<PAGE> 1
As filed with the Securities and Exchange Commission on April 19, 2000.
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------
THE TIMKEN COMPANY
(Exact name of registrant as specified in its charter)
Ohio 34-0577130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1835 Dueber Avenue, S.W., Canton, Ohio 44706-2798
(Address of principal executive offices including zip code)
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF DECEMBER 16, 1999)
(Full title of the plan)
William R. Burkhart
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>
- --------------------------------------------------------------------------------------------------------------
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered(1) Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares,
without par value 3,000,000 shares $15.8125(2) $47,437,500(2) $12,523.50
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers such additional Common Shares as may become issuable
pursuant to the anti-dilution provisions of the Registrant's Long-Term
Incentive Plan (As Amended and Restated as of December 16, 1999) (the
"Plan").
(2) Pursuant to Rule 457(h) under the Securities Act of 1933, this estimate is
made solely for the purpose of calculating the amount of the registration
fee and is based on the average of the high and low prices of the Common
Shares of the Registrant on the New York Stock Exchange on April 17, 2000.
<PAGE> 2
Pursuant to General Instruction E to Form S-8, the contents of Registration
Statement No. 333-02553 on Form S-8 as filed by the Registrant with the
Securities and Exchange Commission on April 16, 1996 are incorporated herein by
reference.
ITEM 8. EXHIBITS.
The following Exhibits are being filed as part of this Registration
Statement:
4(a) Amended Articles of Incorporation of the Registrant (filed as
Exhibit 4(a) to the Registrant's Registration Statement No.
333-02553 on Form S-8 and incorporated herein by reference)
(b) Amended Code of Regulations of the Registrant (filed as
Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, and incorporated
herein by reference)
(c) The Timken Company Long-Term Incentive Plan (As Amended and
Restated as of December 16, 1999)
5 Opinion of Counsel
23(a) Consent of Independent Auditors
(b) Consent of Counsel (included in Exhibit 5)
24 Power of Attorney
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this registration statement on Form S-8 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Canton, State of Ohio, on
this 19th day of April, 2000.
THE TIMKEN COMPANY
By: /s/ Gene E. Little
--------------------------
Gene E. Little
Senior Vice President - Finance
<PAGE> 3
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
*
- --------------------------------- Director and Chairman and April 18, 2000
W.R. Timken, Jr. Chief Executive Officer
(Principal Executive Officer)
*
- --------------------------------- Senior Vice President - April 18, 2000
Gene E. Little Finance (Principal Financial
and Accounting Officer)
*
- --------------------------------- Director April 18, 2000
Stanley C. Gault
*
- --------------------------------- Director April 18, 2000
James W. Griffith
*
- --------------------------------- Director April 18, 2000
J. Clayburn LaForce, Jr.
*
- --------------------------------- Director April 18, 2000
John A. Luke, Jr.
*
- --------------------------------- Director April 18, 2000
Robert W. Mahoney
*
- --------------------------------- Director April 18, 2000
Jay A. Precourt
*
- --------------------------------- Director April 18, 2000
John M. Timken, Jr.
*
- --------------------------------- Director April 18, 2000
Ward J. Timken
*
- --------------------------------- Director April 18, 2000
Joseph F. Toot, Jr.
*
- --------------------------------- Director April 18, 2000
Martin D. Walker
*
- --------------------------------- Director April 18, 2000
Jacqueline F. Woods
<PAGE> 4
* This registration statement has been signed on behalf of the above-named
directors and officers of the Registrant by Gene E. Little, Senior Vice
President - Finance of the Registrant, as attorney-in-fact pursuant to a
power of attorney filed with the Securities and Exchange Commission as
Exhibit 24 to this registration statement.
DATED: April 19, 2000 By: /s/ Gene E. Little
----------------------------
Gene E. Little, Attorney-in-Fact
<PAGE> 5
EXHIBIT INDEX
The following Exhibits are being filed as part of this Registration Statement:
4(a) Amended Articles of Incorporation of the Registrant (filed as Exhibit 4(a)
to the Registrant's Registration Statement No. 333-02553 on Form S-8 and
incorporated herein by reference)
(b) Amended Code of Regulations of the Registrant (filed as Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, and incorporated herein by reference)
(c) The Timken Company Long-Term Incentive Plan (As Amended and Restated as of
December 16, 1999)
5 Opinion of Counsel
23(a) Consent of Independent Auditors
(b) Consent of Counsel (included in Exhibit 5)
24 Power of Attorney
<PAGE> 1
Exhibit 4(c)
THE TIMKEN COMPANY LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF DECEMBER 16, 1999)
<PAGE> 2
THE TIMKEN COMPANY LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF DECEMBER 16, 1999)
Table of Contents
PAGE
----
1. Purpose 1
2. Definitions 1
3. Shares Available under the Plan 5
4. Option Rights 6
5. Appreciation Rights 8
6. Restricted Shares 10
7. Deferred Shares 12
8. Performance Shares and Performance Units 13
9. Automatic Awards to Nonemployee Directors 14
10. Transferability 15
11. Adjustments 15
12. Fractional Shares 16
13. Withholding Taxes 16
14. Participation by Employees of a Less-Than-80-Percent Subsidiary 16
15. Certain Terminations of Employment, Hardship and Other
Special Circumstances 17
16. Foreign Employees 17
17. Administration of the Plan 18
18. Amendments and Other Matters 18
<PAGE> 3
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF DECEMBER 16, 1999)
1. PURPOSE. The purpose of this Plan is to attract and retain
directors, officers and key employees for The Timken Company, an Ohio
corporation (the "Corporation"), and its Subsidiaries and to provide such
persons with incentives and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"APPRECIATION RIGHT" means a right granted pursuant to Section 5
of this Plan, including a Free-standing Appreciation Right and a
Tandem Appreciation Right.
"EVIDENCE OF AWARD" means an agreement, certificate, resolution
or other type or form of writing or other evidence approved by
the Committee which sets forth the terms and conditions of Option
Rights, Appreciation Rights, Restricted Shares, Deferred Shares,
Performance Shares, Performance Units or awards to Nonemployee
Directors. An Evidence of Award may be in any electronic medium,
may be limited to a notation on the books and records of the
Company and, with the approval of the Committee, need not be
signed by a representative of the Company or a Participant.
"BASE PRICE" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-standing
Appreciation Right.
