<PAGE> 1
As filed with the Securities and Exchange Commission on November 6, 1998
Registration No. __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------
THE TIMKEN COMPANY
(Exact name of registrant as specified in its charter)
Ohio 34-0577130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1835 Dueber Avenue, S.W., Canton, Ohio
44706-2798 (Address of principal executive offices
including zip code)
VOLUNTARY INVESTMENT PENSION PLAN FOR HOURLY
EMPLOYEES OF THE TIMKEN COMPANY
(Full title of the plan)
Larry R. Brown
Senior Vice President and General Counsel
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
(Name and address of agent for service)
(330) 438-3000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered(1) registered (1) share price (2)(3) fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
without par value 250,000 shares $18.47 $4,617,500 $1,283.67
======================================================================================================================
</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's Voluntary 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 November 2,
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") or the Voluntary Investment Pension Plan for Hourly Employees of The
Timken Company, as amended (the "Plan"), with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (File No. ____) are incorporated herein by reference:
(1) Annual Report of the Company on Form 10-K for the year ended
December 31, 1997;
(2) Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1998, and June 30, 1998;
(3) Annual Report of the Plan on Form 11-K for the year ended
December 31, 1997;
(4) Current Report of the Company on Form 8-K dated April 21,
1998; and
(5) The description of the Company's common stock, without par
value, contained in the Company's Registration Statements
filed pursuant to Section 12 of the Exchange Act and any
amendments and reports filed for the purpose of updating
that description.
All documents that shall be filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the filing of this registration statement and prior to the filing of a
post-effective amendment indicating that all securities offered under the Plan
have been sold or deregistering all securities then remaining unsold thereunder
shall be deemed to be incorporated herein by reference and shall be deemed to be
a part hereof from the date of filing thereof.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1 of Article IV of the Company's Amended Code of
Regulations provides that the Company shall indemnify its directors, officers
and employees, and may indemnify its agents, to the fullest extent permitted by
law under prescribed conditions and subject to various qualifications. Article
IV of the Company's Amended Code of Regulations is set forth in Exhibit 4(b)
hereto and is incorporated herein by reference.
II-1
<PAGE> 3
Reference is made to Section 1701.13(E) of the Ohio Revised Code
relating to indemnification of directors, officers, employees and agents of an
Ohio corporation.
The Company has entered into contracts with certain of its
directors and officers that indemnify them against many of the types of claims
that may be made against them. The Company also maintains insurance coverage for
the benefit of directors and officers with respect to many types of claims that
may be made against them, some of which may be in addition to those described in
Article IV of the Company's Amended Code of Regulations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Amended Articles of Incorporation of the Company (filed as
Exhibit 4(a) to the Company's Registration Statement No.
333-02553 on Form S-8 and incorporated herein by
reference).
4(b) Amended Code of Regulations of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992, and
incorporated herein by reference).
4(c) Voluntary Investment Pension Plan for Hourly Employees of
The Timken Company, as amended.
5 Opinion of Counsel.
23(a) Consent of Independent Auditors.
23(b) Consent of Counsel (included in Exhibit 5).
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 6 day of November
1998.
THE TIMKEN COMPANY
By: /s/ Gene E. Little
---------------------------
Gene E. Little
Senior Vice President - Finance
II-3
<PAGE> 5
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*W. R. Timken, Jr. Chairman, President and November 6, 1998
------------------------- Chief Executive Officer;
W. R. Timken, Jr. Director
(Principal Executive Officer)
*Gene E. Little Senior Vice President - Finance November 6, 1998
------------------------- (Principal Financial and
Gene E. Little Accounting Officer)
*Joseph F. Toot, Jr. Director November 6, 1998
-------------------------
Joseph F. Toot, Jr.
*Stanley C. Gault Director November 6, 1998
-------------------------
Stanley C. Gault
*J. Clayburn LaForce, Jr. Director November 6, 1998
-------------------------
J. Clayburn LaForce, Jr.
*Robert W. Mahoney Director November 6, 1998
-------------------------
Robert W. Mahoney
*Jay A. Precourt Director November 6, 1998
-------------------------
Jay A. Precourt
*John M. Timken, Jr. Director November 6, 1998
-------------------------
John M. Timken, Jr.
*Ward J. Timken Director November 6, 1998
-------------------------
Ward J. Timken
*Martin D. Walker Director November 6, 1998
-------------------------
Martin D. Walker
*Charles H. West Director November 6, 1998
-------------------------
Charles H. West
*Alton W. Whitehouse Director November 6, 1998
-------------------------
Alton W. Whitehouse
</TABLE>
II-4
<PAGE> 6
* This Registration Statement has been signed on behalf of the above-named
directors and officers of the Company by Gene E. Little, Senior Vice
President - Finance of the Company, as attorney-in-fact pursuant to a
power of attorney filed with the Securities and Exchange Commission as
Exhibit 24 to the Registration Statement.
DATED: November 6, 1998 By: /s/ Gene E. Little
----------------------------------------
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 6 day of November, 1998.
VOLUNTARY INVESTMENT PENSION PLAN
FOR HOURLY EMPLOYEES OF THE TIMKEN
COMPANY
By: /s/ Stephen A. Perry
-------------------------------------
Stephen A. Perry
Senior Vice President - Human Resources,
Purchasing and Communications 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) Voluntary Investment Pension Plan for Hourly Employees of The
Timken Company, as amended.
5 Opinion of Counsel.
23(a) Consent of Independent Auditors.
23(b) Consent of Counsel (included in Exhibit 5 hereto).
24 Power of Attorney.
II-7
<PAGE> 1
Exhibit 4(c)
1997 401(K) AGREEMENT
BETWEEN
THE TIMKEN COMPANY
AND
UNITED STEELWORKERS OF AMERICA
AFL-CIO
THIS 401(k) AGREEMENT, dated as of June 2, 1997, is between THE TIMKEN
COMPANY, hereinafter referred to as the "Company", and UNITED STEELWORKERS OF
AMERICA, AFL-CIO on behalf of itself and Local Unions 1123, 2173, and 2730, said
International Unions and Local Unions collectively being referred to as the
"Union", and shall be known as the 1997 401(k) Agreement.
K-1
<PAGE> 2
PREAMBLE
WHEREAS, the parties have agreed to establish a 401(k) Plan under a
401(k) Agreement and to provide for the payment of Benefits from the trust to be
established.
IT IS HEREBY AGREED, between the parties as follows:
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<PAGE> 3
ARTICLE I - DEFINITIONS
Wherever used herein, the terms hereinafter referred to in this 401(k)
Agreement shall be understood to have the following meaning:
1. The terms "Company", "Union", and "Employee", shall have the same
meanings as ascribed to such words in the 1997 Basic Labor Agreement between the
parties dated June 2, 1997, in respect of rates of pay, hours of work, and
conditions of employment.
a. "Company" shall mean THE TIMKEN COMPANY;
b. "Union" shall mean UNITED STEELWORKERS OF AMERICA,
AFL-CIO, on behalf of itself and LOCAL UNIONS NO. 1123, 2173, and 2730, said
International Union and Local Unions collectively being referred to hereinafter
as the "Union";
c. "Employee" shall mean all production and maintenance
workers in the bearing, steel and tube plants at Canton, Ohio, the steel and
tube plant and bearing plant at Gambrinus (just outside of the City of Canton),
the steel plant on Faircrest Street, S.W., Stark County, Ohio, and the plants at
Wooster and Columbus, Ohio, of the Company, excluding supervisors, assistant
supervisors, or supervisors in charge of any class of labor, bricklayers,
watchmen, guards, factory clerks, or other clerical workers and salaried
employees.
