Document:

EX-10.12

Exhibit 10.12

AMENDED AND RESTATED

EMPLOYEE EXCESS BENEFITS AGREEMENT

          THIS AMENDED AND RESTATED AGREEMENT, made this       day of                     , 200_, by and between
                     (the “Employee”), and THE TIMKEN COMPANY (“Timken”), an Ohio corporation having its
principal offices at Canton, Ohio.

          WHEREAS, the Company and the Employee currently are parties to an Employee Excess Benefits
Agreement, effective as of                      (the “Prior Agreement”), and the Company and the
Employee desire to amend and restate the Prior Agreement to conform to the requirements of Section
409A of the Internal Revenue Code (the “Code”).

          WHEREAS, this Agreement shall supersede and completely replace the Prior Agreement as of
January 1, 2009.

          NOW, THEREFORE, the parties covenant and agree as follows:

	1.	 	Timken shall provide the following Excess Benefits:

	 	(a)	 	Except as provided in Section 2(a), if, under the Amended and Restated
Supplemental Pension Plan of The Timken Company (the “Supplemental Plan”), the Employee
would be eligible for a benefit pursuant to paragraph 2(a) of the Supplemental Plan but
for this Agreement and the Employee Terminates Employment (as defined in Section 4(a)
of this Agreement) after having been an elected officer of Timken for five or more
years, the Employee shall be eligible to receive a benefit in an amount equal to the
difference between

	 	(i)	 	the monthly pension the Employee would be entitled to receive
under the 1984 Retirement Plan for Salaried Employees of The Timken Company and
the Retirement Plan for Salaried Employees of The Timken Company (hereinafter
the “Retirement Plans”) were it not for the limitations imposed by the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and Sections 401
and 415 of the Internal Revenue Code of 1986, as amended (hereinafter
collectively referred to as “the Code Limitations”), and
	 
	 	(ii)	 	the monthly pension he would actually receive under the
Retirement Plans.

	 	 	 	If any portion of the Employee’s benefit under the Retirement Plans is not payable
at the same time the Employee’s Excess Benefits are payable, the

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	 	 	 	corresponding portion of the Excess Benefit under this Section 1(a) shall be
determined by calculating such corresponding portion of the Excess Benefit that
would be payable under Section 1(a) and that portion of the benefit that would be
payable under the Retirement Plans at age 65 and then actuarially reducing such
Excess Benefit from age 65 to the commencement date provided under this Agreement
for the Excess Benefits. Any actuarial adjustments under this Section 1(a) shall be
based on the “applicable mortality table,” as defined in Code Section 417(e)(3) and
the “applicable interest rate” as defined in Code Section 417(e)(3), during the
third calendar month (October) immediately preceding the first day of the calendar
year in which the determination is made.

	 	 	 	The Excess Benefits to which the Employee is entitled under this Section 1(a) shall
commence, subject to Section 3, on the first day of the month following the later of
(A) the Employee’s Termination of Employment or (B) the Employee’s       birthday.
The form of payment of the Excess Benefits to which the Employee is entitled under
this Section 1(a) shall be as specified under the provisions applicable to
Participants under the Supplemental Plan.
	 
	 	(b)	 	If a married Employee dies after having been an elected officer of Timken for
five or more years but prior to commencement of the Employee’s benefit payments and the
Employee’s Spouse is entitled to a monthly pension under the Retirement Plans, Timken
shall pay to the Employee’s Spouse an amount equal to the difference between the
monthly pension the Employee’s Spouse would be entitled to receive under the Retirement
Plans, were it not for the Code Limitations, and the monthly pension the Employee’s
Spouse would actually receive under the Retirement Plans. Monthly payments shall be
made until the Spouse’s death. A Spouse’s benefit under this Section 1(b), shall
commence on the first day of the month following the later of (A) the Employee’s death,
or (B) the date on which the Employee would have reached age      .
	 
