<PAGE> 1
As filed with the Securities and Exchange Commission on August 28, 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)
THE TIMKEN COMPANY - LATROBE STEEL COMPANY
SAVINGS AND INVESTMENT PENSION PLAN
(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 1,250,000 shares $20.1875 $25,234,375 $7,444.14
===================================================================================================================
</TABLE>
(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 The Timken
Company - Latrobe Steel Company Savings and Investment Pension Plan, 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 August 26,
1998.
(3) Estimated solely for the purposes of determining the registration fee.
<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"), 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 Timken Company - Latrobe Steel Company
Savings and Investment Pension 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 24,
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) The Timken Company - Latrobe Steel Company Savings and
Investment Pension Plan, 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 __ day of August 1998.
THE TIMKEN COMPANY
By:
----------------------------------------
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.
Signature Title Date
--------- ----- ----
*W. R. Timken, Jr. Chairman, President and August __, 1998
--------------------------- Chief Executive Officer;
W. R. Timken, Jr. Director
(Principal Executive Officer)
*Gene E. Little Senior Vice President - Finance August __, 1998
---------------------------
Gene E. Little (Principal Financial and
Accounting Officer)
*Joseph F. Toot, Jr. Director August __, 1998
---------------------------
Joseph F. Toot, Jr.
*Stanley C. Gault Director August __, 1998
---------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director August __, 1998
---------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director August __, 1998
---------------------------
Robert W. Mahoney
*Ward J. Timken Director August __, 1998
---------------------------
Ward J. Timken
*Martin D. Walker Director August __, 1998
---------------------------
Martin D. Walker
*Charles H. West Director August __, 1998
---------------------------
Charles H. West
*Alton W. Whitehouse Director August __, 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, 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.
DATED: August __, 1998 By:
---------------------------------
Gene E. Little, Attorney-in-Fact
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 ___ day of August, 1998.
THE TIMKEN COMPANY - LATROBE STEEL
COMPANY SAVINGS AND INVESTMENT
PENSION PLAN
By:
----------------------------------
Gene E. Little
Senior Vice President - Finance
of The Timken 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) The Timken Company - Latrobe Steel Company Savings and
Investment Pension Plan, 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)
THE TIMKEN COMPANY-LATROBE STEEL COMPANY
----------------------------------------
SAVINGS AND INVESTMENT PENSION PLAN
-----------------------------------
The Timken Company Employees' Deferred Income Stock Ownership Plan was
effective January 1, 1981, and thereafter amended November 3, 1981, July 1,
1982, August 11, 1982, and December 1, 1982, and it was amended and restated
January 1, 1983 and September 1, 1983. It was then further amended, restated,
and renamed The Timken Company Savings and Investment Plan, effective January 1,
1984, and thereafter amended March 15, 1984, January 1, 1985, October 30, 1986,
December 31, 1987, July 22, 1988, August 5, 1988, September 21, 1989, August 22,
1991 and September 20 , 1991. Effective January 1, 1992 the Plan was then
further amended, restated and renamed The Timken Company Savings and Investment
Pension Plan. Effective December 31, 1993, the Plan was merged with The Timken
Company Savings and Investment Pension Plan for Latrobe Steel Company Salaried
Employees and renamed The Timken Company-Latrobe Steel Company Savings and
Investment Pension Plan. The Plan was then further amended effective January 1,
1993 and January 1, 1994.
The provisions of the January 1, 1994 amendment and restatement
relating to the qualification of the Plan were generally effective January 1,
1989, except as otherwise specified herein, or to the extent earlier or later
effective dates were provided by the Tax Reform Act of 1986, the Omnibus Budget
Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget
Reconciliation Act of 1989, the Unemployment Compensation Amendments of 1992,
and the Omnibus Budget Reconciliation Act of 1993. Further, to the extent the
Plan was operated in accordance with the provisions of this amendment and
restatement as of an effective date earlier than that required by law, such date
was the
<PAGE> 2
Effective Date. All other provisions of this amendment and restatement solely
relating to the administration and operation of the Plan, excluding all
provisions that relate to and affect the qualification of the Plan in form, were
generally effective January 1, 1994.
The Plan was then further amended effective January 1, 1994 and January
1, 1995. Additional amendments were made effective April 1, 1995, January 1,
1996, November 13, 1996 and January 1, 1997. Additional amendments were made
effective January 1, 1998.
ARTICLE I - DEFINITIONS
The following terms, when used herein, shall have the meanings herein
stated:
1. ACCOUNT - The account maintained for a Participant to record his
share of the contributions to the Plan and adjustments relating thereto. Each
Participant's Account shall have six (6) subaccounts, one (1) each for Pre-1989
Salary Reduction Contributions, Post-1988 Salary Reduction Contributions,
Company Matching Contributions, Performance Sharing Contributions, Post Tax
Contributions and Rollover Contributions.
2. ACCRUED BENEFIT - The balance of a Participant's Account held under
the Trust.
3. ADMINISTRATIVE DELEGATE - One or more persons or institutions to
whom the Company has delegated certain administrative functions
pursuant to a written administrative agreement.
4. BENEFICIAL INTEREST - 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 on the Participant's behalf compared to the total
contributions to the Plan made on behalf of all Participants.
5. BENEFICIAL LOAN INTEREST - The market value of the assets representing
the Participant's Beneficial Interest in Pretax Contributions to the Trust
(including Performance Sharing Contributions and Rollover Contributions) whether
made by the Company or by a Participant, in the custody of the
<PAGE> 3
Trustee as of any Valuation Date, determined for Timken 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.
6. BENEFICIARY - The person last designated by a Participant to receive
any benefits as provided herein. This designation shall be in writing on a form
supplied by the Plan Administrator and filed with the Plan Administrator prior
to the Participant's death. Beneficiaries designated under the Plan prior to
April 1, 1995 will remain as Beneficiaries until changed by Participants.
7. BENEFIT STARTING DATE - The first day of the first period for which
a benefit is payable.
8. CODE - The Internal Revenue Code of 1986, as amended, or any
successor Internal Revenue Code.
9. COMPANY - The Timken Company and/or Latrobe Steel Company and any
successors thereof, as well as all members of a controlled group of corporations
or commonly controlled trades or businesses (as defined in Section 414(b) and
(c) of the Code, as modified by Section 415(h) of the Code) or affiliated
service groups (as defined in Section 414(m) of the Code) of which the Company
is a part, any or all of the above entities being sometimes referred to as
"Controlled Group Member(s)".
10. CONTINUOUS SERVICE - The period of time from the first employment
of the Employee with the Company, except that such Continuous Service shall be
broken by:
(a) voluntarily quitting the service of the Company;
(b) discharge from the service of the Company;
(c) retirement from the Company; or
(d) lay-off or leave of absence for a continuous period exceeding
two years.
<PAGE> 4
If an Employee whose participation has been terminated for any reason is again
employed by the Company on a salaried basis, such Employee shall be eligible to
recommence participation in the Plan immediately following reemployment.
Part-time service rendered by part-time Employees shall not be included
in the computation of Continuous Service for participation purposes; provided
that any Employee who completes one thousand (1,000) Hours of Service in any
Plan Year shall not be considered to be a part-time employee and shall be
eligible to be a Plan Participant. If an Employee changes status from part-time
to full-time employment or from full-time to part-time employment, any service
rendered while a part-time Employee shall not be included in the computation of
Continuous Service for benefit calculation purposes.
11. EMPLOYEE - Any person employed by the U.S. Division of the Company
who is paid on a salaried basis; provided that a leased employee shall not be
considered an Employee, except for purposes of the coverage tests under Section
410(b)(1) of the Code, if necessary. A leased employee is any person who is not
an employee of the Company and who provides services to the Company if (a) such
services are provided pursuant to an agreement between the Company and any
leasing organization, (b) such person has performed such services for the
Company on a substantially full-time basis for a period of at least one year,
and (c) such services are performed under primary direction or control by the
Company. Further provided, that any person determined to be a common-law
employee shall not be considered an Employee if the person (a) has signed an
individual employment agreement or a personal services agreement with the
Company, or (b) is compensated through a third party and not through the
Company's payroll. Further provided, that an employee who is a nonresident alien
and who receives no earned income from the Company, which constitutes income
from sources within the United States, shall not be considered an Employee.
<PAGE> 5
12. ERISA - Public Law No. 93-406, the Employment Retirement Income
Security Act of 1974, as amended from time to time.
13. FIDUCIARIES - The Company, the Plan Administrator and the Trustee,
but only with respect to the specific responsibilities of each for Plan and
Trust administration.
14. GROSS EARNINGS - An Employee's regular salary paid (including any
overtime or premium payments) during his period of participation in the Plan,
and including the management performance bonus, salary reduction contributions
to The Timken Company Flexible Benefits Plan for Salaried Employees or the
Latrobe Steel Company Group Life and Health Insurance Plan, and amounts deferred
under The Timken Company 1996 Deferred Compensation Plan, but excluding any
other special types of payments, such as, but not limited to, suggestion awards,
moving allowance, vacation option pay, or retirement or dismissal pay. Gross
Earnings include payments under certain bonus plans at specified Company plants,
including Performance Reward Pay for all employees except Ashland Plant
Employees, to the extent outlined in the compensation documents attached to this
Plan as Exhibit A. For purposes of this Plan, Gross Earnings cannot exceed
$160,000 during a Plan Year (or, if greater, the dollar limitation in effect
under Section 401(a) (17) of the Code).
