Exhibit 10.1

TRANSFERABLE

THE TIMKEN COMPANY

Nonqualified Stock Option Agreement

               WHEREAS, [NAME] (the “Optionee”) is an employee of The Timken
Company (the “Company”); and

               WHEREAS, the grant of stock options evidenced hereby was
authorized by a resolution of the Compensation Committee (the “Committee”) of
the Board of Directors (the “Board”) of the Company that was duly adopted on
[DATE] (the “Date of Grant”), and the execution of a stock option agreement in
the form hereof was authorized by a resolution of the Committee duly adopted on
[DATE]; and

               WHEREAS, the option evidenced hereby is intended to be a
nonqualified stock option and shall not be treated as an “incentive stock
option” within the meaning of that term under Section 422 of the Internal
Revenue Code of 1986;

               NOW, THEREFORE, pursuant to the Company’s Long-term Incentive
Plan (as Amended and Restated as of February 6, 2004) (the “Plan”), the Company
hereby grants to the Optionee (i) a nonqualified stock option (the “Option”) to
purchase [NUMBER] shares of the Company’s common stock without par value (the
“Common Shares”) at the exercise price of [OPTION PRICE] per Common Share (the
“Option Price”) which represents the Market Value per Share on the Date of
Grant. The Company agrees to cause certificates for any shares purchased
hereunder to be delivered to the Optionee upon payment of the Option Price in
full, subject to the terms and conditions of the Plan and the terms and
conditions hereinafter set forth.

     1. Vesting of Option. (a) Unless terminated as hereinafter provided, the
Option shall be exercisable to the extent of one-fourth (1/4th) of the Common
Shares covered by the Option after the Optionee shall have been in the
continuous employ of the Company or a subsidiary for one full year from the Date
of Grant and to the extent of an additional one-fourth (1/4th) thereof after
each of the next three successive years thereafter during which the Optionee
shall have been in the continuous employ of the Company or a subsidiary. For the
purposes of this agreement: “subsidiary” shall mean a corporation, partnership,
joint venture, unincorporated association or other entity in which the Company
has a direct or indirect ownership or other equity interest; the continuous
employment of the Optionee with the Company or a subsidiary shall not be deemed
to have been interrupted, and the Optionee shall not be deemed to have ceased to
be an employee of the Company or a subsidiary, by reason of the transfer of his
employment among the Company and its subsidiaries.

               (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 an employee of the Company
or a subsidiary. For the purposes of

 

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this agreement, the term “change in control” shall mean the occurrence of any of
the following events:

                         (i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of 30% or more
of either: (A) the then-outstanding Common Shares or (B) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (“Voting Shares”); provided, however,
that for purposes of this subsection (i), the following acquisitions shall not
constitute a change in control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, or (4) any acquisition by any Person pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(b);
or

                         (ii) Individuals who, as of the date hereof, constitute
the Board (the “Incumbent Board”) cease for any reason (other than death or
disability) to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such individual were
a member of the Incumbent Board, but excluding for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-11 of the Securities
Exchange Act of 1934) with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or

                         (iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Common Shares and Voting Shares immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 66-2/3% of, respectively,
the then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Business Combination, of the Common Shares and Voting Shares of the Company, as
the case may be, (B) no Person (excluding any entity resulting from such
Business Combination or any employee benefit plan (or related trust) sponsored
or maintained by the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination, or

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the combined voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

                         (iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.

               (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 while in the employ of the Company or any
subsidiary, or if the Optionee should retire with the Company’s consent.

               For purposes of this agreement, retirement “with the Company’s
consent” shall mean: (i) the retirement of the Optionee prior to age 62 under a
retirement plan of the Company or a subsidiary, if the Board or the Committee
determines that his retirement is for the convenience of the Company or a
subsidiary, or (ii) the retirement of the Optionee at or after age 62 under a
retirement plan of the Company or a subsidiary. For purposes of this agreement,
“permanently disabled” shall mean that the Optionee has qualified for disability
benefits under a disability plan or program of the Company or, in the absence of
a disability plan or program of the Company, under a government-sponsored
disability program.

