<PAGE>
                                                                    EXHIBIT 4(C)

                               THE TIMKEN COMPANY
                        SAVINGS AND STOCK INVESTMENT PLAN
                    FOR TORRINGTON NON-BARGAINING ASSOCIATES

                           EFFECTIVE FEBRUARY 16, 2003

<PAGE>

                               THE TIMKEN COMPANY
                        SAVINGS AND STOCK INVESTMENT PLAN
                    FOR TORRINGTON NON-BARGAINING ASSOCIATES

The Timken Company hereby establishes The Timken Company Savings and Stock
Investment Plan for Torrington Non-bargaining Associates (the "Plan") effective
as of February 16, 2003. The effective date of the Plan coincides with the
purchase of The Torrington Company from Ingersoll-Rand Company.

The Plan is a profit-sharing plan intended to meet the requirements of Section
401(a) of the Internal Revenue Code of 1986 and the Employee Retirement Income
Security Act of 1974 and subsequent legislation and the Plan and contributions
are expressly conditioned upon initial qualification thereunder.

The provisions of this Plan shall apply only to an Employee who is in the employ
of the Company or Participating Subsidiary on or after the Effective Date. The
benefit payable to or on behalf of a Participant included under the Plan in
accordance with the following provisions shall not be affected by the terms of
any amendment to the Plan adopted after such Participant's employment
terminates, unless the amendment expressly provides otherwise.

The Plan is intended to be a qualified plan under Section 401(a) of the Internal
Revenue Code, and its provisions are to be interpreted consistent with such
intent.

This Plan document is an amendment and restatement of the Plan document signed
on February 21, 2003.

<PAGE>

              THE TIMKEN COMPANY SAVINGS AND STOCK INVESTMENT PLAN
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION 1 -- DEFINITIONS                                                    PAGE
<S>                                                                         <C>
     1.1   Affiliated Company .........................................       5
     1.2   After-Tax Contribution .....................................       5
     1.3   Alternate Payee ............................................       5
     1.4   Before-Tax Contribution ....................................       5
     1.5   Beneficiary ................................................       5
     1.6   Benefit Commencement Date ..................................       6
     1.7   Board ......................................................       6
     1.8   Code .......................................................       6
     1.9   Company ....................................................       6
     1.10  Company Contributions ......................................       6
     1.11  Company Stock ..............................................       6
     1.12  Compensation ...............................................       6
     1.13  Compensation Deferral Limit ................................       7
     1.14  Contribution Percentage ....................................       7
     1.15  Deferral Percentage ........................................       8
     1.16  Determination Year .........................................       8
     1.17  Disability .................................................       8
     1.18  Effective Date .............................................       8
     1.19  Eligible Employee ..........................................       8
     1.20  Employee ...................................................       9
     1.21  ERISA ......................................................       9
     1.22  Forfeiture .................................................       9
     1.23  Highly Compensated Employee ................................       9
     1.24  Hour of Service ............................................      10
     1.25  Leave of Absence ...........................................      11
     1.26  Limitation Year ............................................      11
     1.27  Look-Back Year .............................................      11
     1.28  Nonhighly Compensated Employee .............................      11
     1.29  Normal Retirement Date .....................................      11
     1.30  Participant ................................................      11
     1.31  Participant Contribution ...................................      12
     1.32  Period of Severance ........................................      12
     1.33  Plan .......................................................      12
     1.34  Plan Year ..................................................      12
     1.35  Qualified Domestic Relations Order .........................      12
     1.36  Retirement Date ............................................      12
</TABLE>


                                       i
<PAGE>

<TABLE>
<S>                                                                          <C>
     1.37  Rollover Contribution ......................................      12
     1.38  Salary Deferral Agreement ..................................      12
     1.39  Separation Date ............................................      12
     1.40  Service ....................................................      13
     1.41  Spouse .....................................................      14
     1.42  Total Account ..............................................      14
     1.43  Trustee ....................................................      15
     1.44  Trust Fund .................................................      15
     1.45  Valuation Date .............................................      15
     1.46  Vested .....................................................      15
     1.47  Year of Service ............................................      15

SECTION 2 -- PARTICIPATION
     2.1   Participation Requirements .................................      16
     2.2   Application to Participate .................................      16
     2.3   Effective Date of Elections ................................      17
     2.4   Participation Upon Reemployment ............................      17
     2.5   Termination of Participation ...............................      17
     2.6   Veterans' Rights ...........................................      17

SECTION 3 -- PARTICIPANT CONTRIBUTIONS
     3.1   Participant Contributions ..................................      18
     3.2   Increase or Decrease in Rate of Contributions ..............      18
     3.3   Suspension and Resumption of Contributions .................      19
     3.4   Effective Date of Elections ................................      19
     3.5   Rollover Contributions .....................................      19
     3.6   Maximum Amount of Salary Deferral ..........................      20

SECTION 4 -- COMPANY CONTRIBUTIONS
     4.1   Company Contributions ......................................      21
     4.2   Form of Company Matching Contribution ......................      22
     4.3   Forfeitures of Company Contributions .......................      22

SECTION 5 -- INVESTMENT PROVISIONS
     5.1   Description of Funds .......................................      23
     5.2   Investment Election ........................................      23
     5.3   Change in Investment Election ..............................      24
     5.4   Responsibility of Participant In Selecting Elections .......      24
     5.5   Investment of Company Matching Contributions ...............      24
     5.6   Transfer of Funds ..........................................      24
     5.7   Stock Rights, Stock Dividends and Stock Splits .............      25
</TABLE>


                                       ii
<PAGE>

<TABLE>
<S>                                                                        <C>
     5.8   Transfers Affecting Company Stock ..........................      25
     5.9   Blackout Period ............................................      25
     5.10  Definition of Blackout Period ..............................      26

SECTION 6 -- VESTING                                                       PAGE
     6.1   Vesting of Participant Contributions .......................      27
     6.2   Vesting of Company Contributions ...........................      27
     6.3   Forfeitures ................................................      27

SECTION 7 -- DISTRIBUTIONS
     7.1   Distribution on Retirement, Disability, or other Termination
           of Service .................................................      29
     7.2   Lump Sum Distributions .....................................      30
     7.3   Distributions on Death .....................................      30
     7.4   Investment of Deferred Distributions .......................      32
     7.5   Proof of Death .............................................      32
     7.6   Distribution to Alternate Payee ............................      32
     7.7   Notice to Payee ............................................      33
     7.8   Restrictions on Distributions ..............................      33
     7.9   Eligible Rollover Distribution .............................      33
     7.10  Required Minimum Distributions .............................      34

SECTION 8 -- WITHDRAWALS AND LOANS DURING EMPLOYMENT
     8.3   Discretionary Withdrawals ..................................      38
     8.4   Hardship Withdrawals .......................................      38
     8.5   Restoration of Withdrawals .................................      39
     8.6   Timing of Withdrawals ......................................      39
     8.7   Loans ......................................................      40
     8.8   Timing of Loans ............................................      41
     8.9   Compliance with Law ........................................      41
     8.10  Trading Restrictions .......................................      41
     8.11  Combined Limit on Withdrawals and Loans ....................      41

SECTION 9 -- ADMINISTRATION OF THE PLAN
     9.1   The Plan Administrator .....................................      42
     9.2   Powers of the Plan Administrator ...........................      42
     9.3   Procedure for Claiming Benefits Under the Plan .............      43
     9.4   The Plan Is a Voluntary Act by the Company .................      45
     9.5   Indemnification ............................................      45
     9.6   Fiduciary Insurance ........................................      46
     9.7   Filings with the Plan Administrator ........................      46
     9.8   Payee Unknown ..............................................      46
</TABLE>


                                      iii

<PAGE>

<TABLE>
<S>                                                                         <C>
     9.9   Reliance on Statements of Participants and Beneficiaries ...      47
     9.10  Distribution to Minors and Incapacitated Payees ............      47

SECTION 10 -- ADMINISTRATION OF THE TRUST                                   PAGE
     10.1  Trust Agreement ............................................      48
     10.2  Provisions of the Trust Agreement ..........................      48
     10.3  Exclusive Benefit of Participants ..........................      48
     10.4  Directions of the Plan Administrator .......................      48
     10.5  Coordination of Plan and Trust Agreement ...................      48
     10.6  Pension Investment Committee ...............................      48
     10.7  Return of Contributions ....................................      49

SECTION 11 --AMENDMENT, TERMINATION OR MERGER OF THE PLAN
     11.1  Right to Amend .............................................      50
     11.2  Changes in Plan Benefits ...................................      50
     11.3  Right to Terminate .........................................      50
     11.4  Termination of Trust .......................................      50
     11.5  Discontinuance of Contributions ............................      51
     11.6  Merger of Plans ............................................      51

SECTION 12 -- MISCELLANEOUS PROVISIONS
     12.1  Gender .....................................................      52
     12.2  Investments and Expenses ...................................      52
     12.3  Voting Rights ..............................................      52
     12.4  Statements of Accounts .....................................      52
     12.5  Nonalienability of Benefits ................................      52
     12.6  Acquisitions and Divestitures ..............................      53
     12.7  Top Heavy Provisions .......................................      54
     12.8  Nondiscrimination Limitations on Participant Contributions
           and Company Matching Contributions .........................      56
     12.9  Limitation on Contributions ................................      59
</TABLE>


                                       iv
<PAGE>

                                    SECTION 1
                                   DEFINITIONS

1.1   "AFFILIATED COMPANY" means any of the following:

      (a)   Any corporation which is a member of a controlled group of
            corporations which includes the Company, determined under the
            provisions of Section 414(b) of the Code;

      (b)   Any trade or business (whether or not incorporated) which is under
            common control (as defined in Section 414(c) of the Code) with the
            Company;

      (c)   Any organization (whether or not incorporated) which is a member of
            an affiliated service group (as defined in Section 414(m) of the
            Code) which includes the Company; and

      (d)   Any other entity required to be aggregated with the Company pursuant
            to regulations under Section 414(o) of the Code.

      A corporation, trade or business, or member of an affiliated service group
      shall be treated as an Affiliated Company only while it is a member of the
      group.

1.2   "AFTER-TAX CONTRIBUTION" means a contribution to the Trust Fund made by a
      Participant and which is included in the Participant's gross income for
      Federal income tax purposes for the year in which such contribution was
      made.

1.3    "ALTERNATE PAYEE" means any spouse, former spouse, child, or other
       dependent of a Participant recognized by a Qualified Domestic Relations
       Order as having a right to receive all, or a portion of, the
       Participant's nonforfeitable benefits under the Plan.

1.4   "BEFORE-TAX CONTRIBUTION" means a contribution to the Trust Fund made on
      the behalf of a Participant pursuant to a Salary Deferral Agreement and
      which is not included in the Participant's gross income for Federal income
      tax purposes for the year in which such contribution was made.

1.5   "BENEFICIARY" means any person or persons (including a trust established
      for the benefit of such person or persons), designated by a Participant or
      by the terms of the Plan as provided in Section 7.3(a), who is or who may
      become entitled to receive benefits from the Plan. Any person who is an
      Alternate Payee shall be considered a Beneficiary for purposes of the
      Plan.


                                       5
<PAGE>

1.6   "BENEFIT COMMENCEMENT DATE" means the first Valuation Date following the
      date on which all events have occurred which entitle the Participant or
      Beneficiary to a distribution from the Plan in accordance with the
      provisions of Section 7.

1.7   "BOARD" means the Board of Directors of The Timken Company except that any
      action which may be taken by the Board may also be taken by a duly
      authorized officer of The Timken Company.

1.8   "CODE" means the Internal Revenue Code of 1986, as amended from time to
      time. Reference to a specific provision of the Code shall include such
      provision, any valid regulation or ruling promulgated thereunder, and any
      provision of future law that amends, supplements, or supersedes such
      provision.

1.9   "COMPANY" means The Timken Company and its sole participating subsidiary,
      The Torrington Company.

1.10  "COMPANY CONTRIBUTIONS" means the total contributions made by the Company
      on behalf of a Participant pursuant to Section 4.1, including Company
      Matching Contributions, Company Retirement Contributions and Base
      Contributions.

1.11  "COMPANY STOCK" means a share or shares of the common stock of The Timken
      Company, which is intended to be qualifying employer securities within the
      meaning of Section 407(d)(5) of ERISA.

1.12  "COMPENSATION" means an Employee's regular salary pay (including any
      overtime or premium payments) during his period of participation in the
      Plan, and including the management performance bonus, salary reduction
      contributions pursuant to a cafeteria plan established under Section 125
      of the Code or a plan described in Section 132(f)(4) of the Code and
      amounts described in this Section 1.12 deferred under the Timken Company
      1996 Deferred Compensation Plan, but excluding any other special types of
      payments, such as, but not limited to, suggestion awards, moving
      allowance, vacation option pay, or retirement or dismissal pay.
      Compensation includes payments under certain bonus plans at specified
      Company plants, including Annual Performance Awards.


                                       6

<PAGE>
      In addition to other applicable limitations set forth in the Plan, and
      notwithstanding any other provision of the Plan to the contrary, the
      annual compensation of each Employee taken into account under the Plan
      shall not exceed $200,000 or such annual compensation limit specified
      under Section 401(a)(17) of the Code including adjustments made by the
      Commissioner of Internal Revenue for increases in the cost of living in
      accordance with Section 401(a)(17)(B) of the Code.

1.13  "COMPENSATION DEFERRAL LIMIT" means, for any Plan Year, the maximum
      percentage of an Employee's Compensation which may be contributed to the
      Plan pursuant to a Salary Deferral Agreement. The Plan Administrator shall
      establish the Compensation Deferral Limit for each Plan Year for the
      purpose of meeting the nondiscrimination tests of Sections 401(k) and
      401(m) of the Code, and shall apply the limit to such Employees as is
      necessary to assure compliance with such tests.

