Document:

2015 Q1 Exhibit 101

		
			Intersil Corporation
2008 Equity Compensation Plan
Performance-Based Deferred Market Stock 
		

		
			Unit (MSU) Award 
		

		
			Terms and Conditions
(Effective April 2015)
		

		
			 
		

		
			Intersil Corporation (the “Company” or “Intersil”) has awarded you performance-based deferred market stock units (“MSUs”) pursuant to the Intersil Corporation 2008 Equity Compensation Plan (the “Plan”) provisions applicable to DSUs, and under the terms and conditions set forth in your MSU award letter (the “Letter”) and the terms and conditions set forth in this document (the “Terms and Conditions”) (the Letter and Terms and Conditions collectively referred to herein as the “MSU Award Agreement”).  The number of MSUs awarded to you is set forth in the Letter and is subject to adjustment as provided in the MSU Award Agreement.  The specific terms of your MSU award are controlled by the MSU Award Agreement and the Plan.  Capitalized terms which are not defined in this document will have the meanings specified in the Plan.
		

		
			1.    Vesting; Payment on Vest Date.  The vesting of your MSU award is subject to the following rules:
		

		
			a. Vesting.  Subject to Sections 1(c) and 1(d), provided that you remain in the employment or service of the Company through the applicable vesting date, and the Company achieves the performance goals set forth on Schedule 1 attached hereto (the “Performance Goals”) and made a part hereof, you shall become vested in the MSU award per the vesting schedule and percentages set forth in Schedule 1.  Upon vesting of the MSU award you will be entitled to one share of Intersil Common Stock for each vested MSU you have been awarded. The shares of Intersil Common Stock represented by the MSU Award will be distributed to you after the Performance Goals have been certified by the Compensation Committee of the Board of Directors of Intersil (the “Committee”).  Any portion of the MSU award that does not become vested as a result of the failure to achieve the relevant Performance Goals shall be immediately forfeited with no consideration due to you.   
		

		
			b. Separation from Service as a Result of Your Disability or Death.  If you have a Separation from Service as a result of your Disability or death and all or a portion of your MSU award has not yet become vested, any unvested portion of your MSU award will immediately expire and you will not be entitled to any Intersil Common Stock attributable to such unvested portion of the MSU award (except as otherwise specifically provided in Section 1(c) below).  
		

		
			c. Separation from Service as a Result of Your Retirement.  If you have a Separation from Service as a result of your Retirement (as defined in the Company’s Retirement Benefits Policy, as in effect on the grant date of your MSU award) and all or a portion of your MSU award has not yet become vested, notwithstanding such Separation from Service, if the unvested portion would have become vested during the period beginning on your Retirement and ending on the date which is eighteen (18) months after your Retirement (the “Post-Retirement Vesting Period”), such unvested portion of your MSU award will vest and be settled in the same manner and at the same time as if you did not have a Separation from Service prior to the date of vesting.  In the event of your death following your Retirement, your estate or beneficiary, as applicable, will be entitled to 
		

		 

 

		receive that portion of your MSU award that would have become vested during the Post-Retirement Vesting Period in the same manner as if you did not have a Separation from Service prior to the date of vesting of such portion, with such amount to be settled as soon as administratively practicable following the later of (x) the expiration of the performance period and (x) the date of your death.   If you have a Separation from Service as a result of your death following your qualification for Retirement but before your Retirement and all or a portion of your MSU award has not yet become vested at the time of your death, your estate or beneficiary, as applicable, will be entitled to receive that portion of your MSU award that would have become vested during the 18-month period following your death in the same manner as if you did not have a Separation from Service prior to the date of vesting of such portion, with such amount to be settled as soon as administratively practicable following the later of (x) the expiration of the performance period and (x) the date of your death. Notwithstanding the foregoing, if at any time during the Post-Retirement Vesting Period you render services to a competitor of the Company, as determined in good faith by the Committee, the unvested portion of your MSU award will immediately expire on the date such services were initially rendered and you will not be entitled to any Intersil Common Stock attributable to such unvested portion of the MSU award.  To the extent you render services to a company that could reasonably be considered a competitor of the Company, you must provide written notification of employment with such company to the Company within 10 days of the date such services are initially rendered.
		