               (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) thirty days after the date upon which the Optionee ceases to
be an employee of the Company or a subsidiary, unless the cessation of his
employment (i) is a result of his death, permanent disability or retirement with
the Company’s consent or (ii) follows a change in control;

               (b) five years after the date upon which the Optionee ceases to
be an employee of the Company or subsidiary (i) as a result of his permanent
disability, (ii) as a result of his retirement with the Company’s consent,
unless he is also a director of the Company who continues to serve as such
following his retirement with the Company’s consent, or (iii) following a change
in control, unless the cessation of his employment following a change in control
is a result of his death;

               (c) five years after the date upon which the Optionee ceases to
be a director of the Company, but not less than five years after the date upon
which he ceases to be an employee of the Company or a subsidiary, if (i) the
cessation of his employment is a result of his retirement

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with the Company’s consent and (ii) he continues to serve as a director of the
Company following the cessation of his employment;

               (d) one year after the date of the Optionee’s death regardless of
whether he ceases to be an employee of the Company or a subsidiary prior to his
death (i) as a result of his permanent disability or retirement with the
Company’s consent or (ii) following a change in control; or

               (e) ten years after the Date of Grant.

     In the event that the Optionee shall intentionally commit an act that the
Committee determines to be materially adverse to the interests of the Company or
a subsidiary, the Option shall terminate at the time of that determination
notwithstanding any other provision of this agreement.

     3. Payment of Option Price. The Option 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 Option
Price shall be valued on the basis of their Market Value per Share. Subject to
the terms and conditions of Section 6 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 Option 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 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 therein, 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.

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               (b) Notwithstanding Section 5(a) above, the Option, may be
transferable by the Optionee, without payment of consideration therefor, to any
family member of the Optionee (as defined in Form S-8), 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 Option
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 8(a) or 8(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. Withholding Taxes. If the Company shall be required to withhold any
federal, state, local or foreign tax in connection with any exercise of the
Option, the Optionee shall pay the tax or make provisions that are satisfactory
to the Company for the payment thereof. The Optionee may elect to satisfy all or
any part of any such withholding obligation by surrendering to the Company a
portion of the Common Shares that are issuable to the Optionee upon the exercise
of the Option. If such election is made, the shares so surrendered by the
Optionee shall be credited against any such withholding obligation at their
Market Value per Share on the date of such surrender. In no event, however,
shall the Company accept Common Shares for payment of taxes in excess of
required tax withholding rates, except that, unless otherwise determined by the
Committee at any time, the Optionee may surrender Common Shares owned for more
than 6 months to satisfy any tax obligations resulting from any such
transaction.

     8. No Right to Future Awards or Continued Employment. This option award is
a voluntary, discretionary bonus being made on a one-time basis and it does not
constitute a commitment to make any future awards. This option award and any
payments made hereunder will not be considered salary or other compensation for
purposes of any severance pay or similar allowance, except as otherwise required
by law. Nothing in this Agreement will give the Optionee any right to continue
employment with the Company or any Subsidiary, as the case may be, or interfere
in any way with the right of the Company or a Subsidiary to terminate the
employment of the Optionee.

     9. Relation to Other Benefits. Any economic or other benefit to the
Optionee under this agreement or the Plan shall not be taken into account in
determining any benefits to which

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the Optionee may be entitled under any profit-sharing, retirement or other
benefit or compensation plan maintained by the Company or a subsidiary and shall
not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering employees of the Company or a
subsidiary.

     10. 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.

     11. Severability. If any provision of this Agreement or the application of
any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision in any other person or circumstances shall not be
affected, and the provisions so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.

     12. Processing of Information. Information about the Optionee and the
Optionee’s participation in the Plan may be collected, recorded and held, used
and disclosed for any purpose related to the administration of the Plan. The
Optionee understands that such processing of this information may need to be
carried out by the Company and its Subsidiaries and by third party
administrators whether such persons are located within the Optionee’s country or
elsewhere, including the United States of America. The Optionee consents to the
processing of information relating to the Optionee and the Optionee’s
participation in the Plan in any one or more of the ways referred to above.

     13. Governing Law. This agreement is made under, and shall be construed in
accordance with, the internal substantive laws of the State of Ohio.

     14. Relation to Plan. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Plan.

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     This agreement is executed by the Company on this ___day of ___.

            THE TIMKEN COMPANY
      By:           William R. Burkhart        Sr. Vice President & General
Counsel     

     The undersigned Optionee hereby acknowledges receipt of an executed
original of this agreement and accepts the Option granted hereunder, subject to
the terms and conditions of the Plan and the terms and conditions hereinabove
set forth.

         
 
   

  Optionee    

  Date:    

       

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