Exhibit 10.1

THE TIMKEN COMPANY

Performance-Based Restricted Stock Unit Agreement

WHEREAS, __________ (“Grantee”) is an employee of The Timken Company (the
“Company”) or a Subsidiary; and

WHEREAS, the grant of performance-based Restricted Stock Units evidenced hereby
was authorized by a resolution of the Compensation Committee (the “Committee”)
of the Board that was duly adopted on February 12, 2015, and the execution of a
performance-based Restricted Stock Unit Agreement in the form hereof (this
“Agreement”) was authorized by a resolution of the Committee duly adopted on
February 12, 2015.

NOW, THEREFORE, pursuant to The Timken Company 2011 Long-Term Incentive Plan
(the “Plan”) and subject to the terms and conditions thereof and the terms and
conditions hereinafter set forth, the Company hereby confirms to Grantee the
grant, effective ________ __, ____ (the “Date of Grant”), of __________
Restricted Stock Units (the “PRSUs”). Subject to the attainment of the
Management Objectives described in Section 3 of this Agreement, Grantee may earn
between 0% and 200% of the PRSUs. All terms used in this Agreement with initial
capital letters that are defined in the Plan and not otherwise defined herein
shall have the meanings assigned to them in the Plan.

1.
Payment of PRSUs. The PRSUs will become payable in accordance with the
provisions of Section 6 of this Agreement if the Restriction Period lapses and
Grantee’s right to receive payment for the PRSUs becomes nonforfeitable (“Vest,”
“Vesting” or “Vested”) in accordance with Section 3 and Section 4 of this
Agreement.

1.
PRSUs Not Transferrable. None of the PRSUs nor any interest therein or in any
Common Shares underlying such PRSUs will be transferable other than by will or
the laws of descent and distribution prior to payment.

2.
Vesting of PRSUs.

(a)
Subject to the terms and conditions of Section 4 and Section 5 of this
Agreement, the PRSUs will Vest on the basis of the relative achievement of the
Management Objective or Management Objectives approved by the Committee on the
Date of Grant (the “Performance Metrics”) for the period from January 1, 2015
through December 31, 2017 (the “Performance Period”) as follows:

(i)
The applicable percentage of the PRSUs that shall be earned by Grantee for the
Performance Period shall be determined by reference to the Performance Matrix
for the Performance Period

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Exhibit 10.1

approved by the Committee on the Date of Grant (the “Performance Matrix”);
(ii)
In the event that the Company’s achievement with respect to one of the
Performance Metrics is between the performance levels specified in the
Performance Matrix, the applicable percentage of the PRSUs that shall be earned
by Grantee for the Performance Period shall be determined by the Committee using
straight-line interpolation; and

(iii)
The Vesting of the PRSUs pursuant to this Section 3 or pursuant to Section 4
shall be contingent upon a determination of the Committee that the Performance
Metrics, as described in this Section 3, have been satisfied.

(b)
If the Committee determines that a change in the business, operations, corporate
structure or capital structure of the Company, the manner in which it conducts
business or other events or circumstances render the Performance Metrics
specified in this Section 3 to be unsuitable, the Committee may modify such
Performance Metrics or any related minimum acceptable level of achievement, in
whole or in part, as the Committee deems appropriate; provided, however, that no
such action may result in the loss of the otherwise available exemption of the
PRSUs under Section 162(m) of the Code.

(c)
All determinations involving the Performance Metrics set forth in this Section 3
shall be calculated based on U.S. Generally Accepted Accounting Principles in
effect at the time the Performance Metrics are established without regard to any
change in accounting standards that may be required by the Financial Accounting
Standards Board after the Performance Metrics are established.

(d)
Subject to Section 3(a), Section 3(b) and Section 3(c), the PRSUs earned with
respect to the Performance Period will Vest if Grantee is in the continuous
employ of the Company or a Subsidiary from the Date of Grant through the last
day of the Performance Period. For purposes of this Agreement, the continuous
employment of Grantee with the Company or a Subsidiary will not be deemed to
have been interrupted, and Grantee shall not be deemed to have ceased to be an
employee of the Company or a Subsidiary, by reason of the transfer of Grantee’s
employment among the Company and its Subsidiaries.