	 	(c)	 	Except as provided in Section 2(a), if the Employee Terminates Employment after
having been an elected officer of Timken for five or more years, the Employee shall be
entitled to a monthly benefit under this Agreement equal to the sum of (i) and (ii), as
reduced by (iii), as follows:

	 	(i)	 	an amount equal to:

	 	(A)	 	60% of one-twelfth of Final Average Earnings
(as defined in the Retirement Plans without consideration of the pay
limitation under Internal Revenue Code Section 401(a)(17) and based on
a five non-consecutive year average) reduced by
	 
	 	(B)	 	the monthly annuity value equal to the sum of
(I) the account balance the Employee would have accumulated under the
Savings

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	 	 	 	and Investment Pension (SIP) Plan and any other qualified defined
contribution plans sponsored by Timken and the Post-Tax Savings Plan
(the “Savings Plans”) as of December 31, 2008 but excluding amounts
contributed by the Employee as of such date, such account balance
being determined in the manner set forth in the next to last
paragraph of this Section 1(c), plus (II) the account balance the
Employee would have accumulated under the Savings Plans during the
period beginning on January 1, 2009 and ending on the date that
Excess Benefits are to commence under this Section 1(c), but
excluding amounts contributed by the Employee during such period,
such account balance being determined in the manner set forth in the
next to last paragraph of this Section 1(c).

	 	 	 	multiplied by the following ratio:

Years of Continuous Service after December 31, 2003

All Years of Continuous Service

	 	(ii)	 	1.75% of Final Average Earnings (as defined in the Retirement
Plans without consideration of the pay limitation under Internal Revenue Code
Section 401(a)(17) and based on a five non-consecutive year average) reduced by
1.25% of the Employee’s yearly primary Social Security amount, as estimated by
the Company based on the provisions of the Social Security Act, payable at
normal retirement date, the result multiplied by years of Continuous Service
completed prior to January 1, 2004 (to a maximum of 40) with the product
multiplied by 1.05.
	 
	 	(iii)	 	the benefit of the Employee shall be reduced by the total of
(A) and (B) as follows:

	 	(A)	 	the monthly payment from the Retirement Plans
before any adjustments for optional forms of benefits are made but
after any adjustment for early commencement, and
	 
	 	(B)	 	the monthly payment under subsection (a) above
before any adjustments for optional forms of benefits are made but
after any adjustment for early commencement.

	 	 	 	The benefit to which the Employee is entitled to receive under this Section 1(c)
shall commence, subject to Section 3, on the first day of the month following the
later of (1) the Employee’s Termination of Employment, or (2) the Employee’s      
birthday, and shall be paid in the form of a monthly annuity for the life of the
Participant.

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	 	 	 	In the event the benefits described in Section 1(c)(iii) above are not payable
immediately because the Employee has not met the service requirements in the
Retirement Plans, for purposes of this section, the benefits will be reduced for
early commencement in the same manner as if the Employee met the service requirement
for immediate commencement.
	 
	 	 	 	For purposes of Section 1(c)(i)(B)(I), the account balances related to the Savings
Plans will be determined by (y) assuming the Employee received in an account held
for the Employee under the Savings Plans the maximum amount of matching
contributions for each year he was an employee and eligible to participate in the
Savings Plans and (z) using the actual contributions made by Timken for all other
purposes to the Savings Plans. For purposes of Section 1(c)(i)(B)(II), the account
balances related to the Savings Plans will be determined by assuming the Employee
received in an account held for the Employee under the Savings Plans the maximum
amount of matching contributions at the rate of 4.5% of the Employee’s Gross
Earnings (as defined in the Savings Plans on the date hereof) for each year he was
an employee and eligible to participate in the Savings Plans. For purposes of
Section 1(c)(i)(B), interest will be credited to such account at a rate of eight
percent (8%) per annum beginning at the end of the year to which the contributions
are attributable. The monthly annuity will be that which could be purchased on the
date of the Employee’s Termination of Employment with the account balance at the
date that Excess Benefits are to commence under this Section 1(c) from an insurance
company which at the time of purchase has the highest rating by A. M. Best assuming
that the annuity is purchased with assets from a qualified retirement plan, is based
on group rates, is on a no commission basis and is payable for the Employee’s
lifetime, with no continuation after the Employee’s death.
	 
