exv10w6






Exhibit 10.6




AMENDED AND RESTATED

SUPPLEMENTAL PENSION PLAN

OF THE TIMKEN COMPANY

(Amended and Restated Effective as of January 1, 2009)



The Timken Company (“Timken”), 1835 Dueber Avenue, S. W., Canton, Ohio 44706, EIN 34-0577130, and
its wholly-owned subsidiaries MPB Corporation, and The Timken Corporation (collectively the
“Company”) hereby amend and restate the Supplemental Pension Plan of The Timken Company (the
“Supplemental Plan”), originally effective May 14, 1979, for the following purpose and in
accordance with the provisions as set forth below. The prior amendment and restatement of the
Supplemental Plan was effective as of January 1, 2009. This amendment and restatement of the
Supplemental Plan is also effective as of January 1, 2009.




Purpose




          The purpose of the Supplemental Plan is to provide for, on or after the effective date hereof,
the payment of supplemental retirement benefits:





     to those participants of certain qualified defined benefit plans of the Company whose
benefits payable under such qualified defined benefit plans of the Company are subject to
certain benefit limitations imposed by the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”) and Section 401 and Section 415 of the Internal Revenue Code of 1986,
as amended (the “Code”) (collectively referred to as “Code Limitations”); and




     to certain employees of the Company who have Employee Excess Benefits Agreements
(“Excess Agreements”) in effect with the Company.



Eligibility



The following individuals shall be eligible for benefits under the Supplemental Plan and shall be
known as “Participants”:





     Members of or participants in (i) The Timken Company Retirement Plan for Salaried
Employees, (ii) the 1984 Retirement Plan for Salaried Employees of The Timken Company, and
(iii) the Timken-Latrobe-MPB-Torrington Retirement Plan (the “TLMT Plan”) but only to the
extent the members or participants are members or participants pursuant to Part Seven, Part
Eight, and Part Ten (other than Kilian Participants, as defined in Part Ten) of the TLMT
Plan (the plans, or portions of plans, identified in clauses (i), (ii) and (iii) being
collectively the “Qualified Plan”), other than participants described in paragraph 2(c),
who are eligible



 









 







for a retirement benefit other than a deferred vested pension and whose retirement
benefits under the Qualified Plan are limited pursuant to the Code Limitations;




     (i) Former employees of the Company who separated from the service of the Company,
and (ii) current employees of the Company who separate from the service of the Company, in
each case under circumstances which the Company, in its sole discretion, deems to be for
mutually satisfactory reasons and in each case with eligibility for a deferred vested
pension and whose retirement benefits under the Qualified Plan are limited by the Code
Limitations; and




     Employees of the Company who have Excess Agreements currently in effect with the
Company.



Incorporation of the Qualified Plan



The Qualified Plan, with any amendments thereto is hereby incorporated by reference into and shall
be a part of the Supplemental Plan as fully as if set forth herein. Any future amendment made to
the Qualified Plan shall be also incorporated by reference into and form a part of the Supplemental
Plan, effective as of the effective date of such amendment. The Qualified Plan, whenever referred
to in the Supplemental Plan, shall mean such Qualified Plan as it exists as of the date any
determination is made of benefits payable under the Supplemental Plan. All terms used herein shall
have the meanings assigned to them under the provisions of the Qualified Plan unless otherwise
qualified by the context of the Supplemental Plan. If there is any conflict between the provisions
of the Qualified Plan and the provisions of the Supplemental Plan, the provisions of the
Supplemental Plan will govern.




Amount of Benefit





     The benefit payable to a Participant described in paragraphs 2(a) or (b) under the
Supplemental Plan shall be equal to the excess, if any, of:



The benefit which would have been payable to such Participant
under the Qualified Plan, if the provisions of the Qualified Plan were
administered without regard to the Code Limitations, over



The benefit which is in fact payable to such Participant under
the Qualified Plan.
Such benefits payable under the Supplemental Plan to any Participant shall
be computed in accordance with the foregoing using the normal form of
payment under the Qualified Plan and with the objective that such
Participant should receive under the Supplemental Plan and the Qualified


 









 






Plan the total amount which would otherwise have been payable to that
Participant solely under the Qualified Plan had not the Code Limitations
been applicable thereto. The Participant’s benefit under the Supplemental
Plan will be paid in the form provided under paragraph 5(a). If any
portion of a Participant’s benefit under the Qualified Plan is not payable
at the same time the Participant’s benefit under the Supplemental Plan is
payable, for purposes of this paragraph 4, the corresponding portion of
the benefit under the Supplemental Plan shall be determined by calculating
that portion of the benefit that would be payable under the Supplemental
Plan and Qualified Plan at age 65 and then actuarially reducing such
benefit from age 65 to the commencement date provided under the
Supplemental Plan in accordance with paragraph 5(b).