1.14  "CONTRIBUTION PERCENTAGE" means, for each Participant, the ratio of any
      Employer Matching Contributions and After-Tax Contributions made by or on
      behalf of a Participant for a Plan Year, to such Participant's
      compensation (within the meaning of Section 414(s) of the Code) while an
      Eligible Employee during such Plan Year. If more than one plan providing
      employee contributions or matching contributions (within the meaning of
      Section 401(m) of the Code) is maintained by an Employer or Affiliated
      Employer, the Contribution Percentage of any Highly Compensated Employee
      who participates in more than one such plan shall be determined as if all
      such plans were a single plan. Notwithstanding the foregoing, plans shall
      be treated as separate if they are mandatorily disaggregated under Section
      401(k) of the Code.


                                       7
<PAGE>

1.15  "DEFERRAL PERCENTAGE" means, for each Participant, the ratio of any
      Before-Tax Contributions made on behalf of a Participant for a Plan Year,
      to such Participant's compensation (within the meaning of Section
      415(c)(3) of the Code) while an Eligible Employee during such Plan Year.
      If more than one plan providing a cash or deferred arrangement (within the
      meaning of Section 401(k) of the Code) is maintained by an Employer or
      Affiliated Employer, the Deferral Percentage of any Highly Compensated
      Employee who participates in more than one such plan or arrangement shall
      be determined as if all such plans or arrangements were a single plan or
      arrangement. Notwithstanding the foregoing, plans or arrangements shall be
      treated as separate if they are mandatorily disaggregated under Section
      401(k) of the Code.

1.16  "DETERMINATION YEAR" means the Plan Year that is being tested for purposes
      of determining if the Plan meets the applicable nondiscrimination
      requirements of Sections 401(k) and 401(m) of the Code.

1.17  "DISABILITY" as applied to any Employee means any permanent disability
      qualifying the Employee for disability benefits under the federal Social
      Security system.

1.18  "EFFECTIVE Date", with respect to the Plan as herein established, means
      February 16, 2003.

1.19  "ELIGIBLE EMPLOYEE" means any person who is an Employee of The Torrington
      Company, whether full- or part-time, including officers, salaried workers,
      salespersons and wage earners (but not directors who are not otherwise
      employed by the Company) provided that such person shall have completed
      the Service requirements set forth in Section 2.1. The term "Eligible
      Employee" excludes, however:

      (a)   any such person who is a member of a unit of Employees covered by a
            collective bargaining agreement, unless such agreement provides for
            the application of the Plan to the Employees in such unit;

      (b)   any individual who has signed an individual employment agreement or
            a personal services agreement with the Company (unless such
            agreement provides for coverage hereunder of such individual);

      (c)   any individual who is compensated through a third party and not
            through the Company's payroll;

      (d)   any individual who is not classified by the Company as an employee
            for federal income tax withholding purposes (whether or not such
            classification is ultimately determined to be correct as a matter of
            law); including any individual who is classified by the Company as a
            leased worker or an independent contractor;

      (e)   any such person who is employed by the Company under an agreement
            that such person will be an Employee for a period of less than six
            months;


                                       8
<PAGE>

      (f)   any such person who is a leased Employee under Section 414(n)(2) of
            the Code as described in Section 1.20;

      (g)   any such person who is a nonresident alien who receives no earned
            income from the Company which constitutes United States source
            income; and

      (h)   any individual who is no longer an Employee of the Company but who
            has an Account in the Plan.

1.20  "EMPLOYEE" means any individual employed by the Company or an Affiliated
      Company. The term "Employee" includes any leased employee of the Company
      within the meaning of Section 4l4(n)(2) of the Code, without regard to
      Section 414(n)(5) of the Code. A "leased employee" means any individual
      who is not an Employee and who provides services for the Company or an
      Affiliated Company, if (i) such services are provided pursuant to an
      agreement between the Company and any other person; (ii) such individual
      has performed such services for the Company on a substantially full-time
      basis for a period of at least one year; and (iii) such services are
      performed under the primary direction and control of the Company or an
      Affiliated Company.

1.21  "ERISA" means the Employee Retirement Income Security Act of 1974, as
      amended from time to time. Reference to a specific provision of ERISA
      shall include such provision, any valid regulation or ruling promulgated
      thereunder, and any provision of future law that amends, supplements, or
      supersedes such provision.

1.22  "FORFEITURE" means Company Matching Contributions, Company Retirement
      Contributions and/or Base Contributions that are not fully Vested as of a
      Participant's Separation Date and that are forfeited as provided in
      Section 6.3.

1.23  "HIGHLY COMPENSATED EMPLOYEE" means any Employee who performed services
      for the Company or an Affiliated Company during the Determination Year and
      who:

      (a)   was a 5% owner (within the meaning of Section 416(i)(I)(B)(i) of the
            Code) at any time during the Determination Year or the Look-Back
            Year; or

      (b)   received compensation from the Company or an Affiliated Company in
            excess of $90,000 (as adjusted pursuant to 415(d) of the Code)
            during the Look-Back Year.

      For purposes of determining an Employee's compensation under this Section
      1.23, compensation shall mean the Employee's total compensation reportable
      on Form W-2, plus all contributions made on behalf of the Employee by the
      Company or an Affiliated Company pursuant to a Salary Deferral Agreement
      under this Plan (or a similar agreement under any other cash or deferred
      arrangement described in Section 401(k) of the Code) or any salary
      reduction agreement pursuant


                                       9
<PAGE>

      to a cafeteria plan established under Section 125 of the Code or pursuant
      to Section 132(f)(4) of the Code.

1.24  "HOUR OF SERVICE" means:

      (a)   Employees will receive credit for an Hour of Service for each hour
            they are paid, or entitled to payment, for the performance of duties
            for the Company or an Affiliated Company during a Plan Year.

      (b)   Except to the extent limited by subparagraph (d), Employees will
            receive credit for an Hour of Service for each hour for which they
            are directly or indirectly paid, or entitled to payment by the
            Company or an Affiliated Company, on account of a period of time
            during which no duties are performed (irrespective of whether their
            employment relationship has terminated) due to vacation, holiday,
            illness, incapacity (including disability), layoff, jury duty,
            military duty, or leave of absence.

      (c)   Employees will also receive credit for Hours of Service for each
            hour for which back pay, irrespective of mitigation of damages, is
            either awarded or agreed to by the Company or an Affiliated Company,
            but the same Hours of Service will not be credited both under
            paragraph (a) or paragraph (b), as the case may be, and under this
            paragraph (c). Hours credited under this paragraph (c) shall be
            credited to the Plan Year to which the award or agreement pertains,
            rather than to the Plan Year in which the award, agreement or
            payment is made.

      (d)   Notwithstanding paragraph (b),

            (i)   No more than 501 Hours of Service will be credited to an
                  Employee under paragraph (b) on account of any single
                  continuous period during which the Employee performs no
                  duties.

            (ii)  No Hours of Service will be credited to an Employee for a
                  period during which no duties are performed if payment to the
                  Employee was made or due under a plan maintained solely for
                  the purpose of complying with workers' compensation,
                  unemployment compensation or disability insurance laws.

            (iii) No Hours of Service will be credited for a payment which
                  solely reimburses an Employee for medical or medically related
                  expenses incurred by the Employee or his dependents.


                                       10
<PAGE>

      (e)   In the event that payments are made based on periods during which an
            Employee performs no duties, Hours of Service shall be determined by
            dividing the payments received or due by the lesser of (i) the
            Employee's most recent hourly rate of compensation for the
            performance of duties, or (ii) the Employee's average hourly rate of
            compensation for the performance of duties for the most recent
            computation period in which the Employee completed more than five
            hundred (500) Hours of Service.

      The determination of Hours of Service shall be in accordance with the
      rules set forth in the United States Department of Labor's Rules and
      Regulations for Minimum Standards for Employee Pension Benefit Plans,
      Section 2530.200b-2(b) and (c), which are incorporated herein by this
      reference.

1.25  "LEAVE OF ABSENCE" means an absence granted in writing by the Company or
      an Affiliated Company in accordance with the Company's personnel policies
      or as required by law, uniformly applied to all Employees, including but
      not limited to, absences for reasons of health, education, jury duty, or
      service in the armed forces of the United States.

1.26  "LIMITATION YEAR" means the calendar year.

1.27  "LOOK-BACK Year" means the period of twelve consecutive months immediately
      proceeding the Determination Year. For purposes of determining the Average
      Deferral Percentage and Average Contribution Percentage of Nonhighly
      Compensated Employees, the Plan Administrator may elect, in accordance
      with applicable regulations, that the Look-Back Year shall be the
      Determination Year.

1.28  "NONHIGHLY COMPENSATED EMPLOYEE" means an Employee who is not a Highly
      Compensated Employee.

1.29  "NORMAL RETIREMENT DATE" means the date on which the Employee attains the
      age of 65.

1.30  "PARTICIPANT" means an Eligible Employee who participates in the Plan in
      accordance with the provisions of Section 2. Participation in the Plan
      shall cease in accordance with the provisions of Section 2.5.

1.31  "PARTICIPANT CONTRIBUTION" means a contribution made by or on behalf of a
      Participant pursuant to Section 3.1.

1.32  "PERIOD OF SEVERANCE" means the period beginning on an Employee's
      Separation Date and ending on the date such Employee is again credited
      with an Hour of Service. A one-year Period of Severance is any period of
      twelve consecutive months beginning on a Separation Date and any


                                       11
<PAGE>

      anniversary thereof, provided that the former Employee has not performed
      an Hour of Service for the Company or an Affiliated Company at any time
      during such twelve-month period.

1.33  "PLAN" means The Timken Company Savings and Stock Investment Plan for
      Torrington Non-Bargaining Associates, as set forth herein, and as may be
      amended from time to time.

1.34  "PLAN YEAR" means the calendar year.

1.35  "QUALIFIED DOMESTIC RELATIONS ORDER" means a domestic relations order
      which meets the requirements of Section 414(p) of the Code, as determined
      by the Plan Administrator.

1.36  "RETIREMENT DATE" means a Participant's Normal Retirement Date, any actual
      date of retirement subsequent to the Normal Retirement Date, or any early
      retirement date under the terms of any qualified retirement plan
      maintained by the Company by which the Participant is covered.

1.37  "ROLLOVER CONTRIBUTION" means a transfer by a Participant to this Plan of
      all or a portion of a distribution to such Participant from a qualified
      plan or individual retirement account, provided the distribution is:

      (a)   an eligible direct rollover distribution within the meaning of
            Section 7.9(b)(i); or

      (b)   rolled over to the Plan within 60 days following the date the
            Eligible Employee receives the distribution from the qualified plan
            or individual retirement account.

1.38  "SALARY DEFERRAL AGREEMENT" means an agreement in the form provided by the
      Plan Administrator in which an Eligible Employee agrees to reduce his
      Compensation earned after the execution of such agreement and to have the
      amount of such reduction contributed by the Company to the Trust Fund on
      his behalf pursuant to Section 401(k) of the Code. An Eligible Employee
      may execute a new Salary Deferral Agreement from time to time pursuant to
      Section 3.2.

1.39  "SEPARATION DATE" means the last day of the month in which occurs the
      earliest of:

      (a)   The date on which an Employee resigns, is discharged by the Company
            or an Affiliated Company, retires at his Retirement Date, retires
            due to Disability, or dies. For this purpose an Employee shall be
            deemed to have resigned if he (i) is absent from work for seven (7)
            or more successive working days without reasonable cause, or (ii)
            fails, without reasonable cause, to return to work after a Leave of
            Absence or temporary layoff within seven (7) days after notice to
            return has been sent to his last address, as shown by the employer's
            employment records;


                                       12
<PAGE>

      (b)   The first anniversary of the date on which an Employee begins a
            layoff from the Company or an Affiliated Company; or

      (c)   The second anniversary of the date on which an Employee remains
            absent from service (with or without pay) with the Company or an
            Affiliated Company for any reason other than resignation,
            retirement, discharge, or death, such as illness, maternity or
            paternity leave, or Leave of Absence. Notwithstanding the foregoing,
            in the event that the Employee fails to return to active employment
            upon the expiration of a Leave of Absence (or, in the case of a
            military leave, during the period in which his reemployment rights
            are protected by applicable law, or during the period in which his
            reemployment rights are protected by the Plan Administrator,
            whichever is longer), the Employee's Separation Date shall mean the
            date on which such absence from service began, unless such failure
            to return is the result of retirement, Disability, or death.

1.40  "SERVICE" means the aggregate of the following:

      (a)   The period commencing with the first day on which an Employee is
            credited with an Hour of Service, and ending on the Employee's
            Separation Date.

      (b)   Periods of service with The Torrington Company or Ingersoll-Rand
            Company prior to the Effective Date of this Plan, if the Employee is
            an Eligible Employee on the Effective Date.

      (c)   If an Employee performs an Hour of Service within twelve months of a
            Separation Date on account of an event described in Section 1.39(a),
            the period from such Separation Date to such Hour of Service.

      (d)   In the case of an Employee who leaves employment with the Company or
            an Affiliated Company to enter service with the armed forces of the
            United States, the period of such military service, provided the
            individual resumes employment with the Company or an Affiliated
            Company within the period during which his reemployment rights are
            protected by Section 414(u) of the Code, or within the period during
            which his reemployment rights are protected by the Company,
            whichever is longer.

1.41  "SPOUSE" means the person, if any, to whom the Participant is lawfully
      married at the time of his death prior to retirement or at the time his
      benefits are to commence, as the case may be, provided, however, that a
      former spouse will be treated as the Spouse to the extent provided under a
      Qualified Domestic Relations Order.


                                       13
<PAGE>

1.42  "TOTAL ACCOUNT" means the total amounts held under the Plan for a
      Participant, consisting of the following subaccounts and any such other
      subaccounts as may be deemed necessary by the Plan Administrator:

      (a)   "BEFORE-TAX CONTRIBUTION ACCOUNT" -- The portion of the
            Participant's Total Account consisting of Before-Tax Contributions
            made in accordance with Section 3.1(a), plus or minus any investment
            earnings or losses on such contributions, less any withdrawals or
            distributions from such Account.

      (b)   "AFTER-TAX CONTRIBUTION ACCOUNT" -- The portion of the Participant's
            Total Account consisting of After-Tax Contributions made in
            accordance with Section 3.1(b), plus or minus any investment
            earnings or losses on such contributions, less any withdrawals or
            distributions from such Account.

