<PAGE> 1
As filed with the Securities and Exchange Commission on November 6, 1998
Registration No. __________
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)
VOLUNTARY INVESTMENT PROGRAM FOR HOURLY
EMPLOYEES OF LATROBE STEEL COMPANY
(Full title of the plan)
Larry R. Brown
Senior 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 (1) share price (2)(3) fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
without par value 25,000 shares $18.47 $461,750 $128.37
========================================================================================================================
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act") the Registration
Statement also covers an indeterminate amount of interests to be offered pursuant to Voluntary Investment Program
for Hourly Employees of Latrobe Steel Company, as amended.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 under the Securities Act, on the basis of the average of
the high and low sale prices for Common Stock on the New York Stock Exchange on November 2, 1998.
(3) Estimated solely for the purposes of determining the registration fee.
</TABLE>
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 will be sent or given to participating employees as specified by Rule
428(b)(1) of the Securities Act. These documents and the documents incorporated
by reference into this Registration Statement pursuant to Item 3 of Part II of
this Registration Statement, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by The Timken Company (the
"Company") of the Voluntary Investment Program for Hourly Employees of Latrobe
Steel Company, as amended (the "Plan"), with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (File No. ____) are incorporated herein by reference:
(1) Annual Report of the Company on Form 10-K for the year ended
December 31, 1997;
(2) Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1998, and June 30, 1998;
(3) Annual Report of the Plan, as amended, on Form 11-K for the
year ended December 31, 1997;
(4) Current Report of the Company on Form 8-K dated April 21,
1998; and
(5) The description of the Company's common stock, without par
value, contained in the Company's Registration Statements
filed pursuant to Section 12 of the Exchange Act 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 Exchange Act 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 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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.
II-1
<PAGE> 3
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 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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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).
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 Program for Hourly Employees of Latrobe
Steel Company, as amended.
5 Opinion of Counsel.
23(a) Consent of Independent Auditors.
23(b) Consent of Counsel (included in Exhibit 5).
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; (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 Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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 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, 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 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 November
1998.
THE TIMKEN COMPANY
By: /s/ Gene E. Little
______________________________________________
Gene E. Little
Senior Vice President - Finance
II-3
<PAGE> 5
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-8 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, President and November 6, 1998
------------------------------------ Chief Executive Officer;
W. R. Timken, Jr. Director
(Principal Executive Officer)
*Gene E. Little Senior Vice President - Finance November 6, 1998
------------------------------------ (Principal Financial and
Gene E. Little Accounting Officer)
*Joseph F. Toot, Jr. Director November 6, 1998
------------------------------------
Joseph F. Toot, Jr.
*Stanley C. Gault Director November 6, 1998
------------------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director November 6, 1998
------------------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director November 6, 1998
------------------------------------
Robert W. Mahoney
*Jay A. Precourt Director November 6, 1998
------------------------------------
Jay A. Precourt
*John M. Timken, Jr. Director November 6, 1998
------------------------------------
John M. Timken, Jr.
*Ward J. Timken Director November 6, 1998
------------------------------------
Ward J. Timken
*Martin D. Walker Director November 6, 1998
------------------------------------
Martin D. Walker
*Charles H. West Director November 6, 1998
------------------------------------
Charles H. West
*Alton W. Whitehouse Director November 6, 1998
------------------------------------
Alton W. Whitehouse
</TABLE>
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, Senior 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.
<TABLE>
<S> <C>
DATED: November 6, 1998 By: /s/ Gene E. Little
__________________________________________
Gene E. Little, Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
THE PLAN. Pursuant to the requirements of the Securities Act, the Plan has
duly caused this Registration Statement on Form S-8 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 November, 1998.
VOLUNTARY INVESTMENT PROGRAM FOR
HOURLY EMPLOYEES OF LATROBE STEEL
COMPANY
By: /s/ R. Scott White
_______________________________________
R. Scott White
Secretary of The Latrobe Steel Company
II-6
<PAGE> 8
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 Program for Hourly Employees of Latrobe
Steel 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.