Any actuarial adjustments under this paragraph 4 shall be based on the
“applicable mortality table, “ as defined in Code Section 417(e)(3) and
the “applicable interest rate” as defined in Code Section 417(e)(3),
during the third calendar month (October) immediately preceding the first
day of the calendar year in which the determination is made.




     The benefit payable to a Participant described in paragraph 2(c) under the
Supplemental Plan shall be the benefit described in such Participant’s Excess Agreement.




     If a married Participant dies prior to commencement of the Participant’s benefit
payments pursuant to paragraph 5(b), the Supplemental Plan shall pay to the Participant’s
spouse an amount equal to the difference between the monthly pension said spouse would be
entitled to receive under the Qualified Plan, were it not for the Code Limitations, and the
monthly pension said spouse will actually receive under the Qualified Plan.



Payment of Benefits





     Form of Payment.



Participants. Subject to the provisions of any domestic relations order
described in paragraph 6(b), the benefits payable to Participants described in
paragraphs 2(a), (b) or (c) (unless otherwise provided in an Excess Agreement
with a Participant) under the Supplemental Plan shall be paid in the form of a
monthly annuity for the life of the Participant (a “Life


 









 






Annuity”). In lieu of receiving his or her benefit in the form of a Life
Annuity, at any time prior to the date benefit payments commence in
accordance with paragraph 5(b) or the Excess Agreement, if applicable, a
Participant described in paragraphs 2(a), (b) or (c) (if provided for in
the Excess Agreement with Participant) may elect, on a written form
acceptable to the Company, to receive his or her benefit in one of the
following forms (the “Optional Forms”), each of which are actuarially
equivalent to the Life Annuity:



Joint Pension Option. The Joint Pension Option provides for
monthly benefit payments to the Participant during his or her
lifetime and thereafter to the Participant’s duly named joint
pensioner, who shall be a natural person. The amount of each benefit
payment to the Participant will be reduced so that the joint
pensioner after the Participant’s death will receive a monthly
benefit equivalent to 25%, 50%, 75% or 100%, as elected by the
Participant at the time the Joint Pension Option is elected, of the
monthly benefit paid to the Participant during his or her lifetime.
If the joint pensioner dies after benefit payments to the Participant
have started, the benefits will only be payable for the Participant’s
lifetime.



Ten Year Certain and Continuous Pension Option. The Ten Year
Certain and Continuous Pension Option provides monthly pension
payments to the Participant during his lifetime and if he dies after
benefit payments have started but before receiving 120 benefit
payments, the remainder of the 120 monthly benefit payments will be
paid to the Participant’s beneficiary monthly.




If a Participant elects an Optional Form that provides for a benefit to a
joint pensioner or beneficiary, such joint pensioner or beneficiary shall
be designated at the time the Participant elects such Optional Form. If a
Participant is married to a spouse (as defined in the Qualified Plan) and
wants to designate a joint pensioner or beneficiary other than his or her
spouse, such designation will not take effect unless (i) the Participant’s
spouse consents in writing to such election,



 









 







the election designates a beneficiary or a form of benefits which may not
be changed without spousal consent (or the consent of the spouse expressly
permits designations by the Participant without any requirement of further
consent by the spouse), and the spouse’s consent acknowledges the effect
of such election and is witnessed by a Plan representative or a notary
public, or (ii) it is established to the satisfaction of a Plan
representative that the consent required under (i) cannot be obtained
because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as the Secretary of the Treasury may
prescribe by regulations. Any consent by a spouse or establishment that
the consent of a spouse may not be obtained shall be effective only with
respect to such spouse.



Surviving Spouse. Any benefit payable to a surviving spouse pursuant to
paragraph 4(c), shall be paid in the form of a monthly annuity for the life of
the surviving spouse.



Time of Payment.