2. The terms "Continuous Service" and "Hour of Service" shall have the
same meanings as ascribed to such words in the 1997 Pension Agreement between
the parties dated June 2, 1997.
a. Except as otherwise provided, the Continuous Service of any
Participant for determining his eligibility for and the amount of any 401(k)
Benefit hereunder shall be the time from the first
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<PAGE> 4
employment of said Participant by the Company until the time of his voluntary
retirement, except that such Continuous Service shall be broken and credit for
previous service lost by:
(1) Voluntarily quitting the service of the Company.
(An unauthorized absence of seven (7) consecutive scheduled
working days shall be considered a voluntary quit. Absence for
military or naval service, other than temporary training
programs of the State Guard or Reserve Forces, shall be
considered a voluntary quit, unless otherwise provided by law
or by the applicable collective bargaining agreement.)
(2) Discharge for proper cause from the service of
the Company.
(3) (a) Layoff for a continuous period of time as
produces a break in his accumulated Continuous Service record
under the Basic Labor Agreement in effect at the time of a
layoff but not to exceed a continuous period of two (2) years.
(b) Any employee on layoff for reduction in
force or physical disability who returns to work after
September 21, 1997, whose Continuous Service was broken while
laid off due to reduction in force after July 21, 1980,
pursuant to Paragraph 3 of Section K of Article VIII of the
1980, 1983, 1986, 1989, or 1993 Basic Labor Agreement shall,
after the date of the employee's return to work, have his
Continuous Service adjusted so that his Continuous Service,
after the date of his return to work, shall be increased by
the
K-4
<PAGE> 5
excess, if any, of his layoff over two (2) years, up to a
maximum increase of two (2) years.
(c) Any active employee as of September 21,
1997, whose Continuous Service was broken while laid off for
physical disability after July 21, 1980, pursuant to Paragraph
3 of Section K of Article VIII of the 1980, 1983, 1986, 1989,
or 1993 Basic Labor Agreement shall have his Continuous
Service adjusted so that his Continuous Service, as of
September 21, 1997, shall be increased by the excess, if any,
of his layoff over two (2) years, up to a maximum increase of
two (2) years. Any employee on layoff for reduction in force
or physical disability who returns to work after September 21,
1997, whose Continuous Service was broken while laid off due
to physical disability after July 21, 1980, pursuant to
Paragraph 3 of Section K of Article VIII of the 1980, 1983,
1986, 1989, or 1993 Basic Labor Agreement shall, after the
date of the employee's return to work, have his Continuous
Service adjusted so that his Continuous Service, after the
date of his return to work, shall be increased by the excess,
if any, of his layoff over two (2) years, up to a maximum
increase of two (2) years.
(d) A break in Continuous Service shall not
occur during a layoff because of physical disability resulting
from an injury or disease for which Workers' Compensation
Benefits are payable, provided the Participant returns to work
within thirty (30) calendar days after the end of the period
for which Total Disability Benefits are payable and
K-5
<PAGE> 6
provided the total continuous period of his absence from work
does not exceed five (5) years. A Participant who receives
Workers' Compensation Total Disability Benefits for the entire
five (5)-year period or who retires from disability while
receiving Workers' Compensation Total Disability Benefits
within the five (5)-year period shall receive credit for
Continuous Service until the earlier of the termination of the
five (5)-year period or retirement. Any laid off Participant
who has extended recall rights as provided in Article VIII,
Section H, of the then current Basic Labor Agreement may make
an application for a pension during the period in which he has
such extended recall rights; provided, however, that if the
President, Vice President, Financial Secretary, Treasurer, or
Recording Secretary of any Local Union who has been or is an
employee of the Company and has been or may hereafter be given
a leave of absence on the condition stated in Article VIII of
the then current Basic Labor Agreement, such leave of absence
shall not constitute a break in such a Participant's record of
Continuous Service for the purpose of this 401(k) Agreement.
(e) The adjustment of a Participant's
Continuous Service under Subparagraphs (a), (b), (c), or (d)
above shall not result in duplicating credit for Continuous
Service for the same period of layoff.
b. The term "Hour of Service" means each hour (1) for
which a Participant is paid, or entitled to payment for the
K-6
<PAGE> 7
performance of duties, for the Company or for which he is paid, or entitled to
payment, by the Company on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence; (2) for
which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by the Company; or (3) for which a Participant is credited pursuant to
Sections 410(a)(5)(E) and 411(a)(6)(E) of the Internal Revenue Code, solely for
the purpose of determining whether a one (1) year break in service has occurred.
Hours of Service shall be determined by dividing the payments received or due
for reasons other than the performance of duties by the lesser of (I) the
Participant's most recent hourly rate of compensation for the performance of
duties or (ii) the Participant's average hourly rate of compensation for the
performance of duties for the most recent computation period in which the
Participant completed more than five hundred (500) Hours of Service. Hours of
Service shall be computed and credited in accordance with Department of Labor
Regulation 2530.200(b).
3. The term "Beneficial Interest" shall mean the proportionate
allocation of assets held by the Plan in the name of the Trust on behalf of each
Participant, which allocation is determined each business day for each
Participant by the ratio of total contributions to the Plan made by the
Participant compared to the total contributions to the Plan made by all
Participants.
4. Beneficial Loan Interest - The market value of the assets
representing the Participant's Beneficial Interest in the Trust in the
K-7
<PAGE> 8
custody of the Trustee as of any valuation date, determined for Company stock by
the market price for such common stock, as reported by the New York Stock
Exchange, on any valuation date and for other investment options by the market
value on the most recent valuation date immediately preceding the date of the
loan.
5. The term "Gross Earnings" shall mean an Employee's regular wages
paid (including any overtime or premium payments and any cost-of-living
adjustments) during his or her period of participation in the Plan, but
excluding any special types of payments, such as, but not limited to, suggestion
awards, vacation pay, or retirement benefits. For purposes of this Plan, and in
accordance with Section 401(A)(17) of the Internal Revenue Code, gross earnings
cannot exceed $150,000 (as adjusted) for a Plan Year. For purposes of applying
this limitation, the family unit of an Employee who either is a five percent
(5%) owner or is both a Highly Compensated Employee and one of the ten (10) most
Highly Compensated Employees will be treated as a single Employee with one (1)
compensation. If, as a result of the application of these compensation limits,
the limitation is exceeded, then the limitation shall be prorated among the
affected Employees in the proportion to each individual's compensation as
determined under the Plan prior to the application of this limitation. For this
purpose, a family unit is an Employee who is a five percent (5%) owner or one of
the ten (10) most Highly Compensated Employees, the Employee's spouse, and the
Employee's lineal descendants who have not attained age nineteen (19) before the
close of the Plan Year.