	 	 	 	Notwithstanding the foregoing provisions of this subsection (c), if the Employee’s
benefit payable under this subsection (c) commences prior to attaining age 62, such
benefit (before the reductions described in Sections 1(c)(i)(B) and 1(c)(iii) are
made) shall be reduced by 4% for each year by which the commencement date of the
benefit precedes age 62.
	 
	 	(d)	 	If a married Employee is eligible for a benefit under Section 1(c), his
surviving spouse shall be entitled to a monthly benefit after the death of the Employee
as follows:

	 	(i)	 	If a married Employee dies after the Employee has started to
receive the benefit provided for under Section 1(c), the Employee’s surviving
spouse shall be entitled to receive an immediate monthly benefit equal to 50%
of the amount the Employee was receiving pursuant to Section 1(c). Such
benefit will commence on the first day of the month next following the month of
the Employee’s death.

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	 	(ii)	 	If a married Employee dies before the Employee has started to
receive the benefit provided for under Section 1(c) but after having been an
elected officer of Timken for five or more years, the Employee’s Surviving
Spouse shall be entitled to a monthly benefit equal to 50% of the amount the
Employee would have received pursuant to Section 1(c) if the Employee had
commenced to receive that monthly benefit at the Surviving Spouse’s benefit
commencement date specified below, determined by taking into account the
Employee’s Final Average Earnings and years of Continuous Service as of the
Employee’s date of death. The surviving spouse’s benefit payments pursuant to
this subsection (ii) will commence on the first day of the month next following
the later of (A) the Employee’s death, or (B) the date on which the Employee
would have reached age           .
	 
	 	(iii)	 	Monthly payments to a surviving spouse pursuant to this
Section 1(d) shall be made until the spouse’s death.

	2.	(a) 	 	If (i) the Employee voluntarily terminates employment with Timken prior to having been an
elected officer of Timken for five or more years, (ii) Timken discharges the Employee or
requests that he resign his employment, prior to the Employee having been an elected officer
of Timken for five or more years, or (iii) the Employee’s employment with Timken terminates
for Cause, no Excess Benefits shall become due and payable to the Employee and this Agreement
shall be considered terminated.
	 
	 	(b)	 	For purposes of this Section 2, a termination shall be deemed to have been for
“Cause” only if based on the fact that the Employee has done any of the following acts
and such is materially harmful to Timken:

	 	(i)	 	An intentional act of fraud, embezzlement or theft in
connection with the Employee’s duties with Timken and resulting or intended to
result directly or indirectly in substantial personal gain to the Employee at
the expense of Timken;
	 
	 	(ii)	 	Intentional wrongful disclosure of secret processes or
confidential information of Timken or any of its subsidiaries; or
	 
	 	(iii)	 	Intentional wrongful engagement in any Competitive Activity
which would constitute a material breach of the Employee’s duty of loyalty to
Timken.
	 
	 	 	 	For purposes of this Section 2, the term “Competitive Activity” shall mean
the Employee’s participation, without the written consent of an officer of
Timken, in the management of any business enterprise if such enterprise
engages in substantial and direct competition with Timken and such

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	 	 	 	enterprise’s sales of any product or service competitive with any product or
service of Timken amounted to 25% of such enterprise’s net sales for its
most recently completed fiscal year and if Timken’s net sales of said
product or service amounted to 25% of Timken’s net sales for its most
recently completed fiscal year. “Competitive Activity” shall not include
(A) the mere ownership of securities in any enterprise and exercise of
rights appurtenant thereto or (B) participation in the management of any
enterprise or business operation thereof other than in connection with the
competitive operation of such enterprise.

	 	 	 	For purposes of this Section 2(b), no act, or failure to act, on the part of
the Employee shall be deemed “intentional” unless done, or omitted to be
done, by the Employee not in good faith and without reasonable belief that
his action or omission was in or not opposed to the best interest of Timken.
Notwithstanding the foregoing, the Employee shall not be deemed to have
been terminated for “Cause” hereunder unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the Directors then in
office at a meeting of the Directors called and held for such purpose (after
reasonable notice to the Employee and an opportunity for the Employee,
together with his counsel, to be heard before the Directors), finding that,
in the good faith opinion of the Directors, the Employee had committed an
act set forth in subsection (b) of this Section and specifying the
particulars thereof in detail. Nothing herein shall limit the right of the
Employee or his beneficiaries to contest the validity or propriety of any
such determination.