Participants. With respect to a Participant who is described in paragraphs
2(a), (b) or (c) (unless otherwise provided in an Excess Agreement with the
Participant or in a Transition Election), the benefits payable to such
Participant under this Supplemental Plan or the Excess Agreement, as
applicable, shall commence within 30 days of the later of (A) the
Participant’s separation from service, or (B) the Participant’s
55th birthday. The term “Transition Election” means a
Participant’s election made on or before December 31, 2008 in accordance with
IRS Notice 2007-86 and other applicable guidance under Code Section 409A to
designate the time at which the Participant’s benefits will commence.



Surviving Spouses. Any benefit payable to a surviving spouse pursuant to
paragraph 4(c) shall commence within 30 days of the later of (A) the
Participant’s death, or (B) the date on which the Participant would have
reached age 55.




     Delayed Benefits for Specified Employees. Notwithstanding any provision of
this Supplemental Plan to the contrary, if a Participant is a “specified employee,”
determined



 









 







pursuant to procedures adopted by the Company in compliance with Section 409A of the
Code, on the date the Participant separates from service, then to the extent necessary to
comply with Section 409A, amounts that would otherwise be payable pursuant to this
Supplemental Plan during the six-month period immediately following the Participant’s
separation from service will instead be paid or made available on the earlier of (i) the
first business day of the seventh month after the date of the Participant’s separation from
service, or (ii) the Participant’s death. Any benefit payments that are scheduled to be
paid more than six months after such Participant’s separation from service shall not be
delayed and shall be paid in accordance with the schedule prescribed by paragraphs 5(a) and
5(b).




     Small Benefit Cash-Out. Notwithstanding any provision to the contrary but
subject to paragraph 5(c), if, upon a Participant’s separation from service, the actuarial
present value of the benefit the Participant is entitled to receive under this Supplemental
Plan and any other plans with respect to which deferrals of compensation are treated as
having been deferred under a single nonqualified deferred compensation plan with the
Supplemental Plan under Treasury Regulation Section 1.409A-1(c)(2) (the “Aggregate
Benefit”) is less than $15,000, the Company may in its discretion pay the Participant’s
entire Aggregate Benefit in a single lump sum payment on the 30th day following
the Participant’s separation from service. To determine the Aggregate Benefit under this
paragraph 5(d), the “applicable mortality table, “ as defined in Code Section 417(e)(3) and
the “applicable interest rate” as defined in Code Section 417(e)(3), during the third
calendar month (October) immediately preceding the first day of the calendar year in which
the determination is made will be used.




     Separation from Service. For purposes of this paragraph 5, “separation from
service” or “separates from service” shall mean termination of employment (within the
meaning of Treasury Regulation Section 1.409A-1(h)(1)(ii)) with the Company and any member
of its controlled group (as such term is used for purposes of ERISA and the Code, except
that a 50% ownership or common control threshold shall be used to determine controlled
group status instead of an 80% ownership or common control threshold). For purposes of the
preceding sentence a termination of employment shall also include a permanent decrease in
the level of bona fide services performed by the Participant after a certain date to a
level that is 20% or less of the average level of bona fide services performed by the
Participant over the immediately preceding 36-month period.



 









 





General





     The entire cost of the Supplemental Plan shall be paid from the general assets of the
Company. It is the intent of the Company to so pay benefits under the Supplemental Plan as
they become due; provided, however, that the Company may, in its sole discretion, establish
or cause to be established a trust account for any or each Participant pursuant to an
agreement, or agreements, with a bank and direct that some or all of a Participant’s
benefits under the Supplemental Plan be paid from the general assets of the Company which
are transferred to the custody of such bank to be held by it in such trust account as
property of the Company subject to the claims of its creditors until such time as benefit
payments pursuant to the Supplemental Plan are made from such assets in accordance with
such agreement; and until any such payment is made, neither the Plan nor any Participant or
beneficiary shall have any preferred claim on, or any beneficial ownership interest in,
such assets. Notwithstanding any provision of the Supplemental Plan to the contrary, no
amounts shall be so transferred to a trust pursuant to the preceding sentence if, pursuant
to Section 409A(b)(3)(A) of the Code, such amount would, for purposes of Section 83 of the
Code, be treated as property transferred in connection with the performance of services.
No liability for the payment of benefits under the Supplemental Plan shall (i) be imposed
upon any officer, director, employee, or stockholder of the Company, (ii) be imposed upon
the trust fund under the Qualified Plan, (iii) be paid from the trust fund under the
Qualified Plan, or (iv) have any effect whatsoever upon the Qualified Plan or the payment
of benefits from the trust fund under the Qualified Plan.