15. HIGHLY COMPENSATED EMPLOYEE - Effective January 1, 1997, any
Employee who --
(a) was at any time during the Plan Year or the preceding Plan Year a
five percent (5%) owner of the Company's outstanding common stock, or
(b) received compensation during the preceding Plan Year from the
Company in excess of $80,000 (or, if greater, the dollar limitation in effect
under Section 414(q)(1)(b) of the Code) and, if the Company so elects, was in
the top-paid group of employees (as defined in Section 414(q)(4) of the Code)
for such year.
<PAGE> 6
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.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of employees in the top-paid
group, and the compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
<PAGE> 7
16. HOUR OF SERVICE - Each hour (a) for which an Employee is paid or is
entitled to payment for the performance of duties for the Company, or for which
he or she 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, or (b) for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Company, which hours shall be credited to the
Employee for the computation period or periods to which the back pay award or
agreement pertains rather than for the period or periods in which the award or
agreement is paid or due. Hours of Service for reasons other than the
performance of duties shall be determined by dividing the payments received or
due 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 five hundred (500) Hours of
Service. An Hour of Service for reasons other than the performance of duties and
the crediting of Hours of Service to applicable computation periods, shall be
determined in accordance with Department of Labor Regulation Section
2530.200b-2(b) and (c), which are hereby incorporated by reference.
Solely for purposes of determining whether a break in Continuous
Service for participation and vesting purposes has occurred in a Plan Year, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been credited
to such individual but for such absence, or in any case in which such hours
cannot be determined, eight (8) Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (a) by reason of the pregnancy of the individual, (b)
by reason of a birth of a child of the individual, (c) by reason of the
placement of a child
<PAGE> 8
with the individual in connection with the adoption of such child by such
individual, or (d) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited
under this Section shall be credited (a) in the Plan Year in which the absence
begins if the crediting is necessary to prevent a break in service in that
period, or (b) in all other cases, in the following Plan Year. No more than 501
hours are required to be credited to a Participant pursuant to this Section.
Hours of service will be credited for employment with other members of an
affiliated service group (under Section 414(m) of the Code), a controlled group
of corporations (under Section 414(b) of the Code) or a group of trades or
businesses under common control (under Section 414(c) of the Code) of which the
Company is a member, and any other entity required to be aggregated with the
Company pursuant to Section 414(o) of the Code and the regulations thereunder.
17. INCOME - The net gain or loss of the Trust from investments, as
reflected by interest received and accrued, dividends received, realized and
unrealized gains and losses on securities, other investment transactions and
expenses paid from the Trust. In determining the income of the Trust for any
period, assets shall be valued on the basis of their current market value.
18. LATROBE - Latrobe Steel Company, a fully-owned subsidiary of the
Company, and any successor.
19. NORMAL RETIREMENT AGE - The later of the time a Participant attains
sixty-five (65) years of age or the fifth anniversary of the time participation
commenced.
20. NORMAL RETIREMENT DATE - The first day of the first calendar month
following a Participant's attainment of Normal Retirement Age.
21. PARTICIPANT - Any Employee who meets the requirements of Article II
hereof.
22. PLAN - The Timken Company-Latrobe Steel Company Savings and
Investment Pension Plan as herein set forth and as it may be amended and
restated from time to time.
<PAGE> 9
23. PLAN ADMINISTRATOR - The Timken Company or any individuals or
entities designated by it to administer the Plan.
24. PLAN YEAR - A period which includes all pay periods for which
payment is made in a calendar year.
25. POOLED INVESTMENT ACCOUNT - An account established pursuant to an
administrative services agreement between the Company and the Trustee.
26. POST TAX CONTRIBUTIONS TO THE TRUST - The portion of the Trust
representing (a) Participant contributions made prior to January 1, 1984 for
Employees of Timken and April 1, 1984 for Employees of Latrobe and income
thereon, and (b) reclassified excess contributions made prior to January 1,
1987, pursuant to the equity determination provisions of the Plan.
27. PRETAX CONTRIBUTIONS TO THE TRUST - The portion of the Trust
representing (a) Salary Reduction Contributions and the Company Matching
Contributions made after January 1, 1984 for Employees of Timken and April 1,
1984 for Employees of Latrobe and income thereon, (b) contributions from Timken
and Participants which were made to BEST, a medical reimbursement account, in
1984, (c) contributions from the Company which were made to the Amended and
Restated Tax Credit Employee Stock Ownership Plan (PAYSOP), (d) the Company
contributions made prior to January 1, 1984 for Employees of Timken and April 1,
1984 for Employees of Latrobe and income thereon, (e) Performance Sharing
Contributions from the Company made after December 31, 1991 for Employees of
Timken and Latrobe and income thereon, (f) Timken contributions made prior to
January 1, 1994 to The Timken Company Pension Plus Stock Plan for Certain Hourly
Employees in Ohio for Employees of Timken's New Philadelphia plant who became
Participants in this Plan as of January 1, 1994, and income thereon, and (g)
Rollover Contributions to the Trust made pursuant to Article III, Section 4.
<PAGE> 10
28. ROLLOVER CONTRIBUTION - All or part of a distribution a Participant
receives from a qualified trust described in Section 401(a) of the Code and
exempt from taxation under Section 501(a) of the Code, from an annuity plan
described in Section 403(a) of the Code, or from an individual retirement
account or an individual retirement annuity described in Section 408 of the
Code, including any earnings on such distribution, but not including any portion
of such distribution attributable to post-tax contributions, which is
contributed to the Trust.
29. THE TIMKEN COMPANY-LATROBE STEEL COMPANY SAVINGS AND INVESTMENT
PENSION PLAN TRUST (the Trust) - The Trust established in connection with the
Plan which holds and invests the Post Tax Contributions and the Company
contributions made prior to January 1, 1984, for Employees of the Company and
April 1, 1984, for Employees of Latrobe and income thereon, any amounts
transferred pursuant to Article VIII below, and income thereon, any amounts
transferred from the BEST medical reimbursement plan, any amounts transferred
from the Amended and Restated Tax Credit Employee Stock Ownership Plan (PAYSOP),
the Salary Reduction Contributions and the Company Matching Contributions made
after January 1, 1984, for Employees of Timken and April 1, 1984, for Employees
of Latrobe and income thereon, the Performance Sharing Contributions made by the
Company after December 31, 1991 for Employees of Timken and Latrobe and income
thereon, Timken contributions made prior to January 1, 1994 to The Timken
Company Pension Plus Stock Plan for Certain Hourly Employees in Ohio for
Employees of Timken's New Philadelphia plant who became Participants in this
Plan as of January 1, 1994 and income thereon, and Rollover Contributions to the
Trust made pursuant to Article III, Section 4. Effective August 1, 1989, the
Pretax and Post Tax Contributions to the Trust shall be merged and treated for
all purposes of the Trust (except for the tax consequences to the Participant
and availability for loans) as one corpus.
<PAGE> 11
30. TIMKEN - The Timken Company and any successor thereof.
31. TRUSTEE - That individual or institution appointed by the Company
to be the Trustee of the contributions to the Trust as provided herein, or their
successors.
32. VALUATION DATE - Any day that the New York Stock Exchange is open
for business or any other date chosen by the Company to make additional
valuations of the Trust Fund as necessary.
33. Masculine pronouns wherever used in the Plan shall include feminine
or neuter pronouns, and the singular shall include the plural wherever
appropriate.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
1. Participation in this Plan shall be available only to full-time
salaried Employees of the Company in the United States, who have completed the
eligibility requirements of The Timken Company Flexible Benefits Program for
Salaried Employees or the Latrobe Steel Company Group Life and Health Insurance
Plan. For this purpose, any Employee (a) who is expected to work or to be paid
for 1,000 hours or more during any Plan Year or (b) who actually works or is
paid for 1,000 Hours of Service or more during any Plan Year shall be eligible
to be a Plan Participant, except that the initial eligibility computation period
used to determine whether an Employee is eligible to be a Plan Participant shall
be the twelve-consecutive month period beginning with the employment
commencement date. Thereafter succeeding eligibility computation periods will
begin with the Plan Year which includes the first anniversary of the Employee's
employment commencement date. Once an Employee has become eligible and has
elected to participate in this Plan, such Employee will not lose eligibility if
he completes more than 500 Hours of Service in a subsequent Plan Year. Once an
Employee has become a Participant, any eligibility computation period during
which the Employee fails to complete more than 500 Hours of Service shall
constitute a break in Continuous Service. If an Employee loses eligibility
because he fails to complete more than 500 Hours of Service in a Plan Year
<PAGE> 12
and later completes 1,000 or more Hours of Service in a subsequent Plan Year,
the Employee shall again participate immediately upon completion of the 1,000
Hours of Service. Eligibility shall be determined and certified by the Company.
2. Except as provided in Article II, Section 5, eligible Employees
electing to participate in this Plan for the first time or following a rehire to
active employment with the Company shall file a written election to do so, which
election will be effective with the first available pay period. Any other
election to participate or reparticipate may be accomplished by utilizing the
interactive voice response system, which election will be effective with the
first available pay period.
3. An Employee's election to participate in this Plan shall designate
the amount of salary reduction elected by the Employee to be contributed to this
Plan, as provided in Article III below. 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 participation or until such Employee ceases to be eligible to
participate in this Plan.
5. An Employee does not need to file a written election to participate
in the Company's Performance Sharing Contribution. An Employee will participate
in the Plan not later than the earlier of the first day of the first Plan Year
after the Employee has met the service requirements, or six (6) months after the
day such requirements are met.
6. If a Participant is re-instated by the Company, he shall recommence
participation in the Plan on the first day he is credited with an Hour of
Service for the Company.