	3.	 	Notwithstanding any provision of this Agreement to the contrary, if the Employee is a
“specified employee,” determined pursuant to procedures adopted by Timken in compliance with
Section 409A of the Code, on the date the Employee Terminates Employment and if any portion
of the payments to be received by the Employee are by reason of his Termination of Employment,
then to the extent necessary to comply with Section 409A, amounts that would otherwise be
payable pursuant to this Agreement during the six-month period immediately following the
Employee’s Termination of Employment will instead be paid or made available on the earlier of
(i) the first business day of the seventh month after the date of the Employee’s Termination
of Employment, or (ii) the Employee’s death. Any benefit payments that are scheduled to be
paid more than six months after such Employee’s Termination of Employment shall not be delayed
and shall be paid in accordance with the schedule prescribed by Sections 1(a) and 1(c), as
applicable.

	4.	(a) 	 	For purposes of this Agreement, “Terminates Employment” and “Termination of Employment”
shall mean a termination of employment (within the meaning of

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

	 	(b)	 	Any references to the Employee’s Spouse herein shall mean the Employee’s Spouse
at the time of the Employee’s death or commencement of Participant’s Excess Benefits,
whichever is applicable, under the Retirement Plans or Savings Plans if the Employee is
not a participant in the Retirement Plans, provided that if a qualified domestic
relations order provides that a former spouse of the Employee is to be considered the
Employee’s Spouse for purposes of pension benefits, Timken shall consider such former
spouse of the Employee to be the Employee’s Spouse for purposes of this Agreement.

	5.	 	This Agreement shall be binding upon and shall inure to the benefit of Timken and the
Employee and their respective successors and assigns; provided, however, that, except as set
forth herein, no rights to any benefit under this Agreement shall be transferable or
assignable by the Employee or any other person, or be subject to alienation, encumbrance,
garnishment, attachment, execution or levy of any kind, voluntary or involuntary. Any such
attempted assignment or transfer shall terminate this Agreement and Timken shall have no
further liability hereunder.
	 
	6.	 	Timken is hereby designated as the Named Fiduciary of this Agreement, in accordance with
ERISA. The Named Fiduciary shall have the authority to control and manage the operation and
administration of this Agreement and is hereby designated as the Agreement Administrator.
	 
	7.	 	The obligations of Timken hereunder constitute an unsecured promise of Timken to make payment
of the amounts provided for in this Agreement. No property of Timken is or shall be, by
reason of this Agreement, held in trust for the Employee, or any other person, and neither
Employee nor any other person shall have, by reason of this Agreement, any rights, title or
interest of any kind in or to any property of Timken.
	 
	 	 	Notwithstanding the foregoing paragraph, upon the earlier to occur of (i) a Change of
Control that involves a transaction that was not approved by the Board of Directors, and was
not recommended to Timken’s shareholders by the Board of Directors, (ii) a declaration by
the Board of Directors that the trusts under the Employee Excess Benefits Agreements should
be funded in connection with a Change of Control that involves a transaction that was
approved by the Board of Directors, or was recommended to shareholders by the Board of
Directors, or (iii) a declaration by the Board of Directors

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	 	 	that a Change of Control is imminent, Timken shall promptly, to the extent it has not
previously done so, and in any event within five business days fund a trust established for
the sole purpose of the payment of the amounts payable under this Agreement. The amount to
be contributed by Timken prior to the Change of Control shall be calculated, using the
actuarial assumptions set forth in Exhibit A, by Watson Wyatt & Company or another
independent actuary appointed by Timken. Notwithstanding any provision of this Agreement to
the contrary, no amount shall be transferred to a trust in accordance with this paragraph
if, pursuant to Section 409A(b)(3)(A) of the Code, such amount would, for purposes of
Section 83 of the Code, be treated as property transferred in connection with the
performance of services. Upon a Change of Control, the rights of the Employee under this
Agreement shall be fully vested and shall be forfeited only if the Employee voluntarily
terminates his employment prior to completing five years of service as an elected officer of
Timken.
	 