      (c)   "COMPANY MATCHING CONTRIBUTION ACCOUNT" -- The portion of the
            Participant's Total Account consisting of Company Matching
            Contributions made in accordance with Section 4.1(a), plus or minus
            any investment earnings or losses on such contributions, less any
            withdrawals or distributions from such Account.

      (d)   "COMPANY RETIREMENT CONTRIBUTION ACCOUNT" -- The portion of the
            Participant's Total Account consisting of Company Retirement
            Contributions made in accordance with Section 4.1(b), plus or minus
            any investment earnings or losses on such contributions, less any
            withdrawals or distributions from such Account.

      (e)   "BASE CONTRIBUTION ACCOUNT" -- The portion of the Participant's
            Total Account consisting of Base Contributions made in accordance
            with Section 4.1(c), plus or minus any investment earnings or losses
            on such contributions, less any withdrawals or distributions from
            such Account.

      (f)   "ROLLOVER CONTRIBUTION ACCOUNT" -- The portion of the Participant's
            Total Account consisting of any Rollover Contribution made by the
            Participant in accordance with Section 3.5, plus or minus any
            investment earnings or losses on such amounts, less any withdrawals
            or distributions from such Account.

1.43  "TRUSTEE" means the Trustee or Trustees appointed by the Company in
      accordance with Section 10.

1.44  "TRUST FUND" means the fund established under the terms of the Trust
      Agreement for the purpose of holding and investing the assets of the Plan
      held by the Trustee.


                                       14
<PAGE>

1.45  "VALUATION Date" means every day on which the New York Stock Exchange is
      open for trading, or such other date or dates as the Plan Administrator
      deems appropriate.

1.46  "VESTED" means a Participant's non-forfeitable right to his Total Account.

1.47  "YEAR OF SERVICE" means twelve consecutive months of service where a month
      of service is defined as a calendar month during which an Employee
      completes an Hour of Service.

1.48  "I-R PLAN" means the Ingersoll-Rand Company Savings and Stock Investment
      Plan.

1.49  "KILIAN HOURLY ELIGIBLE EMPLOYEES" means Eligible Employees who are
      compensated on an hourly basis and employed at the Company's Kilian
      facility.

1.50  "ROCKFORD HOURLY ELIGIBLE EMPLOYEES" means Eligible Employees who are
      compensated on an hourly basis and employed at the Company's Rockford
      facility.

1.51  "SALARIED ELIGIBLE EMPLOYEES" means Eligible Employees who are compensated
      on a salaried basis.

1.52  "WATERTOWN HOURLY ELIGIBLE EMPLOYEES" means Eligible Employees who are
      compensated on an hourly basis and employed at the Company's Watertown
      facility.


                                       15
<PAGE>

                                    SECTION 2
                                  PARTICIPATION

2.1   PARTICIPATION REQUIREMENTS

      (a)   An Eligible Employee who was actively employed by The Torrington
            Company and a Participant in the I-R Plan immediately prior to the
            Effective Date shall participate in the Plan as of the Effective
            Date in accordance with the provisions contained herein.

      (b)   Any other Employee who is an Eligible Employee as of the Effective
            Date may participate in the Plan on the first day of any subsequent
            month, provided he is then an Eligible Employee.

      (c)   An Employee who becomes an Eligible Employee on or after the
            Effective Date may participate in the Plan for purposes of making
            Before-Tax Contributions and After-Tax Contributions and being
            eligible to receive Company Matching Contributions on the first day
            of the month following his completion of a full calendar month of
            employment. Any Before-Tax Contributions and After-Tax Contributions
            shall be made in accordance with Section 3.1. Any Eligible Employee
            who does not elect to make contributions to the Plan on the date he
            is eligible to do so or who specifically elects not to make
            contributions in accordance with Section 3.1 of the Plan, may begin
            making contributions to the Plan at a later date and such
            contributions shall be made as soon as administratively practicable
            after he elects to make such contributions in accordance with
            Section 3.1 of the Plan, provided he is then an Eligible Employee.

      (d)   An Eligible Employee who is a member of a group of Eligible
            Employees described in Section 4.1(b) shall begin receiving the
            applicable Company Retirement Contributions described in Section
            4.1(b) as of the first day of the month following his completion of
            12 months of Service.

      (e)   An Eligible Employee who is a member of a group of Eligible
            Employees described in Section 4.1(c) shall begin receiving the
            applicable Base Contributions described in Section 4.1(c) as of the
            first day of the month following his completion of 12 months of
            Service.

2.2   APPLICATION TO PARTICIPATE

      An Eligible Employee or an Employee who will become an Eligible Employee
      may elect to contribute to the Plan by executing such forms or by
      complying with such administrative procedures as may be required by the
      Plan Administrator prior to his commencement of participation. Such
      election may be made prior to the date that is 30 days after the Employee


                                       16
<PAGE>

      becomes an Eligible Employee. In addition, such Eligible Employee may be
      deemed to have elected to contribute to the Plan pursuant to Section 3.1.

      Company Retirement Contributions shall automatically be made each pay
      period on behalf of Eligible Employees as defined under Sections 2.1(d)
      and 4.1(b) regardless of whether or not the Eligible Employee has elected
      to contribute to the Plan.

      Base Contributions shall automatically be made on an annual basis on
      behalf of Eligible Employees as defined in Sections 2.1(e) and 4.1(c)
      regardless of whether or not the Eligible Employee has elected to
      contribute to the Plan.

2.3   EFFECTIVE DATE OF ELECTIONS

      In order to make contributions or have contributions made on his behalf
      (except Company Retirement Contributions and Base Contributions), an
      Eligible Employee who becomes a Participant must make elections as
      provided under the Plan. The elections shall become effective with respect
      to the first payroll period of the month commencing on or after the
      Employee's date of commencement of participation.

2.4   PARTICIPATION UPON REEMPLOYMENT

      An Eligible Employee who reaches a Separation Date and who is subsequently
      reemployed at any time thereafter will again be an Eligible Employee as of
      the date of his reemployment, provided he is then an Eligible Employee.
      Any Eligible Employee who reaches a Separation Date and who is
      subsequently reemployed by the Company may participate in the Plan on the
      later of:

            (a)   the date he first becomes eligible to participate (as defined
                  in Section 2.1); or

            (b)   the first available pay period following his date of
                  reemployment;

      or on any subsequent pay period, provided he is then an Eligible Employee.

2.5   TERMINATION OF PARTICIPATION

      A Participant's participation in the Plan shall continue until the later
      of:

            (a)   the Participant's Separation Date; or

            (b)   such time as all nonforfeitable amounts credited to the
                  Participant's Total Account shall have been distributed in
                  full in accordance with the terms of the Plan.


                                       17
<PAGE>

2.6   VETERANS' RIGHTS

      Notwithstanding any provision of the Plan to the contrary, contributions,
      benefits and Service credit with respect to qualified military service
      shall be provided in accordance with Section 414(u) of the Code.


                                       18
<PAGE>

                                    SECTION 3
                            PARTICIPANT CONTRIBUTIONS

3.1   PARTICIPANT CONTRIBUTIONS

      If an Eligible Employee wishes to make contributions to the Plan, he must
      elect to make a contribution and/or have a contribution made on his behalf
      expressed as a percentage of his Compensation, from one percent (1%) to
      sixteen percent (16%), in increments of one percent (1%). Such election
      shall be in the form of a payroll deduction authorization and/or a Salary
      Deferral Agreement, and shall be subject to the Compensation Deferral
      Limit and/or Contribution Percentage Limit, if any, applicable to such
      Participant as established by the Plan Administrator from time to time for
      purposes of meeting the nondiscrimination tests of Sections 401(k) and
      401(m) of the Code, and, if applicable, satisfying the maximum limits
      described in Sections 3.6 and 4.4. Contributions made in accordance with
      this Section 3.1 shall be made by the Company directly to the Trustee no
      less frequently than once per calendar month.

      A Participant's Contributions may consist of Before-Tax Contributions and
      After-Tax Contributions as described below:

      (a)   BEFORE-TAX CONTRIBUTIONS -- Compensation contributed on the
            Participant's behalf under a Salary Deferral Agreement, not to
            exceed sixteen percent (16%) of Compensation, shall be known as his
            Before-Tax Contributions and shall be contributed to his Before-Tax
            Contribution Account.

      (b)   AFTER -TAX CONTRIBUTIONS -- To the extent that less than sixteen
            percent (16%) of a Participant's Compensation is contributed
            pursuant to a Salary Deferral Agreement to the Participant's
            Before-Tax Contribution Account, the Participant may authorize the
            Company to deduct pursuant to a payroll deduction authorization a
            percentage of his Compensation not to exceed the difference between
            sixteen percent (16%) and the total percentage of Compensation
            contributed to the Participant's Before-Tax Contribution Account.
            Contributions made in accordance with this Section 3.1(b) shall be
            known as After-Tax Contributions and shall be contributed to the
            Participant's After-Tax Contribution Account.

      Notwithstanding the foregoing, effective February 16, 2003 for each
      Participant who was a participant in the I-R Plan immediately before
      February 16, 2003, unless the Participant elects otherwise, the
      Participant's rate of Before-Tax Contributions and After-Tax Contributions
      will be the same as the corresponding rates in effect for the Participant
      under the I-R Plan immediately before February 16, 2003. The rate
      described in the preceding sentence shall remain in effect until changed
      by the Participant as described herein or until such date designated by
      the Plan


                                       19
<PAGE>

      Administrator as the date by which Participants must file a new Salary
      Deferral Agreement or payroll deduction authorization described herein.

3.2   INCREASE OR DECREASE IN RATE OF CONTRIBUTIONS

      Except to the extent that a decrease in a Participant's rate of payroll
      deduction contribution is made by the Plan Administrator to meet the
      limitations described in Section 3.1, a Participant may elect to increase
      or decrease his rate of contributions on any day effective as of the next
      available payroll period provided that he notifies the Company in
      accordance with the administrative procedures established by the Plan
      Administrator.

3.3   SUSPENSION AND RESUMPTION OF CONTRIBUTIONS

      (a)   A Participant may elect to suspend contributions, effective the next
            available payroll period, provided that he notifies the Company in
            accordance with the administrative procedures established by the
            Plan Administrator. In the event of an election to suspend
            contributions, the Participant may resume making payroll deduction
            contributions or may have contributions resumed under a Salary
            Deferral Agreement effective any subsequent payroll period, provided
            that he notifies the Company in accordance with the administrative
            procedures established by the Plan Administrator.

      (b)   A Participant may not make up suspended contributions.

      (c)   During a period of suspension, gains and losses on the Participant's
            Total Account will continue to be credited or debited on the balance
            of his Total Account.

      (d)   If a Participant ceases to be an Eligible Employee but continues in
            the employ of the Company, all Employee and Company contributions
            made on his behalf shall be immediately suspended. No contributions
            shall be made for a Participant with respect to the period of such
            suspension. If the Participant again becomes an Eligible Employee,
            he may resume his Employee contributions by filing the appropriate
            form with the Plan Administrator. Resumption of contributions shall
            commence as of the next available payroll period following the date
            the appropriate form is properly filed with the Plan Administrator,
            or as soon as practical thereafter.

3.4   EFFECTIVE DATE OF ELECTIONS

      The elections referred to in this Section 3 shall become effective with
      respect to the first available payroll period, in accordance with the
      administrative procedures established by the Plan Administrator.


                                       20
<PAGE>

3.5   ROLLOVER CONTRIBUTIONS

      (a)   An Employee may file a request in writing with the Plan
            Administrator to accept his Rollover Contribution. The Plan
            Administrator, in accordance with a uniform and nondiscriminatory
            policy, shall determine whether or not such Rollover Contribution
            shall be accepted. Any such request shall state the amount of the
            Rollover Contribution and include a statement that such contribution
            qualifies as a Rollover Contribution as defined in Section 1.35. The
            Plan Administrator may require the Employee to submit such other
            evidence and documentation as the Plan Administrator determines
            necessary to insure that the contribution qualifies as a Rollover
            Contribution. All Rollover Contributions must be made in cash.

      (b)   The Employee shall at all times have a nonforfeitable right to
            one-hundred percent (100%) of his Rollover Contribution Account.

      (c)   At the time the Rollover Contribution is made to the Trust Fund,
            such Rollover Contribution will be invested in accordance with the
            Employee's investment elections in effect for future contributions.
            If the Employee does not have any investment elections in effect, he
            must elect to have it invested in accordance with the terms of
            Section 5.2.

      (d)   In the event the Rollover Contribution includes a Participant's
            after-tax contributions to another plan, this Plan shall separately
            account for amounts so transferred, including separately accounting
            for the portion of such distribution which is includible in gross
            income and the portion of such distribution which is not so
            includible.

3.6   MAXIMUM AMOUNT OF SALARY DEFERRAL

      (a)   Contributions made during a Participant's taxable year (which is
            presumed to be the calendar year) on behalf of the Participant under
            a Salary Deferral Agreement shall be limited to $12,000 (or such
            other limit as may be in effect at the beginning of such taxable
            year under Section 402(g)(1) of the Code), reduced by the amount of
            "elective deferrals" (as defined in Section 402(g)(3) of the Code)
            made during the taxable year of the Participant under any plans or
            agreements maintained by the Company or an Affiliated Company other
            than the Plan (and any plans or agreements maintained by any other
            employer if reported to the Plan Administrator at such time and in
            such manner as the Plan Administrator shall prescribe).