II-7
<PAGE> 1
Exhibit 4(c)
1998 401(K) AGREEMENT
BETWEEN
LATROBE STEEL COMPANY
AND
UNITED STEELWORKERS OF AMERICA
AFL-CIO
THIS 401(K) AGREEMENT, dated as of the 3rd day of May, 1998, is between
LATROBE STEEL COMPANY, Latrobe, Pennsylvania, or its successors, (hereinafter
referred to as the Company) and the UNITED STEELWORKERS OF AMERICA, or its
successors (hereinafter referred to as the Union). Except as otherwise expressly
provided herein, the provisions of this agreement shall be effective 12:01 A.M.
May 3, 1998.
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:
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 1998 Basic Agreement between the
parties dated May 3, 1998, in respect of rates of pay, hours of work, and
conditions of employment.
1
<PAGE> 2
2. The terms "Continuous Service" and "Hour of Service" shall have the
same meanings as ascribed to such words in the 1998 Pension Agreement between
the parties dated May 3, 1998.
For purposes of (A) credit for service for determining an Employee's
eligibility to participate in the Plan under Article II, Section A, and (B) the
restoration of credit for prior Continuous Service when an Employee returns to
active service after a break in service:
(i) The computation period to be used for determining an Employee's
eligibility to participate in the Plan shall be the Vesting Computation Period;
(ii) The term "One Year Break in Service" for purposes of eligibility to
participate means a 12-month period, which shall be the Vesting Computation
Period, during which the Employee has not completed more than 500 Hours of
Service;
(iii) The term "Vesting Computation Period" means (a) a 12-month period,
starting from the date of hire by the Company and anniversaries of that date, or
(b) a 12-month period following a break in service resulting in a loss of
Continuous Service and starting from the date of rehire by the Company and
anniversaries of that date;
(iv) The term "Hour of Service" means each hour (a) for which an
Employee is paid, or entitled to payment for the 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, (b) for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Company, or (c) for which an Employee is
credited pursuant to
2
<PAGE> 3
Sections 410(a)(5)(E) and 411(a)(6)(E) of the Internal Revenue Code, solely for
the purpose of determining whether a One Year Break in Service has occurred.
Hours of Service credited under (c) above shall be credited only in the Vesting
Computation Period in which absence from work begins, if an Employee would be
prevented from incurring a One Year Break in Service in such year or in any
other case, in the immediately following Vesting Computation Period. 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 (a) the Employee's most
recent hourly rate of compensation for the performance of duties or (b) the
Employee's average hourly rate of compensation for the performance of duties for
the most recent computation period in which the Employee completed more than 500
Hours of Service. Hours of Service shall be computed and credited in accordance
with Department of Labor Regulation 2530.200b.
In the case of an Employee who is absent from work for any period by
reason of the pregnancy of the Employee, by reason of the birth of a child of
the Employee, by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or by reason of
caring for such child for a period beginning immediately following such birth or
placement, the plan shall treat as Hours of Service solely for purpose of
determining under this paragraph whether a One Year Break in Service has
occurred, the hours which otherwise would normally have been credited to the
Employee but for such absence, or in any case in which the Plan is unable to
determine the Hours of Service, 8 Hours of Service per day of absence, except
that the total number of hours treated as Hours of Service by reason of any such
pregnancy, birth or placement shall not exceed 501 hours. The
3
<PAGE> 4
hours shall be treated as Hours of Service only in the Vesting Computation
Period in which the absence from work begins, if the Employee would be prevented
from incurring a One Year Break in Service in such Vesting Computation Period
solely because the period of absence is treated as Hours of Service or, in any
other case, in the immediately following Vesting Computation period.
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 custody
of the Trustee as of any valuation date, determined for Timken 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
or cost of living allowances) 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, gross earnings cannot exceed $160,000, or if greater, the dollar
limitation in effect under Section 401(a)(17) of the Internal Revenue Code.