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITTEE" means the committee described in Section 17(a) of
this Plan.
"COMMON SHARES" means (i) shares of the common stock of the
Corporation without par value and (ii) any security into which
Common Shares may be converted by reason of any transaction or
event of the type referred to in Section 11 of this Plan.
"DATE OF GRANT" means the date specified by the Committee on
which a grant of Option Rights or Appreciation Rights or
Performance Shares or Performance Units or a grant or sale of
Restricted Shares or Deferred Shares shall become effective,
which shall not be earlier than the date on which the Committee
takes action with respect thereto, including the date on which an
automatic grant of Common Shares to a Nonemployee Director
becomes effective pursuant to Section 9 of this Plan.
"DEFERRAL PERIOD" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 7 of
this Plan.
"DEFERRED SHARES" means an award pursuant to Section 7 of this
Plan of the right to receive Common Shares at the end of a
specified Deferral Period.
"FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in
tandem with an Option Right or similar right.
8
<PAGE> 4
"INCENTIVE STOCK OPTIONS" means Option Rights that are intended
to qualify as "incentive stock options" under Section 422 of the
Code or any successor provision.
"LESS-THAN-80-PERCENT SUBSIDIARY" means a Subsidiary with respect
to which the Corporation directly or indirectly owns or controls
less than 80 percent of the total combined voting or other
decision-making power.
"MANAGEMENT OBJECTIVES" means the achievement of a performance
objective or objectives established pursuant to this Plan for
Participants who have received grants of Performance Shares or
Performance Units or, when so determined by the Committee, Option
Rights, Appreciation Rights, Restricted Shares and dividend
equivalents. Management Objectives may be described in terms of
Corporation-wide objectives or objectives that are related to the
performance of the individual Participant or of the Subsidiary,
division, department or function within the Corporation or
Subsidiary in which the Participant is employed. The Management
Objectives applicable to any award to a Participant who is, or is
determined by the Committee to be likely to become, a "covered
employee" within the meaning of Section 162(m) of the Code (or
any successor provision) shall be limited to specified levels of,
growth in or peer company performance in: cash flow, cost of
capital, debt reduction, earnings before interest and taxes,
earnings per share, economic value added, free cash flow,
inventory management, net income, productivity improvement,
profit after tax, reduction of fixed costs, return on assets,
return on equity, return on invested capital, sales and/or
shareholder return. Management Objectives may be stated as a
combination of the preceding factors.
Except in the case of such a covered employee, if the Committee
determines that a change in the business, operations, corporate
structure or capital structure of the Corporation, or the manner
in which it conducts its business, or other events or
circumstances render the Management Objectives unsuitable, the
Committee may modify such Management Objectives or the related
minimum acceptable level of achievement, in whole or in part, as
the Committee deems appropriate and equitable.
"MARKET VALUE PER SHARE" means the fair market value of the
Common Shares as determined by the Committee from time to time.
"NONEMPLOYEE DIRECTOR" means a member of the Board who is not an
employee of the Corporation or any Subsidiary.
"OPTIONEE" means the person so designated in an agreement
evidencing an outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the exercise
of an Option Right.
"OPTION RIGHT" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 of this Plan.
"PARTICIPANT" means a person who is selected by the Committee to
receive benefits under this Plan and who is at that time an
officer, including without limitation an officer who may also be
a member of the Board, or other key employee of the Corporation
or any Subsidiary or who has agreed to commence serving in any
such capacity, and shall also include each Nonemployee Director
who receives an award pursuant to Section 9 of this Plan.
9
<PAGE> 5
"PERFORMANCE PERIOD" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to
Section 8 of this Plan within which the Management Objectives
relating thereto are to be achieved.
"PERFORMANCE SHARE" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of
this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a unit
equivalent to $100.00 awarded pursuant to Section 8 of this Plan.
"RELOAD OPTION RIGHTS" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights
pursuant to Section 4(f) of this Plan.
"RESTRICTED SHARES" mean Common Shares granted or sold pursuant
to Section 6 of this Plan as to which neither the substantial
risk of forfeiture nor the restrictions on transfer referred to
in Section 6 hereof has expired.
"RULE 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission (or any successor rule to the same effect), as in
effect from time to time.
"SPREAD" means, in the case of a Free-standing Appreciation
Right, the amount by which the Market Value per Share on the date
when any such right is exercised exceeds the Base Price specified
in such right or, in the case of a Tandem Appreciation Right, the
amount by which the Market Value per Share on the date when any
such right is exercised exceeds the Option Price specified in the
related Option Right.
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the
Corporation has a direct or indirect ownership or other equity
interest; provided, however, for purposes of determining whether
any person may be a Participant for purposes of any grant of
Incentive Stock Options, "Subsidiary" means any corporation in
which the Corporation owns or controls directly or indirectly
more than 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation at
the time of such grant.
"TANDEM APPRECIATION RIGHT" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with
an Option Right or any similar right granted under any other plan
of the Corporation.
3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as
provided in Section 11 of this Plan, the number of Common Shares issued or
transferred (i) upon the exercise of Option Rights or Appreciation Rights, (ii)
as Restricted Shares and released from all substantial risks of forfeiture,
(iii) as Deferred Shares, (iv) in payment of Performance Shares or Performance
Units that have been earned, (v) as automatic awards to Nonemployee Directors or
(vi) in payment of dividend equivalents paid with respect to awards made under
this Plan, shall not in the aggregate exceed 8,800,000 (2,800,000 of which were
approved in 1992 (as adjusted to reflect the 1997 stock split), 3,000,000 of
which were approved in 1995 (as adjusted to reflect the 1997 stock split) and
3,000,000 of which are being added as of this Amendment and Restatement) Common
Shares, which may be Common Shares of original issuance or Common Shares held in
treasury or a combination thereof; PROVIDED, HOWEVER, that the number of
Restricted Shares and Deferred Shares shall not (after taking any forfeitures
into account and excluding all awards of Restricted Shares to Non-Employee
Directors pursuant to Section 9 of this Plan) exceed 500,000, subject to
adjustment as provided in Section 11 of this Plan.
(b) Upon the full or partial payment of any Option Price by the
transfer to the Corporation of Common Shares or upon satisfaction of tax
withholding provisions in connection with any such exercise or any other payment
made or benefit realized under this Plan by the transfer or relinquishment of
Common
10
<PAGE> 6
Shares, there shall be deemed to have been issued or transferred under this plan
only the net number of Common Shares actually issued or transferred by the
Corporation.