                                       21
<PAGE>

                                    SECTION 4
                              COMPANY CONTRIBUTIONS

4.1   COMPANY CONTRIBUTIONS

      (a)   COMPANY MATCHING CONTRIBUTIONS -- The first six percent (6%) of
            Compensation contributed by a Participant as either Before-Tax or
            After-Tax Contribution shall be eligible for Company Matching
            Contributions as hereinafter outlined. The Company shall contribute
            each pay period an amount of fifty percent (50%) of the aggregate
            Before-Tax and After-Tax Contributions made to each Participant's
            Total Account, provided that the maximum contribution rate shall be
            subject to the Contribution Percentage Limit, if any, applicable to
            such Participants as established by the Plan Administrator from time
            to time for purposes of meeting the nondiscrimination test of
            Section 401(m) of the Code, and if applicable the maximum limits
            described in Section 4.4. Such contributions shall be known as
            Company Matching Contributions and shall be contributed to the
            Participant's Company Matching Contribution Account. No Company
            Matching Contributions shall be made with respect to aggregate
            Before-Tax Contributions and After-Tax Contributions in excess of
            six percent (6%) of pay, Rollover Contributions, Company Retirement
            Contributions, or Base Contributions.

      (b)   COMPANY RETIREMENT CONTRIBUTIONS -- Eligible Employees shall be
            eligible to receive each pay period Company Retirement Contributions
            as hereinafter provided:

            (i)   Salaried Eligible Employees and Rockford Hourly Eligible
                  Employees who have more than 12 months but less than 20 Years
                  of Service will be eligible for a contribution of one percent
                  (1%) of Compensation.

            (ii)  Salaried Eligible Employees and Rockford Hourly Eligible
                  Employees with 20 or more Years of Service will be eligible
                  for a contribution of two percent (2%) of Compensation.

      (c)   BASE CONTRIBUTIONS -- Watertown Hourly Eligible Employees and Kilian
            Hourly Eligible Employees who have completed 12 months of Service
            will be eligible for an annual contribution of two percent (2%) of
            Compensation.


                                       22
<PAGE>

4.2   FORM OF COMPANY MATCHING CONTRIBUTION

      Company Matching Contributions shall be contributed to the Trust Fund in
      cash or Company Stock as soon as practicable, but in no event later than
      the time prescribed by law (including extensions thereof) for filing the
      Company's Federal income tax return for the taxable year of the Company
      which includes the last day of the Plan Year for which such contributions
      are made. Contributions in Company Stock may be made in treasury stock or
      in authorized but unissued stock. Contributions in Company Stock may be
      purchased for the Plan on the open market or may be issued directly to the
      Plan by The Timken Company in its sole and exclusive discretion.

4.3   FORFEITURES OF COMPANY CONTRIBUTIONS

      Forfeitures resulting from the application of the vesting provisions
      contained in Section 6 and Forfeitures resulting from the application of
      Section 9.8 shall be applied, no later than the end of the Plan Year
      immediately following the Plan Year in which the Forfeitures occur in the
      following order:

      (a)   to make restorations pursuant to Section 6.3(c);

      (b)   to the extent of any remainder to make restorations pursuant to the
            last sentence of Section 9.8(b);

      (c)   to the extent of any remainder, to reduce future Company
            Contributions including any other contributions approved by the Plan
            Administrator;

      (d)   to the extent of any remainder, to provide a Company Matching
            Contribution to be allocated to Participants no later than the Plan
            Year immediately following the Plan Year in which the Forfeitures
            occurred.


                                       23
<PAGE>

                                    SECTION 5
                              INVESTMENT PROVISIONS

5.1   DESCRIPTION OF FUNDS

      The assets of the Plan shall be invested by the Trustee in accordance with
      the provisions of this Section 5 and the Trust Agreement, in one or more
      of the following investment options:

      (a)   MONEY MARKET FUND -- A fund consisting of securities and obligations
            which produce a fixed rate of investment return, including, but not
            limited to, United States government securities, corporate bonds,
            notes, debentures, convertible securities, preferred stocks, or an
            investment fund or funds maintained by the Trustee or other banks or
            other financial institutions, or any contracts issued by insurance
            companies or other financial institutions.

      (b)   COMPANY STOCK FUND -- A fund designed solely to invest in Company
            Stock.

      (c)   INVESTMENT OPTION -- Such other investment options as may be
            selected from time to time by the Pension Investment Committee
            described in Section 10.6.

      Nothing in this Section 5.1 shall prohibit the Trustee from maintaining
      from time to time reasonable amounts in cash or cash equivalents.

      All dividends, interest and other income of each investment option, as
      well as stock splits, stock dividends, and the like, shall be reinvested
      in that investment option.

5.2   INVESTMENT ELECTION

      At the time an Eligible Employee elects, or is deemed to have elected in
      accordance with Section 3.1 of the Plan, to participate in the Plan, he
      must choose, in accordance with administrative procedures adopted by the
      Plan Administrator, to have contributions, other than Company Matching
      Contributions, invested in the following manner:

      (a)   0%, or in increments of 1% up to a total of 100% in the Money Market
            Fund.

      (b)   0%, or in increments of 1 % up to a total of 100% in any of the
            Investment Options.

      (c)   0%, or in increments of 1 % up to a total of 100% in the Company
            Stock Fund.

      A Participant's investment election must total one hundred (100%) of such
      contributions. In the absence of a valid election by any Participant, one
      hundred (100%) of such contributions, and loan repayments shall be
      credited to the Money Market Fund. Notwithstanding the foregoing,


                                       24
<PAGE>

      from the Effective Date until such date as determined by the Plan
      Administrator, all contributions will be credited to the Money Market
      Fund.

5.3   CHANGE IN INVESTMENT ELECTION

      Each Participant may elect, effective on any business day of the year and
      upon telephonic notification to the recordkeeper appointed by the Company,
      to have his Participant Contributions invested in a proportion different
      from that previously selected. Such election shall be made in accordance
      with the percentage specifications provided in Section 5.2. For purposes
      of the Plan, a "business day" shall be any day the New York Stock Exchange
      is open for trading. All Company Matching Contributions shall be initially
      invested in the Company Stock Fund, but may be transferred to other
      investment funds pursuant to Section 5.6.

5.4   RESPONSIBILITY OF PARTICIPANT IN SELECTING ELECTIONS

      The selection of an investment option in accordance with Sections 5.2 and
      5.3 is the sole responsibility of each Participant. The Plan
      Administrator, the Trustee, the Company, or any other fiduciary to the
      Plan are not authorized or permitted to advise a Participant as to the
      selection of any option or the manner in which such contributions shall be
      invested. The fact that a security is available to Participants for
      investment under the Plan shall not be construed as a recommendation as to
      the purchase of that security, nor shall the designation of an investment
      option impose any liability on the Plan Administrator, the Trustee, the
      Company, or any fiduciary to the Plan.

      The Plan is intended to comply with the provisions of Section 404(c) of
      ERISA and the regulations thereunder. The Plan Administrator, the Trustee,
      the Company, and any fiduciary of the Plan shall be relieved of liability
      for any losses that are the result of investment directions given by a
      Participant, Beneficiary, or any other person authorized hereunder to
      direct the investment of any amount allocated to such Participant's,
      Beneficiary's, or other person's Total Account. The selection of
      investment option choices and the administration of Plan investments are
      intended to comply with the requirements of Section 404(c)(1) of ERISA and
      the regulations thereunder.

5.5   INVESTMENT OF COMPANY MATCHING CONTRIBUTIONS

      Company Matching Contributions shall be initially invested solely in the
      Company Stock Fund, but may be transferred to other investment funds
      pursuant to Section 5.6.

5.6   TRANSFER OF FUNDS

      In accordance with procedures established by the Plan Administrator, each
      Participant may elect, effective on any business day, to reallocate his
      existing account balance among the available


                                       25
<PAGE>

      investment options in dollar amounts or increments of one percent (1%).
      For purposes of the Plan, a "business day" shall be any day the New York
      Stock Exchange is open for trading.

5.7   STOCK RIGHTS, STOCK DIVIDENDS AND STOCK SPLITS

      The Trustee, unless otherwise directed by the Plan Administrator, shall
      sell any rights which it receives to purchase shares of Company Stock. The
      net proceeds of the sale of such rights, and any cash received by the
      Trustee in connection with a stock dividend representing fractional
      interests in shares of Company Stock, shall be applied by the Trustee to
      purchase shares of Company Stock. The shares so purchased and any shares
      received by the Trustee as a result of a stock dividend or stock split
      shall be allocated to the individual accounts of Participants, in
      proportion to their respective interests in Company Stock held by the
      Trust Fund.


                                       26
<PAGE>

                                    SECTION 6
                                     VESTING

6.1   VESTING OF PARTICIPANT CONTRIBUTIONS

      A Participant shall be fully Vested in his Before-Tax Contribution
      Account, After-Tax Contribution Account, and Rollover Contribution Account
      at all times.

6.2   VESTING OF COMPANY CONTRIBUTIONS

      (a)   A Participant's interest in his Company Matching Contribution
            Account, Company Retirement Contribution Account, and Base
            Contribution Account shall be fully Vested in the event of his
            death, Disability, or the attainment of his Retirement Date provided
            such Participant is an Employee on such date.

      (b)   Any Participant not covered under the provisions of paragraph (a)
            above shall become Vested in his Company Matching Contribution
            Account, Company Retirement Contribution Account, and Base
            Contribution Account as follows:

<TABLE>
<CAPTION>
            YEARS OF SERVICE                   VESTING PERCENTAGE
<S>                                            <C>
            Less than 2 years                         20%
            2 years but less than 3 years             40%
            3 years but less than 4 years             60%
            4 years but less than 5 years             80%
            5 years or more                          100%
</TABLE>

      (c)   If any Plan amendment changes the vesting schedule set forth in this
            Section 6.2, each Participant who has completed at least three years
            of Service as of the later of (i) the date the Plan amendment is
            adopted, or (ii) the date the Plan amendment becomes effective,
            shall have the vesting percentage of his Company Matching
            Contribution and Company Retirement Contribution Account and/or Base
            Contribution Account computed in accordance with the vesting
            schedule that produces the higher Vested benefit.

6.3   FORFEITURES

      (a)   If a Participant is partially but not fully Vested in his Total
            Account on the date of his termination of employment, the portion of
            such Account that is not then Vested shall be subject to Forfeiture
            as of the Valuation Date coincident with or next following the date
            on which distribution of the Participant's Vested benefit occurs or
            commences on account of his termination of employment.

      (b)   If a Participant is not Vested in any portion of his Total Account
            on the date of his termination of employment, such Participant shall
            be deemed to have been paid the


                                       27
<PAGE>

            Vested portion of such Account on the date of his termination of
            employment. The nonvested balance in such Account shall be subject
            to Forfeiture as of the Valuation Date coincident with or next
            following the date of the Participant's termination of employment,
            except that there shall be no such Forfeiture if the Participant is
            reemployed by the Company or an Affiliated Company on or prior to
            such Forfeiture date.

      (c)   In the event a Participant is reemployed, any nonvested portion of
            his Company Matching Contribution Account, Company Retirement
            Contribution Account, and/or Base Contribution Account which was
            forfeited in accordance with the provisions of paragraph (a) or (b)
            above shall be restored to such Participant's account on the
            Valuation Date coincident with or next following his date of
            reemployment, provided, in the case of paragraph (a), that the
            Participant repays to the Plan the amount of the Participant's
            Vested Interest that was previously distributed to the Participant.

      (d)   Forfeitures resulting from the application of this Section 6.3 shall
            be applied as provided in Section 4.3.

      (e)   If a Participant receives a distribution from his Company Matching
            Contribution Account, Company Retirement Contribution Account,
            and/or Base Contribution Account at a time when his vesting
            percentage is less than 100%, the Vested balance in each account
            subsequent to the distribution shall be determined by the formula:

                        Vested balance = P(AB + (R x D)) - (R x D).

                  For purposes of applying the above formula:

            P     is the Vested percentage at the date of determination;

            AB    is the account balance at the date of determination;

            D     is the amount of all distributions previously made; and

            R     is the ratio of the account balance at the date of
                  determination to the account balance immediately following
                  each preceding distribution, calculated separately for each
                  prior distribution taking into account only investment gains
                  and losses since the date(s) such distribution(s) were made.


                                       28
<PAGE>

                                    SECTION 7
                                  DISTRIBUTIONS

7.1   DISTRIBUTION ON RETIREMENT, DISABILITY, OR OTHER TERMINATION OF SERVICE

      (a)   After retirement at his Retirement Date or date of Disability or
            after his termination of employment with the Company and all
            Affiliated Companies for any other reason, the Participant's entire
            undistributed Vested interest in the Trust Fund shall be available
            to be distributed to him in a single lump sum payment as described
            in Section 7.2 or, at the election of the Participant and in
            accordance with procedures established by the Plan Administrator,
            the Participant may defer distribution until his attaining age
            70-1/2.

      (b)   After retirement at his Retirement Date or date of Disability or
            after his termination of employment with the Company and all
            Affiliated Companies for any other reason, the Participant may elect
            on a form provided by the Plan Administrator to receive his Vested
            interest in the Trust Fund in installments over a period of not to
            exceed his life expectancy. The amounts and frequency of such
            installments are determined by the Participant on his election form.

      (c)   A Participant who has terminated employment with the Company and all
            Affiliated Companies shall receive payment of the Vested portion of
            the undistributed balance in his Total Account as of one of the
            following "dates:"

            (i)   If the value of the Participant's Vested interest in the Trust
                  Fund at his Benefit Commencement Date exceeds $5,000
                  (excluding his Rollover Account), as of any Valuation Date
                  elected by the Participant, and in accordance with procedures
                  established by the Plan Administrator, following the
                  Participant's termination of employment with the Company and
                  all Affiliated Companies, provided such Valuation Date does
                  not occur later than the end of the deferral period described
                  in Section 7.1(a).

            (ii)  If the value of the Participant's Vested interest in the Trust
                  Fund at his Benefit Commencement Date does not exceed $5,000
                  (excluding his Rollover Account), as soon as practicable
                  following the date of his termination of employment with the
                  Company and all Affiliated Companies.

      Distributions shall be made as soon as practicable after the applicable
      Valuation Date, provided the Participant has elected to receive a
      distribution in accordance with procedures established by the Plan
      Administrator. If the Participant fails to make proper application for
      benefits, distribution shall be made no later than 60 days after the close
      of the Plan Year in which occurs the latest of


                                       29
<PAGE>

      the Participant's (A) Normal Retirement Age, (B) tenth anniversary of Plan
      participation, or (C) separation from Service with the Company and all
      Affiliated Companies.