4
<PAGE> 5
6. The term "Highly Compensated Employee" effective January 1, 1997,
shall mean any employee who, during the year or the preceding year --
(A) was at any time during the current Plan Year or the preceding Plan
Year a 5-percent or more owner of the Company's outstanding common stock, or
(B) received compensation from the Company in excess of $80,000 (or, if
greater, the dollar limitation in effect under Section 414(q)(1)(B) of the
Internal Revenue Code), and if the Company so elects, 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)(5) and Q & A 9(b) of Section 1.414(q)-1T of the Treasury Regulations) of
employees for such year.
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 contributions to a cafeteria plan, cash or deferred
arrangement or tax-sheltered annuity.
A former employee shall be considered a highly compensated employee, if
he separates from service (or was deemed to do so) prior to the year for which
the determination is made, performed no service for the Company during such
determination year, and was a highly compensated employee for either the year in
which he separated from service or any determination year ending on or after his
55th birthday.
(C) was at any time an officer and received compensation greater than
$45,000 (or if greater, 150 percent of the amount in effect under Section
415(c)(1)(A)) for such year.
7. The term "Participant" shall mean any Employee who meets the
requirements of Article II below.
5
<PAGE> 6
8. The term "Plan" shall mean the 401(k) plan established by this
Agreement, which 401(k) plan is a profit sharing plan qualified under the
Internal Revenue Code and includes a cash or deferred arrangement.
9. The term "Plan Administrator" shall mean the Company.
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.
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 1998 Insurance Agreement and to Employees who have
completed 1000 Hours of Service with the Company within a 12-month period, which
shall be the Vesting Computation Period, even if such Employees do not meet the
eligibility requirements to be participants under the 1998 Insurance Agreement.
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.
6
<PAGE> 7
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.
5. If an employee who was a participant in this Plan at any time returns
to active service with the Company, he shall be eligible to recommence
participation on the first day of the first calendar quarter starting after his
return to service.
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 $10,000 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
7
<PAGE> 8
eligible to participate, 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 all succeeding pay periods,
unless changed again by the same procedure.
4. A Participant who is a Participant in the Plan at the time that the
Company pays certain lump sum payments to such Participant will have such
payment reduced and the subsequent reduction contributed to this Plan, in an
amount equal to the wage reduction percentage then in effect for such
Participant.
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 of $30,000 as adjusted or 25 percent
of the Participant's total compensation from the Company. The annual addition
shall be a Participant's wage reduction contributions, contributions to
qualified defined contribution plans maintained by the Company, 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
8
<PAGE> 9
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 $10,000 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.
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 (a) 1.25 times the dollar limitation
of Section 415(b)(1)(A) of the Internal Revenue Code in effect for the
limitation year, or (b) 1.4 times the Participant's average compensation for the
three 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
9
<PAGE> 10
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: (a) 1.25 times the dollar limitation in effect under
Section 415(c)(1)(A) of the Code for such year, or (b) 1.4 times the amount
which may be taken into account under Section 415(c)(1)(B) of the 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.
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.
10
<PAGE> 11
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 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.
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
11
<PAGE> 12
period immediately preceding such period of service in the armed forces, or if
shorter, the period of employment immediately preceding such period.
12
<PAGE> 13
ARTICLE III - OPERATION OF THE TRUST
A. Investment of Funds
1. A Participant will be able to invest his Wage Reduction Contributions
in Timken Company Stock and three (3) other basic investment options offered by
the Trustee, which options shall be selected by the Plan Administrator. The Plan
Administrator may offer additional investment options. There will be no
investment fees for Participants for the Timken Company stock and three (3)
other basic investment 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 reenrolls in the Plan, he or she may select 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 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 as
of the effective date of the transfer, will be reallocated in five percent (5%)
increments to the investment options chosen by the Participant. The
13
<PAGE> 14
Participant's request for transfer must be received by the first day of the
calendar month to become effective by the end of that month.