		
			d. Performance Scoring on Change in Control.   If a change in control occurs, as defined in Section (ii) below your MSU performance results will be determined as follows:  
		

		
			(A)Your unvested MSUs for which the performance period has been completed  shall be payable to you with the number of shares under a particular grant being determined using the Performance Goals as set forth in Schedule 1 for the respective performance period, (ii) your unvested MSUs for any performance period in progress shall be payable to you with the number of shares under a particular grant being determined by applying the Performance Goals as set forth in Schedule 1 to the performance level achieved through the date of the Change in Control, (iii) in both circumstances described in (i) and (ii), you must remain with the surviving company through the vesting periods of the grant.  At the time of vesting, payment of all MSUs will be made to you in accordance with Section 1.f. – “Payment on Vest Date”. 
		

		
			(B)For purposes of this Agreement, "Change in Control" means the consummation of any of the following transactions after the date hereof: (a) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of liquidation or dissolution of the Company or an agreement for the sale, lease, exchange or other transfer or disposition by the Company of all or substantially all (more than fifty percent (50%)) of the Company's assets; (b) any person (as such 
		

		 

 

		term is used in Sections 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) directly or indirectly of 25% or more of the Company's outstanding Common Stock; or (c) a change in the composition of the Board of Directors of the Company  within a three (3) year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either: (A) are directors of the Company as of May 15,2002; (B) are elected, or nominated for election, to the Board of Directors of the Company with the affirmative votes of at least a majority of the directors of the Company who are Incumbent Directors described in (A) above at the time of such election or nomination; or (C) are elected, or nominated for election, to the Board of Directors of the Company with the affirmative votes of at least a majority of the directors of the Company who are Incumbent Directors described in (A) or (B) above at the time of such election or nomination.  Notwithstanding the foregoing, "Incumbent Directors" shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company.
		

		
			 
		

		
			e. Separation from Service for Any Reason Other than Death, Disability, Retirement or a Covered Termination.  If, prior to vesting of a portion of your MSU award, you have a Separation from Service with the Company for any reason other than death, Disability, Retirement or a Covered Termination (including without limitation a termination for Cause or as a result of a reduction in force), the unvested portion of your MSU award will expire on the date of your Separation from Service and you will not be entitled to receive Intersil Common Stock attributable to such unvested portion of your MSU award. 
		

		
			f. Payment Upon Vesting.  Absent an election otherwise in accordance with Section 2 below, settlement of the vested portion of your MSU award will be made as soon as practicable following the date upon which such portion becomes vested, but in no event later than the end of the calendar year in which such portion became vested.
		

		
			For the avoidance of doubt, except as otherwise specifically provided in Sections 1(c) and (d) above, upon any Separation from Service, the unvested portion of your MSU award shall be immediately forfeited with no consideration due to you.
		

		
			 
		

		
			2.    Deferral of Vested Shares.  Notwithstanding Section 1, you may decide to defer the receipt of all or a portion of the shares of Intersil Common Stock payable in respect of your MSU award in accordance with this Section 2 (each deferral period that you select is referred to herein as a “Deferral Period”).  
		

		
			a. Deferral of MSUs.  To the extent permitted by Code Section 409A, you may defer receipt of shares of Intersil Common Stock with the Company’s stock plan service provider, provided that such election must be submitted (i) in the year before the award is made, (ii) within 30 days of initial eligibility under the Plan, (iii) within 30 days of a grant but only if there is at least a 12 month vesting requirement attached to the Award and the deferral election is made at least 12 months before any portion of the Award is scheduled to vest, or (iv) if the Award is subject 
		

		 

 

		to attainment of Performance Goals over a performance period of not less than 12 months, at least 6 months prior to the date the applicable performance period for such Performance Goal ends.   You may not revoke or revise your deferral elections once made.  
		

		
			b. Separation from Service.
		

		
			(i)If, prior to the expiration of the Deferral Period, you have a Separation from Service for any reason and you are not then eligible for Retirement, you shall be entitled to receive shares of Intersil Common Stock in settlement of your vested and deferred MSU awards as soon as administratively practicable thereafter. 
		

		
			(ii)If, prior to the expiration of the Deferral Period, you have a Separation from Service for any reason and you are then eligible for Retirement, the receipt of Intersil Common Stock for which a deferral election is in effect will continue to be deferred until the end of your previously elected Deferral Period. 
		