      (d)   Notwithstanding the foregoing, payments from the Plan shall begin no
            later than April l following the calendar year in which the
            Participant attains age 70-1/2 for payments to any Participant who
            was a five percent (5%) owner (as defined in Section 416 of the
            Code) at any time during the Plan Year ending with or within the
            calendar year in which such Participant attained age 66-1/2 or
            during any subsequent Plan Year. With respect to any Participant
            other than a five percent (5%) owner, payments shall commence no
            later than the April 1 following the calendar year in which the
            Participant attains age 70-1/2 or terminates employment, whichever
            is later. Any distribution pursuant to this Section 7.l shall be
            made in accordance with Section 401(a)(9) of the Code, including the
            minimum distribution incidental benefit requirements as set forth in
            the regulations under Section 401(a)(9) of the Code.

7.2   LUMP SUM DISTRIBUTIONS

      Lump sum distributions under Sections 7.1 or 7.3 may, at the election of
      the Participant (or, in the event of his death, at the election of his
      designated Beneficiary), be made either in the form of cash equal to the
      value of the Participant's interest in his Total Account, or in the form
      of Company Stock equal to all of the Participant's whole shares in the
      Company Stock Fund combined with a cash lump sum equal to the
      Participant's fractional shares in the Company Stock Fund plus the
      remaining value of the Participant's interest in the remaining funds. The
      conversion of shares of Company Stock to cash shall be made pursuant to
      Section 5.6 and shall be based on the closing price per share on the last
      day on which the stock was traded coincident with or next preceding the
      applicable Valuation Date.

7.3   DISTRIBUTIONS ON DEATH

      (a)   Upon the death of any Participant whether serving as an active
            Employee or having terminated his employment for any reason
            whatsoever and prior to commencement of, or complete distribution
            of, his Total Account, his entire remaining Vested interest in the
            Trust Fund shall be payable to his surviving Spouse as designated
            Beneficiary, except as provided below. If the Participant does not
            have a Spouse as of his date of death, the Participant's interest
            shall be paid to his designated Beneficiary. If a Participant's
            designated Beneficiary shall have predeceased him, or if the
            Participant's designation shall have lapsed or failed for any
            reason, payment will be made to the Participant's estate.

            The Participant's Vested interest may be paid to a designated
            Beneficiary other than his Spouse while the Participant's Spouse is
            living only with the written consent of the Spouse. A spousal
            consent under this Section 7.3 must:


                                       30
<PAGE>

                  (i)   be in writing on a form provided by the Plan
                        Administrator;

                  (ii)  specify the Beneficiary;

                  (iii) acknowledge the effect of such consent; and

                  (iv)  be witnessed by a notary public.

            Any such consent will be valid only with respect to the Spouse who
            signs the consent. A spousal consent is not required, however, if it
            is established to the satisfaction of the Plan Administrator that
            the consent cannot be obtained because (A) there is no Spouse; (B)
            the Spouse cannot be located; or (C) such other circumstances as the
            Secretary of the Treasury may prescribe by regulations.

            A Participant's designation of a Beneficiary or Beneficiaries shall
            not be effective for any purpose unless and until it has been filed
            by the Participant with the Plan Administrator, provided, however,
            that any designation received by the Plan Administrator after the
            Participant's death shall take effect upon such receipt, but
            prospectively only and without prejudice to any payer or payee on
            account of any payments made before receipt of such designation by
            the Plan Administrator.

      (b)   Distribution of the Participant's Vested interest in the Trust Fund
            (reduced by the amount of any loan outstanding to the Participant)
            shall be made within 90 days after the date the Participant's death
            is reported to the Plan Administrator or within a reasonable period
            of time thereafter to the Participant's designated Beneficiary (or
            the administrator or executor of the Participant's estate, as the
            case may be), in a single lump sum payment as described in Section
            7.2.

      (c)   Distribution to a designated Beneficiary shall begin no later than
            the earlier of (i) December 31 of the calendar year containing the
            fifth anniversary of the Participant's date of death, or (ii)
            December 31 of the calendar year in which the deceased Participant
            would have attained age 70-1/2.

7.4   INVESTMENT OF DEFERRED DISTRIBUTIONS

      If a Participant defers receipt of a distribution of his Total Account in
      accordance with Section 7.1(c)(i), his Total Account shall continue to be
      invested in accordance with the provisions of Section 5 until his Total
      Account is distributed to him.

7.5   PROOF OF DEATH


                                       31
<PAGE>

      The Plan Administrator shall as a condition precedent to making payment to
      any Beneficiary, require that a death certificate, burial certificate, or
      other evidence of death acceptable to it be furnished.

7.6   DISTRIBUTION TO ALTERNATE PAYEE

      The Plan Administrator may authorize the Trustee to make a lump sum
      distribution to an Alternate Payee pursuant to a Qualified Domestic
      Relations Order as soon as administratively practicable after the
      Valuation Date next following the earlier of:

      (a)   the date the Participant terminates employment;

      (b)   the date the Participant is entitled to a distribution under the
            Plan; or

      (c)   the date the Alternate Payee elects to receive a distribution from
            the Plan; or

      (d)   the date the Plan Administrator determines that the order is a
            Qualified Domestic Relations Order, subject to any deferred
            distribution date specified in the Qualified Domestic Relations
            Order, provided the Alternate Payee has filed a request for
            distribution with the Plan Administrator.

      If the Alternate Payee's nonforfeitable interest in the Plan does not
      exceed $5,000, distribution to the Alternate Payee shall be made at the
      earliest possible date described above.

7.7   NOTICE TO PAYEE

      At the time a Participant or Beneficiary makes application for benefits,
      the Plan Administrator shall furnish the individual with a written notice
      of distribution.

7.8   RESTRICTIONS ON DISTRIBUTIONS

      (a)   Notwithstanding any other provision of the Plan, a Participant's
            Before-Tax Contribution Account shall not be distributable prior to
            his termination of employment with the Company and all Affiliated
            Companies, Disability, or death, except:

            (i)   in cases of hardship, as provided in Section 8.2;

            (ii)  upon termination of the Plan without establishment or
                  maintenance of another defined contribution plan (other than
                  an employee stock ownership plan as defined in Section
                  4975(e)(7) of the Code). No distribution shall be authorized
                  by this paragraph (ii) unless the distribution qualifies as a
                  "lump sum distribution" within the meaning of Section
                  401(k)(10)(B)(ii) of the Code.


                                       32
<PAGE>

      (b)   All distributions made from this Plan shall comply with the
            requirements of Section 401(a)(9) of the Code notwithstanding any
            other provision in the Plan to the contrary.

7.9   ELIGIBLE ROLLOVER DISTRIBUTION

      (a)   Notwithstanding any provisions of the Plan to the contrary that
            would otherwise limit a Distributee's election under this Section
            7.9, a Distributee may elect, at the time and in the manner
            prescribed by the Plan Administrator, to have any portion of a
            distribution transferred to an Eligible Retirement Plan specified by
            the Distributee in a Direct Rollover.

      (b)   Definitions

            (i)   ELIGIBLE ROLLOVER DISTRIBUTION -- An Eligible Rollover
                  Distribution is any distribution of all or any portion of the
                  balance to the credit of the Distributee, except that an
                  Eligible Rollover Distribution does not include: any
                  distribution that is one of a series of substantially equal
                  periodic payments (not less frequently than annually) made for
                  the life (or life expectancy) of the Distributee or the joint
                  lives (or joint life expectancies) of the Distributee and the
                  Distributee's designated Beneficiary, or for a specified
                  period of ten years or more; any distribution to the extent
                  such distribution is required under Section 40l(a)(9) of the
                  Code; any distribution that is made upon the hardship of the
                  employee; and the portion of any distribution that is not
                  includable in gross income (determined without regard to the
                  exclusion for net unrealized appreciation with respect to
                  employer securities). Notwithstanding the foregoing, a portion
                  of a distribution shall not fail to be an Eligible Rollover
                  Distribution merely because the portion consists of after-tax
                  employee contributions which are not includable in gross
                  income. However, such portion may be transferred only to an
                  individual retirement account or annuity described in Section
                  408(a) or (b) of the Code, or to a qualified defined
                  contribution plan described in Section 401(a) or 403(a) of the
                  Code that agrees to separately account for amounts so
                  transferred, including separately accounting for the portion
                  of such distribution which is includable in gross income and
                  the portion of such distribution which is not so includable.

            (ii)  ELIGIBLE RETIREMENT PLAN -- An Eligible Retirement Plan is an
                  individual retirement account described in Section 408(a) of
                  the Code, an individual retirement annuity described in
                  Section 408(b) of the Code, an annuity plan described in
                  Section 403(b) of the Code, a qualified trust described in
                  Section 401(a) of the Code, an annuity contract described in
                  Section 403(b) of the Code, or an eligible plan under Section
                  457(b) of the Code which is maintained by a state, political
                  subdivision of a state, or any agency or


                                       33
<PAGE>

                  instrumentality of a state or political subdivision of a state
                  that accepts the Distributee's Eligible Rollover Distribution
                  and agrees to separately account for amounts rolled into such
                  plan from the Plan.

            (iii) DISTRIBUTEE -- A Distributee includes an Employee or former
                  Employee. In addition, the Employee's or former Employee's
                  surviving Spouse and the Employee's or former Employee's
                  Spouse or former Spouse who is the alternate payee under a
                  qualified domestic relations order, as defined in Section
                  4l4(p) of the Code, are Distributees with regard to the
                  interest of the Spouse or former Spouse.

            (iv)  DIRECT ROLLOVER -- A Direct Rollover is the payment by the
                  Plan to the Eligible Retirement Plan specified by the
                  Distributee.

7.10  REQUIRED MINIMUM DISTRIBUTIONS

      (a)   General Rules.

            (i)   The requirements of this Section 7.10 shall apply to any
                  distribution of a Participant's Account and shall take
                  precedence over any inconsistent provisions of this Plan,
                  provided that the requirements of this Section 7.10 shall not
                  enlarge the distribution options currently available to
                  Participants and Beneficiaries under the other provisions of
                  the Plan.

            (ii)  All distributions required under this Section shall be
                  determined and made in accordance with the regulations under
                  Code Section 401(a)(9), including the minimum distribution
                  incidental benefit requirement of Section 1.401(a)(9)-2 of the
                  regulations.

      (b)   Distributions Commencing During a Participant's Lifetime.

            The entire Interest of a Participant must be distributed to such
            Participant no Later yhan the Participant's required beginning date,
            or must be distributed, beginning not later than the required
            beginning date, over the life of the participant or joint lives of
            the Participant and designated Beneficiary or over a period not
            extending beyond the life expectancy of the Participant or the joint
            life and last survivor expectancy of the Participant and the
            designated Beneficiary.

            (i)   Required Beginning Date means, for a Participant who is a
                  5-percent owner (as defined in Code Section 416), April 1 of
                  the calendar year following the calendar year in which he
                  attains age 70-1/2.

            (ii)  Required Beginning Date means, for any Participant who is not
                  a 5 percent owner (as defined in Section 416 of the Code),
                  April 1 of the


                                       34
<PAGE>

                  calendar year following the earlier of the calendar year in
                  which he attains age 70-1/2 or the calendar year in which he
                  retires.

            (iii) The applicable distribution period for required minimum
                  distributions for distribution calendar years up to and
                  including the distribution calendar year that includes the
                  Participant's death is determined using the Internal Revenue
                  Services' Uniform Lifetime Table for the Participant's age as
                  of the Participant's birthday in the relevant distribution
                  calendar year.

      (c)   Distributions Before Required Beginning Date.

            Lifetime distributions made before the Participant's Required
            Beginning Date for calendar years before the Participant's first
            distribution calendar year, need not be made in accordance with this
            Section 7.10. However, if distributions commence before the
            Participant's Required Beginning Date under a particular
            distribution option, the distribution option fails to satisfy the
            provisions of Section 401(a)(9) of the Code at the time
            distributions commence, if under the terms of the particular
            distribution option, distributions to be made for the Participant's
            first distribution calendar year or any subsequent distribution
            calendar year fail to satisfy Section 401(a)(9).

      (d)   Death After Distributions Have Begun.

            If distribution of the Participant's interest has begun and the
            Participant dies before his entire interest has been distributed to
            him, the remaining portion of such interest will continue to be
            distributed at least as rapidly as under the method of distribution
            being used prior to the Participant's death. The applicable
            distribution period for distribution calendar years after the
            distribution calendar year containing the Participant's death is
            either the longer of the remaining life expectancy of the
            Participant's designated Beneficiary or the remaining life
            expectancy of the Participant. If the Beneficiary is not an
            individual or does not otherwise meet the requirements of Section
            401(a)(9) of the Code, the remaining life expectancy of the
            Participant must be utilized.

      (e)   Death Before Required Beginning Date.

            If the Participant dies before his Required Beginning Date and
            distribution of his interest, distribution of the Participant's
            entire interest shall be completed by December 31 of the calendar
            year containing the fifth anniversary of the Participant's death.

      (f)   Minimum Distribution Amount.

            If a Participant's benefit is to be distributed over:

            (i)   A period not extending beyond the life expectancy of the
                  Participant or the joint life and last survivor expectancy of
                  the Participant and the Participant's designated Beneficiary,
                  or

            (ii)  A period not extending beyond the life expectancy of the
                  designated Beneficiary,


                                       35
<PAGE>

                        the amount required to be distributed for each calendar
                        year beginning with the distributions for the first
                        distribution calendar year, must be at least equal to
                        the quotient obtained by dividing the Participant's
                        benefit by the applicable distribution period. For
                        distribution calendar years up to and including the
                        distribution calendar year that includes the
                        Participant's death, the required minimum distribution
                        amount is determined under the Uniform Lifetime Tables
                        promulgated by the Internal Revenue Service for the
                        Participant's age as of his birthday in the relevant
                        calendar year. If a Participant dies on or after the
                        Required Beginning Date, the distribution period
                        available for calculating the amount that must be
                        distributed during the distribution calendar year that
                        includes the Participant's death is determined as if the
                        Participant had lived throughout the year. If the sole
                        designated Beneficiary of a Participant is the
                        Participant's surviving spouse, for required minimum
                        distributions during the Participant's lifetime, the
                        applicable distribution period is the longer of the
                        distribution period determined in accordance with the
                        preceding three sentences or the joint life expectancy
                        of the Participant and spouse using the Participant's
                        and spouse's attained ages as of the Participant's and
                        spouse's birthdays in the distribution calendar year.
                        The spouse is the sole designated Beneficiary for
                        purposes of determining the applicable distribution
                        period only if the spouse is the sole beneficiary of the
                        Participant's entire interest at all times during the
                        distribution calendar year.