(c) Notwithstanding anything in this Plan to the contrary, the
aggregate number of Common Shares actually issued or transferred by the
Corporation upon the exercise of Incentive Stock Options shall not exceed the
total number of Common Shares first specified above in Section 3(a), subject to
adjustment as provided in Section 11 of this Plan.
(d) The number of Performance Units that may be granted and paid
out under this Plan shall not in the aggregate exceed 150,000.
(e) Upon payment in cash of the benefit provided by any award
granted under this Plan, any Common Shares that were covered by that award shall
again be available for issuance or transfer hereunder.
(f) Notwithstanding any other provision of this Plan to the
contrary, no Participant shall be granted Option Rights for more than 1,000,000
Common Shares during any period of five consecutive calendar years subject to
adjustment as provided in Section 11 of this Plan.
(g) Notwithstanding any other provision of this Plan to the
contrary, in no event shall any Participant in any period of one calendar year
receive awards of Performance Shares and Performance Units having an aggregate
value as of their respective Dates of Grant in excess of $2,000,000.
4. OPTION RIGHTS. The Committee may from time to time authorize
grants to Participants of options to purchase Common Shares upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains, subject to the limitations set forth in Section 3 of
this Plan.
(b) Each grant shall specify an Option Price per Common Share, which
shall be equal to or greater than the Market Value per Share on
the Date of Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of
such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the
Corporation, (ii) nonforfeitable, unrestricted Common Shares,
which are already owned by the Optionee and have a value at the
time of exercise that is equal to the Option Price, (iii) any
other legal consideration that the Committee may deem
appropriate, including without limitation any form of
consideration authorized under Section 4(d) below, on such basis
as the Committee may determine in accordance with this Plan and
(iv) any combination of the foregoing.
(d) Any grant may provide that payment of the Option Price may also
be made in whole or in part in the form of Restricted Shares or
other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the
Committee whenever any Option Price is paid in whole or in part
by means of any of the forms of consideration specified in this
Section 4(d), the Common Shares received by the Optionee upon the
exercise of the Option Rights shall be subject to the same risks
of forfeiture or restrictions on transfer as those that applied
to the consideration surrendered by the Optionee; provided,
however, that such risks of forfeiture and restrictions on
transfer shall apply only to the same number of Common Shares
received by the
11
<PAGE> 7
Optionee as applied to the forfeitable or restricted Common
Shares surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a bank or broker on the date of
exercise of some or all of the Common Shares to which the
exercise relates.
(f) Any grant may provide for the automatic grant to the Optionee of
Reload Option Rights upon the exercise of Option Rights,
including Reload Option Rights, for Common Shares or any other
noncash consideration authorized under Sections 4(d) and (e)
above.
(g) Successive grants may be made to the same Participant regardless
of whether any Option Rights previously granted to such
Participant remain unexercised.
(h) Each grant shall specify the period or periods of continuous
employment of the Optionee by the Corporation or any Subsidiary
that are necessary before the Option Rights or installments
thereof shall become exercisable, and any grant may provide for
the earlier exercisability of such rights in the event of
retirement, death or disability of the Participant or a change in
control of the Corporation or other similar transaction or event.
(i) Any grant of Option Rights may specify Management Objectives that
must be achieved as a condition to the exercise of such rights.
(j) Option Rights granted under this Plan may be (i) options that are
intended to qualify under particular provisions of the Code,
including without limitation Incentive Stock Options, (ii)
options that are not intended to so qualify or (iii) combinations
of the foregoing.
(k) On or after the Date of Grant of any Option Rights other than
Incentive Stock Options, the Committee may provide for the
payment to the Optionee of dividend equivalents thereon in cash
or Common Shares on a current, deferred or contingent basis. In
the case of an Optionee who is, or is determined by the Committee
to be likely to become, a "covered employee" within the meaning
of Section 162(m) of the Code (or any successor provision), the
payment will be contingent on the achievement of Management
Objectives for a specified period. The payment of dividend
equivalents also may be subject to additional conditions. In no
event shall any such Optionee in any period of one calendar year
earn dividend equivalents with a value in excess of $750,000.
(l) Except as provided in Section 15 hereof, no Option Right granted
under this Plan may be exercised more than 10 years from the Date
of Grant.
(m) Each grant shall be evidenced by an Evidence of Award, which
shall contain such terms and provisions as the Committee may
determine consistent with this Plan.
5. APPRECIATION RIGHTS. The Committee may also authorize grants to
Participants of Appreciation Rights. An Appreciation Right shall be a right of
the Participant to receive from the Corporation an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100 percent) of the Spread at the time of the exercise of such right.
Any grant of Appreciation Rights under this Plan shall be upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Any grant may specify that the amount payable upon the exercise
of an Appreciation Right may be paid by the Corporation in cash,
Common Shares or any combination thereof and may (i) either grant
to the Participant or reserve to the Committee the right to
12
<PAGE> 8
elect among those alternatives or (ii) preclude the right of the
Participant to receive and the Corporation to issue Common Shares
or other equity securities in lieu of cash; PROVIDED, HOWEVER,
that no form of consideration or manner of payment that would
cause Rule 16b-3 to cease to apply to this Plan shall be
permitted.
(b) Any grant may specify that the amount payable upon the exercise
of an Appreciation Right shall not exceed a maximum specified by
the Committee on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible
dates or periods on or during which Appreciation Rights shall be
exercisable.
(d) Any grant may specify that an Appreciation Right may be exercised
only in the event of retirement, death or disability of the
Participant or a change in control of the Corporation or other
similar transaction or event.
(e) Any grant may provide for the payment to the Participant of
dividend equivalents thereon in cash or Common Shares on a
current, deferred or contingent basis.
(f) Each grant shall be evidenced by an Evidence of Award, which
shall describe the subject Appreciation Rights, identify any
related Option Rights, state that the Appreciation Rights are
subject to all of the terms and conditions of this Plan and
contain such other terms and provisions as the Committee may
determine consistent with this Plan.
(g) Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the exercise
of such rights.
(h) Regarding Tandem Appreciation Rights only: Each grant shall
provide that a Tandem Appreciation Right may be exercised only
(i) at a time when the related Option Right (or any similar right
granted under any other plan of the Corporation) is also
exercisable and the Spread is positive and (ii) by surrender of
the related Option Right (or such other right) for cancellation.