B. Distributions from the Trust
1. 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
(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.
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 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: (i) the terms and conditions
of the death benefit; (ii) the Participant's right to make, and the effect of,
an election to waive the spouse as beneficiary; (iii) the rights of the
Participant's spouse; and (iv) 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
14
<PAGE> 15
first day of the Plan year in which the Participant attains age 32 and ending
with the close of the Plan year preceding the Plan Year in which the Participant
attains age 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 Code applies to the Participant;
and (v) a reasonable period after separation from service in case of a
Participant who separates before attaining age 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 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
15
<PAGE> 16
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 as soon as possible
after the Participant retires, the Participant's death occurs or Continuous
Service is broken. The appropriate tax withholding will be made, unless the
Participant directs the Company, pursuant to procedures to be implemented by the
Company, to transfer the distribution as a 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 (a)
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the 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; (b) any distribution to the extent
such distribution is required under Section
16
<PAGE> 17
401(a)(9) of the Internal Revenue Code; and (c) 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 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.
b. If the distribution exceeds $5,000, 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).
(c) Effective January 1, 1997, in no event shall payment of such benefits
be deferred beyond April 1 of the calendar year following the calendar year in
which a Participant who is a five percent (5%) owner (as defined in Section 416
of the Code) attains age 70-1/2. For a Participant who is not a five percent
(5%) owner, the payment of benefits shall not be deferred beyond April 1 of the
calendar year following the later of the calendar year in which the
17
<PAGE> 18
Participant attains age 70-1/2 or the calendar year in which the Participant
retires, provided that any Participant may request that benefits commence upon
attainment of age 70-1/2. If distributions are required to be made under this
Section B, Paragraph 3, they shall be made in a lump sum payment. The
requirements of this Section B, Paragraph 3, shall apply to any distribution of
a Participant's interest and will take precedence over any inconsistent
provisions of this Agreement. All distributions required under this Section B,
Paragraph 3, 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.
4. A Participant otherwise entitled to a distribution from the Plan may
elect to retain said distribution in the Plan until such time as the Participant
shall direct the Company to make said distribution, provided that such
distribution must be made not later than the time specified in Section B,
Paragraph 3 above. Upon written notice from the Participant, such distribution
shall be made in a lump sum as soon as possible after the notice is received.
During the time such distribution remains in the Plan, the Participant may make
the investment transfers described in Section A, Paragraph 4 above.
5. a. Partial or total distributions of his wage reduction contributions
may also be made to a Participant, upon application to the Company, 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 Company and such consent shall be given only if,
under uniform rules and regulations, the Company determines that the purpose of
the withdrawal is to meet immediate and heavy financial needs of the
Participant, the
18
<PAGE> 19
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 $3,500
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 semester or a quarter 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 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, 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 January 1 following 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
19
<PAGE> 20
402(g) of the 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, except in the case of post-secondary educational tuition for a
semester or a quarter. All withdrawal elections shall be made by a Participant
on written forms supplied by the Company for that purpose. Such distributions
shall be made as soon as possible after the end of the quarter in which the
application to the Company is made.
6.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 $1,000.
(2) The maximum loan amount is fifty percent (50%) of the
Participant's Beneficial Loan Interest, provided, that 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 period and may apply for only one (1) loan within
each twelve (12)-month period.
20
<PAGE> 21
(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.
(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
21
<PAGE> 22
which the default occurs. The amount of the default will not
constitute part of subsequent distribution 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 applications
shall be made through the interactive voice response system.