ARTICLE III - SALARY REDUCTION CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
1. At any time in accordance with Article II above, a Participant may
elect to have his salary reduced and the subsequent reduction contributed to
this Plan, in an amount equal to any whole
<PAGE> 13
percent between one percent (1%) and fifteen percent (15%) of his Gross Earnings
to be deducted from his Gross Earnings payable for each pay period, provided
that the Company may limit certain Highly Compensated Employees to less than
fifteen percent (15%). Highly Compensated Employees earning between $5,000 and
$6,250 in Gross Earnings per month shall be limited to contributing thirteen
percent (13%). Highly Compensated Employees earning more than $6,250 in Gross
Earnings per month shall be limited to contributing eight percent (8%). The
percent reduction selected cannot result in more than a $10,000 Salary 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 Code).
2. A Participant's election as to the rate of his Salary Reduction
Contributions to this Plan will remain in effect until the Participant changes
his election, ceases to be eligible to participate, or utilizes the interactive
voice response system or through a customer service representative to terminate
his participation in this Plan.
3. A Participant may change his election as to the rate of Salary
Reduction Contributions to this Plan only by utilizing the interactive voice
response system or through a customer service representative on any day. Such
election shall become effective as of the first available pay period. Any change
made will be effective for all succeeding pay periods, unless changed again by
the same procedure.
4. A Participant after filing with the Company or the Administrative
Delegate the form prescribed by the Plan Administrator, may make a cash
contribution to the Trust in the form of a Rollover Contribution. Before
completing the Rollover Contribution, the Participant shall furnish satisfactory
evidence to the Plan Administrator that the proposed Rollover Contribution
satisfies the requirements of Section 408(d)(3) of the Code.
<PAGE> 14
ARTICLE IV - COMPANY CONTRIBUTIONS
1. The Company will contribute to each Participant's account in this
Plan an amount equal to the sum of (a) the Participant's Salary Reduction
Contributions up to the first five percent (5%) of the Participant's Gross
Earnings multiplied by eighty percent (80%) and (b) the Participant's Salary
Reduction Contributions in excess of the first five percent up to the next three
percent (3%) of the Participant's Gross Earnings multiplied by twenty percent
(20%). These percentages may be changed from time to time by the Company.
2. (a) The Company will contribute to each Participant's Account in
this Plan a Performance Sharing Contribution. For an Employee to be eligible for
a Performance Sharing Contribution, he must be actively employed by the Company
on December 31 of the year for which the contribution is to be made, must be
otherwise eligible to participate in the Plan, must not be an elected officer of
the Company having an Employee Excess Benefits Agreement. Nonexempt employees
for federal and state wage and hour law purposes of Latrobe's Sandy Creek
Service Center hired on or after January 1, 1994, will be eligible for a
Performance Sharing Contribution, with the first Performance Sharing
Contribution made for the 1998 Plan Year.
(b) The Performance Sharing Contribution will be based on the Company's
return on assets, which is the Company's consolidated net income (from
operations) divided by the Company's total assets. The contribution will be one
tenth of one percent (0.1%) of a Participant's Gross Earnings for each two
tenths of one percent (0.2%) of return on assets up to a maximum of three
percent (3%) of a Participant's Gross Earnings.
3. In no event shall the annual addition to a Participant's Account
under this Plan and any other qualified defined contribution plan maintained by
the Company exceed the lesser of $30,000 (or, if greater, one-fourth of the
dollar limitation in effect under Section 415(b)(1)(A) of the Code) or 25
percent of the Participant's total compensation from the Company. For purposes
of this Article IV,
<PAGE> 15
Section 3 and the subsequent Sections of this Article IV, compensation is all
amounts received by a Participant from the Company during a Plan 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 Salary 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
Code).
The annual addition shall be the sum of the following amounts credited
to a Participant's Account for the limitation year:
(a) Company Matching Contributions,
(b) Salary Reduction Contributions,
(c) Post Tax Employee Contributions and forfeitures, and
(d) amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Section 415(c)(2) of the Code, which is a part of a
pension or annuity plan maintained by the Company. Amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits,
allocated to the separate account of a key employee, as defined in Section
419A(d)(3) of the Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Company are also treated as annual
additions to a defined contribution plan.
For this purpose, any excess amount applied in the limitation year to
reduce Company contributions will be considered annual additions for such
limitation year.
In the event a corrective distribution is needed, following the end of
the calendar year, the Plan shall distribute such corrective distribution not
later than the first April 15 following the close of the calendar year. The
income (or loss) allocable to any excess Salary Reduction Contribution shall be
distributed as part of any corrective distribution. A Participant eligible to
participate in The Timken
<PAGE> 16
Company 1996 Deferred Compensation Plan may elect to have any corrective
distribution and the allocable income (or loss), contributed to such deferred
compensation plan provided that the Participant has made the proper election to
do so.
4. 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 Company contributions to the
Participant's Account made under this Plan shall be reduced as necessary, in the
following order: Company Matching Contributions, Salary Reduction Contributions
and Performance Sharing Contributions.
5. If the Participant is or was formerly 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.
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 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, including any adjustments under Section 415(b)
of the Code.
Notwithstanding the above, if the Participant were a Participant as of
the first day of the first limitation year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Company which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last limitation year beginning
before January 1, 1987, disregarding any change in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the
<PAGE> 17
defined benefit plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code for all limitation years beginning
before January 1, 1987.
The defined contribution plan fraction is a fraction, the numerator of
which is the sum of the annual additions to the Participant's account under all
defined contribution plans maintained by the Company (whether or not terminated)
for the current and all prior limitation years, and the annual additions
attributable to all welfare benefit funds, as defined in Section 419(e) of the
Code, and individual medical accounts, as defined in Section 415(1)(2) of the
Code, 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.
The maximum aggregate amount in any limitation year is the lesser of
125 percent of the dollar limitation determined under Sections 415(b) and (d) of
the Code in effect under Section 415(c)(1)(A) of the Code or 35 percent of the
Participant's compensation for such year.
If the Participant were a Participant as of the end of the first day of
the first limitation year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Company which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the last limitation year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made after May
5, 1986, but using the Section 415 limitation
<PAGE> 18
applicable to the first limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January 1,
1987, shall not be recomputed to treat all post tax Employee contributions as
annual additions.
6. If the sum of the defined contribution plan fraction and the defined
benefit plan fraction, as described in Article IV, Section 5, for a Participant
exceeds 1.0, the Participant's benefit under the defined benefit plan shall be
reduced accordingly.
7. If, as a result of the allocations of any forfeitures or errors in
estimating a Participant's compensation, the annual addition to a Participant's
Account exceeds the permissible amount, the excess will be disposed of as
follows:
(a) If the Participant is covered by the Plan at the end of the
limitation year, the excess amount in the Participant's Account will be used to
reduce Company contributions (including any allocation of forfeitures) for such
Participant in the next Plan Year and each succeeding Plan Year if necessary.
(b) If the Participant is not covered by the Plan at the end of a Plan
Year, the excess amount will be held unallocated in a suspense account. The
suspense account will be applied to reduce Company Matching Contributions for
all remaining Participants in the next limitation year, and each succeeding year
if necessary.
(c) If a suspense account is in existence at any time during the Plan
Year pursuant to this Section, it will not participate in the allocation of the
Trust investment gain and losses. If a suspense account is in existence at any
time during a particular Plan Year, all amounts in the suspense account must be
allocated and reallocated to Participants' accounts before any Company
contributions may be made to the Plan for that limitation year. Excess amounts
may not be distributed to Participants or former Participants.
<PAGE> 19
(d) Any underpayments of Company contributions will be corrected by the
Company.
For purposes of this Article IV, Section 7, excess amounts attributable
to a specific type of contribution (Salary Reduction Contributions, Company
Matching Contributions or Performance Sharing Contributions) may be utilized to
reduce only a comparable contribution in the following year.
8. The Accrued Benefit for each Participant in the Plan who has accrued
benefits as of December 31, 1993, who has at least one Hour of Service with the
Company in a Plan Year beginning after that date and whose Accrued Benefits were
determined taking into account compensation that exceeded the annual
compensation limit for any year, may be changed as set forth in this Section.
A Participant's Accrued Benefit under the Plan shall be equal to the
greater of
(a) the Participant's Accrued Benefit as of December 31, 1993 and
his Accrued Benefit determined under the formula and
limitations applicable to benefit accruals in the current plan
year as applied to years of service after December 31, 1993,
or
(b) the Participant's Accrued Benefit determined under the formula
and limitations applicable to benefit accruals in the current
Plan Year as applied to the Participant's total years of
service for the Company before and after December 31, 1993.
ARTICLE V - INTERESTS NON-FORFEITABLE
Participants shall have an immediate fully vested and nonforfeitable
right to Salary Reduction Contributions, Company Matching Contributions,
Performance Sharing Contributions and Rollover Contributions properly credited
to their respective subaccounts and the income attributable thereto.
<PAGE> 20
ARTICLE VI - OPERATION OF THE TRUST
1. Except as provided in Sections 2 and 3 below, the Trust shall invest
100% of its funds in The Timken Company Common Stock Fund. The Company may, for
administrative purposes, establish unit values for one or more investment funds
(including Timken Company Common Stock) and maintain the Accounts setting forth
each Participant's interest in such investment fund (or portion thereof) in
terms of such units, all in accordance with fair, equitable and administratively
practicable rules and procedures as the Company shall design and adopt. Such
rules and procedures shall be set forth in a Pooled Investment Service Agreement
between the Company and the Trustee, which Agreement shall be incorporated by
reference and made a part of this Plan. In the event that unit accounting is
established for any investment fund (or portion thereof) the value of a
Participant's Account at any time shall be an amount equal to the then value of
a unit in such investment fund (or any portion thereof) multiplied by the number
of units then credited to the Participant.