		
			(iii)Notwithstanding clauses (i) and (ii) above, if, prior to the expiration of the Deferral Period, you die, your estate or beneficiaries, as applicable, will be entitled to receive shares of Intersil Common Stock in settlement of your vested and deferred MSU awards as soon as administratively practicable thereafter.
		

		
			c. Withdrawals due to Unforeseeable Emergency.  You may submit a written request to the Committee for immediate distribution of deferred and vested shares of Intersil Common Stock at any time.  Such requests are approved at the discretion of the Committee and for a purpose that the Committee determines, in its sole discretion, constitutes an “Unforeseeable Emergency” (as determined in accordance with Code Section 409A).
		

		
			(i) For purposes of this Section 2.d., “Unforeseeable Emergency” shall be determined in accordance with Code Section 409A and means a severe financial hardship to you resulting from:
		

		
			Aa sudden and unexpected illness or accident involving you, your spouse, or of one of your dependents, as defined in section 152(a) of the Code; 
		

		
			Bloss of your property due to casualty; or
		

		
			Cother similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control that satisfies the limitations contained in applicable tax law.
		

		
			(ii) Circumstances that shall not be deemed to meet the above “Unforeseeable Emergency” definition shall include, but not to be limited to, the purchase of a home and the need to pay for the post-secondary education of your children.  
		

		
			(iii) The circumstances that constitute an Unforeseeable Emergency will depend upon the facts and circumstances of each request, but, in any case, distribution shall not be made to the extent that such hardship is or may be relieved:  
		

		
			A.through the reimbursement or compensation by insurance or otherwise; 
		

		
			B.by liquidation of your assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or 
		

		 

 

		
			C. by cessation of deferrals under a retirement plan or other deferred compensation plan maintained by the Company.
		

		
			(iv) Distributions because of an Unforeseeable Emergency shall not exceed the lesser of: 
		

		
			A.the amount required to meet the need created by the hardship, including amounts necessary to pay taxes reasonably anticipated as a result of the distribution (as determined in the Committee’s sole discretion); or 
		

		
			B.the aggregate value of your deferred and vested MSU awards.
		

		
			(v)Distributions for an Unforeseeable Emergency shall be made as soon as practicable following approval of a request for distribution by the Committee.
		

		
			3.    Stock Ownership Restrictions. If you are subject to Intersil Common Stock ownership requirements established by Intersil’s Board of Directors or the Committee, you will not be permitted to sell your Intersil Common Stock (even if vested and not subject to a deferral commitment) if you have not satisfied the Common Stock ownership requirements established for you or if the sale of your Intersil Common Stock will result in your failure to satisfy those requirements.  However, you may be able to sell your Intersil Common Stock without regard to the applicable Common Stock ownership requirements if you establish that you have experienced an Unforeseeable Emergency.  A sale will only be permitted in the amount necessary to satisfy that Unforeseeable Emergency. 
		

		
			4.    Non-Transferability of Your MSU Award.  You may not sell, transfer, assign or in any other way convey or encumber any portion of the MSU award issued to you.
		

		
			5.    Shareholder Rights.  You will have no rights as a shareholder (including, without limitation, voting rights and dividend rights) with respect to any Intersil Common Stock covered by your MSU award until you receive Intersil Common Stock in settlement thereof.  Notwithstanding the foregoing, you will have the right to receive dividend equivalents on the unvested or deferred portion of your MSU award, as set forth in Section 6 below. 
		

		
			6.    Right to Receive Dividend Equivalents.  During the vesting period and deferral periods, you will accrue the right to receive an amount equal to the dividends (if any) paid on the Intersil Common Stock attributable to your MSU award as if you owned the underlying Intersil Common Stock.  These amounts will be held by the Company and distributed without interest on the applicable payment date for the portion of the MSU award to which such dividends relate, and shall be forfeited to the extent that the applicable portion of the MSU award is forfeited.  
		

		
			7.    Nature of Unvested Common Stock Subject to the MSU Award.  The MSU award represents the right to acquire a certain number of shares of Intersil Common Stock upon vesting.  Your MSU award does not constitute Intersil Common Stock and no shares of Intersil Common Stock will be issued or transferred to you until all requirements applicable to the MSU award have been satisfied, as determined by the Committee.  
		

