EX-10.28






Exhibit 10.28 




THE TIMKEN COMPANY




Performance-Vested Restricted Shares Agreement




     WHEREAS, <<name>> (“Grantee”) is an employee of The Timken Company (the
“Company”); and



     WHEREAS, the grant of performance-vested restricted shares evidenced hereby was authorized by
a resolution of the Compensation Committee (the “Committee”) of the Board of Directors (the
“Board”) of the Company that was duly adopted on [                    ], and the execution of a
performance-vested restricted shares agreement in the form hereof (this “Agreement”) was authorized
by a resolution of the Committee duly adopted on such date.



     NOW, THEREFORE, pursuant to The Timken Company Long-Term Incentive Plan (as Amended and
Restated as of February 4, 2008) (the “Plan”) and subject to the terms and conditions thereof, in
addition to the terms and conditions of this Agreement, the Company hereby grants to Grantee,
effective
[                    ] (the “Date of Grant”), the right to receive <<award>> shares
of the Company’s common stock without par value (the “Common Shares”).




	 	1.	 	Rights of Grantee. The Common Shares subject to this grant shall be
fully paid and nonassessable and shall be represented by a certificate or certificates
registered in Grantee’s name and endorsed with an appropriate legend referring to the
restrictions hereinafter set forth. Grantee shall have all the rights of a shareholder
with respect to such shares, including the right to vote the shares and receive all
dividends paid thereon, provided that such shares, and any additional shares that
Grantee may become entitled to receive by virtue of a share dividend, a merger or
reorganization in which the Company is the surviving corporation or any other change in
the capital structure of the Company, shall be subject to the restrictions hereinafter
set forth.
	 
	 	2.	 	Restrictions on Transfer of Common Shares. The Common Shares subject
to this grant may not be assigned, exchanged, pledged, sold, transferred or otherwise
disposed of by Grantee, except to the Company, until the Common Shares have become
nonforfeitable in accordance with Sections 3 and 4 hereof; provided,
however, that Grantee’s rights with respect to such Common Shares may be
transferred by will or pursuant to the laws of descent and distribution. Any purported
transfer in violation of the provisions of this Section 2 shall be null and void, and
the purported transferee shall obtain no rights with respect to such shares.
	 
	 	3.	 	Vesting of Common Shares.





 









 






	 	(a)	 	Normal Vesting: Subject to the terms and conditions of
Sections 4 and 5 hereof, Grantee’s right to receive the Common Shares covered
by this Agreement shall become nonforfeitable (a) if, for the calendar year in
which the Date of Grant occurs, the Company achieves the Management Objective
approved by the Committee on the Date of the Grant with respect to the Common
Shares (the “Threshold Requirement”), and (b) to the extent of one-quarter
(1/4) of the Common Shares covered by this Agreement after Grantee shall have
been in the continuous employ of the Company or a subsidiary for one full year
from the Date of Grant and to the extent of an additional one-quarter (1/4)
thereof after each of the next three successive years during which Grantee
shall have been in the continuous employ of the Company or a subsidiary. If
the Company fails to achieve the Threshold Requirement, the grant of the Common
Shares shall be cancelled. For purposes of this Agreement, “subsidiary” shall
mean a corporation, partnership, joint venture, unincorporated association or
other entity in which the Company has a direct or indirect ownership or other
equity interest. For purposes of this Agreement, the continuous employment of
Grantee with the Company or a subsidiary shall not be deemed to have been
interrupted, and Grantee shall not be deemed to have ceased to be an employee
of the Company or a subsidiary, by reason of the transfer of his employment
among the Company and its subsidiaries.
	 
	 	(b)	 	Vesting Upon Retirement with Consent: If Grantee
should retire with or without consent prior to the Company having attained the
Threshold Requirement, then all Common Shares covered by this Agreement shall
be cancelled. If, on the other hand, Grantee should retiree with the Company’s
consent after the Threshold Requirement has been met, but before the fourth
anniversary of the Date of Grant, then Grantee’s right to receive the Common
Shares covered by this Agreement shall become nonforfeitable in accordance with
the terms and conditions of Section 3(a) as if Grantee had remained in the
continuous employ of the Company or a subsidiary from the Date of Grant until
the date of the fourth anniversary or the occurrence of an event referenced in
Section 4, whichever occurs first.