3.
Alternative Vesting of PRSUs. Notwithstanding the provisions of Section 3 of
this Agreement, and subject to the payment provisions of Section 6 hereof,
Grantee shall Vest in some or all of the PRSUs under the following
circumstances:

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Exhibit 10.1

(a)
Death or Disability: If Grantee should die or become permanently disabled while
in the employ of the Company or a Subsidiary, then Grantee shall Vest in a
number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee
would have Vested in accordance with the terms and conditions of Section 3 if
Grantee had remained in the continuous employ of the Company or a Subsidiary
from the Date of Grant until the end of the Performance Period or the occurrence
of a Change in Control to the extent a Replacement Award is not provided,
whichever occurs first, multiplied by (ii) a fraction (in no case greater than
1) the numerator of which is the number of whole months from the first day of
the Performance Period through the date of such death or permanent disability
and the denominator of which is 36. PRSUs that Vest in accordance with this
Section 4(a) will be paid as provided for in Section 6(a) of this Agreement. For
purposes of this Agreement, “permanently disabled” means that Grantee has
qualified for long-term 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 and is “disabled”
within the meaning of Section 409A(a)(2)(C) of the Code.

(b)
Retirement: If Grantee should retire with the Company’s consent, then Grantee
shall Vest in a number of PRSUs equal to the product of (i) the number of PRSUs
in which Grantee would have Vested in accordance with the terms and conditions
of Section 3 if Grantee had remained in the continuous employ of the Company or
a Subsidiary from the Date of Grant until the end of the Performance Period or
the occurrence of a Change in Control to the extent a Replacement Award is not
provided, whichever occurs first, multiplied by (ii) a fraction (in no case
greater than 1) the numerator of which is the number of whole months from the
first day of the Performance Period through the date of such retirement and the
denominator of which is 36. PRSUs that Vest in accordance with this Section 4(b)
will be paid as provided for in Section 6(a) of this Agreement. For purposes of
this Agreement, “retire with the Company’s consent” means: (i) the retirement of
Grantee 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 Grantee at
or after age 62 under a retirement plan of the Company or a Subsidiary.

(c)
Change in Control:

(i)
Upon a Change in Control occurring during the Restriction Period while Grantee
is an employee of the Company or a Subsidiary or during the period that Grantee
is deemed to be in the continuous employ of the Company or a Subsidiary pursuant
to Section 4(a), 4

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Exhibit 10.1

(b), 4(d) or 4(e), to the extent the PRSUs have not been forfeited, the PRSUs
will Vest (except to the extent that a Replacement Award is provided to Grantee
for the PRSUs) as follows: the Performance Period will terminate and the
Committee as constituted immediately before the Change of Control will determine
and certify the Vested PRSUs based on actual performance through the most recent
date prior to the Change of Control for which achievement of the Performance
Metrics can reasonably be determined. PRSUs that Vest in accordance with this
Section 4(c)(i) will be paid as provided for in Section 6(b) of this Agreement.
(ii)
For purposes of this Agreement, a “Replacement Award” means an award (A) of
performance-based restricted stock units, (B) that has a value at least equal to
the value of the PRSUs, (C) that relates to publicly traded equity securities of
the Company or its successor in the Change in Control (or another entity that is
affiliated with the Company or its successor following the Change in Control),
(D) the tax consequences of which, under the Code, if Grantee is subject to U.S.
federal income tax under the Code, are not less favorable to Grantee than the
tax consequences of the PRSUs, (E) that vests upon a termination of Grantee’s
employment with Company or its successor in the Change in Control (or another
entity that is affiliated with the Company or its successor following the Change
in Control) for Good Reason by Grantee or without Cause by such employer within
a period of two years after the Change in Control based on actual performance
through the date of such termination, and (F) the other terms and conditions of
which are not less favorable to Grantee than the terms and conditions of the
PRSUs (including the provisions that would apply in the event of a subsequent
Change in Control). A Replacement Award may be granted only to the extent it
conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or
otherwise does not result in the PRSUs or Replacement Award failing to comply
with Section 409A of the Code. Without limiting the generality of the foregoing,
the Replacement Award may take the form of a continuation of the PRSUs if the
requirements of the preceding sentence are satisfied. The determination of
whether the conditions of this Section 4(c)(ii) are satisfied will be made by
the Committee, as constituted immediately before the Change in Control, in its
sole discretion.