	 	 	For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the
following events:

	 
	 	(a)	 	The sale or transfer of all or substantially all of the assets of Timken; or
the merger, consolidation or reorganization of Timken with or into another corporation
or entity with the result that upon the completion of the transaction, less than 51% of
the outstanding securities entitled to vote generally in the election of directors or
other capital interests of the surviving corporation or entity are owned, directly or
indirectly, by the pre-transaction shareholders of Timken;
	 
	 	(b)	 	A Schedule 13D or 14D-1F report (or any successor schedule, form or report
promulgated pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”)), is
filed with the United States Securities and Exchange Commission (the “SEC”) disclosing
that any person (including a person as defined in Sections 13(d)(3) or 14(d)(2) of the
Exchange Act) has become the beneficial owner (as defined in SEC Rule 13d-3) of
securities representing 30% or more of the combined voting power of the outstanding
shares of Timken;
	 
	 	(c)	 	Timken files a report or proxy statement with the SEC that includes a
disclosure, including, but not limited to, a disclosure in Item 1 of Form 8-K or Item
6(e) of Schedule 14A, that a change of control of Timken has or may have occurred or
will or may occur in the future pursuant to any existing contract or transaction; and
	 
	 	(d)	 	The individuals who at the beginning of any two consecutive calendar year
period constituted the Board of Directors cease for any reason to constitute a majority
of the Board of Directors; provided, however, this subsection (d) shall not apply if
the nomination of each new Director elected during such two-year period was approved by
the vote of at least two-thirds of the Directors of Timken still in office who were
Directors of Timken on the first day of such two-year period.

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	8.	 	In the event that, in its discretion, Timken purchases an insurance policy or policies
insuring the life of the Employee to allow Timken to recover in whole or in part, the cost of
providing the benefits under this Agreement, neither the Employee nor any beneficiary shall
have any right whatsoever therein; Timken shall be the sole owner and beneficiary of such
insurance policy or policies and shall possess and may exercise all incidents of ownership
therein.
	 
	9.	 	All questions of interpretation, construction or application arising under this Agreement
shall be decided by the Board of Directors of Timken and its decision shall be final and
conclusive upon all parties. Timken, in its discretion, shall make all determinations as to
rights to benefits under this Agreement. Any decision by Timken denying a claim for benefits
under this Agreement shall be stated in writing and delivered or mailed to the Employee or the
Employee’s Spouse. Such decision shall (i) be made and issued in accordance with the claims
regulations issued by the Department of Labor, (ii) set forth the specific reasons for the
denial of the claim, and (iii) state that the decision may be appealed by the Employee.
	 
	10.	 	Nothing contained in this Agreement shall be construed to be a contract of employment nor as
conferring upon the Employee the right to continue in the employ of Timken in any capacity.
It is expressly understood by the parties hereto that this Agreement relates exclusively to
Excess Benefits and is not intended to be an employment contract.
	 
	11.	 	This Agreement may not be amended, altered or modified, except by a written instrument signed
by the parties hereto. This Agreement shall supersede the provisions of the Prior Agreement
and the Employee shall be entitled to benefits solely under this Agreement.
	 
	12.	 	Following Termination of Employment, the Employee shall comply with the Restriction on
Competition in paragraph 9 of the Supplemental Plan. If the Employee engages in activity
prohibited by this Section, then in addition to all other remedies available to Timken, Timken
shall be released from any obligation under this Agreement to pay benefits to the Employee or
the Employee’s Spouse under this Agreement. Any such cessation of payments shall not reduce
any monetary damages that may be available to Timken as a result of the Employee’s breach.
	 
	13.	 	The failure at any time to require performance of any provision expressed herein shall in no
way affect the right thereafter to enforce such provision; nor shall the waiver of any breach
of any provision expressed herein be taken or held to be a waiver of any succeeding breach of
any such provision or as a waiver of a provision itself.
	 
	 	 	In the event that any provision or term of this Agreement is finally determined by any
judicial, quasi-judicial or administrative body to be void or not enforceable for any
reason, it is the agreed upon intent of the parties hereto that all other provisions or
terms of the Agreement shall remain in full force and effect and that the Agreement shall be
enforceable as if such void or unenforceable provision or term had never been included
herein.