            (g)   Life expectancies for purposes of determining required minimum
                  distributions must be computed using the Single Life Table and
                  the Joint Last Survivor Table promulgated by the Internal
                  Revenue Service.

            (h)   If Distributions are Made in Accordance With This Section
                  7.10, the minimum distribution incidental benefit requirement
                  is satisfied.

            (i)   Timing of Distributions. The minimum required distribution
                  required for the Participant's first distribution calendar
                  year must be made on or before the Participant's Required
                  Beginning Date. The minimum distribution for other calendar
                  years, including the minimum distribution for the distribution
                  calendar year in which the Participant's Required Beginning
                  Date occurs, must be made on or before December 31 of that
                  calendar year.


                                       36
<PAGE>

                                    SECTION 8
                     WITHDRAWALS AND LOANS DURING EMPLOYMENT

8.1   DISCRETIONARY WITHDRAWALS

      A Participant may elect to withdraw from the Trust Fund an amount not to
      exceed the sum of the balance in his After-Tax Contribution Account and
      his Rollover Account at his discretion.

      The withdrawal shall be made as soon as practicable following the date on
      which the request for the withdrawal is made. The amount available for
      withdrawal is based on the balance in each account as of the date the
      withdrawal request is processed by the recordkeeper appointed by the
      Company.

      Amounts withdrawn under this Section 8.1 shall be debited to each Fund in
      proportion to how the balance in each account from which the withdrawal to
      be made is invested in each such Fund.

      If a Participant withdraws an amount from his After-Tax Contributions
      Account before he has completed five years of Plan participation, the
      Participant will be suspended from receiving Company Matching
      Contributions for a period of six months following such withdrawal. Except
      as described in the preceding sentence, withdrawals may be made under this
      Section 8.1 without a suspension.

8.2   HARDSHIP WITHDRAWALS

      (a)   A Participant may request a hardship withdrawal, subject to the
            approval of the Plan Administrator, in an amount which does not
            exceed the amount required to meet the immediate and heavy financial
            need created by the hardship and provided the Participant has
            obtained all distributions (other than hardship distributions) and
            all nontaxable loans available under all qualified plans maintained
            by the Company or an Affiliated Company.

            The Plan Administrator shall promptly review the hardship withdrawal
            request and notify the Participant that the request has been
            approved or disapproved. The Plan Administrator shall approve
            requests for hardship withdrawals using the objective criteria set
            forth in paragraph (b) below as well as documentary evidence
            submitted by the Participant to substantiate the reason for and the
            amount of the need. The only discretion to be exercised by the Plan
            Administrator is that which is reasonably necessary to determine
            whether the objective conditions have been met.

            Participant Contributions made under Section 3.1 shall be suspended
            for a period of six consecutive months commencing on the next
            available pay period.


                                       37
<PAGE>

      (b)   For purposes of this Section 8.2, a withdrawal shall be deemed to be
            made on account of an immediate and heavy financial need of the
            Participant if the withdrawal is on account of:

            (i)   medical expenses described in Section 213(d) of the Code
                  incurred by the Participant, the Participant's Spouse, or any
                  dependent of the Participant (as defined in Section 152 of the
                  Code);

            (ii)  purchase (excluding mortgage payments) of a principal
                  residence for the Participant;

            (iii) payment for tuition, related educational fees, and room and
                  board expenses for the next semester or quarter of
                  post-secondary education for the Participant, his Spouse,
                  children or dependents; or

            (iv)  the need to prevent the eviction of the Participant from his
                  principal residence or foreclosure on the mortgage of the
                  Participant's principal residence.

      (c)   Any withdrawal under this Section 8.2 shall be withdrawn first from
            the balance in the Participant's After-Tax Contributions Account,
            then the Participant's Before-Tax Contributions Account (exclusive
            of earnings), then from the Participant's Rollover Contributions
            Account (exclusive of earnings) and finally, from the Participant's
            Vested Company Matching Contributions Account.

      (d)   Amounts withdrawn under paragraph (c) above shall be debited from
            each Fund in proportion to the balance of each account from which
            the withdrawal to be made is invested in such Fund.

      (e)   Requests for hardship withdrawals may be made at any time, but not
            more frequently than once a year for reasons other than payment of
            post-secondary education expenses. Requests for hardship withdrawals
            for payment of post-secondary education expenses may be made as
            often as every calendar quarter, and may be made in addition to a
            request for a hardship withdrawal for a non-tuition payment reason.
            All hardship withdrawal requests shall be made by a Participant on
            written forms supplied by the Trustee for that purpose.

8.3   RESTORATION OF WITHDRAWALS

      A Participant shall not be permitted to restore to the Plan any amounts
      withdrawn under the provision if Section 8.1 or 8.2


                                       38
<PAGE>

8.4   TIMING OF WITHDRAWALS

      All withdrawals shall be made as soon as practicable after the Valuation
      Date designated by the Participant in his election. The Plan Administrator
      in its discretion may authorize an advance payment in an amount equal to
      all or a portion of the amount of the requested withdrawal, with the
      balance, if any, to be made as soon as practicable after such Valuation
      Date. To the extent that any withdrawals are made from the Company Stock
      Fund, such withdrawals shall be made in cash.

8.5   LOANS

      A Participant or beneficiary who is a party in interest (as defined in
      Section 3(14) of ERISA) may obtain a loan from the Trust upon proper
      application pursuant to procedures established by the Plan Administrator.
      The nature and amount of the loan must conform to the following rules and
      limits:

      (a)   The Participant may borrow only the assets in his Participant
            Contributions and Rollover Contributions Accounts. However, the loan
            amount available will be calculated to also include the
            Participant's Company Matching Contributions Account.

      (b)   The minimum loan amount is $1,000;

      (c)   The maximum loan amount is 50 percent (50%) of the Participant's
            Before-Tax Contributions Account, After-Tax Contributions Account,
            Company Matching Contributions Account and Rollover Contributions
            Account, provided, that no loan may be greater than $50,000, reduced
            by the excess (if any) of (i) the highest outstanding loan balance
            from the Plan during the one year period ending on the day before
            the date on which such loan is made over (ii) the outstanding loan
            balance from the Plan on the date on which such loan is made. The
            Trustee will accept only the Participant's accrued benefit as
            collateral for loans.

      (d)   The term of the loan cannot exceed five (5) years. The term of a
            loan may be extended beyond five (5) years for Participants on
            military leave from the Company with the term of the extension not
            to exceed the length of such military leave.

      (e)   A Participant may have no more than two loans from this Plan in
            effect at any one time.

      (f)   The Company will establish the rate of interest to be charged on all
            loan balances. This rate of interest will be one percent (1%) in
            excess of the prime rate as published in the Wall Street Journal on
            the first business day of the month in which the loan is granted. A
            Participant on a military leave from the Company may be entitled to
            the interest rate reduction provided in the Soldiers' and Sailors'
            Civil Relief Act of 1940.


                                       39
<PAGE>

      (g)   The loan shall be repaid by the Participant, if the Participant is
            an active Employee, through payroll deduction as established by the
            loan agreement. If the borrower is not an active Employee, the
            borrower and the Company shall agree to a repayment schedule which
            shall be incorporated in the loan agreement.

      (h)   The loan may be repaid in full at a date earlier than provided in
            the loan agreement with no penalty.

      (i)   Any loan fees charged will be paid by the Participant from loan
            proceeds.

      (j)   Interest paid by the Participant will be credited directly to the
            Participant's account.

      (k)   The loan amount will be taken on a pro-rata basis from the
            Participant Contributions and Rollover Contributions at the time of
            the loan. Repayments will be redeposited into the Participant's
            current investment options and contributions using the current
            ratio.

      (l)   If a Participant or Beneficiary does not repay a loan which he or
            she may have from the Plan, the Trustee will declare such loan to be
            in default when the loan is in arrears of repayment for more than 90
            days. The Trustee may take steps to preserve Plan assets, if
            necessary, in the event of such default. Once default has been
            established, the amount of the loan in default (unpaid principal and
            the interest accrued thereon) shall be treated as a distribution
            from the Plan in the Plan Year in which the default occurs. The
            amount of the default will not constitute part of subsequent
            distributions from the Trust.

      (m)   Loan repayments will be suspended under this Plan as permitted under
            Section 414(u) of the Code.

8.6   TIMING OF LOANS

      Loans may be applied for on any business day.

8.7   COMPLIANCE WITH LAW

      The rules and limits for this loan provision may be changed from time to
      time to comply with the Internal Revenue Code and with regulations issued
      thereunder.


                                       40
<PAGE>

                                    SECTION 9
                           ADMINISTRATION OF THE PLAN

9.1   THE PLAN ADMINISTRATOR

      The Timken Company is the named Fiduciary of the Plan and the Plan
      Administrator, unless it appoints a Plan Administrator.

9.2   POWERS OF THE PLAN ADMINISTRATOR

      The Plan Administrator shall have the sole responsibility for the
      administration of the Plan with all powers necessary to enable it properly
      to carry out its duties in that respect, and its decisions upon all
      matters within the scope of its authority shall be final. Subject to this
      Section 9 and ERISA, the Plan Administrator shall have and shall exercise
      complete discretionary authority to construe, interpret, and apply all of
      the terms of the Plan, including all matters relating to eligibility for
      benefits, amount, time or form of benefits, and any disputed or doubtful
      terms. In exercising such discretion, the Plan Administrator shall give
      controlling weight to the intent of the sponsor of the Plan. Specifically,
      but not in limitation of the broad power herein conferred, the Plan
      Administrator shall have the power, pursuant to the Plan, to:

      (a)   Determine the following:

            (i)   Whether a person working for the Company is an Eligible
                  Employee within the definition of that term as used in the
                  Plan;

            (ii)  The Service of any such Employee;

            (iii) All other questions involving construction of the Plan or any
                  of the terms or provisions thereof.

      (b)   Examine the administration by the Trustee of the Trust Fund, to take
            action where necessary regarding any acts or omissions of the
            Trustee in the administration of the Trust Fund and to make any
            claim against the Trustee for negligence or otherwise with reference
            to such acts or omissions. The responsibility of the Plan
            Administrator in this area is limited to administrative actions and
            procedures of the Plan Administrator and does not include investment
            policies, practices or management.

      (c)   Engage an independent qualified public accountant to conduct an
            examination of any financial statement of the Plan so as to enable
            him to conduct an opinion as to any other financial statements
            necessary for the operation of the Plan.


                                       41
<PAGE>

       (d)  Appoint such agents and subcommittees as it may deem necessary for
            the effective exercise of its powers and duties and to delegate to
            such agents and subcommittees any powers and duties, both
            ministerial and discretionary, as the said Plan Administrator shall
            deem expedient and appropriate.

      (e)   Authorize the Trustee to incur expenses not provided for in the
            Trust Agreement and to reimburse the Trustee for any expenses so
            incurred.

      (f)   Adopt such rules of procedure as it shall deem necessary in the
            administration of the Plan, including, but not limited to,
            procedures for presenting claims for benefits under the Plan and for
            review of claims which are denied in whole or in part, and
            procedures for complying with the requirements of Section 414(p) of
            the Code with respect to Qualified Domestic Relations Orders.

      The decision of the Plan Administrator made in good faith upon any matter
      within the scope of its authority shall be final, but the Plan
      Administrator at all times in carrying out its decisions shall act in a
      uniform and nondiscriminatory manner and may from time to time set down
      uniform rules of interpretation and administration, which rules may be
      modified from time to time.

9.3   PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN

      The Plan Administrator shall have responsibility for the administration of
      this Plan, including power to construe this Plan, to determine all
      questions that shall arise hereunder, including particularly questions on
      eligibility and participation of Employees and allocations of Company
      Contributions to Participants' accounts and all matters necessary for it
      properly to discharge its duties, powers and obligations and to apply its
      established policies concerning the employment status of Participants.

      (a)   The Plan Administrator will make all determinations as to the right
            of any person to benefits under the Plan in accordance with the
            governing Plan documents and will ensure that Plan provisions are
            applied consistently with respect to similarly situated claimants.
            Any denial by the Plan Administrator of a claim for benefits under
            the Plan by a claimant, who may be a Participant or a Beneficiary,
            will be stated in writing by the Plan Administrator and delivered or
            mailed to the claimant within a reasonable period of time, but not
            later than 90 days after receipt of the claim by the Plan, unless
            the Plan Administrator determines that special circumstances require
            an extension of time for processing the claim. Written notice of the
            extension shall be furnished to the claimant prior to the
            termination of the initial 90-day period. The extension notice shall
            indicate the special circumstances requiring an extension of time
            and the day by which the


                                       42
<PAGE>

            Plan expects to render the benefit determination, which cannot
            exceed a period of 90 days from the end of the initial determination
            period.

      (b)   The Plan Administrator shall provide a claimant with written or
            electronic notification of any adverse benefit determination. The
            notification shall set forth in a manner calculated to be understood
            by the claimant:

            (i)   The specific reason or reasons for the adverse benefit
                  determination;

            (ii)  Reference to the specific plan provisions on which the
                  determination is based;

            (iii) A description of any additional material or information
                  necessary for the claimant to perfect the claim and an
                  explanation of why such material or information is necessary;

            (iv)  A description of the Plan's review procedures and the time
                  limits applicable to such procedures, including a statement of
                  the claimant's right to bring a civil action under Section
                  502(a) of the Act following an adverse benefit determination
                  on review.