(iii)
For purposes of Section 4(c)(ii), “Cause” will be defined not less favorably
with respect to Grantee than: any intentional act of fraud, embezzlement or
theft in connection with the Grantee’s

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Exhibit 10.1

duties with the Company, any intentional wrongful disclosure of secret processes
or confidential information of the Company or a Subsidiary, or any intentional
wrongful engagement in any competitive activity that would constitute a material
breach of Grantee’s duty of loyalty to the Company, and no act, or failure to
act, on the part of Grantee shall be deemed “intentional” unless done or omitted
to be done by Grantee not in good faith and without reasonable belief that
Grantee’s action or omission was in or not opposed to the best interest of the
Company; provided, that for any Grantee who is party to an individual severance
or employment agreement defining Cause, “Cause” will have the meaning set forth
in such agreement. For purposes of Section 4(c)(ii), “Good Reason” will be
defined to mean: a material reduction in the nature or scope of the
responsibilities, authorities or duties of Grantee attached to Grantee’s
position held immediately prior to the Change in Control, a change of more than
60 miles in the location of Grantee’s principal office immediately prior to the
Change in Control, or a material reduction in Grantee’s remuneration upon or
after the Change in Control; provided, that no later than 90 days following an
event constituting Good Reason Grantee gives notice to the Company of the
occurrence of such event and the Company fails to cure the event within 30 days
following the receipt of such notice.
(iv)
If a Replacement Award is provided, notwithstanding anything in this Agreement
to the contrary, any outstanding PRSUs which at the time of the Change in
Control are not subject to a “substantial risk of forfeiture” (within the
meaning of Section 409A of the Code) will be deemed to be Vested at the time of
such Change in Control and will be paid as provided for in Section 6(b) of this
Agreement.

(d)
Divestiture: If Grantee’s employment with the Company or a Subsidiary terminates
as the result of a divestiture, then Grantee shall Vest in a number of PRSUs
equal to the product of (i) the number of PRSUs in which Grantee would have
Vested in accordance with the terms and conditions of Section 3 if Grantee had
remained in the continuous employ of the Company or a Subsidiary from the Date
of Grant until the end of the Performance Period or the occurrence of a Change
in Control to the extent a Replacement Award is not provided, whichever occurs
first, multiplied by (ii) a fraction (in no case greater than 1) the numerator
of which is the number of whole months from the first day of the Performance
Period through the date of such termination and the denominator of which is 36.
PRSUs that Vest in accordance with this Section 4(d) will be paid as provided
for in Section 6(a) of this Agreement. For the purposes of this

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Exhibit 10.1

Agreement, the term “divestiture” shall mean a permanent disposition to a Person
other than the Company or any Subsidiary of a plant or other facility or
property at which Grantee performs a majority of Grantee’s services whether such
disposition is effected by means of a sale of assets, a sale of Subsidiary stock
or otherwise.
(e)
Layoff: If (i) Grantee’s employment with the Company or a Subsidiary terminates
as the result of a layoff and (ii) Grantee is entitled to receive severance pay
pursuant to the terms of any severance pay plan of the Company in effect at the
time of Grantee’s termination of employment that provides for severance pay
calculated by multiplying Grantee’s base compensation by a specified severance
period, then Grantee shall Vest in a number of PRSUs equal to the product of (x)
the number of PRSUs in which Grantee would have Vested in accordance with the
terms and conditions of Section 3 if Grantee had remained in the continuous
employ of the Company or a Subsidiary from the Date of Grant until the end of
the Performance Period or the occurrence of a Change in Control to the extent a
Replacement Award is not provided, whichever occurs first, multiplied by (y) a
fraction (in no case greater than 1) the numerator of which is the number of
whole months from the first day of the Performance Period through the end of the
specified severance period and the denominator of which is 36. PRSUs that Vest
in accordance with this Section 4(e) will be paid as provided for in Section
6(a) of this Agreement. For purposes of this Agreement, a “layoff” shall mean
the involuntary termination by the Company or any Subsidiary of Grantee’s
employment with the Company or any Subsidiary due to (A) a reduction in force
leading to a permanent downsizing of the salaried workforce, (B) a permanent
shutdown of the plant, department or subdivision in which Grantee works, or (C)
an elimination of position.