(i) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-standing
Appreciation Right a Base Price per Common Share, which
shall be equal to or greater than the Market Value per
Share on the Date of Grant;
(ii) Successive grants may be made to the same Participant
regardless of whether any Free-standing Appreciation Rights
previously granted to such Participant remain unexercised;
(iii) Each grant shall specify the period or periods of
continuous employment of the Participant by the Corporation
or any Subsidiary that are necessary before the
Free-standing Appreciation Rights or installments thereof
shall become exercisable, and any grant may provide for the
earlier exercise of such rights in the event of retirement,
death or disability of the Participant or a change in
control of the Corporation or other similar transaction or
event; and
(iv) No Free-standing Appreciation Right granted under this Plan
may be exercised more than 10 years from the Date of Grant.
13
<PAGE> 9
6. RESTRICTED SHARES. The Committee may also authorize grants or
sales to Participants of Restricted Shares upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of
the performance of services, entitling such Participant to
dividend, voting and other ownership rights, subject to the
substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.
(b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the
Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a
period of at least three years to be determined by the Committee
on the Date of Grant, and any grant or sale may provide for the
earlier termination of such period in the event of retirement,
death or disability of the Participant or a change in control of
the Corporation or other similar transaction or event; PROVIDED,
HOWEVER, that the Committee may authorize the grant or
sale of Restricted Shares that are subject to such a risk of
forfeiture for periods of less than three years in amounts that,
when taken together with any Deferred Shares granted or sold on
such terms pursuant to Section 7(c) of this Plan (after taking
any forfeitures into account and excluding all awards of
Restricted Shares to Non-Employee Directors pursuant to Section 9
of this Plan), in the aggregate do not exceed three percent of
the number of Common Shares specified in Section 3 above as being
added to this Amendment and Restatement.
(d) Each grant or sale shall provide that, during the period for
which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the
Committee on the Date of Grant. Such restrictions may include
without limitation rights of repurchase or first refusal in the
Corporation or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any
transferee.
(e) Any grant of Restricted Shares may specify Management Objectives
which, if achieved, will result in termination or early
termination of the restrictions applicable to such shares and
each such grant shall specify in respect of such specified
Management Objectives, a minimum acceptable level of achievement
and shall set forth a formula for determining the number of
Restricted Shares on which restrictions will terminate if
performance is at or above the minimum level, but falls short of
full achievement of the specified Management Objectives.
(f) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of
such restrictions be automatically sequestered. Such distribution
may be reinvested on an immediate or deferred basis in additional
Common Shares, which may be subject to the same restrictions as
the underlying award or such other restrictions as the Committee
may determine.
(g) Each grant or sale shall be evidenced by an Evidence of Award,
which shall contain such terms and provisions as the Committee
may determine consistent with this Plan. Unless otherwise
directed by the Committee, all certificates representing
Restricted Shares, together with a stock power that shall be
endorsed in blank by the Participant with respect to such shares,
shall be held in custody by the Corporation until all
restrictions thereon lapse.
14
<PAGE> 10
7. DEFERRED SHARES. The Committee may also authorize grants or sales
of Deferred Shares to Participants upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by the
Corporation to issue or transfer Common Shares to the Participant
in the future in consideration of the performance of services,
subject to the fulfillment during the Deferral Period of such
conditions as the Committee may specify.
(b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the
Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale shall provide that the Deferred Shares covered
thereby shall be subject to a Deferral Period of at least three
years, which shall be fixed by the Committee on the Date of
Grant, and any grant or sale may provide for the earlier
termination of such period in the event of retirement, death or
disability of the Participant or a change in control of the
Corporation or other similar transaction or event; PROVIDED,
HOWEVER, that the Committee may authorize the grant or sale of
Shares that are subject to Deferral Periods of less than three
years in amounts that, when taken together with any Restricted
Shares granted or sold on such terms pursuant to Section 6(c) of
this Plan (and after taking any forfeitures into account and
excluding all awards of Restricted Shares to Non-Employee
Directors pursuant to Section 9 of this Plan), in the aggregate
do not exceed three percent of the number of Common Shares
specified in Section 3 above as being added to this Amendment and
Restatement.
(d) During the Deferral Period, the Participant shall not have any
right to transfer any rights under the subject award, shall not
have any rights of ownership in the Deferred Shares and shall not
have any right to vote such shares, but the Committee may on or
after the Date of Grant authorize the payment of dividend
equivalents on such shares in cash or additional Common Shares on
a current, deferred or contingent basis.
(e) Each grant or sale shall be evidenced by an Evidence of Award,
which shall contain such terms and provisions as the Committee
may determine consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee may also
authorize grants to Participants of Performance Shares and Performance Units,
which shall become payable to the Participant upon the achievement of specified
Management Objectives, upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, subject to the
limitations in Section 3, which may be subject to adjustment to
reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Committee on the Date
of Grant and may be subject to earlier termination in the event
of retirement, death or disability of the Participant or a change
in control of the Corporation or other similar transaction or
event.
(c) Each grant shall specify the Management Objectives that are to be
achieved by the Participant and each grant shall specify in
respect of the specified Management Objectives a minimum
acceptable level of achievement below which no payment will be
made and shall set forth a formula for determining the amount of
any payment to be made
15
<PAGE> 11
if performance is at or above the minimum acceptable level but
falls short of full achievement of the specified Management
Objectives.
(d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been
earned, and any grant may specify that any such amount may be
paid by the Corporation in cash, Common Shares or any combination
thereof and may either grant to the Participant or reserve to the
Committee the right to elect among those alternatives.
(e) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified
by the Committee on the Date of Grant. Any grant of Performance
Units may specify that the amount payable, or the number of
Common Shares issued, with respect thereto may not exceed
maximums specified by the Committee on the Date of Grant.
(f) Any grant may provide for the payment to the Participant of
dividend equivalents thereon in cash or in additional Common
Shares on a current, deferred or contingent basis.
(g) Each grant of Performance Shares or Performance Units shall be
evidenced by an Evidence of Award, which shall contain such terms
and provisions as the Committee may determine consistent with
this Plan.
9. AUTOMATIC AWARDS TO NONEMPLOYEE DIRECTORS. Common Shares,
Restricted Shares and Option Rights shall be automatically granted to
Nonemployee Directors as follows:
(a) 2,000 Restricted Shares shall be granted to each person upon his
first election or appointment to the Board as a Nonemployee
Director. Such Restricted Shares shall become transferable and
nonforfeitable at the rate of 20 percent per year.