      (c)   In addition, the Plan Administrator will provide an opportunity to
            any claimant whose claim for benefits has been denied an opportunity
            for a full and fair review of the denial. As part of the review, the
            Plan Administrator will:

            (i)   Provide a claimant at least 60 days following receipt of
                  notification of an adverse benefit determination within which
                  to appeal the determination;

            (ii)  Provide a claimant the opportunity to submit written comments,
                  documents, records, and other information relating to the
                  claim for benefits;

            (iii) Provide that a claimant shall be provided, upon request and
                  free of charge, reasonable access to, and copies of, all
                  documents, records, and other information relevant to the
                  claimant's claim for benefits;

            (iv)  Provide for a review that takes into account all comments,
                  documents, records, and other information submitted by the
                  claimant relating to the claim, without regard to whether such
                  information was submitted or considered in the initial benefit
                  determination.


                                       43
<PAGE>

      (d)   The Plan Administrator shall provide a claimant with written or
            electronic notification of the Plan's benefits determination on
            review within 60 days after the Plan Administrator receives the
            request for review. In the case of an adverse benefit determination,
            the notification shall set forth, in a manner calculated to be
            understood by the claimant:

            (i)   The specific reason or reasons for the adverse benefit
                  determination;

            (ii)  Reference to the specific plan provisions on which the
                  determination is based;

            (iii) A statement that the claimant is entitled to receive, upon
                  request and free of charge, reasonable access to, and copies
                  of, all documents, records, and other information relevant to
                  the claimant's claim for benefits;

            (iv)  A statement describing any voluntary appeal procedures offered
                  by the Plan and the claimant's right to obtain the information
                  about such procedures and a statement of the claimant's right
                  to bring an action under Section 502(a) of ERISA.

9.4   THE PLAN IS A VOLUNTARY ACT BY THE COMPANY

      Establishment and maintenance of the Plan constitute voluntary acts of the
      Company and are not to be deemed or construed to be a part of any contract
      of employment, or as giving any person any enforceable right against the
      Company. The Trust Fund shall be the sole source of all distributions or
      other benefits provided for in the Plan and the Company shall not be
      liable or responsible therefor. Neither the action of The Timken Company
      in establishing the Plan nor any action hereafter taken by the Board or by
      any committees in connection with the Plan shall be construed as giving to
      any Employee a right to be retained in the service of the Company or any
      right or claim to any benefits under the Plan except as expressly provided
      in the Plan.

9.5   INDEMNIFICATION

      The Company may indemnify all persons, including Employees, who are or may
      be determined to be fiduciaries as that term is defined in ERISA,
      including independent professional advisors and service organizations
      which it is contractually obligated to indemnify to the extent permitted
      by law against any and all claims, loss, damages, expenses and liability
      from any action or failure to act except when such action or failure to
      act is due to the gross negligence, willful misconduct of willful breach
      of fiduciary duty of such person.


                                       44
<PAGE>

9.6   FIDUCIARY INSURANCE

      The Company may secure to the extent practicable and maintain in full
      force and effect insurance on behalf of all persons, including Employees,
      who are or may be determined to be fiduciaries, as that term is defined in
      ERISA, including independent professional advisors and service
      organizations which it is contractually obligated to indemnify, to cover
      liability or losses occurring by reason of the act or omission of each
      such person, unless such act or omission is due to the gross negligence,
      willful misconduct or willful breach of fiduciary duty of such person, and
      may secure and maintain in full force and effect insurance on behalf of
      other independent professional advisors and service organizations which
      are or may be determined to be fiduciaries, as that term is defined in
      ERISA.

9.7   FILINGS WITH THE PLAN ADMINISTRATOR

      For all purposes of the Plan, any designation or change of Beneficiary,
      distribution election, or other form or document required under the Plan
      shall become effective only upon receipt by the Plan Administrator or its
      delegate of such written designation, change, or election, or other form
      or document.

9.8   PAYEE UNKNOWN

      (a)   If the Plan Administrator is unable after any benefit becomes due
            hereunder to authorize payment because the whereabouts of a
            Participant or Beneficiary cannot be ascertained, the Plan
            Administrator shall send written notice of such benefit to the
            Participant or Beneficiary at his last known mailing address as
            shown by the records of the Company. The Total Account payable to
            the Participant or Beneficiary shall continue to be maintained until
            the earlier of:

            (i)   the date the Participant or Beneficiary entitled to the
                  benefit makes application therefor, or

            (ii)  the fifth anniversary of the Participant's or Beneficiary's
                  Benefit Commencement Date.

      (b)   If the Plan Administrator, after making a reasonably diligent
            effort, cannot locate the Participant or Beneficiary for a period of
            five years, the amount payable to such Participant or Beneficiary
            shall be forfeited on the Valuation Date next following the fifth
            anniversary of the Participant's or Beneficiary's Benefit
            Commencement Date. Forfeitures arising under this Section 9.8 shall
            be applied as provided in Section 4.3.

            Should the Participant or Beneficiary subsequently make application
            for benefits, the amount so forfeited shall be paid to the
            Participant or Beneficiary, and the Company shall


                                       45
<PAGE>

            reimburse the Trust Fund for the payment by making a special
            contribution for such purpose or by using Forfeitures.

9.9   RELIANCE ON STATEMENTS OF PARTICIPANTS AND BENEFICIARIES

      The Company, any Affiliated Company, the Plan Administrator, and the
      Trustee may rely upon any certificate, statement, or other representation
      made to them by any Employee, Participant, Spouse, or other Beneficiary
      with respect to age, length of service, leave of absence, date of
      cessation of employment, marital status, or other fact required to be
      determined under any of the provisions of this Plan, and shall not be
      liable on account of any payment or the performance of any act in reliance
      upon any such certificate, statement, or other representation.

      Any such certificate, statement or other representation made by an
      Employee or Participant shall be conclusively binding upon such Employee
      or Participant and his Spouse or other Beneficiary, and such Employee,
      Participant, Spouse, or Beneficiary shall thereafter and forever be
      estopped from disputing the truth and correctness of such certificate,
      statement, or other representation.

9.10  DISTRIBUTION TO MINORS AND INCAPACITATED PAYEES

      In the event a distribution is to be made to a minor or an adult unable to
      attend to his affairs for any reason (including, but not limited to,
      illness, infirmity, or mental incapacity), the Plan Administrator may in
      its discretion direct that such distribution be made (a) directly to him,
      or (b) to the parent or other legal guardian, committee, or conservator of
      such person, or to a custodian for a minor Beneficiary under the Uniform
      Gifts to Minors Act. Payment to any such person shall fully discharge the
      Plan Administrator, Trustee, Company, and Plan from further liability on
      account thereof.


                                       46
<PAGE>

                                   SECTION 10
                           ADMINISTRATION OF THE TRUST

10.1  TRUST AGREEMENT

      The Company has entered into a Trust Agreement, herein before and
      hereinafter referred to as the "Trust Agreement".

10.2  PROVISIONS OF THE TRUST AGREEMENT

      Pursuant to the terms and provisions of the Trust Agreement, such Trustees
      as the Company may appoint, will receive and invest all contributions made
      under the Plan by the Company and by the Participants to the Trust Fund
      held by the Trustees and all income derived therefrom. The Company may
      remove the Trustee and may appoint successor or additional trustees and
      may divide their duties and responsibilities as it sees fit.

10.3  EXCLUSIVE BENEFIT OF PARTICIPANTS

      All assets of the Trust Fund whether representing contributions made by
      the Company or by the Participants, shall be held by the Trustees as a
      trust fund for the benefit of Participants and Beneficiaries under the
      Plan. In no event shall it be possible at any time prior to the
      satisfaction of all liabilities, fixed or contingent, under the Plan for
      any part of the assets of the Trust Fund whether principal or income, to
      be used for or diverted to purposes other than for the exclusive benefit
      of such Participants and their Beneficiaries.

10.4  DIRECTIONS OF THE PLAN ADMINISTRATOR

      The Trust Agreement also specifically provides, among other things, for
      the investment or reinvestment of the Trust Fund and the income derived
      therefrom, and for the management of such Trust Fund, the responsibilities
      and immunities of the Trustees, the removal of the Trustee, and the
      appointment of successors accountings by the Trustees and the disbursement
      of the Trust Fund in accordance with the direction of the Plan
      Administrator.

10.5  COORDINATION OF PLAN AND TRUST AGREEMENT

      The rights of all persons under the Plan are subject to all the terms and
      provisions of said Trust Agreement.

10.6  PENSION INVESTMENT COMMITTEE

      The Pension Investment Committee of The Timken Company shall exercise all
      powers under the Plan which relate to the investment policy, practice and
      management of the assets of the Plan, including the selection of the
      investment funds hereunder. In furtherance of its duties it may engage
      investment managers, who may be authorized to direct the Trustee in the
      making of investments, and may discharge any investment manager so engaged
      and engage other investment


                                       47
<PAGE>

      managers at any time in its sole judgment. The Pension Investment
      Committee is the named fiduciary for investment policy of the Trust Fund.

10.7  RETURN OF CONTRIBUTIONS

      Nothing herein shall prohibit a return to the Company, within one year
      after payment, of excess sums contributed to the Trust Fund as a result of
      a mistake of fact. In the event that the Commissioner of Internal Revenue
      (or his delegate) determines that the Plan is not initially qualified
      under the Code, any Company Contributions made to the Plan shall be
      returned to the Company within one year after the date the initial
      qualification is denied, provided application for qualification is made by
      the time prescribed by law for filing the Company's return for the taxable
      year in which the Plan is adopted, or such later date as the Secretary of
      the Treasury may prescribe.

      Each Company Contribution is conditioned on the deductibility of the
      contribution under Section 404 of the Code, and to the extent such
      contribution is disallowed, the contribution shall be returned to the
      Company within one year after the date of disallowance.


                                       48
<PAGE>

                                   SECTION 11
                      AMENDMENT, TERMINATION, OR MERGER OF THE PLAN

11.1  RIGHT TO AMEND

      The Company expressly reserves the right to amend or discontinue the Plan
      by action of the Board at any time.

      The Board or the Plan Administrator shall have the authority to waive
      requirements as to eligibility in the case of those Participants whose
      standing has changed so as to otherwise render them ineligible to
      participate. No amendment may be made which will deprive any Employee of
      any interest hereunder that has accrued to him.

11.2  RIGHT TO TERMINATE

      The Plan may be terminated at any time by resolution of the Board provided
      that no such action shall permit any part of the assets of the Trust Fund,
      whether principal or income, to revert to the Company or to be used for or
      diverted to purposes other than for the exclusive benefit of Participants
      and their Beneficiaries until all liabilities, fixed or contingent, under
      the Plan with respect to such Participants and Beneficiaries shall have
      been satisfied in full.

11.3  TERMINATION OF TRUST

      If the Plan is terminated, all of the Participants' Total Accounts shall
      be nonforfeitable as of the date of termination. The Trust Fund shall be
      revalued as of the date the remaining assets are to be distributed, and
      the then current value of all Total Accounts shall be distributed in the
      manner described in Section 7.

      Until all Total Accounts are fully distributed, any remaining Total
      Accounts held in the Trust Fund shall continue to be adjusted in
      accordance with the provisions of Section 5.

11.4  DISCONTINUANCE OF CONTRIBUTIONS

      The Company may at any time, by written resolution of the Board,
      completely discontinue its participation in and contributions under the
      Plan. If the Company completely discontinues its contributions under the
      Plan, either by resolution of the Board or for any other reason, and such
      discontinuance is deemed a partial termination of the Plan within the
      meaning of Section 411(d)(3) of the Code, the amounts credited to the
      Total Accounts of all affected Participants (other than Participants who,
      in connection with the discontinuance of Company contributions, transfer
      employment to a Company which continues to contribute under the Plan)
      shall be nonforfeitable.


                                       49
<PAGE>

11.5  MERGER OF PLANS

      Subject to the provisions of this Section, the Plan may be amended to
      provide for the merger of the Plan with, or a transfer of all or part of
      its assets to, any other qualified plan within the meaning of Section
      401(a) of the Code. In the case of any merger or consolidation with, or
      transfer of assets or liabilities to, any other plan, each Participant in
      this Plan shall be entitled to a benefit immediately after such merger,
      consolidation, or transfer equal to or greater than the benefit the
      Participant would have received if the Plan had been terminated
      immediately prior to the merger, consolidation, or transfer


                                       50
<PAGE>

                                   SECTION 12
                            MISCELLANEOUS PROVISIONS

12.1  GENDER

      Whenever the word "he" or "his" or "him" is used in the Plan, such word is
      intended to embrace within its purview the word "she" or "her", as may be
      appropriate.

12.2  INVESTMENTS AND EXPENSES

      All Trustee's fees, investment management fees, investment related fees
      and administrative costs shall be borne by the Plan except to the extent
      such fees and costs are otherwise paid by the Company. Such fees and costs
      that are paid by the Plan shall be charged against Participants' Total
      Accounts on a pro-rata basis.

12.3  VOTING RIGHTS

      Before each annual or special meeting of its shareholders, the Company
      shall cause to be furnished to each Participant having shares of Company
      Stock credited to his Total Account, a copy of the proxy material,
      together with a form requesting instructions of the Trustee on how such
      shares credited to the Participant's Total Account should be voted. Upon
      receipt of such instructions, the Trustee shall vote such shares as
      instructed. Any shares held by the Trustee as to which it receives no
      voting instructions shall be voted proportionally, as it votes the shares
      for which it has received instructions.

12.4  NONALIENABILITY OF BENEFITS

      Participants and Beneficiaries are entitled to all the benefits
      specifically set out under the terms of the Plan, but neither those
      benefits nor any of the property rights in the Plan are assignable or
      distributable to any creditor or other claimant of a Participant or
      Beneficiary. A Participant will not have the right to anticipate, assign,
      pledge, accelerate or in any way dispose of or encumber any of the monies
      or benefits or other property that may be payable or become payable to
      such Participant or his Beneficiary provided, however, the Plan
      Administrator shall recognize and comply with a valid Qualified Domestic
      Relations Order as defined in Section 414(p) of the Code. The first
      sentence of this Section 12.4 shall not apply with respect to any offset
      to a Participant's benefits expressly provided for in a judgment, order,
      decree or settlement agreement described in Section 401(a)(13)(C) of the
      Code.