2. Participants will be able to diversify the investment of their
Beneficial Interest for contributions made after January 1, 1989. A Participant
may choose to invest his Salary Reduction Contributions, his Performance Sharing
Contributions and his Rollover Contributions in Timken stock, or in other
investment options offered by the Company. At the time the Participant enrolls
or re-enrolls in the Plan, he may elect what percentage, if any, of his Salary
Reduction Contributions, his Performance Sharing Contributions and his Rollover
Contributions, in increments of five percent (5%), he wishes to place in each
investment option.
A Participant can request fund transfers on any business day of his
prior Salary Reduction Contributions (made on or after January 1, 1989), his
Performance Sharing Contributions and his Rollover Contributions from one
investment option to another by utilizing the interactive voice response system
or through a customer service representative. The Participant may elect what
<PAGE> 21
percentage, if any, of those assets in the Participant's Account eligible for
transfer will be withdrawn in five percent (5%) increments from existing
investment options. The Participant may then elect what percentage of the assets
so withdrawn will be transferred to other investment options in five percent
(5%) increments. In order to effectuate a transfer into or out of the fund
holding Timken Stock, shares of Timken Stock may be (a) bought and/or sold on
the open market at the market price of the stock on any Valuation Date, or (b)
effective November 13, 1996, bought from and/or sold to the Company at the
average of the high and low market price on the Valuation Date the request is
received by the Company, if cash is not available. Company Matching
Contributions can be transferred to another investment option only under the
circumstances described in Paragraphs 3 and 4 below.
3. Contributions to the Plan made prior to January 1, 1989, cannot be
transferred to any other investment option. However, Participants who are active
Employees and who have attained age 55 or who have 30 years of service will be
permitted to transfer all past Company Matching Contributions, Salary Reduction
Contributions, Performance Sharing Contributions, Rollover Contributions and
other Pretax and Post Tax Contributions to the Trust to any investment option
offered by the Company. A Participant meeting the age and service requirements
can request investment transfers as described in Paragraph 2 above.
4. Participants who have retired from the Company and who have elected
to retain their distribution in the Plan pursuant to Article VII, Section 6,
hereof will be permitted to transfer all past Company Matching Contributions,
Pretax and Post Tax Contributions, Salary Reduction Contributions, Performance
Sharing Contributions and Rollover Contributions to any investment option
offered by the Company, according to the procedures described in Paragraph 2
above.
5. The Trustee shall, following the end of each Valuation Date, value
all assets of the Trust Fund, allocate net gains or losses, and process
additions to and withdrawals from Account
<PAGE> 22
balances in the following manner:
a. The Trustee shall first compute the fair market value of securities
and/or the other assets comprising each investment fund designated by the
Company for direction of investment by the Participants of this Plan. Each
Account balance shall be adjusted each business day by applying the closing
market price of the investment fund on the current business day to the
share/unit balance of the investment fund as of the close of business on the
current business day.
b. The Trustee shall then account for any requests for additions or
withdrawals made to or from a specific designated investment fund by any
Participant, including allocations of contributions. In completing the valuation
procedure described above, such adjustments in the amounts credited to such
Accounts shall be made on the business day to which the investment activity
relates. Contributions received by the Trustee pursuant to this Plan shall not
be taken into account until the Valuation Date coinciding with or next following
the date such contribution was both actually paid to the Trustee and allocated
among the Accounts of Participants.
c. Notwithstanding Subsections a and b above, in the event a Pooled
Investment Fund is created as an investment option in this Plan, valuation of
the Pooled Investment Fund and allocation of earnings of the Pooled Investment
Fund shall be governed by the Administrative Services Agreement for such Pooled
Investment Fund. The provisions of any such Administrative Services Agreement
shall be incorporated by reference and made a part of this Plan.
It is intended that this Section operate to distribute among the
Participant's Accounts in the Trust Fund, all income of the Trust Fund and
changes in the value of the assets of the Trust Fund.
6. 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.
<PAGE> 23
7. Investment fees attributable to a Participant's choice of a
particular investment option may be charged against the Participant's Account
balance in that investment option.
8. Certain managerial Employees subject to trading restrictions on
Timken stock should consult the Company's Legal Department prior to purchasing,
diversifying and/or disposing of shares of Timken stock in this Plan.
ARTICLE VII - DISTRIBUTIONS FROM THE TRUST
1. Effective January 1, 1997, the shares and cash held in the Trust for
the benefit of a Participant shall be distributed to the Participant at the
Participant's request upon retirement at or after Normal Retirement Age, upon
attainment of age 70-1/2, 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 Participant's Beneficiary shall be his 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
Beneficiary. The Account balance shall be adjusted for gains and losses
occurring after the Participant's death in accordance with usual Plan procedures
for adjusting Account balances for other types of distributions.
A Participant may elect at any time to waive the surviving spouse as
Beneficiary and may revoke any such election at any time. 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
<PAGE> 24
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.
In order to elect to waive his spouse as Beneficiary, a Participant
also must affirmatively elect that the payment of his benefits not be in the
form of a life annuity, and with respect to such Participant, this Plan may not
be a transferee of a defined benefit plan or an individual account plan subject
to the funding standards of the Internal Revenue Code or any other plan required
to provide a mandatory qualified joint and survivor annuity provision.
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 other 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 Participant or Beneficiary entitled to a distribution from the
Trust shall receive certificates for the full shares of Timken stock held for
his or her benefit and cash for any fractional interests in shares and
investments in other investment options. Timken stock shall be valued by using
the closing price of such stock on any Valuation Date. Other investment options
shall be valued by using the market value on the most recent Valuation Date
immediately preceding the date of distribution.
<PAGE> 25
4. Such distributions shall be made in a lump sum as soon as possible
following completion of a distribution request form after the Participant
retires, the Participant's death occurs, Continuous Service is broken or a
hardship withdrawal is processed. Notwithstanding the foregoing, unless the
Participant otherwise elects, distribution to a Participant will be made no
later than the sixtieth (60th) day after the close of the Plan Year in which
Continuous Service is broken. If the distribution exceeds $5,000 or if the
account balance of the Participant ever exceeded $5,000 at the time of a prior
distribution, it cannot be distributed without the written consent of the
Participant and the Participant's spouse, if any, or in cases where the
Participant is dead, the Participant's surviving spouse or Beneficiary (if the
surviving spouse is not the Beneficiary).
For distributions made from the Plan, the appropriate tax withholdings
will be made, unless the Participant directs the Plan Administrator, pursuant to
procedures to be implemented by the Plan Administrator, to roll over directly
his eligible rollover distribution to an eligible retirement plan. A direct
rollover is a payment by the Plan to the eligible retirement plan specified by
the Participant. An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the Participant, except that an
eligible rollover distribution does not include (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
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
<PAGE> 26
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.
Participants and Beneficiaries will also have the option to receive a
distribution in installments. The Participant or Beneficiary may elect the
frequency of the distribution which may be monthly, quarterly or annually over a
period not to exceed the recipient's life expectancy. A Participant must have a
minimum Account balance of $1,000 to elect installment distribution. After
installment payments begin, when the Account balance becomes $1,000 or less, the
entire balance will be distributed in a lump sum payment.
If distribution of benefits has commenced before the Participant's
death, the remaining benefits will be distributed at least as rapidly as under
the method of distribution being used as of the date of the Participant's death.
If the Participant dies before the distribution of benefits has commenced, the
remaining portion of the Participant's interest that is not payable to a
Beneficiary designated by the Participant shall be distributed within five (5)
years after the Participant's death; provided, that the five-year rule shall not
apply to any portion of the Participant's interest payable to a Beneficiary
designated by the Participant, if the remaining interest will be distributed
over the life of such Beneficiary (or over a period of time not greater than
said Beneficiary's life expectancy), commencing not later than one year after
the Participant's death (or, if the designated Beneficiary is the Participant's
surviving spouse, commencing not later than the date on which the Participant
would have attained age 70-1/2).
<PAGE> 27
5. Unless the Participant otherwise elects, the payment of benefits to
a Participant shall begin not later than the sixtieth (60th) day after the
latest of the close of the Plan Year in which (a) the Participant attains age
sixty-five (65), (b) the Participant completes ten (10) years of Continuous
Service, or (c) the Participant terminates his service with the Company. The
election to postpone the payment of benefits beyond the time specified above
shall be made by submitting to the Company a written statement, signed by the
Participant, which describes the benefit and the date on which the payment of
such benefit shall commence. Such an election may not be made if the exercise of
such election will cause the benefits payable under this Plan in the event of
the death of the Participant to be more than incidental.
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 Participant
attains age 70-1/2 or the calendar year in which the Participant retires.
If distributions are required to be made under this Article VII,
Section 5, they shall be made in a lump sum payment or in installment payments,
if the Participant so elects. The requirements of this Article VII, Section 5
shall apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan. All distributions
required under this Article VII, Section 5 shall be determined and made in
accordance with the proposed regulations under Section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-(2) of the proposed regulations. The amount to be distributed each
year, beginning with distributions for the first distribution calendar year
shall not be less than the quotient obtained by dividing the Partici-
<PAGE> 28
pant's benefit by the lesser of (i) the applicable life expectancy or (ii) if
the Participant's spouse is not the designated beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of
the Proposed Regulations. Distributions after the death of the Participant shall
be distributed using the applicable life expectancy set forth above as the
relevant divisor without regard to proposed regulations Section 1.401(a)(9)-2.