     No right or interest of a Participant or beneficiary under the Supplemental Plan shall
be anticipated, assigned (either at law or in equity), or alienated by the Participant or
beneficiary, nor shall any such right or interest be subject to attachment, garnishment,
levy, execution, or other legal or equitable process or in any manner be liable for or
subject to the debts of any Participant or beneficiary. The Company shall not recognize
any attempt by any Participant or beneficiary to alienate, sell, transfer, assign, pledge,
or otherwise encumber his or her benefits under the Supplemental Plan or any part thereof.
To the extent permitted by Section 409A of the Code, this Paragraph 6(b) shall not apply,
however, in the case of a domestic relations order that would be a “qualified domestic
relations order” within the meaning of Section 206(d)(3) of ERISA if the Supplemental Plan
was subject to



 









 







Section 206(d)(3) of ERISA. Except as permitted under Section 409A of the Code, any
deferred compensation (within the meaning of Section 409A of the Code) payable to a
Participant or for a Participant’s benefit under this Supplemental Plan may not be reduced
by, or offset against, any amount owing by a Participant to the Company or any of its
affiliates.




     Employment rights shall not be enlarged or affected hereby. The Company shall
continue to have the right to discharge or retire a Participant, with or without cause.



Miscellaneous





     Timken shall, in its discretion, interpret where necessary, in its reasonable and good
faith judgment, the provisions of the Supplemental Plan and, except as otherwise provided
in the Supplemental Plan, shall determine the rights and status of Participants and
beneficiaries hereunder (including, without limitation, the amount of any benefit to which
a Participant or beneficiary may be entitled under the Supplemental Plan). Except to the
extent federal law controls, all questions pertaining to the construction, validity, and
effect of the provisions hereof shall be determined in accordance with the laws of the
State of Ohio.




     Timken may, from time to time, delegate all or part of the administrative powers,
duties, and authorities delegated to it under the Supplemental Plan to such person or
persons, office or committee as it shall select. For the purposes of ERISA, Timken shall
be the plan sponsor and the plan administrator.




     Whenever there is denied, whether in whole or in part, a claim for benefits under the
Supplemental Plan filed by any person (herein referred to as the “Claimant”), the plan
administrator shall transmit a written notice of such decision to the Claimant within 90
days of receiving the claim from the Claimant, which notice shall be written in a manner
calculated to be understood by the Claimant and shall contain a statement of the specific
reasons for the denial of the claim, a reference to the relevant Supplemental Plan
provisions, a description and explanation of additional information needed, and a statement
advising the Claimant that, within 60 days of the date on which he or she receives such
notice, he or she may obtain review of such decision in accordance with the procedures
hereinafter set forth. Within such 60-day period, the Claimant or the Claimant’s
authorized representative may request that the claim denial be reviewed by filing with the
plan



 









 







administrator a written request therefor, which request shall contain the following
information:



the date on which the Claimant’s request was filed with the plan
administrator; provided, however, that the date on which the Claimant’s
request for review was in fact filed with the plan administrator shall control
in the event that the date of the actual filing is later than the date stated
by the Claimant pursuant to this paragraph;



the specific portions of the denial of the claim which the
Claimant requests the plan administrator to review;



a statement by the Claimant setting forth the basis upon which
the Claimant believes the plan administrator should reverse the previous
denial of the Claimant’s claim for benefits and accept the claim as made; and



any written material (offered as exhibits) which the Claimant
desires the plan administrator to examine in its consideration of the
Claimant’s position as stated pursuant to clause (iii) above.




Within 60 days of the date determined pursuant to clause (i) above, the
plan administrator shall conduct a full and fair review of the decision
denying the Claimant’s claim for benefits. Within 60 days of the date of
such hearing, the plan administrator shall render its written decision on
review, written in a manner calculated to be understood by the Claimant
and including the reasons and Plan provisions upon which its decision was
based, a statement that the Claimant is entitled to receive, upon request
and free of charge, reasonable access to and copies of all documents and
other information relevant to the claim, and a statement describing the
Claimant’s right to bring an action under Section 502(a) of ERISA.