     For purposes of this Agreement, retirement “with the Company’s consent” shall mean: (i) the
retirement of Grantee prior to age 62 under a retirement plan of the Company or a subsidiary, if
the Board or the Committee determines that his retirement is for the convenience of the Company or
a subsidiary, or (ii) the retirement of Grantee at or after age 62 under a retirement plan of the
Company or a subsidiary.




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








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	 	(a)	 	Death or Disability: Grantee’s right to receive the
Common Shares covered by this Agreement, if not cancelled for failure to
achieve the Threshold Requirement, shall become nonforfeitable if Grantee
should die or become permanently disabled while in the employ of the Company or
any subsidiary. For purposes of this Agreement, “permanently disabled” shall
mean that Grantee has qualified for long-term disability benefits under a
disability plan or program of the Company or, in the absence of a disability
plan or program of the Company, under a government-sponsored disability
program.
	 
	 	(b)	 	Change in Control: Grantee’s right to receive the
Common Shares covered by this Agreement, if not cancelled for failure to
achieve the Threshold Requirement prior to the change of control, shall become
nonforfeitable upon any change in control of the Company that shall occur while
Grantee is an employee of the Company or a subsidiary. For the purposes of
this Agreement, the term “change in control” shall mean the occurrence of any
of the following events:






	 	(i)	 	The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of 30% or more of either: (A) the
then-outstanding Common Shares or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (“Voting Shares”); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a change in control: (1) any
acquisition directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any subsidiary, or (4)
any acquisition by any Person pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (i) of this Section 4(b);
or
	 
	 	(ii)	 	Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for any reason
(other than death or disability) to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director,
without objection to such nomination) shall be considered as though
such individual were a member of the Incumbent Board, but excluding for
this purpose, any such individual whose initial







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	 	 	 	assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Securities
Exchange Act of 1934) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
	 
	 	(iii)	 	Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a “Business Combination”), in each case,
unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Common Shares and Voting Shares immediately prior
to such Business Combination beneficially own, directly or indirectly,
more than 66-2/3% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such
Business Combination (including, without limitation, an entity which as
a result of such transaction owns the Company or all or substantially
all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Business
Combination, of the Common Shares and Voting Shares of the Company, as
the case may be, (B) no Person (excluding any entity resulting from
such Business Combination or any employee benefit plan (or related
trust) sponsored or maintained by the Company or such entity resulting
from such Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then-outstanding shares
of common stock of the entity resulting from such Business Combination,
or the combined voting power of the then-outstanding voting securities
of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
	 
	 	(iv)	 	Approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.






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









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	 	 	 	the purposes of this Agreement, the term “divestiture” shall mean a
permanent disposition to a Person other than the Company or any subsidiary
of a plant or other facility or property at which Grantee performs a
majority of Grantee’s services whether such disposition is effected by means
of a sale of assets, a sale of subsidiary stock or otherwise.
	 
	 	(d)	 	Layoff: If (i) Grantee’s employment with the Company
or a subsidiary terminates as the result of a layoff and (ii) Grantee is
entitled to receive severance pay pursuant to the terms of any severance pay
plan of the Company in effect at the time of Grantee’s termination of
employment that provides for severance pay calculated by multiplying Grantee’s
base compensation by a specified severance period, then the Common Shares shall
become nonforfeitable, if not cancelled for failure to achieve the Threshold
Requirement, with respect to the total number of Common Shares that would have
been exercisable under the provisions of Section 3 hereof if Grantee had
remained in the employ of the Company through the end of the severance period.






          For purposes of this Agreement, a “layoff” shall mean the involuntary
termination by the Company or any subsidiary of Grantee’s employment with the
Company or any subsidiary due to (i) a reduction in force leading to a permanent
downsizing of the salaried workforce, (ii) a permanent shutdown of the plant,
department or subdivision in which Grantee works, or (iii) an elimination of
position.