6. The term "Highly Compensated Employee" shall mean any employee who,
during the current Plan Year or the preceding Plan Year:
K-8
<PAGE> 9
a. was at any time a five percent (5%) or more owner of the
Company's outstanding common stock,
b. received compensation from the Company in excess of
$100,000 (or, if greater, the dollar limitation in effect
under Section 414(q)(1)(C) of the Internal Revenue Code),
c. received compensation from the Company in excess of $66,000
(or, if greater, the dollar limitation in effect under Section
414(q)(1)(C) of the Internal Revenue Code) and was in the
top-paid group (the top twenty percent (20%) of Employees
ranked on the basis of compensation received during the year,
but excluding any Employee described in Section 414(q)(8) and
Q&A 9(b) of Section 1.414(q)-IT of the Treasury Regulations)
of employees for such year, or
d. was at any time an officer and received compensation
greater than $60,000 [or, if greater, fifty percent (50%) of
the amount in effect under Section 415(b)(1)(A) for such year,
with the number of officers being limited to fifty (50) (or,
if lesser, the greater of three (3) Employees or ten percent
(10%) of Employees excluding those who may be excluded in
determining the top-paid group), and where no officer has
compensation in excess of fifty percent (50%) of the Section
415(b)(1)(A) limit, the highest paid officer is treated as
highly compensated.
For purposes of this definition, compensation is
compensation within the meaning of Section 415(c)(3) of the
Internal Revenue Code, including elective or wage reduction
K-9
<PAGE> 10
contributions to a cafeteria plan, cash, or deferred
arrangement or tax-sheltered annuity.
A Highly Compensated Employee who is either a five
percent (5%) owner or one of the ten (10) most Highly
Compensated Employees is subject to the family aggregation
rules. In such case, the family member and five percent (5%)
owner or top ten (10) Highly Compensated Employee shall be
treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family
member and the five percent (5%) owner or top ten (10) Highly
Compensated Employee. Family member includes the spouse,
lineal ascendants and descendants of the Employee, and the
spouses of such lineal ascendants and descendants.].
In the case of the year for which the relevant determination is being
made, an employee described in Subparagraph b., c., or d. for the current year
only, and not described in Subparagraph a. for either the current or the
preceding year, shall not be treated as a Highly Compensated Employee, unless
such employee is a member of the group consisting of the one hundred (100)
employees paid the greatest compensation during the year for which such
determination is being made.
7. The term "Participant" shall mean any Employee who meets the
requirements of Article II below.
8. The term "Plan" shall mean the 401(k) Plan established by this
Agreement.
9. The term "Plan Administrator" shall mean the Company.
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<PAGE> 11
10. The term "Plan Year" shall mean a period which includes all pay
periods for which payment is made in a calendar year.
11. The term "the 401(k) Trust" or "the Trust" shall mean the Trust
established in connection with the Plan which holds and invests the Participant
contributions.
12. The term "Trustee" shall mean a trust company selected by the
Company and any successors thereto.
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<PAGE> 12
ARTICLE II - 401(k) BENEFITS
A. ELIGIBILITY AND PARTICIPATION
1. Participation in this Plan shall be available only to Employees of
the Company in the United States, who have completed the eligibility
requirements to be participants under the 1997 Insurance Agreement, that is the
completion of the probationary period of one hundred twenty (120) days worked in
the employ of the Company.
2. Eligible Employees electing to participate in this Plan for the
first time or following a return to active employment with the Company must
elect to participate in this Plan by filing a written election to do so, which
election will be effective with the first available pay period. Any other
election to participate or reparticipate may be accomplished by utilizing the
interactive voice response system, which election will be effective with the
first available pay period.
3. An Employee's election to participate in this Plan shall designate
the amount of wage reduction elected by the Employee to be contributed to this
Plan, as provided in Section B of this Article II. Such election shall become
effective with the first available pay period.
4. An Employee's election to participate in this Plan shall continue in
effect until the Employee utilizes the interactive voice response system to
terminate his or her participation or until such Employee ceases to be eligible
to participate in this Plan.
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<PAGE> 13
B. WAGE REDUCTION CONTRIBUTIONS
1. At any time, in accordance with Section A above, a Participant may
elect to have his or her wages reduced and the subsequent reduction contributed
to this Plan, in an amount equal to any whole percent between one percent (1%)
and fifteen percent (15%) of his or her Gross Earnings to be deducted from his
or her wages payable for each pay period; provided however, that the percent
reduction selected cannot result in more than a $9500 wage reduction
contribution on behalf of a Participant in a Plan Year (or, if greater, the
dollar limitation in effect under Section 402(g)(1) of the Internal Revenue
Code).
2. A Participant's election as to the rate of his or her wage reduction
contributions to this Plan will remain in effect until the Participant changes
his or her election, ceases to be eligible to participate, or utilizes the
interactive voice response system to terminate his or her participation in this
Plan.
3. A Participant may change his or her election as to the rate of wage
reduction contributions to this Plan by utilizing the interactive voice response
system on any business day. Any change made on the appropriate form will be
effective for the first available pay period and for all succeeding pay periods,
unless changed again by the same procedure.
C. LIMITS ON CONTRIBUTIONS
1. In no event shall the annual addition to a Participant's account
under this Plan and any other contributions to qualified defined contribution
plans maintained by the Company exceed the lesser
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<PAGE> 14
of $30,000 (or, if greater, one-fourth (1/4) of the dollar limitation in effect
under Section 415(b)(1)(A) of the Internal Revenue Code) or twenty-five percent
(25%) of the Participant's total compensation from the Company less the amount
of wage reduction contributions. The annual addition shall be a Participant's
wage reduction contributions and amounts allocated after March 31, 1984, to an
individual medical account, as defined in Section 415(c)(2) of the Internal
Revenue Code, which is a part of a pension or annuity plan maintained by the
Company. Amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits, allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in Section 419(e) of the Code, maintained by the Company are
also treated as annual additions. For purposes of this Section C, Paragraph 1,
compensation shall include all amounts received by a Participant from the
Company during a calendar year for the performance of personal services to the
extent that such amounts are includable in taxable income. In no event shall the
amount of Participant wage reduction contributions to a Participant's account
exceed $9500 for any Plan Year (or, if greater, the dollar limitation in effect
under Section 402(g)(1) of the Internal Revenue Code).
2. If the annual addition limitation for any Participant would be
exceeded by the amounts contributed to this Plan and any other defined
contribution plans maintained by the Company, the contributions to the
Participant's account made under this Plan shall be reduced as necessary.
K-14
<PAGE> 15
3. a. If the Participant is also a participant in a defined benefit
plan maintained by the Company, the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Plan Year may not exceed 1.0.
b. The defined benefit plan fraction is a fraction, the numerator of
which is the sum of the Participant's projected annual benefits under all
defined benefit plans (whether or not terminated) maintained by the Company, and
the denominator of which is the lesser of (1) 1.25 times the dollar limitation
of Section 415(b)(1)(A) of the Internal Revenue Code in effect for the
limitation year or (2) 1.4 times the Participant's average compensation for the
three (3)-consecutive years that produce the highest average.
c. The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all defined contribution plans maintained by the Company (whether
or not terminated) for the current and all prior limitation years, and the
denominator of which is the sum of the lesser of the following amounts
determined for such year and for each prior year of service with the Company:
(1) 1.25 times the dollar limitation in effect under Section 415(c)(1)(A) of the
Internal Revenue Code for such year or (2) 1.4 times the amount which may be
taken into account under Section 415(c)(1)(B) of the Internal Revenue Code.