The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's required
beginning date. The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which the
Participant's required beginning date occurs, must be made on or before December
31 of that distribution calendar year.
6. 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 Article VII,
Section 5 above. Upon written notice (or by any other method approved by the
Company) from the Participant, such distribution shall be made as soon as
possible after the notice is received.
7. The assets of the Trust to be distributed to a Participant or
Beneficiary shall include any shares (or cash in lieu of fractional shares)
attributable to dividends payable to shareholders of record as of the end of the
quarter with respect to which the calculation is being made.
8. Partial or total distributions of the Participant's Salary Reduction
Contributions and/or Rollover 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
Trustee and such consent shall be given only if, under uniform rules and
regulations, all in conformance with
<PAGE> 29
procedures established by the Company, the Trustee determines that the purpose
of the withdrawal is to meet immediate and heavy financial needs of the
Participant, the amount of the withdrawal does not exceed such financial need,
and the amount of the withdrawal is not reasonably available from the resources
of the Participant. If the Participant is married, a distribution in excess of
$5,000 cannot be distributed without the written consent of the Participant's
spouse.
The determination of whether a Participant has an immediate and heavy
financial need will be made on the basis of all relevant facts and
circumstances. Financial needs which will be deemed immediate and heavy
financial need are the purchase of a primary residence (excluding mortgage
payments) of the Participant, payment of post-secondary educational tuition for
a year for the Participant or his dependents, health care expenses incurred by a
Participant or his dependents, and the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of a
Participant's principal residence.
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 (grossed up to reflect the income
taxes that will be assessed on the distribution), the Participant has obtained
all distributions (other than hardship distributions) and all available
nontaxable loans under all plans maintained by the Company, the Participant
agrees that all Salary Reduction Contributions and all other Participant
contributions to all plans maintained by the Company will be suspended until
twelve (12) months after receipt of the hardship distribution, and the
Participant agrees that any Salary Reduction Contributions made in the taxable
year following the taxable year of the hardship distribution shall not exceed
the maximum limit under Section 402(g) of the Code less the amount of the
Participant's Salary Reduction Contributions
<PAGE> 30
for the taxable year of the hardship distribution.
Such election may be made at any time, but not more frequently than
once every twelve months. All withdrawal elections shall be made by a
Participant on written forms supplied by the Trustee for that purpose. Such
distributions shall be processed immediately following completion of the
application procedure.
Certain managerial Employees subject to trading restrictions on Timken
stock should consult the Company's Legal Department prior to applying for a
hardship withdrawal from the Plan which would require disposing of shares of
Timken stock in this Plan.
9. The Company may transfer a Participant's Account under the Plan to
another qualified defined contribution plan maintained by a Controlled Group
Member, when the Participant transfers employment from an employee group covered
by the Plan to an employee group not so covered, provided that the other plan
accepts such transfers. Accounts so transferred shall be subject to such rights,
restrictions, and features (including vesting provisions) applicable to assets
in similar accounts contributed to and held under the other plan. The Plan
Administrator may establish such nondiscriminatory 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 or
by a Controlled Group Member) under the Code; including, without limitation,
rules insuring that such transfers comply with Sections 411(a) and 411(d)(6) of
the Code and the regulations thereunder. In no event shall any amount be
transferred to the Trust from a defined benefit pension plan or a money purchase
pension plan.
When a Participant transfers employment from an employee group not
covered by the Plan to an employee group covered by the Plan and has otherwise
satisfied the eligibility requirements of the Plan, the Company may transfer the
Participant's account balance under another qualified defined
<PAGE> 31
contribution plan maintained by a Controlled Group Member 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 nondiscriminatory 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 and any
other plan sponsored by it or by a Controlled Group Member under the Code;
including, without limitation, rules insuring that such transfers comply with
Section 411(a) and 411(d)(6) of the Code and the regulations thereunder.
ARTICLE VIII - EQUITY DETERMINATION
1. The Company may amend or revoke the Salary Reduction Contribution
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
Article IV, Section 3, or to insure that the discrimination tests of Section
401(k) of the 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 Code and (2) that the
actual deferral percentage for Highly Compensated Employees (as defined in
Article I, Section 15) for such Plan Year bears a relationship to the actual
deferral percentage for all other eligible Employees for the preceding Plan Year
which meets either of the following tests:
(a) the actual deferral percentage for the group of Highly
Compensated Employees is not more than the actual deferral
percentage of all other eligible Employees multiplied by 1.25,
or
(b) the excess of the actual deferral percentage for the group of
Highly Compensated Employees over that of all other eligible
Employees is not more than two (2) percent-
<PAGE> 32
age points, and the actual deferral percentage for the group
of Highly Compensated Employees is not more than the actual
deferral percentage of all other eligible Employees multiplied
by two (2).
For purposes of this Section, the actual deferral percentage for a specified
group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(a) the amount of Salary Reduction Contributions actually paid to
the Trust on behalf of each such Employee for such Plan Year,
as well as any Company Matching Contributions and any
Performance Sharing Contributions treated by the Company as
elective contributions, to
(b) the Employee's compensation (as defined in Section 414(s) of
the Code) for such Plan Year.
For purposes of determining whether the Plan satisfies the actual deferral
percentage test, all Salary Reduction Contributions, as well as any Company
Matching Contributions and any Performance Sharing Contributions treated by the
Company as elective contributions that are made under two or more plans that are
aggregated for purpose of satisfying Sections 401(a)(4) of the Code and 410(b)
(other than Section 410(b)(2)(A)(ii) of the Code), are to be treated as made
under a single plan. If two or more plans are permissively aggregated for
purpose of satisfying Section 401(k) of the Code, the aggregated plans must also
satisfy Sections 401(a)(4) and 410(b) of the Code as though they were a single
plan. In calculating the actual deferral percentage, the actual deferral ratio
of a Highly Compensated Employee will be determined by treating all plans
subject to Section 401(k) of the Code under which the Highly Compensated
Employee is eligible (other than those that may not be permissively aggregated)
as a single plan.
<PAGE> 33
2. The Company may amend or revoke the Salary Reduction Contributions
election of any Participant at any time, if the Company determines that such
revocation or amendment is necessary to insure that the discrimination tests of
Section 401(m) of the Code are met for such Plan Year. The discrimination tests
shall be that the actual contribution percentage for Highly Compensated
Employees (as defined in Article I, Section 15) for such Plan Year bears a
relationship to the actual contribution percentage for all other eligible
Employees for the preceding Plan Year which meets either of the following tests:
(a) the actual contribution percentage for the group of Highly
Compensated Employees is not more than the actual contribution
percentage of all other eligible Employees multiplied by 1.25,
or
(b) the excess of the actual contribution percentage for the group
of Highly Compensated Employees over that of all other
eligible Employees is not more than two (2) percentage points,
and the actual contribution percentage for the group of Highly
Compensated Employees is not more than the actual contribution
percentage of all other eligible Employees multiplied by two
(2).
For purposes of this Section, the actual contribution percentage for a specified
group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(a) the amount of Company Matching Contributions actually paid to
the Trust on behalf of each such Employee for such Plan Year,
as well as any salary reduction contributions and any
Performance Sharing Contributions, that are treated by the
Company as matching contributions to the Plan, to
<PAGE> 34
(b) the Employees' compensation (as defined in Section 414(s) of
the Code) for such Plan Year.
For purposes of determining whether the Plan satisfies the actual
contribution percentage test of Section 401(m) of the Code, all Matching
Contributions that are made under two or more plans that are aggregated for
purpose of satisfying Sections 401(a)(4) and 410(b) of the Code (other than
Section 410(b)(2)(A)(ii) of the Code, are to be treated as made under a single
plan. If two or more plans are permissively aggregated for purposes of
satisfying Section 410(m) of the Code, the aggregated plans must also satisfy
Sections 401(a)(4) and 410(b) of the Code as though they were a single plan. In
calculating the actual contribution percentage, the actual contribution ratio of
a Highly Compensated Employee will be determined by treating all plans subject
to Section 401(m) of the Code under which the Highly Compensated Employee is
eligible (other than those that may not be permissively aggregated) as a single
plan.
3. Effective January 1, 1997, in the event that the Plan should fail to
meet the test set forth in Article VIII, Section l, the amount of excess
contributions for a Highly Compensated Employee for a Plan Year is to be
determined by the following leveling method, under which the dollar amount of
contributions by and on behalf of the Highly Compensated Employee with the
highest dollar amount of such contributions is reduced to the extent required to
- -
(a) enable the arrangement to satisfy the actual deferral
percentage test, or
(b) cause such Highly Compensated Employee's dollar amount of such
contributions to equal the dollar amount of a Highly
Compensated Employee with the next highest dollar amount of
such contributions.
This process must be repeated until the Plan satisfies the actual
deferral percentage test. For each Highly Compensated Employee, the amount of
excess contributions is equal to the total Salary
<PAGE> 35
Reduction Contribution, plus Company Matching Contributions and Performance
Sharing Contributions treated as elective contributions, on behalf of the
Participant.
Excess contributions (and income allocable thereto) are distributed in
accordance with this Article VIII, Section 3, only if such excess contributions
(and allocable income) are designated by the Company as a distribution of excess
contributions (and income) and are distributed to the appropriate Highly
Compensated Employees after the close of the Plan Year in which the excess
contributions occurred and within twelve months after the close of such Plan
Year.
A corrective distribution of excess contributions (and income) is
includable in gross income of the Participant on the earliest dates any Salary
Reduction Contributions by the Participant during the Plan Year would have been
received by the Participant had he originally elected to receive the amounts in
cash, or, if distributed more than two and a half months after the Plan Year for
which such contributions were made, in the taxable year of the Participant in
which distributed. A Participant eligible to participate in The Timken Company
1996 Deferred Compensation Plan may elect to have any corrective distribution
and the allocable income (or loss), contributed to such deferred compensation
plan provided that the Participant has made the proper election to do so.