7.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 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
22
<PAGE> 23
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 insure 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 insure that the discrimination tests of Section
401(k) or 401(m) of the Internal Revenue Code are met for such Plan Year. The
discrimination tests shall be (1) that the Employees eligible to benefit under
this Plan shall satisfy the nondiscrimination provisions of Section 410(b)(1) of
the Internal Revenue Code, (2) 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 (3) 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. Effective January 1, 1997, 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 dollar amount of contributions will
be reduced to the extent necessary to satisfy the actual deferral percentage
test or cause such ratio to equal the dollar amount of the Highly Compensated
23
<PAGE> 24
Employee with the next highest dollar amount of such contributions. 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 for a Plan Year 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 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
contributions occurred and within twelve (12) months after the close of the Plan
Year. The amount of excess contributions to be distributed shall be reduced by
excess deferrals previously distributed for the taxable year ending in the same
Plan Year and excess deferrals to be distributed for a taxable year will be
reduced by excess contributions previously distributed for the Plan Year
beginning in such taxable year.
For purposes of the actual deferral percentage test and the determination of
excess contributions, compensation shall be 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.
24
<PAGE> 25
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. Nonalienation 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, 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.
25
<PAGE> 26
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 (1)
the name and last known mailing address of the Participant and of each alternate
payee covered under the order, (2) 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, (3) the number of payments or the period to
which the order applies, and (4) 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 (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
26
<PAGE> 27
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 (either
Company or 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 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
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 (either
Company or 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
27
<PAGE> 28
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. In the event the Plan fails to qualify INITIALLY under the applicable
provisions of the Internal Revenue Code, the contributions shall be returned to
the Company and the Participants.
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 particularly
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 nondiscriminatory 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 Company shall pay all expenses incurred in connection with the
administration of the Plan and Trust.
28
<PAGE> 29
3. 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:
Information shall be furnished (1) to the District Director at North
Versailles, Pennsylvania, in five (5) copies, (2) effective as of December 31 of
the years in which this Agreement is in effect, and (3) within one hundred
twenty (120) days from the 31st day of December of the years in which this
Agreement is in effect.
a. Information
(i) Name of trustee.
(ii) Number of employees making contributions to the Plan.
(iii) 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 distributions.
(iv) Financial information.
(A) Assets of fund at beginning of year.
(B) Participant contributions during year.
(C) Net amount of income for year.
29
<PAGE> 30
(D) Net amount of disbursements.
(E) Assets of fund at end of year.
30
<PAGE> 31
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 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
31
<PAGE> 32
or induced by corruption, fraud, or undue means or was beyond the scope of the
arbitrator's authority herein provided.
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.
ARTICLE VI - EFFECTIVE AND TERMINATION DATES
A. This 401(k) Agreement shall become effective at 12:01 A.M. May 3, 1998,
except as otherwise expressed, and shall remain in effect until December 31,
2001, and for yearly periods thereafter unless either party shall give written
notice to the other party 60 days prior to May 1, 2001 of its desire to
terminate the Agreement effective January 1, 2002 and to negotiate on a new
agreement during the 60-day period prior to May 1, 2001.
32
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in the respective names by their respective names by their
respective representatives thereunto duly authorized, as of the day and
year first above written.
UNITED STEELWORKERS OF AMERICA
------------------------------------
George Becker
------------------------------------
Leo Gerard
------------------------------------
Richard Davis
------------------------------------
Leon Lynch
------------------------------------
Andrew V. Palm
------------------------------------
Jack Coates
------------------------------------
William H. Ehman
------------------------------------
Joseph A. Camaione
------------------------------------
William R. Burns
------------------------------------
Robert W. Welc
------------------------------------
Ronald A. Moyer
------------------------------------
David Baum
33
<PAGE> 34
LATROBE STEEL COMPANY
------------------------------------
Charles T. DeVault
------------------------------------
Lori A. Wisener
34
<PAGE> 35
SUMMARY PLAN DESCRIPTION
This Notice plus your booklet entitled "1998 401(k) Agreement between
Latrobe Steel Company and United Steelworkers of America, AFL-CIO" provide
you with the Summary Plan Description required by the Employee Retirement
Income Security Act of 1974 (ERISA).