4. If the annual addition which would otherwise be made to a
Participant's account exceeds the permissible amount, the Company's contribution
to the defined benefit plan shall be reduced accordingly.
K-15
<PAGE> 16
D. INTERESTS NON-FORFEITABLE
Participants shall have an immediate fully vested and non-forfeitable
right to Participant contributions properly credited to their respective
accounts and the income attributable thereto.
E. VETERANS' RIGHTS
1. A Participant who is reemployed by the Company pursuant to the
provisions of the Uniformed Services Employment and Reemployment Rights Act of
1994 shall be treated as not having incurred a break in service with the Company
by reason of such Participant's period or periods of service in the armed forces
of the United States. Each period served by a Participant in the armed forces
shall, upon reemployment, be deemed to constitute service with the Company for
purposes of determining and non-forfeitability of benefits and the accrual of
benefits under the Plan.
2. A Participant so reemployed shall be entitled to accrued benefits
that are contingent on the making of, or derived from, Wage Reduction
Contributions only to the extent such Participant makes payment to the Plan with
respect to such Wage Reduction Contributions. No such payment may exceed the
amount the Participant would have been permitted to contribute had the
Participant remained continuously employed by the Company through the period of
service in the armed forces. Any payment of Wage Reduction Contributions to the
Plan shall be made during the period beginning with the date of reemployment and
whose duration is three (3) times the period of the Participant's service in the
armed forces, not to exceed a maximum duration of five (5) years.
K-16
<PAGE> 17
3. For purposes of computing Wage Reduction Contributions under Section
E, Paragraph 2, above, the Participant's compensation during the period of
service in the armed forces shall be computed at the rate the Participant would
have received, but for the period of service in the armed forces, or, in the
case that the determination of such rate is not reasonably certain, on the basis
of the Participant's average compensation during the twelve (12)-month period
immediately preceding such period of service in the armed forces, or if shorter,
the period of employment immediately preceding such period.
K-17
<PAGE> 18
ARTICLE III - OPERATION OF THE TRUST
A. INVESTMENT OF FUNDS
1. A Participant will be able to invest his Wage Reduction
Contributions in the investment options offered by the Trustee, which options
shall be selected by the Plan Administrator. The Plan Administrator will offer
four (4) basic investment options to Participants and may offer additional
investment options. There will be no investment fees for Participants for the
four (4) basic options, but investment fees on the additional options will be
charged to the account of any Participant electing them. At the time the
Participant enrolls or re-enrolls in the Plan, he or she may elect what
percentage, if any, of his Wage Reduction Contributions, in increments of five
percent (5%), he wishes to place in each investment option.
2. Each business day, the Trustee or its designee shall, by appropriate
accounting procedures, determine the Beneficial Interest of each Participant in
the assets then held in the Trust.
3. As soon as possible following the end of each calendar quarter, each
Participant shall receive a statement showing the details of the Participant's
Beneficial Interest in the Trust.
4. A Participant can request fund transfers on any business day of his
prior Wage Reduction Contributions from one (1) investment option to another by
utilizing the interactive voice response system. The Participant may elect what
percentage, if any, of those assets in the Participant's investment accounts
will be reallocated in five percent (5%) increments to the investment options
chosen by the Participant.
K-18
<PAGE> 19
B. DISTRIBUTIONS FROM THE TRUST
1. a. The shares held in the Trust for the benefit of a Participant
shall be distributed to the Participant upon retirement at or after normal
retirement age sixty-five (65), upon early retirement as provided under the then
current Pension Agreement, upon a break in Continuous Service with the Company,
or to the Participant's beneficiary upon the death of the Participant, except as
hereinafter provided.
b. Early retirement shall include retirement at any age under
sixty-five (65) years with not less than thirty (30) years of continuous
service, retirement at the age of sixty (60) years with the not less than
twenty-five (25) years of continuous service, retirement at the age of sixty-two
(62) years with not less than fifteen (15) years of continuous service,
retirement with an actuarially reduced Pension Benefit between the ages of sixty
(60) and sixty-two (62) with not less than fifteen (15) years of continuous
service, retirement due to shutdown or layoff, and retirement due to disability.
2. a. A Participant's beneficiary shall be his or her spouse or, if the
Participant has no spouse or the Participant's spouse consents (in the manner
described in this Paragraph) to the designation of another person or persons,
such other person or persons as is designated by the Participant as his or her
beneficiary. A Participant may elect at any time during the applicable
K-19
<PAGE> 20
election period, which begins on the first day of the Plan Year in which the
Participant becomes a Participant in the Plan and ends on the date of the
Participant's death, to waive the surviving spouse as beneficiary and may revoke
any such election at any time during the applicable election period. The Plan
shall provide to each Participant, within the applicable period with respect to
such Participant (and consistent with such regulations as the Secretary of the
Treasury may prescribe) a written explanation of: (1) the terms and conditions
of the death benefit; (2) the Participant's right to make, and the effect of, an
election to waive the spouse as beneficiary; (3) the rights of the Participant's
spouse; and (4) the right to make, and the effect of, a revocation of an
election. The term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last: (i) a period beginning with the
first day of the Plan Year in which the Participant attains age thirty-two (32)
and ending with the close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35); (ii) a reasonable period after the
individual becomes a Participant; (iii) a reasonable period ending after Section
417(a)(5) of the Internal Revenue Code ceases to apply to the Participant; (iv)
a reasonable period ending after Section 401(a)(11) of the Internal Revenue Code
applies to the Participant; and (v) a reasonable period after separation from
service in case of a Participant who separates before attaining age thirty-five
(35).
b. Such an election shall not take effect unless the spouse of
the Participant consents in writing to such election, such election designates a
beneficiary (or a form of benefits) which may not be changed without spousal
consent (or the consent of the spouse expressly permits designations by the
Participant without any requirement of further consent by the spouse) and the
spouse's consent acknowledges the effect of such election and is witnessed by a
Plan
K-20
<PAGE> 21
representative or a notary public, or it is established to the satisfaction of
the Plan Administrator that the consent required may not be obtained because
there is no spouse, because the spouse cannot be located, or because of such
other circumstances as the Secretary of the Treasury may by regulations
prescribe. Any consent by a spouse (or establishment that the consent of a
spouse may not be obtained) shall be effective only with respect to such spouse.
c. In order to elect to waive his spouse as beneficiary, a
Participant also must affirmatively elect that the payment of his benefits not
be in the form of a life annuity, and with respect to such Participant, this
Plan may not be a transferee of a defined benefit plan or an individual account
plan subject to the funding standards of the Internal Revenue Code or any other
plan required to provide a mandatory qualified joint and survivor annuity
provision.
d. If a Participant has no spouse, if the spouse has consented
in the manner described above to not being the designated beneficiary, if the
spouse cannot be located, or because of circumstances prescribed by the
Secretary of the Treasury, the Participant may, by written notice delivered to
the Plan Administrator, designate or change the designation of a beneficiary to
whom payments of benefits may be paid in the event of his death. In the absence
of such notice, such benefits shall, to the extent permitted by law, be paid at
the discretion of the Company to the deceased Participant's surviving spouse,
child or children, parent or parents, and/or the executor or administrator of
his estate.