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	14.	 	Every designation, election, revocation or notice authorized or required hereunder shall be
deemed delivered to Timken: (a) on the date it is personally delivered to Timken offices at
1835 Dueber Avenue, S.W., Canton, OH 44706-0927 or (b) three business days after it is sent by
registered or certified mail, postage prepaid, addressed to Timken at the offices indicated
above. Every designation, election, revocation or notice authorized or required hereunder
which is to be delivered to the Employee or a beneficiary shall be deemed delivered to the
Employee or beneficiary: (a) on the date it is personally delivered to such individual (either
physically or through interactive electronic communication), or (b) three business days after
it is sent by registered or certified mail, postage prepaid, addressed to such individual at
the last address shown for him on Timken records. Any notice required hereunder may be waived
by the person entitled thereto.
	 
	15.	 	In the event the Employee or the Employee’s Spouse is declared incompetent and a guardian,
conservator or other person is appointed and legally charged with the care of the person or
the person’s estate, the payments under this Agreement to which the Employee or the Employee’s
Spouse is entitled shall be paid to such guardian, conservator or other person legally charged
with the care of the person or the estate. Except as provided hereinabove, when Timken, in
its sole discretion, determines that the Employee or the Employee’s Spouse is unable to manage
his financial affairs, Timken may make distribution(s) of the amounts payable to the Employee
or the Employee’s Spouse to any one or more of the spouse, lineal ascendants or descendants or
other closest living relatives of the Employee or the Employee’s Spouse who demonstrate to the
satisfaction of Timken the propriety of making such distribution(s). Any payment so made
shall be made at the same time and in the same form as such benefit would be made to the
Employee and shall be in complete discharge of any liability under this Agreement for such
payment. Timken shall not be required to see to the application of any such distribution made
under this Section 15.
	 
	16.	 	This Agreement shall be subject to and construed under the laws of the State of Ohio.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this     day of
                    , 200___.

	 	 	 	 	 	 	 
	 	 	THE TIMKEN COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 
Employee

	 	 	 	 

William R. Burkhart
	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	Senior Vice President & General Counsel	 	 

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EXHIBIT A

The amount to be contributed to a trust fund pursuant to Section 7 of this Agreement to insure the
performance of Timken’s obligations under this Agreement in the event of a Change of Control shall
be calculated using the “applicable mortality table,” and the “applicable interest rate” as defined
in Code Section 417(e)(3), during the third calendar month immediately preceding the date in which
the contribution to the trust fund occurs.

- 11 -EX-10.19

Exhibit 10.19

TRANSFERABLE

THE TIMKEN COMPANY

Nonqualified Stock Option Agreement

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

          WHEREAS, the grant of stock options 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 [DATE] (the “Date of Grant”), and the execution of a stock option
agreement in the form hereof (this “Agreement”) was authorized by a resolution of the Committee
duly adopted on [DATE]; and

          WHEREAS, the option evidenced hereby is intended to be a nonqualified stock option and shall
not be treated as an “incentive stock option” within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986, as amended;

          NOW, THEREFORE, pursuant to the Company’s Long-Term Incentive Plan (as Amended and Restated as
of February 4, 2008) (the “Plan”), the Company hereby grants to the Optionee (i) a nonqualified
stock option (the “Option”) to purchase
<<nqso>> shares of the Company’s common stock
without par value (the “Common Shares”) at the exercise price of [$                    ] per Common Share
(the “Option Price”) which represents the Market Value per Share on the Date of Grant. The Company
agrees to cause certificates for any Common Shares purchased hereunder to be delivered to the
Optionee upon payment of the Option Price in full, subject to the terms and conditions of the Plan,
in addition to the terms and conditions of this Agreement.