The amount of excess contributions to be distributed under this Article
VIII, Section 3, with respect to a Participant for a Plan Year shall be reduced
by any excess Salary Reduction Contribution elections under Article IV, Section
3, previously distributed to such Participant for the Participant's taxable year
ending with or within such Plan Year. The amount of excess Salary Reduction
Contributions elections that may be distributed under Article IV, Section 3,
with respect to a Participant for a calendar year shall be reduced by any excess
contributions previously distributed with respect to such Participant for the
Plan Year beginning with or within such calendar year. In the event
<PAGE> 36
of a reduction under this paragraph, the amount of excess contributions
includable in the gross income of the Participant and the amount of excess
contributions reported by the Company as includable in the gross income of the
Participant shall be reduced by the amount of the reduction under this
paragraph.
4. Effective January 1, 1997, in the event that the Plan should fail to
meet the test set forth in Article VIII, Section 2, the amount of excess
aggregate contributions for a Highly Compensated Employee for a Plan Year is to
be determined by the following leveling method under which the dollar amount of
contributions by and on behalf of the Highly Compensated Employee with the
highest dollar amount of such contributions is reduced to the extent required to
(1) enable the Plan to satisfy the actual contribution percentage
test, or
(2) cause such Highly Compensated Employee's dollar amount of such
contributions to equal the dollar amount of the Highly
Compensated Employee with the next highest dollar amount of
such contributions.
This process must be repeated until the Plan satisfies the actual
contribution percentage test. For each Highly Compensated Employee, the amount
of excess aggregate contributions is equal to the total Company Matching
Contributions, plus Salary Reduction Contributions and Performance Sharing
Contributions treated as matching contributions, on behalf of the Participant.
Excess aggregate contributions (and income allocable thereto) are
distributed in accordance with this Article VIII, Section 4, only if such excess
aggregate contributions (and allocable income) are designated by the Company as
a distribution of excess aggregate contributions (and income) and are
distributed to the appropriate Highly Compensated Employees after the close of
the Plan Year in which the excess aggregate contributions occurred and within
twelve months after the close of the following Plan Year.
<PAGE> 37
A corrective distribution of excess aggregate contributions (and
income) is includable in gross income for the taxable year of the Participant
ending with or within the Plan Year for which the excess aggregate contributions
were made or, if distributed more than two and a half months after the Plan Year
for which such excess aggregate contributions were made, in the taxable year of
the Participant in which distributed. A Participant eligible to participate in
The Timken Company 1996 Deferred Compensation Plan may elect to have any
corrective distribution and the allocable income (or loss), contributed to such
deferred compensation plan provided that the Participant has made the proper
election to do so.
5. If a multiple use of the alternative limitations described in
Article VIII, Sections 1 and 2, occurs with respect to the Plan, such multiple
use shall be prevented as to any Highly Compensated Employee according to the
provisions of Section 1.401(m)-2(b) of the Treasury Regulations. Such multiple
use shall be corrected by reducing the dollar amount of contributions by and on
behalf of all Highly Compensated Employees. The amount of the reduction to the
dollar amount of such contributions of all Highly Compensated Employees shall be
calculated in the manner described in Article VIII, Section 4. The required
reduction shall be treated as an excess aggregate contribution under the Plan.
ARTICLE IX - LOANS FROM THE TRUST
1. A Participant or alternate payee who has succeeded to the interest
of a Participant, may obtain a loan from the Trust upon proper application to
the Trust pursuant to procedures established by the Company. For purposes of
this Article IX, the term "Participant" shall include an alternate payee
described in the preceding sentence. The nature and amount of the loan must
conform to the following rules and limits:
<PAGE> 38
(a) The Participant may borrow only from Pretax Contributions
(including Performance Sharing Contributions and Rollover
Contributions) to the Trust in the custody of the Trustee;
(b) The minimum loan amount is $1,000;
(c) The maximum loan amount is 50 percent 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 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.
(d) The term of the loan cannot exceed 5 years, except that the
term of a loan made for the purpose of purchasing a primary
residence cannot exceed 30 years, provided that the term of a
loan made for any purpose can not extend beyond the
Participant's attainment of age 70-1/2.
(e) A Participant may have only one loan from this Plan in effect
at any one time and may apply for only one loan within each
twelve month period.
(f) The Company 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.
(g) 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 borrower is not
an active Employee, the borrower and the Company shall agree
to a repayment schedule which shall be incorporated in the
loan agreement.
<PAGE> 39
(h) The loan may be repaid in full at a date earlier than provided
in the loan agreement with no penalty.
(i) Interest paid by the Participant in excess of the loan fees,
if any, will be credited directly to the Participant's
account.
(j) Any loan fees charged will be paid by the Participant from
funds other than those in the Trust.
(k) 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 and on a pro-rata basis from Company and
Participant contributions at the time of the loan. Repayments
will be redeposited into the Participant's current investment
options and contributions using the current ratio, except for
amounts which must be reinvested in Timken Company Stock.
(l) If a Participant or Beneficiary 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 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 o? the loan in
default (unpaid principal and the interest accrued thereon)
shall be treated as a distribution from the Plan in the Plan
Year in which the default occurs. The amount of the default
will not constitute part of subsequent distributions from the
Trust.
(m) The proceeds of the loan cannot be applied toward the purchase
of any securities.
(n) Loan repayments will be suspended under this Plan as permitted
under Section 414(u) of the Code.
<PAGE> 40
2. Loans may be applied for on any business day and will be processed
immediately. Loan applications shall be made through the interactive voice
response system, except that any loan whose term extends beyond five (5) years
must be on a written application form available from and returned to the
Trustee.
3. The rules and limits for this loan provision may be changed from
time to time to comply with the Internal Revenue Code and with regulations
issued thereunder.
4. Certain managerial Employees subject to trading restrictions on
Timken stock should consult the Company's Legal Department prior to applying for
a loan from the Plan which would require disposing of shares of Timken stock in
this Plan.
ARTICLE X - VOTING OF SHARES HELD BY THE TRUSTEE
Each Participant, each Beneficiary who has succeeded to the interest of
a Participant and each alternate payee ("Eligible Participants and
Beneficiaries") in this Plan shall have the authority to direct the exercise of
voting rights as to whole shares of Timken stock held for the benefit of the
Eligible Participant or Beneficiary as of the most current Valuation Date
available preceding the record date for the shareholders' meeting. The Company
shall furnish Timken's Annual Report, Notice of Annual Meeting, Proxy Statement,
Proxy Card and other shareholder information to each Eligible Participant and
Beneficiary and shall solicit each Eligible Participant's and Beneficiary's
vote; the Company reserves the option to retain the Trustee to perform these
services. All other shares of Timken stock held in the Trust, including shares
not voted by Eligible Participants or Beneficiaries or not yet allocated to
Eligible Participants or Beneficiaries, are to 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 Eligible Participants and Beneficiaries with
respect to whole shares of Timken stock.
<PAGE> 41
ARTICLE XI - 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).
ARTICLE XII - CONDITIONS TO THE EFFECTIVENESS AND CONTINUANCE OF THIS
PLAN
1. The Company will not be required to make any 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 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) of the 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 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 Company's contributions to such Trust shall
be included in the regular rate of pay of any Employee. Continued contributions
to the Trust and operation of the Plan shall be conditioned upon retaining such
favorable ruling or rulings.
3. In the event the Plan fails to qualify under the applicable
provisions of the Code, initially or as amended, the Company's contributions
shall be returned to the Company. Contributions to the Trust by the Company are
conditioned on their deductibility under Section 404(a) of the Code.
<PAGE> 42
If any deduction is disallowed for all or part of such contributions, the
contributions for which the deduction is disallowed shall, upon proper notice to
the Trustee, be returned to the Company.
ARTICLE XIII - AMENDMENT OR TERMINATION OF PLAN
1. The Company expects to continue this Plan indefinitely, but reserves
the right to terminate the Plan or to amend the Plan in any other respect and in
any manner that it may deem advisable. The Board of Directors of Timken has
authorized and instructed its Vice President - Human Resources and Logistics (or
any other officer or delegate of an officer, except the Administrative Delegate)
to amend or terminate the Plan. Any such amendment shall be in writing. Upon
delivery of written notice from Timken to the Trustee, the Plan and Trust
Agreement shall be deemed to have been terminated or amended in the manner set
forth therein, and all Participants and all persons claiming any interest
hereunder shall be bound thereby; provided that no termination or amendment:
(a) shall have the effect of vesting in the Company any interest
in any property held subject to the terms of the Plan;
(b) shall cause or permit any property held subject to the terms
of the Plan to be diverted to purposes other than the
exclusive benefit of Participants and their Beneficiaries,
including contributions to the Plan which are intended to
bridge any differences between the price at which Timken Stock
is bought and/or sold on the open market and the price at
which it is credited to a Participant's account;
(c) shall reduce the interest of a Participant in the Trust
property as of that time or his right to enjoy such interest
without the written consent of the Participant;
(d) shall increase the duties or liabilities of the Trustee
without its written consent.
<PAGE> 43
2. Without terminating this Plan, the Company may, at its sole
discretion, at any time prior to the end of a Plan Year, reduce or suspend its
contributions to this Plan.