3. a. Such distributions shall be made in a lump sum or in installments
as soon as possible after the Participant retires, the
K-21
<PAGE> 22
Participant's death occurs, or Continuous Service is broken. If the distribution
exceeds $3500 or if the account balance of the Participant ever exceeded $3500
at the time of a prior distribution, it cannot be distributed without the
written consent of the Participant and the Participant's spouse, if any, or in
cases where the Participant is dead, the Participant's surviving spouse or
beneficiary (if the surviving spouse is not the beneficiary).
b. For distributions made after December 31, 1992, the
appropriate tax withholdings will be made, unless the Participant instructs the
Plan Administrator, pursuant to procedures to be implemented by the Plan
Administrator, to roll over directly his eligible rollover distribution to an
eligible retirement plan. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the Participant. An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the Participant, except that an eligible rollover distribution does
not include (1) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Participant or the joint lives (or joint life expectancies)
of the Participant and the Participant's designated beneficiary, or for a
specified period of ten (10) years or more; (2) any distribution to the extent
such distribution is required under Section 401(a)(9) of the Internal Revenue
Code; and (3) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities). An eligible retirement plan
is an individual retirement account
K-22
<PAGE> 23
described in Section 408(a) of the Internal Revenue Code, an individual
retirement annuity described in Section 408(b) of the Internal Revenue Code, an
annuity plan described in Section 403(a) of the Internal Revenue Code, or a
qualified trust described in Section 401(a) of the Internal Revenue Code, that
accepts the Participant's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity. For purposes of this provision, a Participant includes an Employee or
former Employee, a Participant's surviving spouse, and a Participant's spouse or
former spouse who is the alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Internal Revenue Code.
c. A Participant or beneficiary electing to receive a
distribution in installments shall elect the frequency of the distribution which
may be monthly, quarterly, or annually over a period not to exceed the
recipient's life expectancy according to procedures established by the Company.
4. Unless the Participant otherwise elects, the payment of benefits to
a Participant shall begin not later than the 60th day after the latest of the
close of the year in which (a) the Participant attains age sixty-five (65), (b)
the Participant completes ten (10) years of Continuous Service, or (c) the
Participant terminates his service with the Company. The election to postpone
the payment of benefits beyond the time specified above shall be made by
submitting to the Plan Administrator a written statement, signed by the
Participant, which describes the benefit and the date on which the
K-23
<PAGE> 24
payment of such benefit shall commence. Such an election may not b made if the
exercise of such election will cause benefits payable under this Agreement in
the event of the death of the Participant to be more than incidental. In no
event shall payment of such benefits be deferred beyond April 1 of the calendar
year following the calendar year in which the Participant attains (or, in the
case of a deceased Participant, would have attained) age seventy and one-half
(70-1/2). If distributions are required to be made under this Section B,
Paragraph 4, they shall be made in a lump sum payment or in installments. The
requirements of this Section B, Paragraph 4, shall apply to any distribution of
a Participant's interest and will take precedence over any inconsistent
provisions of this Plan. All distributions required under this Section B,
Paragraph 4, shall be determined and made in accordance with the proposed
regulations under Section 401(a)(9) of the Internal Revenue Code, including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the proposed regulations.
5. A Participant or beneficiary otherwise entitled to a distribution
from the Plan may elect to retain said distribution in the Plan until such time
as the Participant or beneficiary shall direct the Trustee to make said
distribution, provided that such distribution must be made not later than the
time specified in Section B, Paragraph 4, above. Upon written notice from the
Participant or beneficiary, such distribution shall be made in a lump sum or in
installments as soon as possible after the notice is received.
K-24
<PAGE> 25
6. a. Partial or total distributions of his wage reduction
contributions may also be made to a Participant, upon application to the
Trustee, in cases of hardship. If a Participant elects a withdrawal prior to the
date he retires, becomes disabled, or terminates his service with the Company,
such withdrawal will require the consent of the Trustee and such consent shall
be given only if, under uniform rules and regulations, and in conformance with
procedures established by the Company, the Trustee determines that the purpose
of the withdrawal is to meet immediate and heavy financial needs of the
Participant, the amount of the withdrawal does not exceed such financial need,
and the amount of the withdrawal is not reasonably available from the resources
of the Participant. If the Participant is married, a distribution in excess of
$3500 cannot be distributed without the written consent of the Participant's
spouse.
b. The determination of whether a Participant has an immediate and
heavy financial need will be made on the basis of all relevant facts and
circumstances. Financial needs which will be deemed immediate and heavy
financial need are the purchase of a primary residence (excluding mortgage
payments) of the Participant, payment of post-secondary educational tuition for
a year for the Participant or his dependents, health care expenses incurred by a
Participant or his dependents, and the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of a
Participant's principal residence.
c. The determination of whether a distribution is necessary to
satisfy an immediate and heavy financial need shall be made on the basis of all
relevant facts and circumstances. A
K-25
<PAGE> 26
distribution will be deemed to satisfy an immediate and heavy financial need if
it is not in excess of the amount of the immediate and heavy financial need of
the Participant (grossed up to reflect the income taxes that will be assessed on
the distribution), the Participant has obtained all distributions (other than
hardship distributions) under all plans maintained by the Company, the
Participant agrees that all wage reduction contributions and all other
Participant contributions to all plans maintained by the Company will be
suspended until twelve (12) months after receipt of the hardship distribution,
and the Participant agrees that any wage reduction contributions made in the
taxable year following the taxable year of the hardship distribution shall not
exceed the maximum limit under Section 402(g) of the Internal Revenue Code less
the amount of the Participant's wage reduction contributions for the taxable
year of the hardship distribution.
d. Such election may be made at any time, but not more frequently
than once a year. All withdrawal elections shall be made by a Participant on
written forms supplied by the Trustee for that purpose. Such distributions shall
be processed immediately following the completion of the application procedure.
7. a. A Participant may obtain a loan from the Trust upon proper
application to the Trust pursuant to procedures established by the Plan
Administrator. The nature and amount of the loan must conform to the following
rules and limits:
(1) The minimum loan amount is $1000.
(2) The maximum loan amount is fifty percent (50%) of
the Participant's Beneficial Loan Interest, provided, that
K-26
<PAGE> 27
no loan may be greater than $50,000, reduced by the excess, if
any, of (a) the highest outstanding loan balance from the Plan
during the one (1)-year period ending on the day before the
date on which such loan is made over (b) the outstanding loan
balance from the Plan on the date on which such loan is made.
The Trustee will accept only the Participant's accrued benefit
as collateral for loans.
(3) The term of the loan cannot exceed four (4)
years.
(4) A Participant may have only one (1) loan from
this Plan in effect at any one time and may apply for only one
(1) loan within each twelve (12)-month period.
(5) The Plan Administrator will establish the rate of
interest to be charged on all loan balances. This rate of
interest will be one percent (1%) in excess of the prime rate
as published in the Wall Street Journal the first business day
of the month in which the loan is granted.
(6) The loan shall be repaid by the Participant, if
the Participant is an active Employee, through payroll
deduction as established by the loan agreement. If the
Participant is not an active Employee, the Participant and the
Company shall agree to a repayment schedule which shall be
incorporated in the loan agreement. The loan may be repaid in
full at a date earlier than provided in the loan agreement
with no penalty. Interest paid by the Participant will be
credited directly to the Participant's account. The loan fee
of $50.00 per loan will be paid by the Participant from funds
other than those in the Trust.