Amendment and Termination





     Timken has reserved and does hereby reserve the right to amend, restate or terminate,
at any time, any or all of the provisions of the Supplemental Plan, without the consent of
any Participant, beneficiary, or any other person. Without limiting the authority of the
Board of Directors of Timken or a duly authorized committee thereof to amend, restate or
terminate the Supplemental Plan, the Board of Directors of Timken has authorized



 









 







and instructed its Senior Vice President — Human Resources and Organizational
Advancement (or any other officer or delegate of an officer) to amend, restate or terminate
the Plan. Any amendment, restatement or termination of the Plan shall be expressed in an
instrument executed in the name of Timken. Any such amendment, restatement or termination
shall become effective as of the date designated in such instrument or, if no such date is
specified, on the date of its execution.




     Notwithstanding paragraph 8(a) hereof, no amendment, restatement or termination of the
Supplemental Plan shall, without the consent of the Participant (or, in the case of his or
her death, his or her beneficiary), adversely affect (i) the benefit under the Supplemental
Plan of any Participant or beneficiary then entitled to receive a benefit under the
Supplemental Plan or (ii) the right of any Participant to receive upon termination of
employment with the Company (or the right of the Participant’s beneficiary to receive upon
the Participant’s death) that benefit which would have been received under the Supplemental
Plan if such employment of the Participant had terminated immediately prior to the
amendment, restatement or termination of the Supplemental Plan; provided, however, that the
consent requirement of Participants or beneficiaries to certain actions shall not apply to
any amendment or termination made by the Company pursuant to paragraph 10(b).
Notwithstanding any provision to the contrary, Timken, in its sole discretion, may
terminate this Supplemental Plan in accordance with Treasury Regulation Section
1.409A-3(j)(4)(ix), or any successor provision.



Restriction on Competition



For a period of two years following a Participant’s separation from service, the Participant shall
not (a) engage or participate, directly or indirectly, in any Competitive Activity (as defined
below), or (b) solicit or cause to be solicited on behalf of a competitor any person or entity
which was a customer of the Company during the three year period ending on the Participant’s
retirement date, if the Employee had any direct responsibility for such customer while employed by
the Company. The term “Competitive Activity” shall mean the Participant’s participation, without
the written consent of an officer of the Company, in the management of any business enterprise if
such enterprise engages in substantial and direct competition with the Company and such
enterprise’s sales of any product or service competitive with any product or service of the Company
amounted to 25% of such enterprise’s net sales for its most recently completed fiscal year and if
the Company’s net sales of said product or service amounted to 25% of the Company’s net





 









 







sales for its most recently completed fiscal year. “Competitive Activity” shall not include (y)
the mere ownership of securities in any enterprise and exercise of rights appurtenant thereto or
(z) participation in management of any enterprise or business operation thereof other than in
connection with the competitive operation of such enterprise. If a Participant engages in activity
prohibited by this paragraph, then in addition to all other remedies available to the Company, the
Company shall be released of any obligation under the Supplemental Plan to pay benefits to such
Participant or to such Participant’s spouse or beneficiary under the Supplemental Plan.




Compliance with Section 409A of the Code.





     To the extent applicable, it is intended that this Supplemental Plan (including all
amendments thereto) 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 the
Participant or a beneficiary. This Supplemental Plan shall be administered in a manner
consistent with this intent.




     Notwithstanding any provision of this Supplemental Plan to the contrary, in light of
the uncertainty with respect to the proper application of Section 409A of the Code, Timken
reserves the right to make amendments to this Supplemental Plan as Timken deems necessary
or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code.
In any case, a Participant shall be solely responsible and liable for the satisfaction of
all taxes and penalties that may be imposed on a Participant or for a Participant’s account
in connection with this Supplemental Plan (including any taxes and penalties under Section
409A of the Code), and neither the Company nor any of its affiliates shall have any
obligation to indemnify or otherwise hold a Participant harmless from any or all of such
taxes or penalties.


IN WITNESS WHEREOF, The Company has executed this amendment and restatement of this Plan at Canton,
Ohio, this ___ day of                     , 2009.




THE TIMKEN COMPANY




Scott A. Scherff

Corporate Secretary and

Vice President, Ethics and Compliance