(b) 500 Common Shares shall be granted to each Nonemployee Director
immediately following each annual meeting of shareholders for so
long as he continues to be a Nonemployee Director. Such Common
Shares shall be subject only to a restriction on transfer for a
period of six months immediately following the Date of Grant
thereof and shall bear a legend to the effect.
(c) An Option Right to purchase 2,000 Common Shares shall be granted
to each Nonemployee Director immediately following each annual
meeting of shareholders for so long as he continues to be a
Nonemployee Director. The purchase price per Common Share for
which each such Option Right is exercisable shall be a price
equal to the average of the reported high and low prices on the
first trading day after any such meeting as quoted on the New
York Stock Exchange.
Each grant of Restricted Shares shall be evidenced by an Evidence of
Award consisting of an award agreement in substantially the form of Exhibit
A hereto and shall be subject to all of the terms and conditions set forth
therein.
Each Option to purchase Common Shares shall be evidenced by an
Evidence of Award consisting of an award agreement in substantially the
form of Exhibit B hereto and shall be subject to all of the terms and
conditions set forth therein.
10. TRANSFERABILITY. (a) No Option Right or other derivative
security (as that term is used in Rule 16b-3) awarded under this Plan shall be
transferable by a Participant other than by will or the laws of descent and
distribution. Option Rights and Appreciation Rights shall be exercisable during
a Participant's lifetime only by the Participant or, in the event of the
Participant's legal incapacity, by his guardian or legal representative acting
in a
16
<PAGE> 12
fiduciary capacity on behalf of the Participant under state law and court
supervision. Notwithstanding the foregoing, the Committee, in its sole
discretion, may provide for transferability of particular awards under this
Plan.
(b) Any award made under this Plan may provide that all or any
part of the Common Shares that are (i) to be issued or transferred by the
Corporation upon the exercise of Option Rights or Appreciation Rights or upon
the termination of the Deferral Period applicable to Deferred Shares, or in
payment of Performance Shares or Performance Units or (ii) no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions upon transfer.
11. ADJUSTMENTS. The Committee may make or provide for such
adjustments in the (a) number of Common Shares covered by outstanding Option
Rights, Appreciation Rights, Deferred Shares and Performance Shares granted
hereunder, (b) prices per share applicable to such Option Rights and
Appreciation Rights, and (c) kind of shares (including shares of another issuer)
covered thereby, as the Committee in its sole discretion may in good faith
determine to be equitably required in order to prevent dilution or enlargement
of the rights of Participants that otherwise would result from (x) any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Corporation, (y) any merger, consolidation,
spin-off, spin-out, split-off, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to
purchase securities or (z) any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such transaction or
event, the Committee may provide in substitution for any or all outstanding
awards under this Plan such alternative consideration as it may in good faith
determine to be equitable under the circumstances and may require in connection
therewith the surrender of all awards so replaced. Moreover, the Committee may
on or after the Date of Grant provide in the agreement evidencing any award
under this Plan that the holder of the award may elect to receive an equivalent
award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect, or the
Committee may provide that the holder will automatically be entitled to receive
such an equivalent award. The Committee may also make or provide for such
adjustments in the number of shares specified in Section 3, and in the number of
Common Shares, Restricted Shares and Option Rights to be granted automatically
pursuant to Section 8, of this Plan as the Committee in its sole discretion may
in good faith determine to be appropriate in order to reflect any transaction or
event described in this Section 11.
12. FRACTIONAL SHARES. The Corporation shall not be required to issue
any fractional Common Shares pursuant to this Plan. The Committee may provide
for the elimination of fractions or for the settlement thereof in cash.
13. WITHHOLDING TAXES. To the extent that the Corporation is required
to withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Corporation for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other person make
arrangements satisfactory to the Corporation for payment of the balance of such
taxes required to be withheld. At the discretion of the Committee, such
arrangements may include relinquishment of a portion of such benefit.
14. PARTICIPATION BY EMPLOYEES OF A LESS-THAN-80-PERCENT SUBSIDIARY.
As a condition to the effectiveness of any grant or award to be made hereunder
to a Participant who is an employee of a Less-Than-80-Percent Subsidiary,
regardless whether such Participant is also employed by the Corporation or
another Subsidiary, the Committee may require the Less-Than-80-Percent
Subsidiary to agree to transfer to the Participant (as, if and when provided for
under this Plan and any applicable agreement entered into between the
Participant and the Less-Than-80-Percent Subsidiary pursuant to this Plan) the
Common Shares that would otherwise be delivered by the Corporation upon receipt
by the Less-Than-80-Percent Subsidiary of any consideration then otherwise
payable by the Participant to the Corporation. Any such award may be evidenced
by an agreement between the Participant and the Less-Than-80-Percent Subsidiary,
in lieu of the Corporation, on terms consistent with this Plan and approved by
the Committee and the Less-Than-80-Percent Subsidiary. All Common Shares so
delivered by or to a Less-Than-80-Percent Subsidiary will be treated as if they
had been delivered by or to the Corporation for purposes of Section 3 of this
Plan, and all references to the Corporation in this Plan shall be deemed to
refer to the
17
<PAGE> 13
Less-Than-80-Percent Subsidiary except with respect to the definitions of the
Board and the Committee and in other cases where the context otherwise requires.
15. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND OTHER SPECIAL
CIRCUMSTANCES. Notwithstanding any other provision of this Plan to the contrary,
in the event of termination of employment by reason of death, disability, normal
retirement, early retirement with the consent of the Corporation, termination of
employment to enter public service with the consent of the Corporation or leave
of absence approved by the Corporation, or in the event of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right that is or is not immediately and fully exercisable, any
Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, any Deferred Shares as to
which the Deferral Period is not complete, any Performance Shares or Performance
Units that have not been fully earned, or any Common Shares that are subject to
any transfer restriction pursuant to Section 10(b) of this Plan, the Committee
may in its sole discretion take any action that it deems to be equitable under
the circumstances or in the best interests of the Corporation, including,
without limitation, accelerating the date when any such Option Right becomes
exercisable, extending the term of any such Option Right past the 10-year period
provided for in Section 4(l) hereof, or waiving or modifying any other
limitation or requirement with respect to any award under this Plan.