		
			8.    Nature of Deferred Shares.  No shares of Intersil Common Stock (or dividend equivalents) will be issued or transferred to you until all requirements applicable to your deferral under Section 2 of these Terms and Conditions have been satisfied as determined by the Committee.  The obligation to make distributions pursuant to MSU awards for which a deferral election has previously been made will be an obligation solely of the Company.  Notwithstanding any other 
		

		 

 

		provision of the MSU Award Agreement, you and your beneficiaries will be unsecured general creditors of the Company, with no secured or preferential rights to any assets of the Company or any other party in connection with the Company’s obligation to make distributions hereunder.  The Company’s obligation to make distributions hereunder constitutes an unfunded and unsecured promise.
		

		
			9.    Withholding of Taxes.
		

		
			a. Share Withholding.  Upon vesting of this MSU award, or the expiration of a deferral period if you elected to defer receipt of Intersil Common Stock, you may request through the Company’s stock plan service provider to withhold shares of Intersil Common Stock then issued by the Company from the shares otherwise to be received by you in order to satisfy the liability for any amount of tax withholding as required by law.  The number of Shares so withheld shall have an aggregate Fair Market Value on the date of vesting or the last day of the applicable deferral period, as applicable, sufficient to satisfy the applicable withholding taxes (provided that withholding in the form of shares of Intersil Common Stock shall not occur at a rate that exceeds the minimum required federal, state and local statutory withholding rates).
		

		
			b. Withholding Required.  Notwithstanding anything herein to the contrary, your satisfaction of any tax-withholding requirements shall be a condition precedent to the Company’s obligation as may otherwise be provided hereunder to distribute shares of Intersil Common Stock (and dividend equivalents) to you.
		

		
			10.    Delay of Certain Payments.  Notwithstanding any other provision of these Terms and Conditions, if you are a “Specified Employee” as defined in Section 409A of the Code, and if any payment due under these Terms and Conditions would subject you to any penalty tax imposed under Section 409A of the Code if such payment was made within six months after your Separation from Service, then the payments that would be made during such period shall be withheld and paid (without interest) on the first day which is at least six months after the date of your Separation from Service (or within 10 days after the date of your death, if earlier).
		

		
			11.    Incorporation by Reference.  Your MSU award shall be subject to the terms, conditions and limitations set forth in the MSU Award Agreement and the Plan (the terms of which are incorporated herein by reference).  In the event of any contradiction, distinction or differences between the MSU Award Agreement and the terms of the Plan, the terms of the Plan will control.
		

		
			12.    Governing Law.  Your MSU award and the MSU Award Agreement shall be construed in accordance with the laws of the State of Delaware, without regard to the application of any conflicts of laws provisions.
		

		
			13.    Definitions.  The terms “Change in Control,” “Involuntary Termination” and “Voluntary Termination for Good Reason” shall have the meanings set forth in your Executive Change in Control Severance Benefits Agreement, (as amended from time to time).  The terms “Cause,” “Code,” “Committee,” “Disability,” “Fair Market Value” and “Separation from Service” shall have the meanings set forth in the Plan.  
		

		
			14.    Miscellaneous.
		

		
			a.The captions of these Terms and Conditions are not part of the provisions hereof and shall have no force or effect.  These Terms and Conditions may not be amended or modified, except pursuant to a written agreement between you and the Company unless such amendments or modifications are required in order to comply with applicable laws or to preserve deferral of 
		

		 

 

		taxation under Section 409A of the Code.  The invalidity or unenforceability of any provision of these Terms and Conditions shall not affect the validity or enforceability of any other provision of these Terms and Conditions.
		

		
			b.The Committee may make such rules and regulations and establish such procedures for the administration of your MSU award as it deems appropriate.  Without limiting the generality of the foregoing, the Committee may interpret the MSU Award Agreement, with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law.  In the event of any dispute or disagreement as to the interpretation of the MSU Award Agreement or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the MSU Award Agreement, the decision of the Committee shall be final and binding on all persons, including without limitation, you.
		

