Plan Year shall be [10
Dollars][specify equivalent amount in local currency]. If a Participant
participates in the Plan during any Plan Year for less than the entire Plan
Year, such Participant's Minimum Participant Contribution for such Plan Year
shall be prorated based on the ratio of (a) the portion of such Plan Year during
which the Participant participates to (b) the entire Plan Year.
5. MAXIMUM BASIC PARTICIPANT CONTRIBUTION. The Maximum Basic
Participant Contribution that a Local Participant may make under the Plan in a
given Plan Year shall be the lesser of:
(a) an amount equal to that percentage of the
Local Participant's Base Compensation for
such Plan Year determined by the
International Employer, in its sole
discretion, to be the maximum percentage of
Base Compensation that a Local Participant
may contribute as Basic Participant
Contributions in such Plan Year; and
(b) [4,500 Dollars][specify equivalent amount in local
currency].
6. GOVERNING LAW. This Participation Agreement and the Plan
shall be governed exclusively by and interpreted exclusively in accordance with
the internal substantive
<PAGE> 28
2
laws of the State of Ohio, USA, without giving effect to its principles of
conflict of laws. Any legal action or proceeding with respect to or arising out
of (a) this Participation Agreement, (b) the Plan or (c) any claim or benefit
under the Plan or this Participation Agreement shall be brought and litigated
only in a United States federal or state court sitting in the State of Ohio,
USA, and the International Employer and the Company hereby irrevocably and
unconditionally submit to the jurisdiction of each such court.
7. [OTHER PROVISIONS.] [SEE SECTION 8.4(C) FOR A LIST OF OTHER
POTENTIAL PROVISIONS.]
IN WITNESS WHEREOF, the undersigned International Employer has executed
this Participation Agreement this _____ day of _________________, ____.
[INTERNATIONAL EMPLOYER]
By:
-------------------------------------
Title:
The terms of this Participation Agreement are hereby approved
by The Timken Company.
THE TIMKEN COMPANY
By:
-------------------------------------
Title:
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to The Timken Company International Stock Ownership Plan of
our report 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) for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
January 6, 1998
<PAGE> 1
Exhibit 24
DIRECTORS AND OFFICERS OF
THE TIMKEN COMPANY
REGISTRATION STATEMENT ON FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors and officers of The Timken Company, an Ohio corporation (the
"Company"), hereby: (1) constitutes and appoints W.R. Timken, Jr., Stephen A.
Perry, Gene E. Little and Larry R. Brown, collectively and individually, as his
agent and attorney-in-fact, with full power of substitution and resubstitution,
to (a) sign and file on his behalf and in his name, place and stead in any and
all capacities (i) a Registration Statement on Form S-8 (the "Registration
Statement") with respect to the registration under the Securities Act of 1933,
as amended, of the Company's Common Stock, without par value, for issuance under
The Timken Company International Stock Ownership Plan, (ii) any and all
amendments, including post-effective amendments, and exhibits to the
Registration Statement and (iii) any and all applications or other documents to
be filed with the Securities and Exchange Commission or any state securities
commission or other domestic or foreign regulatory authority with respect to the
securities covered by the Registration Statement, and (b) do and perform any and
all other acts and deeds whatsoever that may be necessary or required in the
premises; and (2) ratifies and approves any and all actions that may be taken
pursuant hereto by any of the above-named agents and attorneys-in-fact or their
substitutes.
IN WITNESS WHEREOF, the undersigned directors and officers of the
Company have hereunto set their hands as of the 17th day of December, 1997.
/s/ Robert Anderson /s/ Ward J. Timken
- --------------------------------- ---------------------------
Robert Anderson Ward J. Timken
/s/ Stanley C. Gault /s/ W.R. Timken, Jr.
- --------------------------------- ---------------------------
Stanley C. Gault W.R. Timken, Jr.
/s/ J. Clayburn LaForce, Jr. /s/ Joseph F. Toot, Jr.
- --------------------------------- ---------------------------
J. Clayburn LaForce, Jr. Joseph F. Toot, Jr.
/s/ Gene E. Little /s/ Martin D. Walker
- --------------------------------- ---------------------------
Gene E. Little Martin D. Walker
/s/ Robert W. Mahoney /s/ Charles H. West
- --------------------------------- ---------------------------
Robert W. Mahoney Charles H. West
/s/ Jay A. Precourt /s/ Alton W. Whitehouse
- --------------------------------- ---------------------------
Jay A. Precourt Alton W. Whitehouse
/s/ John M. Timken, Jr.
- --------------------------------
John M. Timken, Jr.