K-27
<PAGE> 28
(7) The loan amount will be taken on a pro-rata basis
from the Beneficial Loan Interest in all investment options at
the time of the loan. Repayments will be redeposited into the
Participant's current investment options and contributions
using the current ratio.
(8) If a Participant does not repay a loan which he
or she may have from the Plan, the Trustee will declare such
loan to be in default when the loan is in arrears of repayment
for more than ninety (90) days. The Trustee may take steps to
preserve Plan assets, if necessary, in the event of such
default. Once default has been established, the amount of the
loan in default (unpaid principal and the interest accrued
thereon) shall be treated as a distribution from the Plan in
the Plan Year in which the default occurs. The amount of the
default will not constitute part of subsequent distributions
from the Trust.
(9) The proceeds of the loan cannot be applied toward
the purchase of any securities.
b. Loans may be applied for on any business day. Loan
application shall be made through the interactive voice response system.
8. a. When a Participant has satisfied the eligibility requirements of
the Plan, the Company may transfer the Participant's account balance under
another qualified defined contribution plan or a conduit individual retirement
account which authorizes such transfers to the Plan. Transferred accounts shall
be subject to such rights, restrictions, and features (including vesting
provisions) applicable
K-28
<PAGE> 29
to assets in similar accounts contributed to and held under the Plan. The Plan
Administrator may establish such non-discriminatory restrictions and rules
applicable to such transfers from the Plan and transfers to the Plan as it may
determine to be necessary or desirable to maintain the qualified status of the
Plan. In no event shall any amount be transferred to the Trust from a defined
benefit pension plan or a money purchase pension plan.
b. The Company may transfer a Participant's account under the
Plan to another qualified defined contribution plan maintained by the Company,
when the Participant transfers employment from an employee group covered by the
Plan to an employee group not so covered, provided that the other plan accepts
such transfers. Accounts so transferred shall be subject to such rights,
restrictions, and features (including vesting provisions) applicable to assets
in similar accounts contributed to and held under the other plan. The Plan
Administrator may establish such non-discriminatory restrictions and rules
applicable to such transfers as it may determine to be necessary or desirable to
maintain the qualified status of the Plan (and any other plan sponsored by it)
under the Code.
C. EQUITY DETERMINATION
1. The Company may amend or revoke the wage reduction election of any
Participant at any time, if the Company determines that such revocation or
amendment is necessary to ensure that the annual addition to a Participant's
account for any Plan Year will not exceed the limitations of Section C,
Paragraph 1, of Article II or to ensure that the discrimination tests of Section
401(k) or 401(m) of the
K-29
<PAGE> 30
Internal Revenue Code are met for such Plan Year. The discrimination tests shall
be (a) that the Employees eligible to benefit under this Plan shall satisfy the
non-discrimination provisions of Section 410(b)(1) of the Internal Revenue Code,
(b) that the actual deferral percentage for Highly Compensated Employees for
such Plan Year meets the tests of Section 401(k)(3) of the Internal Revenue
Code, and (c) that the actual contribution percentage for Highly Compensated
Employees for such Plan Year meets the tests of Section 401(m) of the Internal
Revenue Code.
2. In the event that the Plan should fail to meet the tests referred to
in Section C, Paragraph 1, of this Article III, the amount of excess
contributions for a Highly Compensated Employee for a Plan Year will be
determined in the following manner. The actual deferral ratio of the Highly
Compensated Employee with the highest actual deferral ratio will be reduced to
the extent necessary to satisfy the actual deferral percentage test or cause
such ratio to equal the actual deferral ratio of the Highly Compensated Employee
with the next highest ratio. This process will be repeated for each Highly
Compensated Employee until the actual deferral percentage test is satisfied. The
amount of excess contributions for a Highly Compensated Employee is equal to the
total of Wage Reduction Contributions taken into account for the actual deferral
percentage test minus the product of the Employee's reduced deferral ratio as
determined above and the Employee's compensation. The distribution of any excess
contributions will include the income allocable thereto. The income allocable to
excess contributions includes income for the Plan Year for which the excess
contributions were made. The amount of
K-30
<PAGE> 31
excess contributions for a Highly Compensated Employee for a Plan Year will be
distributed to that Highly Compensated Employee after the close of the Plan Year
in which the excess contribution occurred and within twelve (12) months after
the close of the following Plan Year. In the case of a Highly Compensated
Employee whose actual deferral ratio is determined under the family aggregation
rules, the determination of the amount of excess contributions shall be made in
the following manner: The actual deferral ratio will be reduced in accordance
with the "leveling" method described in Section 1.401(k)-l)f)(2) of the Treasury
Regulations and the excess contributions will be allocated among the family
members in proportion to the contributions of each family member that have been
combined.
K-31
<PAGE> 32
ARTICLE IV -
GENERAL CONDITIONS CONCERNING THE 401(k) AGREEMENT
A. MERGER, CONSOLIDATION, OR TRANSFER
In case of any merger or consolidation with, or transfer of assets or
liabilities to, any other plan, the benefits which would be paid to each
Participant in this Plan (if this Plan terminated immediately after the merger,
consolidation, or transfer) shall be equal to or greater than the benefit each
Participant would have been entitled to receive immediately before the merger,
consolidation, or transfer, (if this Plan had then terminated).
B. NON-ALIENATION OF PARTICIPANTS' INTERESTS
1. No right to the monies contributed by a Participant under this Plan,
nor in any assets held by the Trustee, shall be subject in any manner to
alienation, assignment, encumbrance, pledge, sale, or transfer of any kind prior
to being distributed to the Participant as provided in the Plan. However, the
Trustee is granted in the Trust Agreement a lien on Trust assets for the payment
of Trustee fees and expenses. If at any time prior thereto a Participant shall
attempt to alienate, assign, encumber, pledge, sell, or otherwise transfer his
or her right to any shares or monies held by the Trustee, such attempted
alienation, assignment, encumbrance, pledge, sale, or transfer shall be of no
effect. To the extent permitted by law, the interest of a Participant shall also
be protected from involuntary attachment, garnishment, or levy. In the event of
an attempted attachment,
K-32
<PAGE> 33
garnishment, or levy of the Participant's interest in the Trust, the Participant
will be promptly notified; but the Trustee shall have no obligation to resist
such action. In no event shall any person be entitled to the distribution of
shares or the payment of monies held by the Trustee prior to the time when
distribution is to be made to the Participant as provided in the Plan.
2. Section B, Paragraph 1, above shall not apply if the attachment or
garnishment of the Participant's interest in the Trust is to be made pursuant to
a qualified domestic relations order, as determined under the procedures of this
Plan. A domestic relations order is a judgment, decree, or order that relates to
the provision of child support, alimony payments, or marital property rights to
a spouse, former spouse, child, or other dependent of a Participant and is made
pursuant to a state domestic relations law. A domestic relations order is
qualified if it creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive all or a
portion of the benefits payable to a Participant under the Plan, specifies (a)
the name and last known mailing address of the Participant and of each alternate
payee covered under the order, (b) the amount or percentage of the Participant's
benefits to be paid to any alternate payee or the manner in which such amount or
percentage is to be determined, (c) the number of payments or the period to
which the order applies, and (d) each plan to which the order relates. Such
order cannot require the Plan to provide any type or form of benefits, or any
option, not otherwise provided under the Plan; it cannot require the Plan to
provide increased benefits
K-33
<PAGE> 34
(determined on the basis of actuarial value), and it cannot require the payment
of benefits to an alternate payee which are required to be paid to another
alternate payee under another order previously determined to be a qualified
domestic relations order.