4.
Forfeiture of PRSUs. Any PRSUs that have not Vested pursuant to Section 3 or
Section 4 at the end of the Performance Period will be forfeited automatically
and without further notice after the end of the Performance Period (or earlier
if, and on such date that, Grantee ceases to be an employee of the Company or a
Subsidiary prior to the end of the Performance Period for any reason other than
as described in Section 4).

5.
Form and Time of Payment of PRSUs.

(a)
General. Subject to Section 5 and Section 6(b), payment for Vested PRSUs will be
made in cash or Common Shares (as determined by the Committee) between January
1, 2018 and March 15, 2018.

(b)
Other Payment Event. Notwithstanding Section 6(a), to the extent that the PRSUs
are Vested on the date of a Change in Control, Grantee will receive payment for
Vested PRSUs in cash or Common Shares (as determined by

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Exhibit 10.1

the Committee) on the date of the Change in Control; provided, however, that if
such Change in Control would not qualify as a permissible date of distribution
under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and
where Section 409A of the Code applies to such distribution, Grantee is entitled
to receive the corresponding payment on the date that would have otherwise
applied pursuant to Section 6(a).
6.
Payment of Dividend Equivalents. With respect to each of the PRSUs covered by
this Agreement, Grantee shall be credited on the records of the Company with
dividend equivalents in an amount equal to the amount per Common Share of any
cash dividends declared by the Board on the outstanding Common Shares during the
period beginning on the Date of Grant and ending either on the date on which
Grantee receives payment for the PRSUs pursuant to Section 6 hereof or at the
time when the PRSUs are forfeited in accordance with Section 5 of this
Agreement. These dividend equivalents will accumulate without interest and,
subject to the terms and conditions of this Agreement, will be paid at the same
time, to the same extent and in the same manner, in cash or Common Shares (as
determined by the Committee) as the PRSUs for which the dividend equivalents
were credited.

7.
Detrimental Activity and Recapture.

(a)
Notwithstanding anything in this Agreement to the contrary, in the event that,
as determined by the Committee, Grantee shall engage in Detrimental Activity
during employment with the Company or a Subsidiary, the PRSUs will be forfeited
automatically and without further notice at the time of that determination
notwithstanding any other provision of this Agreement.

(b)
If a Restatement occurs and the Committee determines that Grantee is personally
responsible for causing the Restatement as a result of Grantee’s personal
misconduct or any fraudulent activity on the part of Grantee, then the Committee
has discretion to, based on applicable facts and circumstances and subject to
applicable law, cause the Company to recover all or any portion (but no more
than 100%) of the PRSUs earned or payable to Grantee for some or all of the
years covered by the Restatement. The amount of any earned or payable PRSUs
recovered by the Company shall be limited to the amount by which such earned or
payable PRSUs exceeded the amount that would have been earned by or paid to
Grantee had the Company’s financial statements for the applicable restated
fiscal year or years been initially filed as restated, as reasonably determined
by the Committee. The Committee shall also determine whether the Company shall
effect any recovery under this Section 8(b) by: (i) seeking repayment from
Grantee; (ii) reducing, except with respect to any non-qualified deferred
compensation under Section 409A of the Code,

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Exhibit 10.1

the amount that would otherwise be payable to Grantee under any compensatory
plan, program or arrangement maintained by the Company (subject to applicable
law and the terms and conditions of such plan, program or arrangement); (iii) by
withholding, except with respect to any non-qualified deferred compensation
under Section 409A of the Code, payment of future increases in compensation
(including the payment of any discretionary bonus amount) that would otherwise
have been made to Grantee in accordance with the Company’s compensation
practices; or (iv) by any combination of these alternatives. For purposes of
this Agreement, “Restatement” means a restatement of any part of the Company’s
financial statements for the current fiscal year or any years thereafter due to
material noncompliance with any financial reporting requirement under the U.S.
securities laws applicable to such fiscal year or years.
8.
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 Company shall not be
obligated to issue any of the Common Shares covered by this Agreement if the
issuance thereof would result in violation of any such law.