16. FOREIGN EMPLOYEES. In order to facilitate the making of any grant
or combination of grants under this Plan, the Committee may provide for such
special terms for awards to Participants who are foreign nationals, or who are
employed by the Corporation or any Subsidiary outside of the United States of
America, as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to, or amendments, restatements or alternative versions
of, this Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of this Plan as in effect for any other
purpose, and the Secretary or other appropriate officer of the Corporation may
certify any such document as having been approved and adopted in the same manner
as this Plan. No such special terms, supplements, amendments or restatements
shall include any provisions that are inconsistent with the terms of this Plan
as then in effect unless this Plan could have been amended to eliminate such
inconsistency without further approval by the shareholders of the Corporation.
17. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered
by the Compensation Committee of the Board, as constituted from time to time.
The Committee shall be composed of not less than three members of the Board,
each of whom shall be a "nonemployee director" within the meaning of Rule 16b-3
and an "outside director" within the meaning of Section 162(m) of the Code. A
majority of the Committee shall constitute a quorum, and the acts of the members
of the Committee who are present at any meeting thereof at which a quorum is
present, or acts unanimously approved by the members of the Committee in
writing, shall be the acts of the Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares or Deferred
Shares, Performance Shares and Performance Units and any determination by the
Committee pursuant to any provision of this Plan or any such agreement,
notification or document, shall be final and conclusive. No member of the
Committee shall be liable for any such action taken or determination made in
good faith.
18. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from
time to time by the Committee; provided, however, that any amendment that must
be approved by the shareholders of the Corporation in order to comply with
applicable law or the rules of the New York Stock Exchange or, if the Common
Shares are not traded on the New York Stock Exchange, the principal national
securities exchange upon which the Common Shares are traded or quoted, shall not
be effective unless and until such approval has been obtained. Presentation of
this Plan or any amendment hereof for shareholder approval shall not be
construed to limit the Corporation's authority to offer similar or dissimilar
benefits under other plans or otherwise with or without shareholder approval.
Without limiting the generality of the foregoing, the Committee may amend this
Plan to eliminate provisions which are no longer necessary as a result of
changes in tax or securities laws or regulations, or in the interpretation
thereof.
18
<PAGE> 14
(b) The Committee also may permit Participants to elect to defer
the issuance of Common Shares or the settlement of awards in cash under the Plan
pursuant to such rules, procedures or programs as it may establish for purposes
of this Plan. The Committee also may provide that deferred settlements include
the payment or crediting of interest on the deferral amounts, or the payment or
crediting of dividend equivalents where the deferral amounts are denominated in
Common Shares.
(c) The Committee may condition the grant of any award or
combination of awards under the Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation
otherwise payable by the Corporation or any Subsidiary to the Participant.
(d) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) To the extent that any provision of this Plan would prevent
any Option Right that was intended to qualify under particular provisions of the
Code from so qualifying, such provision of this Plan shall be null and void with
respect to such Option Right; provided, however, that such provision shall
remain in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Plan.
19
<PAGE> 15
EXHIBIT A
THE TIMKEN COMPANY
RESTRICTED SHARE AGREEMENT FOR
NONEMPLOYEE DIRECTORS
..............................., Grantee:
The Timken Company (the "Company") pursuant to its Long-term
Incentive Plan (the "Plan") has this day granted to you, the above-named
grantee, a total of ( ) Common Shares of the Company ("Common Shares") subject
to the following terms, conditions, limitations and restrictions:
1. The Common Shares subject to this grant shall be fully paid and
nonassessable and shall be represented by a certificate or certificates
registered in your name and endorsed with an appropriate legend referring to the
restrictions hereinafter set forth. You shall have all the rights of a
shareholder with respect to such shares, including the right to vote the shares
and receive all dividends paid thereon, provided that such shares, and any
additional shares that you may become entitled to receive by virtue of a share
dividend, a merger or reorganization in which the Company is the surviving
corporation or any other change in the capital structure of the Company, shall
be subject to the restrictions hereinafter set forth.
2. The Common Shares subject to this grant may not be assigned,
exchanged, pledged, sold, transferred or otherwise disposed of by you, except to
the Company, and shall be subject to forfeiture as herein provided until five
years have elapsed from the date of this grant, except that (a) 20 percent of
such shares shall become freely transferable and nonforfeitable at the end of
each year from and after the date of this grant and (b) your rights with respect
to such shares may be transferred by will or pursuant to the laws of descent and
distribution. Any purported transfer in violation of the provisions of this
paragraph shall be null and void, and the purported transferee shall obtain no
rights with respect to such shares.
3. All of the Common Shares subject to this grant that are then
forfeitable shall be forfeited by you if your service as a member of the Board
of Directors of the Company (a "Director") is terminated before the fifth
anniversary of the date of this grant; provided, however, if your service as a
Director of the Company is terminated before the fifth anniversary of the date
of this grant as a result of your death or disability, or owing to your removal
as a Director without cause, a portion of the shares covered by this grant that
then remain forfeitable shall become freely transferable and nonforfeitable as
follows: that number of shares shall become freely transferable and
nonforfeitable which bears the same ratio to the total number of shares subject
to this grant that then remain forfeitable and would have become forfeitable at
the next anniversary date as the number of full months from the date of this
grant (or, if such service is terminated after the first anniversary of the date
of this grant, then from the date of the latest anniversary) to the date of
termination of such service bears to 12, and the balance of the shares subject
to this grant shall be forfeited to the Company.
4. During the period in which the restrictions on transfer and risk
of forfeiture provided in paragraphs 2 and 3 above are in effect, the
certificates representing the Common Shares covered by this grant shall be
retained by the Company, together with the accompanying stock power signed by
you and endorsed in blank.