     1. Four-Year Vesting of Option.

          (a) Normal Vesting: Unless terminated as hereinafter provided, the Option shall be
exercisable to the extent of one-fourth (1/4th) of the Common Shares covered by the Option after
the Optionee 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-fourth (1/4th) thereof after
each of the next three successive years during which the Optionee shall have been in the continuous
employ of the Company or a subsidiary. For the 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; the continuous employment
of the Optionee with the Company or a subsidiary shall not be deemed to have been interrupted, and
the Optionee 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 the Optionee should retiree with the
Company’s consent before the fourth anniversary of the Date of Grant, then the Optionee’s Option
shall become nonforfeitable in accordance with the terms and conditions of Section 1(a) as if the
Optionee 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
2, whichever occurs first.

     For purposes of this Agreement, retirement “with the Company’s consent” shall mean: (i) the
retirement of the Optionee 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 the Optionee at or after age 62 under a retirement plan
of the Company or a subsidiary.

          (c) To the extent that the Option shall have become exercisable in accordance with the terms
of this Agreement, it may be exercised in whole or in part from time to time thereafter.

     2. Accelerated Vesting of Option. Notwithstanding the provisions of Sections 1(a) and
1(b) hereof, the Option may become exercisable earlier than the time provided in such section if
any of the following circumstances apply:

          (a) Death or Disability: The Option shall become immediately exercisable in full if
the Optionee 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 the Optionee
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: The Option shall become immediately exercisable in full upon
any change in control of the Company that shall occur while the Optionee 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

2

 

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 (iii) of this Section 2(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
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: The Option shall become immediately exercisable in full if the
Optionee’s employment with the Company or a subsidiary terminates as the result of a divestiture.
For the purposes of this Agreement, the term “divestiture” shall mean a permanent

3

 

disposition to a Person other than the Company or any subsidiary of a plant or other facility
or property at which the Optionee performs a majority of Optionee’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) the Optionee’s employment with the Company or a subsidiary
terminates as the result of a layoff and (ii) the Optionee is entitled to receive severance pay
pursuant to the terms of any severance pay plan of the Company in effect at the time of Optionee’s
termination of employment that provides for severance pay calculated by multiplying the Optionee’s
base compensation by a specified severance period, then the Option shall be exercisable with
respect to the total number of Common Shares that would have been exercisable under the provisions
of Section 1(a) hereof if the Optionee 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 Optionee’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 Optionee works, or (iii) an elimination
of position.

     3. Termination of Option. The Option shall terminate automatically and without
further notice on the earliest of the following dates:

          (a) thirty days after the date upon which the Optionee ceases to be an employee of the Company
or a subsidiary, unless (i) the cessation of his employment (A) is a result of his death, permanent
disability or retirement with the Company’s consent, or (B) follows a change in control, a
divestiture, or a layoff; or (ii) the Optionee continues to serve as a director of the Company
following the cessation of his employment.

          (b) three years after the date upon which the Optionee ceases to be an employee of the Company
or a subsidiary following (i) a change in control, (ii) a divestiture, or (iii) a layoff;

          (c) five years after the date upon which the Optionee ceases to be an employee of the Company
or a subsidiary (i) as a result of his death, or (ii) as a result of his permanent disability;

          (d) five years after the date upon which the Optionee ceases to be a director of the Company
if he continues to serve as a director of the Company following the cessation of his employment
other than as a result of his retirement with the Company’s consent;

          (e) ten years after the Date of Grant if (i) the Optionee remains an employee of the Company
or a subsidiary until such ten-year anniversary, or (ii) the Optionee ceases to be an employee of
the Company or subsidiary as a result of his retirement with the Company’s consent.

     In the event that the Optionee shall intentionally commit an act that the Committee determines
to be materially adverse to the interests of the Company or a subsidiary, the Option

4

 

shall terminate at the time of that determination notwithstanding any other provision of this
Agreement to the contrary.

     4. Payment of Option Price. The Option Price shall be payable (a) in cash in the form
of currency or check or other cash equivalent acceptable to the Company, (b) by transfer to the
Company of nonforfeitable, unrestricted Common Shares that have been owned by the Optionee for at
least six months prior to the date of exercise or (c) by any combination of the methods of payment
described in Sections 4(a) and 4(b) hereof. Nonforfeitable, unrestricted Common Shares that are
transferred by the Optionee in payment of all or any part of the Option Price shall be valued on
the basis of their Market Value per Share. Subject to the terms and conditions of Section 7
hereof, and subject to any deferral election the Optionee may have made pursuant to any plan or
program of the Company, the Company shall cause certificates for any shares purchased hereunder to
be delivered to the Optionee upon payment of the Option Price in full.