9.
Adjustments. Subject to Section 12 of the Plan, the Committee shall make any
adjustments in the number of PRSUs or kind of shares of stock or other
securities underlying the PRSUs covered by this Agreement that the Committee may
determine to be equitably required to prevent any dilution or expansion of
Grantee’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 10(a) or 10(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 Grantee’s rights under this Agreement such alternative consideration
as the Committee may determine in good faith to be equitable under the
circumstances.

10.
Withholding Taxes. If the Company is required to withhold federal, state, local,
employment, or foreign taxes, or, to the extent permitted under Section 409A of
the Code, any other applicable taxes, in connection with Grantee’s right to
receive Common Shares under this Agreement (regardless of whether Grantee is
entitled to the delivery of any Common Shares at that time), and the amounts
available to the Company for such withholding are insufficient, it shall be a
condition to the receipt of any Common Shares or any other benefit provided for
under this Agreement that Grantee make arrangements satisfactory to the Company
for payment of the balance of the taxes. Grantee may satisfy such tax obligation
by paying the Company cash via personal check. Alternatively, Grantee may elect

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Exhibit 10.1

that all or any part of such tax obligation be satisfied by the Company’s
retention of a portion of the Common Shares provided for under this Agreement or
by Grantee’s surrender of a portion of the Common Shares that he or she has
owned for at least 6 months. In no event, however, shall the Company accept
Common Shares for payment of taxes in excess of required tax withholding rates.
If an election is made to satisfy Grantee’s tax obligation with the release or
surrender of Common Shares, the Common Shares shall be credited in the following
manner: (a) at the Market Value per Share on the date of delivery if the tax
obligations arise due to the delivery of Common Shares under this Agreement; or
(b) at the Market Value per Share on the date the tax obligation arises, if for
a reason other than the delivery of Common Shares under this Agreement.
11.
Right to Terminate Employment. No provision of this Agreement will limit in any
way whatsoever any right that the Company or a Subsidiary may otherwise have to
terminate the employment of Grantee at any time.

12.
Relation to Other Benefits. Any economic or other benefit to Grantee under this
Agreement or the Plan will not be taken into account in determining any benefits
to which Grantee may be entitled under any profit‑sharing, retirement or other
benefit or compensation plan maintained by the Company or a Subsidiary and will
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.

13.
Amendments. Any amendment to the Plan will be deemed to be an amendment to this
Agreement to the extent that the amendment is applicable to this Agreement;
provided, however, that no amendment will adversely affect the rights of Grantee
with respect to the Common Shares or other securities covered by this Agreement
without Grantee’s consent. Notwithstanding the foregoing, the limitation
requiring the consent of Grantee to certain amendments will not apply to any
amendment that is deemed necessary by the Company to ensure compliance with
Section 409A of the Code.

14.
Severability. In the event that one or more of the provisions of this Agreement
is invalidated for any reason by a court of competent jurisdiction, any
provision so invalidated will be deemed to be separable from the other
provisions of this Agreement, and the remaining provisions of this Agreement
will continue to be valid and fully enforceable.

15.
Governing Law. This Agreement is made under, and shall be construed in
accordance with, the internal substantive laws of the State of Ohio.

16.
Compliance with Section 409A of the Code. To the extent applicable, it is
intended that this Agreement and the Plan comply with the provisions of Section
409A of the Code, so that the income inclusion provisions of Section 409A(a)(1)
of the Code do not apply to Grantee. This Agreement and the Plan shall be

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Exhibit 10.1

administered in a manner consistent with this intent. Reference to Section 409A
of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended,
and will also include any regulations or any other formal guidance promulgated
with respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service.

[SIGNATURES ON FOLLOWING PAGE]

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Exhibit 10.1

The undersigned Grantee hereby acknowledges receipt of an executed original of
this Agreement and accepts the award of PRSUs covered hereby, subject to the
terms and conditions of the Plan and the terms and conditions herein above set
forth.

_________________________________
Grantee

Date: ___________________________

This Agreement is executed by the Company on this __ day of ___________, ____.

The Timken Company

        
By ___________________________________
William R. Burkhart
Sr. Vice President and General Counsel

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