NAME OF PLAN
401(k) Plan for Hourly-Paid
Employees of Latrobe Steel
Company
NAME AND ADDRESS OF EMPLOYER
Latrobe Steel Company
Subsidiary of The Timken Company
2626 Ligonier Street
Latrobe, PA 15650
EMPLOYER IDENTIFICATION NUMBER
25-0610595
PLAN NUMBER
018
TYPE OF PLAN
Defined Contribution Pension Plan
TYPE OF ADMINISTRATION
Trusteed Plan
35
<PAGE> 36
PLAN ADMINISTRATOR
The Employer named above. The Plan Administrator has authority to control
and manage the operation and administration of the Plan.
PLAN TRUSTEE
Society National Bank
P.O. Box 5937
Cleveland, OH 44101
TELEPHONE NUMBER OF PLAN ADMINISTRATOR
(412) 532-6355
AGENT FOR LEGAL SERVICE OF LEGAL PROCESS
The Employer named above and the plan trustee.
COLLECTIVE BARGAINING AGREEMENTS
The Plan is maintained pursuant to a collective bargaining agreement
between the Company and the United Steelworkers of America.
BENEFITS
The Plan provides retirement benefits. The 401(k) Agreement booklet
describes these benefits in detail.
ELIGIBILITY FOR A BENEFIT
You must have completed the eligibility requirements to be a Participant
under the Insurance Agreement. Employees may choose to participate on a
calendar quarter basis.
36
<PAGE> 37
NORMAL RETIREMENT. You must have attained age 65.
EARLY FULL RETIREMENT. You must have at least 15 years of continuous
service and have attained age 62; or have at least 30 years of
continuous service.
60/15 RETIREMENT. You must have at least 15 years but less than 30 years
of continuous service and have attained age 60.
PERMANENT INCAPACITY RETIREMENT. You must have at least 15 years of
continuous service and be permanently incapacitated.
70/80 RETIREMENT. You must have at least 15 years of continuous service
and attained age 55 with combined age and years of service that equals
70 or more; or have a combined age and years of continuous service that
equals 80 or more, and
1. continuous service is broken by reason of a permanent shutdown of
a plant, department or subdivision or by reason of a layoff or
physical disability, or
2. continuous service is not broken and you are absent from work by
reason of
a. layoff resulting from election to be placed on layoff
status pursuant to provisions of Basic Agreement applicable in
event of a permanent shutdown, or
b. physical disability or layoff other than layoff resulting
from an election in a. above and whose return to active
employment is declared unlikely by the Company, or
37
<PAGE> 38
3. continuous service is broken and while on layoff status by
reason of election pursuant to provisions of Basic Agreement
applicable to a permanent shutdown, accepts a job with the
Company and, prior to expiration of 90 consecutive calendar
days from the first day worked on such job, elects to retire.
BREAK IN CONTINUOUS SERVICE BENEFIT. If you are not eligible to
receive any of the above benefits and your continuous service is
broken for any reason.
RULE OF 65 RETIREMENT. You must have at least 20 years of continuous
service and a combined age and years of continuous service that
equals 65 or more, and
1. continuous service is broken by reason of a permanent
shutdown of a plant, department or subdivision or by reason of
an extended layoff or disability, and
2. the Company fails to provide suitable long-term employment.
TERMINATION OF BENEFITS
See your 401(k) Agreement booklet for circumstances governing
disqualification, ineligibility or denial of benefits.
SOURCE OF CONTRIBUTION TO THE PLAN
Employee contributions.
FUNDING
The Plan is funded by the payment of Employee contributions to the Plan
Trustee, through payroll deduction, up to 15 percent (15%) of
compensation.
38
<PAGE> 39
PLAN YEAR
The financial records of the Plan are kept on a Plan Year basis ending on
each December 31.
PLAN INSURANCE
Benefits under this Plan are based on the balance in your individual
account and therefore are not insured by the Pension Benefit Guaranty
Corporation (PBGC) under the plan termination provisions of ERISA.
SURVIVOR BENEFITS
The Plan provides Survivor
Benefits. The 401(k)
Agreement booklet describes
these benefits in detail.