12.5  TOP-HEAVY PROVISIONS

      (a)   Definitions. For the purpose of this Section 12.5, the following
            definitions shall apply:

            (i)   "Key Employee" means an Employee of former Employee who at any
                  time during the Plan Year containing the Determination Date
                  was:


                                       51
<PAGE>

                  (a)   An officer of the Company having an annual compensation
                        greater than $130,000 (as adjusted under Section
                        416(i)(1) of the Code);

                  (b)   A five percent (5%) owner of the Company; or

                  (c)   A one percent (1%) owner of the Company who has an
                        annual compensation above $150,000.

                  For purposes of determining the number of officers taken into
                  account under clause (a) above, Employees described in Section
                  414(q)(8) of the Code will be excluded. The definition of Key
                  Employee shall be interpreted in accordance with Section
                  416(i) of the Code and the rules and regulations promulgated
                  thereunder. Any Employee who does not meet the requirement of
                  this definition shall be considered a non-Key Employee.

            (ii)  "Determination Date" means the last day of the preceding Plan
                  Year.

      (b)   This Plan shall be top-heavy for any Plan Year if, as of the
            Determination Date, the aggregate of the Total Accounts of Key
            Employees under the Plan exceeds 60 percent of the aggregate of the
            Total Accounts of all Employees under the Plan. For purposes of this
            determination, the following rules shall apply:

            (i)   Employees shall include former Employees, Beneficiaries and
                  former Beneficiaries who have a benefit greater than zero on
                  the Determination Date.

            (ii)  The amount of the Total Account of any Employee shall be
                  increased by the aggregate distributions made with respect to
                  such Employee within the 1-year period ending on the
                  Determination Date (provided that if such aggregate
                  distributions were made for a reason other than separation
                  from service, death or disability, this clause (ii) shall be
                  applied by substituting "5-year period" for "1-year period").

            (iii) The Total Account of any Employee who is not a Key Employee as
                  of the Determination Date but who was a Key Employee during
                  any prior Plan Year shall be disregarded.

            (iv)  The Total Account of any Employee who has not performed any
                  service for the Company during the 1-year period ending on the
                  Determination Date shall not be taken into account.


                                       52
<PAGE>

            (v)   If the Company maintains other plans which are qualified under
                  Section 401 of the Code, the top-heavy determination described
                  above shall be made by aggregating the Accounts under this
                  Plan with the accounts or the present values of the cumulative
                  accrued benefits under (i) any such other plan (including
                  plans terminated in the past 5 years) in which a Key Employee
                  is a participant and (ii) any such other plan (including plans
                  terminated in the past 5 years) which enables a plan in which
                  a Key Employee is a Participant to meet the requirements of
                  Section 401(a)(4) or Section 410 of the Code. The Company may
                  also aggregate any such other plans not required to be
                  aggregated, provided the resulting group of plans, taken as a
                  whole, continue to meet the requirements of Sections 401(a)(4)
                  and 410 of the Code.

            (vi)  The Accrued Benefit of any Employee (other than a Key
                  Employee) shall be determined by the method used for accrual
                  purposes for all plans of the Company.

            (vii) The top-heavy determination under this Paragraph shall be made
                  in accordance with Section 416 of the Code and the rules and
                  regulations promulgated thereunder.

      (c)   If the Plan is deemed to be top heavy under Paragraph (b) then,
            notwithstanding any other provision of the Plan to the contrary, the
            following shall apply with respect to each Plan Year in which the
            Plan is top-heavy:

            (i)   MINIMUM CONTRIBUTIONS -- The Company Contributions for each
                  Participant who is not a Key Employee shall not be less than
                  three percent (3%) of such Participant's Compensation or the
                  largest percentage of the Company Contributions of the Key
                  Employee's Compensation allocated on behalf of any Key
                  Employee for that year, provided if the highest rate allocated
                  to a Key Employee is less than three percent (3%), amounts
                  contributed as a result of Salary Reduction Agreements must be
                  included in determining the contributions made on behalf of
                  Key Employees. Company Matching Contributions will be taken
                  into account in determining whether the minimum contribution
                  requirement has been satisfied. This minimum allocation shall
                  be made even though, under other Plan provisions, the
                  Participant would not otherwise be entitled to receive an
                  allocation, or would have received a lesser allocation for the
                  year because of (i) the Participant's failure to complete
                  1,000 Hours of Service or (ii) the Participant's failure to
                  make mandatory Employee contributions to the Plan, provided,
                  however, this provision shall not apply to any Participant who
                  was not an Employee on the last day of the Plan Year. Company
                  Contributions allocated under any other defined contribu-


                                       53
<PAGE>

                  tion plan of the Company, in which any Key Employee
                  participates or which enables another defined contribution
                  plan to meet the requirements of Section 401(a)(4) or 410 of
                  the Code, shall be considered contributions and Forfeitures
                  allocated under this Plan. In the case of any non-Key Employee
                  Participant who is also a Participant in any defined benefit
                  plan of the Company, the foregoing provisions of this Section
                  shall be applied, but with five percent (5%) substituted for
                  three percent (3%).

            (ii)  VESTING SCHEDULE -- For any Plan Year during which the Plan is
                  Top Heavy, the vesting schedule set forth in Section 6.2, will
                  automatically continue to apply to all benefits within the
                  meaning of Section 411(a)(7) of the Code except those
                  attributable to Employee contributions, including benefits
                  accrued before the effective date of Section 416 of the Code
                  and benefits accrued before the Plan became Top Heavy.
                  Further, no decrease in a Participant's nonforfeitable
                  percentage may occur in the event the Plan's status as Top
                  Heavy changes for any Plan Year.

12.6  NONDISCRIMINATION LIMITATIONS ON PARTICIPANT CONTRIBUTIONS AND COMPANY
      MATCHING CONTRIBUTIONS

      (a)   For purposes of this Section, the following terms shall have the
            meaning indicated below:

            (i)   "ACTUAL DEFERRAL PERCENTAGE" means the average (expressed as a
                  percentage) of the deferral percentages of Eligible Employees
                  in a group. An Eligible Employee's deferral percentage is
                  equal to the ratio (expressed as a percentage) of the
                  Employee's Before-Tax Contributions for the Plan Year to the
                  Eligible Employee's Compensation for the Plan Year. The
                  individual ratios and the percentages for any groups of
                  individuals shall be calculated to the nearest one-hundredth
                  of one percent (.01 %).

            (ii)  "ACTUAL CONTRIBUTION PERCENTAGE" means the average (expressed
                  as a percentage) of the contribution percentages of Eligible
                  Employees in a group. An Eligible Employee's contribution
                  percentage is equal to the ratio of the Employee's After-Tax
                  Contributions and Company Matching Contributions for the Plan
                  Year to the Eligible Employee's Compensation for the Plan
                  Year. The individual ratios and the percentages for any groups
                  of individuals shall be calculated to the nearest
                  one-hundredth of one percent (.01 %).

            (iii) "ELIGIBLE EMPLOYEE" means any Employee of the Company who,
                  during the Plan Year, is eligible to make Before-Tax
                  Contributions or After-Tax Contributions in accordance with
                  the provision of Section 3.1. An individual shall be treated
                  as an Eligible Employee for a Plan Year if he so qualifies for
                  any


                                       54
<PAGE>

                  part of the Plan Year, and whether or not his right to make
                  Before-Tax Contributions or After-Tax Contributions has been
                  suspended.

            (iv)  "COMPENSATION" means compensation under Section 415(c)(3) of
                  the Code but not in excess of the limitations of Section
                  401(a)(17) of the Code.

      (b)   If more than one plan providing for a cash or deferred arrangement,
            or for matching contributions, or employee contributions (within the
            meaning of Sections 401(k) and 401(m) of the Code) is maintained by
            the Company or an Affiliated Company, the individual ratios of any
            Highly Compensated Employee who participates in more than one such
            plan or arrangement shall, for purposes of determining the
            individual's Actual Contribution Percentage and Actual Deferral
            Percentage, be determined as if all such arrangements were a single
            plan or arrangement.

      (c)   In the event that this Plan satisfies the requirements of Section
            410(b) of the Code only if aggregated with one or more other plans,
            then this Section shall be applied by determining the Actual
            Deferral Percentage and Actual Contribution Percentage of Eligible
            Employees as if all such plans were a single plan.

      (d)   In accordance with the nondiscrimination requirements of Section
            401(k) of the Code, the Plan Administrator shall establish a
            Compensation Deferral Limit with respect to Before-Tax Contributions
            credited to a Participant's Total Account during a Plan Year and may
            adjust such deferral limit from time to time during the Plan Year in
            order to satisfy one of the following tests:

            (i)   The Actual Deferral Percentage of the group of Highly
                  Compensated Employees for the current Plan Year shall not
                  exceed the Actual Deferral Percentage of the group of
                  Nonhighly Compensated Employees for the Plan Year immediately
                  preceding the current Plan Year multiplied by 1.25.

            (ii)  The Actual Deferral Percentage of the group of Highly
                  Compensated Employees for the current Plan Year shall not
                  exceed the Actual Deferral Percentage of the group of
                  Nonhighly Compensated Employees for the Plan Year immediately
                  preceding the current Plan Year multiplied by two, provided
                  that the Actual Deferral Percentage for Highly Compensated
                  Employees for the current Plan Year is not more than two
                  percentage points higher than the Actual Deferral Percentage
                  for Nonhighly Compensated Employees for the Plan Year
                  immediately preceding the current Plan Year.


                                       55
<PAGE>

      (e)   In accordance with the nondiscrimination requirements of Section
            401(m) of the Code, the Plan Administrator shall establish a
            Contribution Percentage Limit with respect to After-Tax
            Contributions and Company Matching Contributions credited to a
            Participant's Total Account during a Plan Year and may adjust such
            percentage limit from time to time during the Plan Year in order to
            satisfy one of the following tests:

            (i)   The Actual Contribution Percentage of the group of Highly
                  Compensated Employees for the current Plan Year shall not
                  exceed the Actual Contribution Percentage of the group of
                  Nonhighly Compensated Employees for the Plan Year immediately
                  preceding the current Plan Year multiplied by 1.25.

            (ii)  The Actual Contribution Percentage of the group of Highly
                  Compensated Employees for the current Plan Year shall not
                  exceed the Actual Contribution Percentage of the group of
                  Nonhighly Compensated Employees for the Plan Year immediately
                  preceding the current Plan Year, multiplied by two, provided
                  that the Actual Contribution Percentage for Highly Compensated
                  Employees is not more than two percentage points higher than
                  the Actual Contribution Percentage for Nonhighly Compensated
                  Employees for the Plan Year immediately preceding the current
                  Plan Year.

      (f)   The Plan Administrator may take the following actions to assure
            compliance with the nondiscrimination limitations of Section 401(k)
            and/or Section 401(m) of the Code:

            (i)   If during the Plan Year the average percentage described in
                  paragraphs (d) and/or (e) to the group of Highly Compensated
                  Employees are expected to exceed the maximum average
                  percentage necessary to comply with the rules described in
                  such paragraphs, the Plan Administrator may direct that the
                  Actual Deferral Percentage and/or the Actual Contribution
                  Percentage as the case may be, for each member of the group of
                  Highly Compensated Employees be reduced (beginning with the
                  Highly Compensated Employee whose Actual Deferral Percentage
                  and/or Actual Contribution Percentage are the largest) so that
                  the maximum average percentage is not exceeded.


            (ii)  If at the end of the Plan Year, the average percentage
                  described in paragraphs (d) and/or (e) above applicable to the
                  group of Highly Compensated Employees exceed the maximum
                  average percentage necessary to comply with the rules
                  described in such paragraphs after reduction for any excess
                  deferrals returned pursuant to Section 3.6, the Plan
                  Administrator shall first determine the total amount of excess
                  contributions by calculating successive reductions in
                  descending order of the highest individual Actual Deferral
                  Percentage and/or


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<PAGE>

                  Actual Contribution Percentage attributable to the members of
                  the group of Highly Compensated Employees (beginning with the
                  Highly Compensated Employee whose Actual Deferral Percentage
                  and/or Actual Contribution Percentage is the highest) until
                  the maximum average percentage is not exceeded. The sum of the
                  percentage reduction shall be multiplied by the applicable
                  Compensation of the affected Highly Compensated Employee to
                  determine the total excess contributions. The Plan
                  Administrator shall then direct that successive reductions of
                  the highest individual Before-Tax Contribution and/or Company
                  Matching Contribution and After-Tax Contributions of members
                  of the group of Highly Compensated Employees be made and
                  returned (beginning with the Highly Compensated Employees with
                  the largest contributions) and continuing in descending order
                  until the total amount of excess contributions have been
                  returned.

12.7  LIMITATION ON CONTRIBUTIONS

      The maximum annual addition (as described below) that may be contributed
      or allocated to a Participant's accounts under the Plan, all other defined
      contribution plans, all individual medical accounts (as defined in Section
      415(1)(2) of the Code) which are part of a defined benefit plan,
      maintained by the Company and all Affiliated Companies for any Limitation
      Year shall not exceed the lesser of (a) or (b) below:

      (a)   The dollar amount as specified in Section 415(c)(1)(A) of the Code
            as adjusted pursuant to Section 415(d)(1)(A) of the Code, or

      (b)   100% of the Participant's Compensation (as defined in Section
            12.6(a)(iv)) for such Limitation Year.

      The provisions of Section 415 of the Code are hereby incorporated into the
      Plan by reference.


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<PAGE>

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized representative effective as of the 16th day of February, 2003.

                            THE TIMKEN COMPANY


Date: March 11, 2003        By: /s/ Roger W. Lindsay
                               --------------------------------------------
                                Roger W. Lindsay
                                Senior Vice President - Human Resources and
                                Organizational Advancement


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