3. In the event of termination or partial termination of the Plan or a
complete discontinuance of contributions, the Participants, retired
Participants, former Participants and Beneficiaries of deceased Participants,
and alternate payees shall have a fully vested interest in the amounts credited
to their respective Accounts at the time of such termination, partial
termination or discontinuance.
4. Upon the termination of the Plan and Trust, after proportional
adjustment of the Accounts to reflect losses or profits and reallocations to the
date of termination, each Participant, retired Participant, former Participant
and Beneficiary of a deceased Participant, and alternate payees shall be
entitled to receive any amounts then credited to his Account in the Trust.
Distribution of such amounts shall be made upon the Participant's attainment of
age 59-1/2, or if earlier, the termination of his employment with the Company.
5. In the event that amendments to this Plan are necessary or desirable
for the purpose of (a) obtaining a favorable ruling by the Internal Revenue
Service concerning the qualification of or any matter arising under this Plan,
(b) clarifying any ambiguity, correcting any apparent error, or supplying any
omission from the provisions of this Plan, or (c) facilitating or improving the
administration of this Plan, such amendments may be made by the Company;
provided that no such amendment shall adversely affect any of the rights of
Participants or prospective Participants in this Plan, nor impose additional
obligations on the Company, or relieve the Company of any obligations prescribed
hereby.
6. The Board of Directors of Timken may delegate its duties and
responsibilities with respect to the Plan to such officer or officers (or their
designees, except the Administrative Delegate)
<PAGE> 44
as the Board of Directors may determine and may allocate to and among any one or
more of such officers such duties and responsibilities, including the power to
amend the Plan in any manner or suspend or modify the level of Company
contributions to the Plan.
ARTICLE XIV - NONALIENATION OF PARTICIPANTS' INTERESTS
1. No right to the monies contributed by a Participant or the Company
under this Plan, nor in any shares held by the Trustee, nor any dividends
thereon, 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 the authority to recover any Trustee fees and expenses as agreed
to by the Company and the Trustee. If at any time prior thereto a Participant
shall attempt to alienate, assign, encumber, pledge, sell or otherwise transfer
his 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.
2. Section 1 of this Article XIV 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
<PAGE> 45
of an alternate payee's right to, or assigns to an alternate payee the right to,
receive all or a portion of the benefits payable to a Participant under the
Plan, specifies (a) the name and last known mailing address of the Participant
and of each alternate payee covered under the order, (b) the amount or
percentage of the Participant's benefits to be paid to any alternate payee, or
the manner in which such amount or percentage is to be determined, (c) the
number of payments or the period to which the order applies, and (d) each plan
to which the order relates. Such order cannot require the Plan to provide any
type or form of benefits, or any option, not otherwise provided under the Plan;
it cannot require the Plan to provide increased benefits (determined on the
basis of actuarial value), and it cannot require the payment of benefits to an
alternate payee which are required to be paid to another alternate payee under
another order previously determined to be a qualified domestic relations order.
3. Each alternate payee under a qualified domestic relations order
shall have the right from time to time to file with the Company a written
request regarding the time and manner of payment of the alternate payee's
interest in the Plan pursuant to such qualified domestic relations order.
Provided such qualified domestic relations order complies with the Internal
Revenue Code, such request shall be considered by the Company and shall be acted
upon in accordance with the terms of such qualified domestic relations order.
The options available to an alternate payee shall be those set forth in Article
VII, Section 4, unless otherwise modified by the qualified domestic relations
order, provided that said qualified domestic relations order cannot enlarge the
options available under Article VII, Section 4. 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.
ARTICLE XV - TENDER OFFERS
<PAGE> 46
1. In the event a tender offer (as determined by the Board of Directors
of Timken) for shares of Timken stock is commenced, then, notwithstanding any
other provision of the Plan or the Trust Agreement, each Participant, each
Beneficiary who has succeeded to the interest of a Participant and each
alternate payee ("Affected Participants and Beneficiaries") shall, in accordance
with the following provisions of this Article, have the right to decide if
Timken Company common stock credited to his account shall be tendered.
2. In the event of a tender offer described in Section 1 of this
Article, Timken 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 Timken stock credited to his account all information pertinent to such
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
Timken stock credited to his Account. 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 Timken 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 Timken stock held under the Plan shall continue
to be held by the Trustee. If, in the course of a tender offer described in
Section 1 of this Article, an issue shall arise on which Affected Participants
and Beneficiaries are required to have an opportunity to alter their
circumstances, Timken 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) Timken 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.
<PAGE> 47
3. To the extent that a tender offer described in Section 1 of this
Article is for cash, proceeds from the sale of any shares of Timken stock
pursuant to such offer shall be held by the Trustee in an interest bearing
account or in short-term government bonds acquired by the Trustee upon the
receipt of any such cash proceeds. To the extent that a tender offer described
in Section 1 of this Article is for property other than cash, property received
by the Trustee from the sale of any shares of Timken stock pursuant to such
offer shall be held by the Trustee in a general investment fund established by
the Trustee upon the receipt of any such property.
4. Any decision by an Affected Participant or Beneficiary to tender (or
not tender) or to sell (or not sell), and any other direction by an Affected
Participant or Beneficiary, pursuant to this Article shall constitute an
exercise of control by such Affected Participant or Beneficiary over the assets
allocated to his account within the meaning of Section 404(c) of ERISA.
ARTICLE XVI - TOP-HEAVY PROVISIONS
1. DEFINITIONS. For the purposes of this Article XVI, the following
definitions shall apply:
(a) "Key Employee" means an Employee or former Employee who at any
time during the Plan Year containing the Determination Date or
during the four preceding Plan Years is:
(1) an officer of the Company having an annual
compensation greater than 50 percent of the amount in
effect under Section 415(b)(1)(A) of the Code for any
such Plan Year;
(2) an owner (or considered the owner within the meaning
of Section 318 of the Code) of one of the largest
interests in the Company, if such individual's annual
compensation exceeds 100% of the limitation in effect
under Section 415(c)(1)(A) of the Code;
<PAGE> 48
(3) a five percent (5%) owner of the Company; or
(4) a one percent (1%) owner of the Company who has an
annual compensation above $150,000.
For purposes of determining the number of officers taken into
account under clause (1) above, Employees described in Section
414(q)(8) of the Code will be excluded. For purposes of clause
(2) above, if two Employees have the same interest in the
Company or any affiliated or subsidiary Company, the Employee
having greater annual compensation from the Company or any
affiliated or subsidiary Company shall be treated as having a
larger interest. "Key Employee" shall also include such
Employee's beneficiary in the event of his death.
The definition of Key Employee shall be interpreted
in accordance with Section 416(i) of the Code and the rules
and regulations promulgated thereunder. Any employee who does
not meet the requirement of this definition shall be
considered a non-key employee.
(b) "Determination Date" means the last day of the preceding Plan
Year.
2. TOP-HEAVY DETERMINATION. This Plan shall be top-heavy for any Plan
Year if, as of the Determination Date, the aggregate of the Accounts of Key
Employees under the Plan exceeds 60 percent of the aggregate of the Accounts of
all Employees under the Plan. For purposes of this determination, the following
rules shall apply:
(a) Employees shall include former Employees, Beneficiaries and
former Beneficiaries who have a benefit greater than zero on
the Determination Date.
(b) The amount of the Account of any Employee shall be increased
by the aggregate distributions made with respect to such
Employee within the 5-year period ending on
<PAGE> 49
the Determination Date.
(c) The Account of any Employee who is not a Key Employee as of
the Determination Date but who was a Key Employee during any
prior Plan Year shall be disregarded.
(d) The Account of any Employee who has not received any
compensation from the Company during the 5-year period ending
on the Determination Date shall not be taken into account.
(e) If the Company maintains other plans which are qualified under
Section 401 of the Code, the top-heavy determination described
above shall be made by aggregating the Accounts under this
Plan with the accounts or the present values of the cumulative
accrued benefits under (i) any such other plan (including
plans terminated in the past 5 years) in which a Key Employee
is a participant and (ii) any such other plan (including plans
terminated in the past 5 years) which enables a plan in which
a Key Employee is a Participant to meet the requirements of
Section 401(a)(4) or Section 410 of the Code. The Company may
also aggregate any such other plans not required to be
aggregated, provided the resulting group of plans, taken as a
whole, continue to meet the requirements of Sections 401(a)(4)
and 410 of the Code.
(f) The Accrued Benefit of any Employee (other than a Key
Employee) shall be determined by the method used for accrual
purposes for all plans of the Company.
(g) The top-heavy determination under this Paragraph shall be made
in accordance with Section 416 of the Code and the rules and
regulations promulgated thereunder.
3. TOP-HEAVY REQUIREMENTS: If the Plan is deemed to be top heavy under
Paragraph 2 then, notwithstanding any other provision of the Plan to the
contrary, the following shall apply with respect to each Plan Year in which the
Plan is top-heavy:
<PAGE> 50
(a) MINIMUM CONTRIBUTIONS: The Company contributions for each
Participant who is not a Key Employee shall not be less than
three percent (3%) of such Participant's compensation or the
largest percentage of the Company contributions, as a
percentage of the first $150,000, as adjusted, of the Key
Employee's compensation allocated on behalf of any Key
Employee for that year, provided if the highest rate allocated
to a Key Employee is less than three percent (3%), amounts
contributed as a result of Salary Reduction Agreements must be
included in determining the contributions made on behalf of
Key Employees. This minimum allocation shall be made even
though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have
received a lesser allocation for the year because of (i) the
Participant's failure to complete 1,000 Hours of Service or
(ii) the Participant's failure to make mandatory Employee
contributions to the Plan, provided, however, this provision
shall not apply to any Participant who was not an Employee on
the last day of the Plan Year. Company contributions allocated
under any other defined contribution plan of the Company, in
which any Key Employee participates or which enables another
defined contribution plan to meet the requirements of Section
401(a)(4) or 410 of the Code, shall be considered
contributions and forfeitures allocated under this Plan. In
the case of any non-key employee Participant who is also a
Participant in any defined benefit plan of the Company, the
foregoing provisions of this section shall be applied, but
with five percent (5%) substituted for three percent (3%).