		
			c.All notices hereunder shall be in writing, and if to the Company or the Committee, shall be delivered to the Board of Directors of the Company or mailed to its principal office, addressed to the attention of the Board of Directors; and if to you, shall be delivered personally, sent by facsimile transmission or mailed to you at the address appearing in the records of the Company.  Such addresses may be changed at any time by written notice to the other party given in accordance with this Section 14(c).
		

		
			d.The failure of you or the Company to insist upon strict compliance with any provision of the MSU Award Agreement or the Plan, or to assert any right that you or the Company, respectively, may have under the MSU Award Agreement or the Plan, shall not be deemed to be a waiver of such provision or right or any other provision or right of the MSU Award Agreement or the Plan.
		

		
			e.Nothing in these Terms and Conditions shall confer on you the right to continue in the service or employment of the Company or interfere in any way with the right of the Company and its stockholders to terminate your service or employment at any time.
		

		
			f.Nothing in these Terms and Conditions, and no action taken pursuant to the provisions of these Terms and Conditions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company or its officers or the Committee, on the one hand, and you or any other person, or entity on the other.  
		

		
			g.Your MSU award is intended to comply with, or be exempt from, Code Section 409A and shall be interpreted in a manner consistent therewith; provided, however, that neither the Company, any of its subsidiaries, the Board of Directors, the Committee or any other person shall have any liability to you if your MSU award is not exempt from, or compliant with, Code Section 409A.  Each payment in a series of payments hereunder shall be treated as a separate payment for purposes of Code Section 409A.   
		

		

		

		 

 

		Schedule 1
		

		
			1)Vesting Schedule
		

		
			Depending upon performance, your MSU award will 100% cliff vest in three (3) years from the date of the Award.
		

		
			 
		

		
			2)Performance Period
		

		
			The Performance Period for your MSU award is three (3) years.
		

		
			 
		

		
			3)Performance Goals and Payout 
		

		
			a.Performance Metric:
		

			
	
			
				 ·
			

			
	
			
			Distribution of your MSU award is based on the Company’s total shareholder return (TSR) and stock price appreciation relative to the TSR and stock price appreciation of the S&P Semiconductor Select Index, as set forth on Schedule 2.  

		
			 
		

		
			b.Plan Structure:
		

			
	
			
				 ·
			

			
	
			
			Intersil TSR performance is measured against TSR performance of  the S&P Semiconductor Select Index of companies (see Schedule 2). During the three years performance period, additions to the S&P Semiconductor Select Index will not be added, however, companies that are removed from the index will be dropped.

			
	
			
				 ·
			

			
	
			
			If Intersil TSR performance results are above the 90.0th percentile, payout is capped at the payout for 90th percentile.

			
	
			
				 ·
			

			
	
			
			If Intersil TSR performance results are at the 50.0th percentile, there will be 100% payout.

			
	
			
				 ·
			

			
	
			
			If Intersil TSR performance results are below the 25.0th percentile, there will be 0% payout.

			
	
			
				 ·
			

			
	
			
			If Intersil TSR performance results are between the 25.0th percentile and the 90.0th percentile, the payout percentage will be linearly interpolated

			
	
			
				 ·
			

			
	
			
			If the average closing price of Intersil common stock on the NASDAQ exchange during the final measurement period of [last three months of performance period] (the “Final Average Stock Price”) is at or above $___.00 and Intersil’s relative TSR is at or above the 75th percentile, the payout will be increased as indicated in the table below.

		
			 
		

			
					
						 

					
						 

					
						 

					
					
						 

					
						 

					
						 $25

					
						 

					
					
						 

					
						 

					
						 

					
						 

					
					
						 

					
						 

					
						 $25

					
						 

					
					
						 

					
						 

					
						 

					
						 

				
	
					
						Percentile

					
						Rank

					
						 

					
					
						Payout

					
						(TSR >0%)

					
						Final Average Stock Price 

					
						<  $__

					
					
						Payout

					
						(TSR >0%)

					
						Final Average Stock Price 

					
						≥ $__

					
					
						Payout

					
						(TSR <0%)

					
						Final Average Stock Price 

					
						< $__

					
					
						Payout

					
						(TSR <0%)

					
						Final Average Stock Price 

					
						≥ $__

				
	
					
						90.0th

					
					
						200%

					
					
						300%

					
					
						100%

					
					
						150%

				
	
					
						75.0th

					
					