3. Each alternate payee under a qualified domestic relations order
shall have the right from time to time to file with the Company a written
request regarding the time and manner of payment of the alternate payee's
interest in the Plan pursuant to such qualified domestic relations order.
Provided such qualified domestic relations order complies with the Internal
Revenue Code, such request shall be considered by the Company and shall be acted
upon in accordance with the terms of such qualified domestic relations order.
The options available to an alternate payee shall be those set forth in Section
B, Paragraph 3, of Article III, unless otherwise modified by the qualified
domestic relations order, provided that said qualified domestic relations order
cannot enlarge the options available under Section B, Paragraph 3, of Article
III. If an alternate payee so desires, distribution of an alternate payee's
interest in the Trust may be distributed to such alternate payee, as soon as
such qualified domestic relations order is approved by the Company and by the
court.
C. CONDITIONS TO THE EFFECTIVENESS AND CONTINUANCE OF THE PLAN
1. The Company will not be required to make any contributions (wage
reduction contributions) to the 401(k) Trust required to be established under
this Plan or to place any part of the Plan into operation, unless and until it
shall have received from the Internal Revenue Service a currently effective
ruling or rulings, satisfactory
K-34
<PAGE> 35
to the Company, that such Trust is a qualified Trust under Sections 401(a),
401(k), and 401(m), Internal Revenue Code, and exempt from Federal Income Tax
under Section 501(a) of the Internal Revenue Code. Continued contributions to
the Trust and operation of the Plan shall be conditioned upon retaining such
favorable ruling or rulings from the Internal Revenue Service.
2. The Company will not be required to make any contributions (wage
reduction contributions) to the Trust required to be established under this Plan
or to place any part of the Plan into operation, unless and until it shall have
received from the United States Department of Labor a currently effective ruling
or rulings, satisfactory to the Company that no part of the contributions to
such Trust shall be included in the regular rate of pay of any Employee.
Continued contributions to the Trust and operation of the Plan shall be
conditioned upon retaining such favorable ruling or rulings.
3. The Company will not be required to make any contributions (wage
reduction contributions) to the 401(k) Trust required to be established under
this Plan or to place any part of the Plan into operation, unless and until it
shall have determined that no action will be taken by the Securities and
Exchange Commission concerning such Trust or any information contained or
omitted in a registration statement for the Plan. Continued contributions to the
Trust and operation of the Plan shall be conditioned upon further determinations
by the Company that the Securities and Exchange Commission will take no action
concerning the Trust or any information contained or omitted in a registration
statement for the Plan.
K-35
<PAGE> 36
4. In the event the Plan fails to qualify under the applicable
provisions of the Internal Revenue Code, initially or as amended, the
contributions shall be returned to the Company and the Participants.
K-36
<PAGE> 37
ARTICLE V - ADMINISTRATION OF THE PLAN
A. PLAN ADMINISTRATION
1. The Company, which shall be the Plan Administrator, shall have
responsibility for the administration of this Plan, including power to construe
said Plan, to select the investment options to be available to Participants, to
determine all questions that shall arise thereunder, including particular
questions on eligibility and participation of Employees and all matters
necessary for it properly to discharge its duties, powers, and obligations and
to apply its established policies concerning the employment status of
Participants. The decision of the Company made in good faith upon any manner
within the scope of its authority shall be final, but the Company at all times
in carrying out its decisions shall act in a uniform and non-discriminatory
manner and may from time to time set down uniform rules of interpretation and
administration, which rules may be modified from time to time in the light of
its experience.
2. The Plan established by this Agreement is maintained for the
exclusive benefit of Participants and beneficiaries, and the Plan's terms,
including those relating to coverage and benefits, are legally enforceable. The
Plan shall be administered in accordance with all applicable state and federal
laws and regulations.
B. INFORMATION AS TO 401(k) PLAN
1. The Company agrees to furnish the following additional items of
information to the Union:
K-37
<PAGE> 38
Information shall be furnished (a) to the District Director at
Columbus, Ohio, in five (5) copies, (b) effective as of December 31 of the years
in which this Agreement is in effect, and (c) within one hundred twenty (120)
days from the 31st day of December of the years in which this Agreement is in
effect.
a. Information
(1) Name of Trustee.
(2) Number of employees making contributions to
the Plan.
(3) List of distributions made during preceding
year showing:
(a) Social Security number, clock
number, name, and address of
recipient.
(b) Date hired.
(c) Amount of distribution.
(4) Financial information.
(a) Assets of funds at beginning of
year.
(b) Participant contributions during
year.
(c) Net amount of income for year.
(d) Net amount of disbursements.
(e) Assets of funds at end of year.
C. SETTLEMENT OF DISPUTES
1. If any dispute shall arise between any Participant or beneficiary
applying for a benefit and the Administrator or between any Participant or
beneficiary applying for a benefit and the Company, as to such Participant's or
beneficiary's entitlement to a benefit or
K-38
<PAGE> 39
the amount of his benefit, such dispute may be disposed of in the manner
provided for in the Adjustment of Grievances commencing with the last step in
the grievance procedure preceding arbitration of the collective bargaining
agreement in effect at the time such action is taken. Any Participant or
beneficiary who wishes to submit such a dispute to such step of the grievance
procedure must have a notice of his intention to do so filed by the
Representative of the International Union with the Administrator postmarked
within sixty (60) days from the date of the notice to him of the action to which
he objects. The Participant or beneficiary shall state clearly and concisely, in
such notice of his intention to submit such dispute to such step of the
grievance procedure, all facts which are the basis of his grievance; and if he
claims that any Article or Articles of this Agreement are involved, he shall
specify such Article or Articles. The notice from the Administrator shall advise
such Participant or beneficiary of his right to submit such dispute to such step
of the grievance procedure within said time. The arbitrator, in deciding any
such dispute and only insofar as necessary to decide such dispute, shall have
authority only to interpret and apply the provisions of this Agreement to the
facts as presented in evidence to him, but he shall not have the authority to
add to or subtract from or, in any way, to alter or amend any of such
provisions. The decision of the arbitrator on such dispute, which shall properly
have been referred to him, shall be final and binding upon the Company, the
Union, Participant or beneficiary, and the Administrator, unless said decision
was procured or induced by corruption, fraud, or undue means or was beyond the
scope of the arbitrator's authority herein provided.
K-39
<PAGE> 40
2. If no appeal to arbitration is taken in accordance with Section C
hereof from any decision of the Administrator either awarding or denying a
benefit under this Agreement, or modifying or reversing any earlier decision
awarding or denying such benefit, such decision of the Administrator shall be
final and binding upon said Participant or beneficiary or any person on his
behalf and upon the Union.
K-40
<PAGE> 41
ARTICLE VI - EFFECTIVE AND TERMINATION DATES
A. This 1997 401(k) Agreement shall be effective on June 1, 1997, at 12:01 a.m.,
except as hereinafter provided.
B. No provision in this Agreement shall be considered as having any retroactive
effect, unless it is clearly so stated.
C. This Agreement shall continue in full force and effect until 12:01 a.m.,
January 1, 2001, and for yearly periods thereafter, unless either party shall
notify the other party in writing not less than sixty (60) days before any
termination date of the 1997 Basic Labor Agreement between the parties of such
party's desire to commence negotiations for a new Agreement.