5. Upon any change in control of the Company, the restrictions on
transfer and risk of forfeiture provided in paragraphs 2 and 3 above shall lapse
and terminate with respect to all of the Common Shares that are subject to this
grant to which such restriction and risk then remain applicable. For purposes of
this grant, the term "change in control" shall mean the occurrence of any of the
following events:
<PAGE> 16
(a) all or substantially all of the assets of the Company are sold
or transferred to another corporation or entity, or the Company
is merged, consolidated or reorganized into or with another
corporation or entity, with the result that upon conclusion of
the transaction less than 51% of the outstanding securities
entitled to vote generally in the election of Directors or other
capital interests of the acquiring corporation or entity are
owned, directly or indirectly, by the shareholders of the
Company generally prior to the transaction; or
(b) there is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act"), disclosing that any person (as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner") is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing
30% or more of the combined voting power of the then-outstanding
voting securities of the Company; or
(c) the Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Item 1 of Form 8-K thereunder or Item
5(f) of Schedule 14A thereunder (or any successor schedule, form
or report or item therein) that a change in control of the
Company has or may have occurred or will or may occur in the
future pursuant to any then-existing contract or transaction; or
(d) the individuals who, at the beginning of any period of two
consecutive calendar years, constituted the Directors of the
Company cease for any reason to constitute at least a majority
thereof unless the nomination for election by the Company's
shareholders of each new Director of the Company was approved by
a vote of at least two-thirds of the Directors of the Company
still in office who were Directors of the Company at the
beginning of such period.
6. This grant of restricted Common Shares is made pursuant to the
Plan, a copy of which is attached hereto. This grant is subject to all of the
terms and provisions of the Plan, including without limitation the provision
making this grant subject to the approval of the shareholders of the Company,
which are incorporated herein by reference.
Dated this ____ day of ______________________, 199_.
THE TIMKEN COMPANY
By:___________________________
Name:
Title:
Accepted and agreed to: _________________
Dated:_____________________
<PAGE> 17
EXHIBIT B
THE TIMKEN COMPANY
NONQUALIFIED STOCK OPTION AGREEMENT FOR
NONEMPLOYEE DIRECTORS
WHEREAS, ____________ (the "Optionee") is a non-employee Director (a
"Nonemployee Director") of The Timken Company (the "Company").
NOW, THEREFORE, pursuant to the Company's Long-term Incentive Plan
(as Amended and Restated as of December 20, 1995) (the "Plan") and subject to
the terms and conditions thereof and the terms and conditions hereinafter set
forth, the Company hereby grants to _____________________ (the "Optionee"),
effective as of the date of the Annual Meeting of Shareholders of the Company
last written below (the "Date of Grant") a nonqualified stock option (the
"Option") to purchase 2,000 shares of the Company's common stock without par
value (the "Common Shares") at the exercise price of _____________________
($________) per Common Share (the "Exercise Price").
1. VESTING OF OPTION. (a) Unless terminated as hereinafter provided,
the Option shall be exercisable with respect to all of the Common Shares covered
by the Option after the Optionee continuously serves as a Nonemployee Director
of the Company for a period of one (1) year following the Date of Grant.
(b) Notwithstanding the provisions of Section 1(a) hereof, the
Option shall become immediately exercisable in full upon any change in control
of the Company that shall occur while the Optionee is a Nonemployee Director of
the Company. For the purposes of this agreement, the term "change in control"
shall mean the occurrence of any of the following events:
(i) all or substantially all of the assets of the Company are
sold or transferred to another corporation or entity, or the Company is
merged, consolidated or reorganized into or with another corporation or
entity, with the result that upon conclusion of the transaction less than
51 percent of the outstanding securities entitled to vote generally in the
election of directors or other capital interests of the acquiring
corporation or entity is owned, directly or indirectly, by the shareholders
of the Company generally prior to the transaction; or
(ii) there is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report thereto), as promulgated
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"),
disclosing that any person (as the term "person" is used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation thereto under the Exchange Act) of securities
representing 30 percent or more of the combined voting power of the
then-outstanding voting securities of the Company; or
(iii) the Company shall file a report or proxy statement with the
Securities and Exchange Commission (the "SEC") pursuant to the Exchange Act
disclosing in response to Item 1 of Form 8-K thereunder or Item 5(f) of
Schedule 14A thereunder (or any successor schedule, form, report or item
thereto) that a change in control of the Company has or may have occurred,
or will or may occur in the future, pursuant to any then-existing contract
or transaction; or
(iv) the individuals who constituted the Board at the beginning
of any period of two consecutive calendar years cease for any reason to
constitute at least a majority thereof unless the nomination for election
by the Company's shareholders of each new member of the Board was approved
by
<PAGE> 18
a vote of at least two-thirds of the members of the Board still in office
who were members of the Board at the beginning of any such period.
In the event that any person described in Section 1(b)(ii) hereof files an
amendment to any report referred to in Section 1(b)(ii) hereof that shows the
beneficial ownership described in Section 1(b)(ii) hereof to have decreased to
less than 30 percent, or in the event that any anticipated change in control
referred to in Section 1(b)(iii) hereof does not occur following the filing with
the SEC of any report or proxy statement described in Section 1(b)(iii) hereof
because any contract or transaction referred to in Section 1(b)(iii) hereof is
canceled or abandoned, the Committee may nullify the effect of Section 1(b)(ii)
or 1(b)(iii) hereof, as the case may be, and reinstate the provisions of Section
1(a) hereof by giving notice thereof to the Optionee; PROVIDED, HOWEVER, that
any such action by the Committee shall not prejudice any exercise of the Option
that may have occurred prior to the nullification and reinstatement. The
provisions of Section 1(b)(ii) hereof shall again become automatically effective
following any such nullification of the provisions thereof and reinstatement of
the provisions of Section 1(a) hereof in the event that any person described in
Section 1(b)(ii) hereof files a further amendment to any report referred to in
Section 1(b)(ii) hereof that shows the beneficial ownership described in Section
1(b)(ii) hereof to have again increased to 30 percent or more.
(c) Notwithstanding the provisions of Section 1(a) hereof, the
Option shall become immediately exercisable in full if the Optionee should die
or become permanently disabled (within the meaning of the Company's long-term
disability plan) while serving as a Nonemployee Director of the Company.
(d) To the extent that the Option shall have become exercisable
in accordance with the terms of this agreement, it may be exercised in whole or
in part from time to time thereafter.
2. TERMINATION OF OPTION. The Option shall terminate automatically
and without further notice on the earliest of the following dates:
(a) one year after the date upon which the Optionee ceases to be
a Nonemployee Director of the Company, unless the cessation of his service (i)
is a result of his disability or (ii) follows a change in control;
(b) five years after the date upon which the Optionee ceases to
be a Nonemployee Director of the Company or subsidiary (i) as a result of his
disability or (ii) following a change in control, unless the cessation of his
service as a Nonemployee Director of the Company following a change in control
is a result of his death;
(c) one year after the date of the Optionee's death; or
(d) ten years after the Date of Grant.