HOW TO FILE A CLAIM
As outlined in 401(k) Agreement Booklet. Forms may be obtained from the
Plan Administrator.
HOW TO APPEAL A CLAIM
In the event a claim has been denied in whole or in part, an Employee or
beneficiary can request the Plan Administrator to review the claim. You
may have access to papers affecting the claim, may present written
arguments concerning this claim, and may have a representative if you
desire. This request for review should be sent within 60 days after you
receive notice of denial of the claim. When requesting a review, please
state the reason you believe the claim was improperly denied and submit
any data, questions or comments you deem appropriate.
39
<PAGE> 40
The Plan Administrator will re-evaluate all the information. You will be
informed of its decision in writing within 60 days of your request for
review unless additional information is required of you. In that case, the
decision will be made within 60 days of receipt of the additional
information.
After you have received the decision of the Plan Administrator, you may
appeal your claim for benefits, pursuant to provisions presently included
in the grievance procedure of your 401(k) Agreement booklet.
Instructions for appealing claims for benefits are presently included in
the grievance provisions of your 401(k) Agreement booklet.
STATEMENT OF ERISA RIGHTS
As a participant in the 401(k) Plan you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974
(ERISA). ERISA provides that all plan participants shall be entitled to:
-examine, without charge, at the plan administrator's office all plan
documents, including collective bargaining agreements and copies of all
documents filed by the plan with the U.S. Department of Labor, such as
annual reports and plan descriptions.
-obtain copies of all plan documents and other plan information upon
written request to the plan administrator. The administrator may make a
reasonable charge for the copies.
40
<PAGE> 41
-receive a summary of the plan's annual financial report. The plan
administrator is required by law to furnish each participant with a copy
of this summary annual report.
-obtain a statement telling you whether you have a right to receive a
benefit at normal retirement age and if so, what your benefits would be at
normal retirement age if you stop working under the plan now. If you do
not have a right to a benefit, the statement will tell you how many more
years you have to work to get a right to a benefit. This statement must be
requested in writing and is not required to be given more than once a
year. The plan must provide the statement free of charge.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee
benefit plan. The people who operate your plan, called "fiduciaries" of the
plan, have a duty to do so prudently and in the interest of you and other
plan participants and beneficiaries. No one, including your employer, your
union, or any other person, may fire you or otherwise discriminate against
you in any way to prevent you from obtaining a benefit or exercising your
rights under ERISA. If your claim for a benefit is denied in whole or in
part you must receive a written explanation of the reason for the denial.
You have the right to have the plan review and reconsider the claim. Under
ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the
court may require the plan administrator to provide the materials and pay
you up to $100 a day until you receive the materials, unless the materials
were not sent because of reasons beyond
41
<PAGE> 42
the control of the administrator. If you have a claim for benefits which is
denied or ignored, in whole or in part, you may file suit in a state or
federal court. If it should happen that plan fiduciaries misuse the plan's
money, or if you are discriminated against for asserting your rights, you
may seek assistance from the U.S. Department of Labor, or you may file suit
in a federal court. The court will decide who should pay court costs and
legal fees. If you are successful the court may order the person you have
sued to pay those costs and fees. If you lose, the court may order you to
pay these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the plan
administrator.
If you have any questions about this statement or about your rights
under ERISA, you should contact the nearest office of the Pension and
Welfare Benefits Administration, U.S. Department of Labor, listed in
your telephone directory or the Division of Technical Assistance and
Inquiries, Pension and Welfare Benefits Administration, U.S. Department
of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
The Philadelphia Regional PWBA Office is located at:
Gateway Building
3535 Market Street, Room M300
Philadelphia, PA 19104
Phone: (215) 596-1134
The Cincinnati Regional Office is located at:
1885 Dixie Highway,
Suite 210
Ft. Wright, KY
41011-2664
Phone: (606)578-4680
42
<PAGE> 1
Exhibit 5
November 6, 1998
The Timken Company
1835 Dueber Avenue S.W.
Canton, Ohio 44706
RE: Voluntary Investment Program for Hourly Employees of Latrobe Steel
Company
Gentlemen and Mesdames:
We have acted as legal counsel for Latrobe Steel Company ("Latrobe"), a
Pennsylvania corporation, and Latrobe's corporate parent, The Timken Company
(the "Company"), an Ohio corporation, in connection with the preparation and
adoption by Latrobe of the Voluntary Investment Program for Hourly Employees of
Latrobe Steel Company, as amended (the "Plan"). The Plan provides for the
issuance of shares of the Company's common stock, without par value (the "Common
Stock"), and of participation interests (the "Participation Interests") offered
to eligible employees of Latrobe. The Company recently authorized the issuance
of an additional 25,000 shares of Common Stock pursuant to the Plan (the
"Shares"). A Form S-8 Registration Statement is being filed with the Securities
and Exchange Commission to cover the Shares and the Participation Interests.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public authorities, and other documents and instruments, and have made such
other factual inquiries, as we have deemed necessary or appropriate in
connection with this opinion.
On the basis of the foregoing, we are of the opinion that:
1. The Shares are duly authorized.
2. When the Shares have been issued and delivered against payment
therefor in accordance with the terms of the Plan, such Shares
will be duly authorized, validly issued under the Ohio General
Corporation Law, fully paid, and nonassessable, assuming that
such Shares remain duly authorized on the date of such
issuance and delivery and assuming that no change occurs in
the applicable law or pertinent facts between the date hereof
and the date of such issuance and delivery.
<PAGE> 2
The Timken Company
November 6, 1998
Page 2
3. When contributions are made to the Plan and are allocated in
accordance with the terms of the Plan, the resulting
Participation Interests will have been validly created, fully
paid, and nonassessable, assuming that as of the date(s) of
such contributions and allocations the applicable terms of the
Plan remain in substantially the same form as at the date
hereof, and further assuming that no other change occurs in
the pertinent facts or the applicable law between the date
hereof and the date(s) of such contributions and allocations.
We hereby consent to your use of this opinion as an exhibit to the said
Form S-8 Registration Statement and your reference to this opinion in any of the
materials constituting the prospectus thereof, as any of the same may be
amended, updated, and/or supplemented from time to time.
Very truly yours,
DAY, KETTERER, RALEY, WRIGHT
& RYBOLT, LTD.
<PAGE> 1
Exhibit 23(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Voluntary Investment Program for Hourly Employees of
Latrobe Steel Company of our reports (a) dated February 5, 1998, 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 12, 1998, with
respect to the financial statements and schedules of the Voluntary Investment
Program for Hourly Employees of Latrobe Steel Company included in the Plan's
Annual Report (Form 11-K), both for the year ended December 31, 1997, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
November 5, 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 participation interests issuable under the Voluntary Investment
Program for Hourly Employees of Latrobe Steel Company and up to 25,000 shares of
the Company's Common Stock, without par value, for issuance under the 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 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 6th day of November, 1998.
/s/ Stanley C. Gault /s/ Ward J. Timken
- ---------------------------- ------------------------------
Stanley C. Gault Ward J. Timken
/s/ J. Clayburn LaForce, Jr. /s/ W. R. Timken, Jr.
- ---------------------------- ------------------------------
J. Clayburn LaForce, Jr. W. R. Timken, Jr.
/s/ Gene E. Little /s/ Joseph F. Toot, Jr.
- ---------------------------- ------------------------------
Gene E. Little Joseph F. Toot, Jr.
/s/ Robert W. Mahoney /s/ Martin D. Walker
- ---------------------------- ------------------------------
Robert W. Mahoney Martin D. Walker
/s/ Jay A. Precourt /s/ Charles H. West
- ---------------------------- ------------------------------
Jay A. Precourt Charles H. West
/s/ John M. Timken, Jr. /s/ Alton W. Whitehouse
- ---------------------------- ------------------------------
John M. Timken, Jr. Alton W. Whitehouse