(b) ADJUSTED CODE SECTION 415 LIMITATIONS. In order to reduce the
overall limitations on combined plan contributions and
benefits under Section 415 of the Code, the number 1.00 shall
be substituted for 1.25 in the definitions of defined
contribution fraction and
<PAGE> 51
defined benefit fraction in Article IV, Section 5 of the Plan.
The foregoing sentence shall not apply if (i) the top-heavy
ratio is 90% or less and (ii) each non-Key Employee receives
an additional minimum contribution or benefit under a Plan of
the Company. In the case of a non-Key Employee participating
only in a defined benefit plan, the additional minimum benefit
for each Year of Service counted is one percentage point, up
to a maximum of ten percentage points, of the Employee's
average compensation for the five consecutive years when the
Employee had the highest aggregate compensation from the
Company. In the case of a non-Key Employee participating only
in this or another defined contribution plan, the additional
minimum contribution is one percent of the Employee's
compensation. In the case of a Non-Key Employee participating
both in a defined benefit plan and this or another defined
contribution plan, there is no additional minimum benefit, but
the additional minimum contribution shall be two and one-half
percent (2-1/2%) of the Employee's compensation.
(c) PLAN COMPENSATION: For any Plan Year in which the Plan is a
top-heavy plan, annual compensation taken into account under
the Plan shall not exceed $150,000. The compensation
limitation of this subparagraph (c), shall be interpreted in
accordance with Section 416(d) of the Code and the rules and
regulations promulgated thereunder.
ARTICLE XVII - PLAN ADMINISTRATION
1. Timken shall be the Plan Administrator and have responsibility for
the administration of this Plan, including power to construe this Plan, to
determine all questions that shall arise hereunder, including particularly
questions on eligibility and participation of Employees and allocations of
Company contributions to Participants' Accounts and all matters necessary for it
properly to discharge its duties, powers and obligations and to apply its
established policies concerning the employment
<PAGE> 52
status of Participants. The decision of Timken made in good faith upon any
manner within the scope of its authority shall be final, but Timken 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. Timken will make all determinations as to the right of any persons
to benefits under the Plan. Any denial by Timken of a claim for benefits under
the Plan by a Participant or beneficiary will be stated in writing by Timken and
delivered or mailed to the Participant or Beneficiary. Such notice will set
forth the specific reasons for the denial and the plan provision on which the
denial is based. If additional information is needed to perfect a claim, a
Participant or Beneficiary shall be so informed. In addition, Timken will
provide an opportunity to any Participant or Beneficiary whose claim for
benefits has been denied an opportunity for review of the denial. As part of the
review, the Participant or Beneficiary will be permitted to (1) view all Plan
documents and other papers which affect the claim, (2) argue the denial of
benefits in writing and (3) have a representative if he or she so desires.
3. Timken may from time to time authorize and instruct certain of its
Employees to perform any and all acts, deeds and other matters required to be
performed by Timken under the Plan and the Trust Agreement. Timken has so
authorized and instructed that its Vice President - Human Resources and
Logistics or any other officer or the delegate of an officer (except the
Administrative Delegate), may sign any and all documents on behalf of the Plan.
4. Timken may, from time to time, retain the services of one or more
persons or firms designated as an Investment Manager for the management of
(including the power to acquire and dispose of) all or any part of the Trust,
provided that each of such persons or firms is registered as an investment
advisor under the Investment Advisors Act of 1940, is a bank (as defined in that
Act), or an insurance company qualified to perform, manage, acquire or dispose
of trust assets under the laws of more than one State of the United States. Each
such Investment Manager shall acknowledge in writing
<PAGE> 53
that it is a fiduciary with respect to the assets of the Trust under its
authority and management. Timken may by similar notice modify or terminate such
designation and authority from time to time. So long as and to the extent that
any designation is in effect, the Trustee shall invest and reinvest that portion
of the Trust assigned to an Investment Manager in accordance with the
instructions received from such Investment Manager, and, with respect to such
portion of the Trust managed by such Investment Manager, shall follow any
instructions received by it from such Investment Manager. The Trustee shall be
under no duty to review the investments made or held in any portion of the Trust
over which an Investment Manager has been given investment authority nor shall
it be under any obligation to invest or otherwise manage any assets of the Trust
which are subject to the management of such Investment Manager or Managers. Such
assets shall expressly be held by such Investment Manager as custodian of such
assets.
5. Timken shall also have the authority and discretion to engage an
Administrative Delegate who shall perform, without discretionary authority or
control, administrative functions within the framework of policies,
interpretations, rules, practices, and procedures developed by Timken. Any
action made or taken by the Administrative Delegate may be appealed by an
affected Employee or Beneficiary to Timken in accordance with the claims review
procedures provided in Section 2 of this Article. Any decisions which call for
interpretations of Plan provisions not previously made by Timken shall only be
made by Timken. The Administrative Delegate shall not be considered a fiduciary
with respect to the services it provides.
ARTICLE XVIII - 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 Continuous Service with
the Company by reason of such Participant's period or
<PAGE> 54
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 the
nonforfeitability of benefits and the accrual of benefits under the Plan.
2. Effective December 12, 1994, Company upon reemploying a Participant
with respect to a period of service with the armed forces shall allocate the
amount of any Company contribution, including a Performance Sharing
Contribution, for the Participant in the same manner and to the same extent the
allocation occurs for other Participants during the period of service. For
purposes of determining the amount of any such allocation, earnings shall not be
included.
3. A Participant so reemployed shall be entitled to Accrued Benefits
that are contingent on the making of, or derived from Salary Reduction
Contributions only to the extent such Participant makes payment to the Plan with
respect to such Salary 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 Salary Reduction Contributions to
the Plan shall be made during the period beginning with the date of reemployment
and whose duration is three times the period of the Participant's service in the
armed forces, not to exceed a maximum duration of five years.
4. For purposes of computing the Company's Matching Contributions,
Salary Reduction Contributions and Performance Sharing Contributions under
Sections 2 and 3 above, the Participant's Gross Earnings 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 Gross Earnings from the Company during the twelve
month period immediately preceding such period
<PAGE> 55
of service in the armed forces, or if shorter, the period of employment
immediately preceding such period of service in the armed services.
5. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 404(u) of the Code.
EXECUTED by The Timken Company at Canton, Ohio on December _____, 1997,
effective January 1, 1998, except as specifically provided.
THE TIMKEN COMPANY
By
-----------------------------
Title: Vice President -
Human Resources and Logistics
<PAGE> 56
EXHIBIT A
I. Effective January 1, 1998, for purposes of the definition of "Gross
Earnings" in Section A, Paragraph 6 hereof, any payments made as quarterly bonus
payments from the following compensation plans shall be excluded as "Gross
Earnings":
Ashland Gainshare Plan up to a predetermined level as defined
in the Gainshare Plan document.
Any payments made as quarterly bonus payments from the following compensation
plans shall be included as "Gross Earnings":
New Philadelphia Gainshare Plan.
II. Effective January 1, 1997, for purposes of the definition of "Gross
Earnings" in Section A, Paragraph 6 hereof, any payments made under the
Performance Reward Pay Plan shall be included to the following extent:
A. 33% of payments made in 1997 for the 1996 performance
year are included.
B. 66% of payments made in 1998 for the 1997 performance
year are included.
C. 100% of payments made in 1999 for the 1998
performance year and any payments made in years
thereafter are included.
<PAGE> 1
EXHIBIT 5
August 27, 1998
The Timken Company
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
Re: THE TIMKEN COMPANY - LATROBE STEEL COMPANY SAVINGS AND INVESTMENT
PENSION PLAN
Ladies and Gentlemen:
We have acted as counsel to The Timken Company, an Ohio
corporation (the "Company"), in connection with the filing of a Registration
Statement on Form S-8 to register 1,250,000 shares of the Company's common stock
without par value ("Common Stock") to be issued or transferred and sold under
The Timken Company - Latrobe Steel Company Savings and Investment Pension Plan,
as amended (the "Plan"). We have examined such documents, records and matters of
law as we have deemed necessary for the purposes of this opinion, and based
thereon, we are of the opinion that the shares of Common Stock that may be
issued or transferred and sold by the Company to the Trustee (as defined in the
Plan) pursuant to the Plan will be, when issued or transferred and sold in
accordance with the Plan, duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement on Form S-8.
Very truly yours,
Jones, Day, Reavis & Pogue
<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 Timken Company - Latrobe Steel Company Savings and
Investment Pension Plan 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 Timken Company -
Latrobe Steel Company Savings and Investment Pension Plan 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
August 28, 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., 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 Timken Company -
Latrobe Steel Company Savings and Investment Pension Plan and up to 1,250,000
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 20th day of August, 1998.
- --------------------------------- ------------------------------------
Stanley C. Gault Ward J. Timken
- --------------------------------- ------------------------------------
J. Clayburn LaForce, Jr. W. R. Timken, Jr.
- --------------------------------- ------------------------------------
Gene E. Little Joseph F. Toot, Jr.
- --------------------------------- ------------------------------------
Robert W. Mahoney Martin D. Walker
------------------------------------
Charles H. West
------------------------------------
Alton W. Whitehouse
