Exhibit 10.28
THE TIMKEN COMPANY
Performance-Vested Restricted Shares Agreement
     WHEREAS, <<name>> (“Grantee”) is an employee of The Timken Company (the
“Company”); and
     WHEREAS, the grant of performance-vested restricted shares 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
[                    ], and the execution of a performance-vested restricted
shares agreement in the form hereof (this “Agreement”) was authorized by a
resolution of the Committee duly adopted on such date.
     NOW, THEREFORE, pursuant to The Timken Company Long-Term Incentive Plan (as
Amended and Restated as of February 4, 2008) (the “Plan”) and subject to the
terms and conditions thereof, in addition to the terms and conditions of this
Agreement, the Company hereby grants to Grantee, effective
[                    ] (the “Date of Grant”), the right to receive <<award>>
shares of the Company’s common stock without par value (the “Common Shares”).

  1.   Rights of Grantee. The Common Shares subject to this grant shall be fully
paid and nonassessable and shall be represented by a certificate or certificates
registered in Grantee’s name and endorsed with an appropriate legend referring
to the restrictions hereinafter set forth. Grantee 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 Grantee 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.   Restrictions on
Transfer of Common Shares. The Common Shares subject to this grant may not be
assigned, exchanged, pledged, sold, transferred or otherwise disposed of by
Grantee, except to the Company, until the Common Shares have become
nonforfeitable in accordance with Sections 3 and 4 hereof; provided, however,
that Grantee’s rights with respect to such Common 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 Section 2 shall be null and void, and the
purported transferee shall obtain no rights with respect to such shares.     3.
  Vesting of Common Shares.

 

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  (a)   Normal Vesting: Subject to the terms and conditions of Sections 4 and 5
hereof, Grantee’s right to receive the Common Shares covered by this Agreement
shall become nonforfeitable (a) if, for the calendar year in which the Date of
Grant occurs, the Company achieves the Management Objective approved by the
Committee on the Date of the Grant with respect to the Common Shares (the
“Threshold Requirement”), and (b) to the extent of one-quarter (1/4) of the
Common Shares covered by this Agreement after Grantee 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-quarter (1/4) thereof after each
of the next three successive years during which Grantee shall have been in the
continuous employ of the Company or a subsidiary. If the Company fails to
achieve the Threshold Requirement, the grant of the Common Shares shall be
cancelled. For 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. For purposes of this Agreement, the continuous employment of Grantee
with the Company or a subsidiary shall 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 his employment among the Company
and its subsidiaries.     (b)   Vesting Upon Retirement with Consent: If Grantee
should retire with or without consent prior to the Company having attained the
Threshold Requirement, then all Common Shares covered by this Agreement shall be
cancelled. If, on the other hand, Grantee should retiree with the Company’s
consent after the Threshold Requirement has been met, but before the fourth
anniversary of the Date of Grant, then Grantee’s right to receive the Common
Shares covered by this Agreement shall become nonforfeitable in accordance with
the terms and conditions of Section 3(a) as if Grantee had remained in the
continuous employ of the Company or a subsidiary from the Date of Grant until
the date of the fourth anniversary or the occurrence of an event referenced in
Section 4, whichever occurs first.

     For purposes of this Agreement, retirement “with the Company’s consent”
shall mean: (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.

  4.   Accelerated Vesting of Common Shares. Notwithstanding the provisions of
Section 3 hereof, Grantee’s right to receive the Common Shares covered by this
Agreement, which have not been cancelled due to the Company’s failure to meet
the Threshold Requirement, may become nonforfeitable earlier than the time
provided in such section if any of the following circumstances apply:

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  (a)   Death or Disability: Grantee’s right to receive the Common Shares
covered by this Agreement, if not cancelled for failure to achieve the Threshold
Requirement, shall become nonforfeitable if Grantee should die or become
permanently disabled while in the employ of the Company or any subsidiary. For
purposes of this Agreement, “permanently disabled” shall mean 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.     (b)   Change in
Control: Grantee’s right to receive the Common Shares covered by this Agreement,
if not cancelled for failure to achieve the Threshold Requirement prior to the
change of control, shall become nonforfeitable upon any change in control of the
Company that shall occur while Grantee is an employee of the Company or a
subsidiary. For the purposes of 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 (i) of this Section 4(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