     5. 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 Option shall not be exercisable if the exercise thereof would
result in a violation of any such law. To the extent that the Ohio Securities Act shall be
applicable to the Option, the Option shall not be exercisable unless the Common Shares or other
securities covered by the Option 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.

     6. Transferability and Exercisability.

          (a) Except as provided in Section 6(b) below, the Option, including any interest therein,
shall not be transferable by the Optionee except by will or the laws of descent and distribution,
and the Option shall be exercisable during the lifetime of the Optionee only by him or, in the
event of his legal incapacity to do so, by his guardian or legal representative acting on behalf of
the Optionee in a fiduciary capacity under state law and court supervision.

          (b) Notwithstanding Section 6(a) above, the Option, may be transferable by the Optionee,
without payment of consideration therefor, to any family member of the Optionee (as defined in Form
S-8), or to one or more trusts established solely for the benefit of such members of the immediate
family or to partnerships in which the only partners are such members of the immediate family of
the Optionee; provided, however, that such transfer will not be effective until notice of such
transfer is delivered to the Company; and provided, further, however, that any such transferee is
subject to the same terms and conditions hereunder as the Optionee.

     7. Adjustments. The Committee shall make any adjustments in the Option Price and the
number or kind of shares of stock or other securities covered by the Option that the Committee may
determine to be equitably required to prevent any dilution or expansion of the Optionee’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

5

 

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 subsection (a) or (b) herein. 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 the Optionee’s rights under this
Agreement such alternative consideration as the Committee may determine in good faith to be
equitable under the circumstances.

     8. Withholding Taxes. If the Company shall be required to withhold any federal,
state, local or foreign tax in connection with any exercise of the Option, the Optionee shall pay
the tax or make provisions that are satisfactory to the Company for the payment thereof. The
Optionee may elect to satisfy all or any part of any such withholding obligation by surrendering to
the Company a portion of the Common Shares that are issuable to the Optionee upon the exercise of
the Option. If such election is made, the shares so surrendered by the Optionee shall be credited
against any such withholding obligation at their Market Value per Share on the date of such
surrender. 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, the Optionee may surrender Common Shares owned for more than 6 months to satisfy any
tax obligations resulting from any such transaction.

     9. No Right to Future Awards or Continued Employment. This option award is a
voluntary, discretionary bonus being made on a one-time basis and it does not constitute a
commitment to make any future awards. This option award and any payments made hereunder will not
be considered salary or other compensation for purposes of any severance pay or similar allowance,
except as otherwise required by law. Nothing in this Agreement will give the Optionee any right to
continue employment with the Company or any subsidiary, as the case may be, or interfere in any way
with the right of the Company or a subsidiary to terminate the employment of the Optionee.

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

     11. 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 the Optionee with respect to the Option without the
Optionee’s consent.

     12. Severability. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid or unenforceable, the remainder of
this Agreement and the application of such provision in any other person or circumstances shall not
be affected, and the provisions so held to be invalid or unenforceable shall be reformed to the
extent (and only to the extent) necessary to make it enforceable and valid.

6

 

     13. Processing of Information. Information about the Optionee and the Optionee’s
participation in the Plan may be collected, recorded and held, used and disclosed for any purpose
related to the administration of the Plan. The Optionee understands that such processing of this
information may need to be carried out by the Company and its Subsidiaries and by third party
administrators whether such persons are located within the Optionee’s country or elsewhere,
including the United States of America. The Optionee consents to the processing of information
relating to the Optionee and the Optionee’s participation in the Plan in any one or more of the
ways referred to above.

     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. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan.

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

	 	 	 	 	 
	 	THE TIMKEN COMPANY

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

          The undersigned Optionee hereby acknowledges receipt of an executed original of this Agreement
and accepts the Option granted hereunder, subject to the terms and conditions of the Plan and the
terms and conditions hereinabove set forth.

                                                                      

Optionee

Date:                                                             

7

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