D. Negotiations for a new 401(k) Agreement shall be carried on concurrently with
negotiations for a Basic Labor Agreement to replace the 1997 Basic Labor
Agreement.
E. In the event of a strike at the termination of the 1997 Basic Labor
Agreement, the operation of this 401(k) Agreement shall not be suspended during
the period of such strike until the termination date of this 401(k) Agreement.
F. In the event that no agreement is reached on a new 401(k) Agreement by 12:01
a.m., September 25, 2000, the Union shall not
K-41
<PAGE> 42
be bound by its no-strike pledge contained in the Basic Labor Agreement then in
effect between the parties.
G. The no-strike clause contained in the Basic Labor Agreement between the
parties then in effect shall be applicable to this 401(k) Agreement, except as
hereinabove provided.
H. Except as provided above, there shall be no strikes by reason of disputes
under this 401(k) Agreement during the term of this Agreement.
THE TIMKEN COMPANY UNITED STEELWORKERS OF AMERICA, AFL-CIO
- ------------------------ ---------------------------------------
Donald W. Simonson George Becker
Director - International President
Industrial Relations
---------------------------------------
Leo W. Gerard
International Secretary-Treasurer
---------------------------------------
Richard Davis
International Vice President -
Administration
---------------------------------------
Leon Lynch
International Vice President -
Human Affairs
K-42
<PAGE> 43
---------------------------------------
Frank Vickers
Director - District 1
---------------------------------------
Robert Andrews
Staff Representative
---------------------------------------
Frank Buzaki, Jr.
Staff Representative
K-43
<PAGE> 44
UNITED STEELWORKERS OF AMERICA, AFL-CIO
---------------------------------------
Ron Stokes
President - Local Union 1123
---------------------------------------
Art Maurer
Vice President - Local Union 1123
---------------------------------------
Stan Jasionowski - Local Union 1123
---------------------------------------
Jerry Wright - Local Union 1123
---------------------------------------
Pat Eslich - Local Union 1123
---------------------------------------
Sam Vorhies - Local Union 1123
---------------------------------------
Tom Wilkinson - Local Union 1123
---------------------------------------
Gerald Withrow
President - Local Union 2173
---------------------------------------
Richard Egan
Vice President - Local Union 2173
K-44
<PAGE> 45
UNITED STEELWORKERS OF AMERICA, AFL-CIO
---------------------------------------
Harold Carpenter
President - Local Union 2730
---------------------------------------
Rex Marmet
Vice President - Local Union 2730
---------------------------------------
Joseph V. Kostic
President - Local Union 1123
K-45
<PAGE> 1
Exhibit 5
November 6, 1998
The Timken Company
1835 Dueber Avenue S.W.
Canton, Ohio 44706
RE: Voluntary Investment Pension Plan for Hourly
Employees of The Timken Company
Gentlemen and Mesdames:
We have acted as legal counsel for The Timken Company, an Ohio
corporation (the "Company"), in connection with the preparation and adoption by
the Company of the Voluntary Investment Pension Plan for Hourly Employees of The
Timken Company, as amended (the "Plan"). The Plan provides for the issuance of
shares of the Company's common stock, without par value (the "Common Stock"),
and of participation interests (the "Participation Interests") offered to
eligible employees of the Company. The Company recently authorized the issuance
of an additional 250,000 shares of Common Stock pursuant to the Plan (the
"Shares"). A Form S-8 Registration Statement is being filed with the Securities
and Exchange Commission to cover the Shares and the Participation Interests.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public authorities, and other documents and instruments, and have made such
other factual inquiries, as we have deemed necessary or appropriate in
connection with this opinion.
On the basis of the foregoing, we are of the opinion that:
1. The Shares are duly authorized.
2. When the Shares have been issued and delivered against payment
therefor in accordance with the terms of the Plan, such Shares
will be duly authorized, validly issued under the Ohio General
Corporation Law, fully paid, and nonassessable, assuming that
such Shares remain duly authorized on the date of such
issuance and delivery and assuming that no change occurs in
the applicable law or pertinent facts between the date hereof
and the date of such issuance and delivery.
<PAGE> 2
The Timken Company
November 6, 1998
Page 2
3. When contributions are made to the Plan and are allocated in
accordance with the terms of the Plan, the resulting
Participation Interests will have been validly created, fully
paid, and nonassessable, assuming that as of the date(s) of
such contributions and allocations the applicable terms of the
Plan remain in substantially the same form as at the date
hereof, and further assuming that no other change occurs in
the pertinent facts or the applicable law between the date
hereof and the date(s) of such contributions and allocations.
We hereby consent to your use of this opinion as an exhibit to the said
Form S-8 Registration Statement and your reference to this opinion in any of the
materials constituting the prospectus thereof, as any of the same may be
amended, updated, and/or supplemented from time to time.
Very truly yours,
DAY, KETTERER, RALEY, WRIGHT
& RYBOLT, LTD.
<PAGE> 1
Exhibit 23(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Voluntary Investment Pension Plan for Hourly
Employees of The Timken Company of our reports (a) dated February 5, 1998, with
respect to the consolidated financial statements and schedule of The Timken
Company included in its Annual Report (Form 10-K) and (b) dated June 12, 1998,
with respect to the financial statements and schedules of the Voluntary
Investment Pension Plan for Hourly Employees of The Timken Company included in
the Plan's Annual Report (Form 11-K), both for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
November 5, 1998
<PAGE> 1
Exhibit 24
DIRECTORS AND OFFICERS OF
THE TIMKEN COMPANY
REGISTRATION STATEMENT ON FORM S-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors and officers of The Timken Company, an Ohio corporation (the
"Company"), hereby: (1) constitutes and appoints W.R. Timken, Jr., Stephen A.
Perry, Gene E. Little and Larry R. Brown, collectively and individually, as his
agent and attorney-in-fact, with full power of substitution and resubstitution,
to (a) sign and file on his behalf and in his name, place and stead in any and
all capacities (i) a Registration Statement on Form S-8 (the "Registration
Statement") with respect to the registration under the Securities Act of 1933,
as amended, of participation interests issuable under The Voluntary Investment
Pension Plan for Hourly Employees of the Timken Company and up to 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 6 day of November, 1998.
/s/ Stanley C. Gault /s/ Ward J. Timken
- ------------------------------- -------------------------------
Stanley C. Gault Ward J. Timken
/s/ J. Clayburn LaForce, Jr. /s/ W. R. Timken, Jr.
- ------------------------------- -------------------------------
J. Clayburn LaForce, Jr. W. R. Timken, Jr.
/s/ Gene E. Little /s/ Joseph F. Toot, Jr.
- ------------------------------- -------------------------------
Gene E. Little Joseph F. Toot, Jr.
/s/ Robert W. Mahoney /s/ Martin D. Walker
- ------------------------------- -------------------------------
Robert W. Mahoney Martin D. Walker
/s/ Jay A. Precourt /s/ Charles H. West
- ------------------------------- -------------------------------
Jay A. Precourt Charles H. West
/s/ John M. Timken, Jr. /s/ Alton W. Whitehouse
- ------------------------------- -------------------------------
John M. Timken, Jr. Alton W. Whitehouse