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      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 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)   Divestiture: Grantee’s right to receive the Common Shares covered by
this Agreement, if not cancelled for failure to achieve the Threshold
Requirement, shall become nonforfeitable if Grantee’s employment with the
Company or a subsidiary terminates as the result of a divestiture. For

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      the purposes of this 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.     (d)   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 the Common Shares shall become nonforfeitable, if not cancelled for
failure to achieve the Threshold Requirement, with respect to the total number
of Common Shares that would have been exercisable under the provisions of
Section 3 hereof if Grantee had remained in the employ of the Company through
the end of the severance period.

          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 (i) a reduction in force leading to a permanent
downsizing of the salaried workforce, (ii) a permanent shutdown of the plant,
department or subdivision in which Grantee works, or (iii) an elimination of
position.

  5.   Forfeiture of Awards. In the event the Company fails to achieve the
Threshold Requirement, the grant of the Common Shares hereunder shall be
cancelled immediately and Grantee shall have no further rights under this
Agreement. Further, Grantee’s right to receive the Common Shares covered by this
Agreement that are then forfeitable shall be forfeited automatically and without
further notice on the date that Grantee ceases to be an employee of the Company
or a subsidiary prior to the fourth anniversary of the Date of Grant for any
reason other than as described in Sections 3 or 4. If Grantee shall
intentionally commit an act that the Committee determines to be materially
adverse to the interests of the Company or a subsidiary, Grantee’s right to
receive the Common Shares covered by this Agreement shall be forfeited at the
time of that determination notwithstanding any other provision of this
Agreement.     6.   Retention of Certificates. During the period in which the
restrictions on transfer and risk of forfeiture provided in Sections 2 and 5
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 Grantee and endorsed in blank.     7.   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

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    obligated to issue any of the Common Shares covered by this Agreement if the
issuance thereof would result in violation of any such law. To the extent that
the Ohio Securities Act shall be applicable to this Agreement, the Company shall
not be obligated to issue any of the Common Shares or other securities covered
by this Agreement unless such Common Shares 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.     8.   Adjustments. The Committee shall make any adjustments in
the number or kind of shares of stock or other securities 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 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 Grantee’s rights under this Agreement
such alternative consideration as the Committee may determine in good faith to
be equitable under the circumstances.     9.   Withholding Taxes. To the extent
that the Company is required to withhold federal, state, local or foreign taxes
in connection with any benefit received (including income recognized) in
connection with this Agreement, and the amounts available to the Company for
such withholding are insufficient, it shall be a condition to the realization of
such benefit that Grantee make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld. The Grantee may
elect that all or any part of such withholding requirement be satisfied by
retention by the Company of a portion of such benefit. If such election is made,
the shares so retained shall be credited against such withholding requirement at
the Market Price per Common Share on the date the shares are retained or
relinquished. 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, Grantee may surrender
Common Shares owned for more than 6 months to satisfy any tax obligations
resulting from any such transaction.     10.   Right to Terminate Employment. No
provision of this Agreement shall 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.

  11.   Relation to Other Benefits. Any economic or other benefit to Grantee
under this Agreement or the Plan shall 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

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      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.     12.   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 Grantee with respect to the Common Shares or other securities
covered by this Agreement without Grantee’s consent.     13.   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.     14.   Governing Law. This agreement is made under, and shall be
construed in accordance with, the internal substantive laws of the State of
Ohio.     15.   Relation to Plan. This agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistency between the provisions
of this Agreement and the Plan, the Plan shall govern. 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 and General
Counsel     

     The undersigned Grantee hereby acknowledges receipt of an executed original
of this Agreement and accepts the right to receive the Common Shares or other
securities covered hereby, subject to the terms and conditions of the Plan and
the terms and conditions herein above set forth.
                                                                           
Grantee
Date:                                                             

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