	 	5.	 	Forfeiture of Awards. In the event the Company fails to achieve the
Threshold Requirement, the grant of the Common Shares hereunder shall be cancelled
immediately and Grantee shall have no further rights under this Agreement. Further,
Grantee’s right to receive the Common Shares covered by this Agreement that are then
forfeitable shall be forfeited automatically and without further notice on the date
that Grantee ceases to be an employee of the Company or a subsidiary prior to the
fourth anniversary of the Date of Grant for any reason other than as described in
Sections 3 or 4. If Grantee shall intentionally commit an act that the Committee
determines to be materially adverse to the interests of the Company or a subsidiary,
Grantee’s right to receive the Common Shares covered by this Agreement shall be
forfeited at the time of that determination notwithstanding any other provision of this
Agreement.
	 
	 	6.	 	Retention of Certificates. During the period in which the restrictions
on transfer and risk of forfeiture provided in Sections 2 and 5 above are in effect,
the certificates representing the Common Shares covered by this grant shall be retained
by the Company, together with the accompanying stock power signed by Grantee and
endorsed in blank.
	 
	 	7.	 	Compliance with Law. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Company shall not be









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	 		 	obligated to issue any of the Common Shares covered by this Agreement if the
issuance thereof would result in violation of any such law. To the extent that the
Ohio Securities Act shall be applicable to this Agreement, the Company shall not be
obligated to issue any of the Common Shares or other securities covered by this
Agreement unless such Common Shares are (a) exempt from registration thereunder, (b)
the subject of a transaction that is exempt from compliance therewith, (c)
registered by description or qualification thereunder or (d) the subject of a
transaction that shall have been registered by description thereunder.
	 
	 	8.	 	Adjustments. The Committee shall make any adjustments in the number or
kind of shares of stock or other securities covered by this Agreement that the
Committee may determine to be equitably required to prevent any dilution or expansion
of Grantee’s rights under this Agreement that otherwise would result from any (a) stock
dividend, stock split, combination of shares, recapitalization or other change in the
capital structure of the Company, (b) merger, consolidation, separation, reorganization
or partial or complete liquidation involving the Company or (c) other transaction or
event having an effect similar to any of those referred to in Section 8(a) or 8(b)
hereof. Furthermore, in the event that any transaction or event described or referred
to in the immediately preceding sentence shall occur, the Committee may provide in
substitution of any or all of Grantee’s rights under this Agreement such alternative
consideration as the Committee may determine in good faith to be equitable under the
circumstances.
	 
	 	9.	 	Withholding Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any benefit received
(including income recognized) in connection with this Agreement, and the amounts
available to the Company for such withholding are insufficient, it shall be a condition
to the realization of such benefit that Grantee make arrangements satisfactory to the
Company for payment of the balance of such taxes required to be withheld. The Grantee
may elect that all or any part of such withholding requirement be satisfied by
retention by the Company of a portion of such benefit. If such election is made, the
shares so retained shall be credited against such withholding requirement at the Market
Price per Common Share on the date the shares are retained or relinquished. In no
event, however, shall the Company accept Common Shares for payment of taxes in excess
of required tax withholding rates, except that, unless otherwise determined by the
Committee at any time, Grantee may surrender Common Shares owned for more than 6 months
to satisfy any tax obligations resulting from any such transaction.
	 
	 	10.	 	Right to Terminate Employment. No provision of this Agreement shall
limit in any way whatsoever any right that the Company or a subsidiary may otherwise
have to terminate the employment of Grantee at any time.






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








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	 	 	 	shall not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering employees of the Company or a
subsidiary.
	 
	 	12.	 	Amendments. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment shall adversely affect the rights of Grantee with
respect to the Common Shares or other securities covered by this Agreement without
Grantee’s consent.
	 
	 	13.	 	Severability. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent jurisdiction, any
provision so invalidated shall be deemed to be separable from the other provisions
hereof, and the remaining provisions hereof shall continue to be valid and fully
enforceable.
	 
	 	14.	 	Governing Law. This agreement is made under, and shall be construed in
accordance with, the internal substantive laws of the State of Ohio.
	 
	 	15.	 	Relation to Plan. This agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistency between the provisions of
this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein
without definition shall have the meanings assigned to them in the Plan.






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     This
Agreement is executed by the Company on this ___ day of       
          
    ,           
          .



	 	 	 	 	 
	 	The Timken Company

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




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



   
                
               
               
                
     

Grantee




Date:                                                             







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