For the purposes of this agreement "disability" shall mean that the
Optionee would qualify for disability benefits under the Company's Long-Term
Disability Program or any successor disability plan or program of the Company.
3. PAYMENT OF EXERCISE PRICE. The Exercise Price shall be payable
(a) in cash in the form of currency or check or other cash equivalent acceptable
to the Company, (b) by transfer to the Company of nonforfeitable, unrestricted
Common Shares that have been owned by the Optionee for at least six months prior
to the date of exercise or (c) by any combination of the methods of payment
described in Sections 3(a) and 3(b) hereof. Nonforfeitable, unrestricted Common
Shares that are transferred by the Optionee in payment of all or any part of the
Exercise Price shall be valued on the basis of their fair market value as
determined by the Committee from time to time. Subject to the terms and
conditions of Section 4 hereof, and subject to any deferral election the
Optionee may have made pursuant to any plan or program of the Company, the
Company shall cause certificates for any shares purchased hereunder to be
delivered to the Optionee upon payment of the Exercise Price in full.
4. COMPLIANCE WITH LAW. The Company shall make reasonable
efforts to comply with all applicable federal and state securities laws;
PROVIDED, HOWEVER, notwithstanding any other provision of this
<PAGE> 19
agreement, the Option shall not be exercisable if the exercise thereof would
result in a violation of any such law. To the extent that the Ohio Securities
Act shall be applicable to the Option, the Option shall not be exercisable
unless the Common Shares or other securities covered by the Option are (a)
exempt from registration thereunder, (b) the subject of a transaction that is
exempt from compliance therewith, (c) registered by description or qualification
thereunder or (d) the subject of a transaction that shall have been registered
by description thereunder.
5. TRANSFERABILITY AND EXERCISABILITY.
(a) Except as provided in Section 5(b) below, the Option
including any interest in thereof, shall not be transferable by the Optionee
except by will or the laws of descent and distribution, and the Option shall be
exercisable during the lifetime of the Optionee only by him or, in the event of
his legal incapacity to do so, by his guardian or legal representative acting on
behalf of the Optionee in a fiduciary capacity under state law and court
supervision.
(b) Notwithstanding Section 5(a) above, the Option or any
interest in thereof, may be transferable by the Optionee, without payment of
consideration therefor, to any one or more members of the immediate family of
Optionee (as defined in Rule 16a-1(e) under the Exchange Act), or to one or more
trusts established solely for the benefit of such members of the immediate
family or to partnerships in which the only partners are such members of the
immediate family of the Optionee; provided, however, that such transfer will not
be effective until notice of such transfer is delivered to the Company; and
provided, further, however, that any such transferee is subject to the same
terms and conditions hereunder as the Optionee.
6. ADJUSTMENTS. The Committee shall make any adjustments in the
Exercise Price and the number or kind of shares of stock or other securities
covered by the Option that the Committee may determine to be equitably required
to prevent any dilution or expansion of the Optionee's rights under this
agreement that otherwise would result from any (a) stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, (b) merger, consolidation, separation, reorganization or partial
or complete liquidation involving the Company or (c) other transaction or event
having an effect similar to any of those referred to in Section 6(a) or 6(b)
hereof. Furthermore, in the event that any transaction or event described or
referred to in the immediately preceding sentence shall occur, the Committee may
provide in substitution of any or all of the Optionee's rights under this
agreement such alternative consideration as the Committee may determine in good
faith to be equitable under the circumstances.
7. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this agreement to the extent that the amendment is applicable
hereto; PROVIDED, HOWEVER, that no amendment shall adversely affect the rights
of the Optionee with respect to the Option without the Optionee's consent.
8. SEVERABILITY. In the event that one or more of the provisions of
this agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
9. GOVERNING LAW. This agreement is made under, and shall be
construed in accordance with, the laws of the State of Ohio.
<PAGE> 20
Dated this ____ day of ______________________, 199_.
THE TIMKEN COMPANY
By:___________________________
Name:
Title:
Accepted and agreed to: _________________
Dated:_____________________
<PAGE> 1
Exhibit 5
April 19, 2000
The Timken Company
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
Re: Long-term Incentive Plan (as Amended
and Restated as of December 16, 1999)
-------------------------------------
Gentlemen:
We have acted as counsel for The Timken Company, an Ohio corporation
(the "Registrant"), in connection with its Long-term Incentive Plan (As Amended
and Restated as of December 16, 1999) (the "Plan"). We have examined such
documents, records and matters of law as we have deemed necessary for purposes
of this opinion, and based thereon, we are of the opinion that the Registrant's
common shares, without par value (the "Common Shares"), that may be issued or
transferred and sold pursuant to the Plan and the agreements contemplated
thereunder (the "Agreements") have been duly authorized and will be, when issued
or transferred and sold in accordance with the Plan and such Agreements, 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 being filed by the Registrant to effect
registration of the 3,000,000 Common Shares to be issued and sold pursuant to
the Plan under the Securities Act of 1933.
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 Long-Term Incentive Plan (As Amended
and Restated as of December 16, 1999) of our report dated February 3, 2000, with
respect to the consolidated financial statements and schedule of The Timken
Company included in its Annual Report (Form 10-K) for the year ended December
31, 1999, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Canton, Ohio
April 17, 2000
<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 Lyle G. Ganske, Gene E. Little,
and Scott A. Scherff, collectively and individually, as his or her agent and
attorney-in-fact, with full power of substitution and resubstitution, to (a)
sign and file on his or her behalf and in his or her 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 The
Timken Company Long-Term Incentive Plan, as amended and restated as of December
16, 1999 (the "Plan"), and up to 3,000,000 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 18th day of April, 2000.
/s/ Stanley C. Gault /s/ John M. Timken, Jr.
--------------------------------- ---------------------------------
Stanley C. Gault John M. Timken, Jr.
/s/ James W. Griffith /s/ Ward J. Timken
--------------------------------- ---------------------------------
James W. Griffith 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/ John A. Luke, Jr. /s/ Martin D. Walker
--------------------------------- ---------------------------------
John A. Luke, Jr. Martin D. Walker
/s/ Robert W. Mahoney /s/ Jacqueline F. Woods
--------------------------------- ---------------------------------
Robert W. Mahoney Jacqueline F. Woods
/s/ Jay A. Precourt
---------------------------------
Jay A. Precourt