						150%

					
					
						225%

					
					
						100%

					
					
						150%

				
	
					
						62.5th

					
					
						125%

					
					
						125%

					
					
						100%

					
					
						100%

				
	
					
						50.0th

					
					
						100%

					
					
						100%

					
					
						100%

					
					
						100%

				
	
					
						37.5th

					
					
						75%

					
					
						75%

					
					
						75%

					
					
						75%

				
	
					
						25.0th

					
					
						50%

					
					
						50%

					
					
						50%

					
					
						50%

				
	
					
						No TSR Threshold

				

		

		

		 

 

		 
		

		
			c.Calculation of TSR to Determine Final Equity Award Distribution:
		

		
			Effective on the date of issuance of the MSU award, which is the beginning of the performance period, the TSR performance baseline will be calculated using the three (3) month period preceding the issuance date and applying a “simple” average (un-weighted) compared to the three (3)  month period preceding the end of the Performance Period  and applying a “simple” average (un-weighted) at the end of the Performance Period against the peer group. 
		

		
			 
		

		
			d.Treatment of Dividends:
		

		
			Dividends are assumed to be reinvested for purposes of determining the TSR.
		

		
			 
		

		
			e.The Compensation Committee reviews and approves the TSR calculation that determines the earned amount of equity that will be distributed in respect of your MSU award.
		

		
			 
		

		
			4)Peer Group Comparison
		

		
			a.See Schedule 2 (attached) for the peer group of companies.  The Compensation Committee has selected the S&P Semiconductor Select Index as the peer group of companies to use when measuring TSR performance.  The Compensation Committee  has the authority to use discretion in determining the ultimate peer group if the number of peer group companies falls below ten within the Performance Period.  
		

		
			 
		

		
			b.If a company in the peer group is no longer the surviving entity or a publicly traded company, the company shall no longer be considered a peer company when calculating the performance comparison.
		

		
			 
		

		

		

		 

 

		Schedule 2
		

		
			Peer Group of Companies
		

			
					
						 

				
	
					
						S&P Semiconductor Select IndexTKR Exhibit 10.1 3.31.15

Exhibit 10.1

THE TIMKEN COMPANY 

Performance-Based Restricted Stock Unit Agreement

WHEREAS, __________ (“Grantee”) is an employee of The Timken Company (the “Company”) or a Subsidiary; and

WHEREAS, the grant of performance-based Restricted Stock Units evidenced hereby was authorized by a resolution of the Compensation Committee (the “Committee”) of the Board that was duly adopted on February 12, 2015, and the execution of a performance-based Restricted Stock Unit Agreement in the form hereof (this “Agreement”) was authorized by a resolution of the Committee duly adopted on February 12, 2015.

NOW, THEREFORE, pursuant to The Timken Company 2011 Long-Term Incentive Plan (the “Plan”) and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to Grantee the grant, effective ________ __, ____ (the “Date of Grant”), of __________ Restricted Stock Units (the “PRSUs”).  Subject to the attainment of the Management Objectives described in Section 3 of this Agreement, Grantee may earn between 0% and 200% of the PRSUs.  All terms used in this Agreement with initial capital letters that are defined in the Plan and not otherwise defined herein shall have the meanings assigned to them in the Plan.

		
	1.
	Payment of PRSUs.  The PRSUs will become payable in accordance with the provisions of Section 6 of this Agreement if the Restriction Period lapses and Grantee’s right to receive payment for the PRSUs becomes nonforfeitable (“Vest,” “Vesting” or “Vested”) in accordance with Section 3 and Section 4 of this Agreement.

		
	1.
	PRSUs Not Transferrable.  None of the PRSUs nor any interest therein or in any Common Shares underlying such PRSUs will be transferable other than by will or the laws of descent and distribution prior to payment.  

		
	2.
	Vesting of PRSUs.  

		
	(a)
	Subject to the terms and conditions of Section 4 and Section 5 of this Agreement, the PRSUs will Vest on the basis of the relative achievement of the Management Objective or Management Objectives approved by the Committee on the Date of Grant (the “Performance Metrics”) for the period from January 1, 2015 through December 31, 2017 (the “Performance Period”) as follows:

		
	(i)
	The applicable percentage of the PRSUs that shall be earned by Grantee for the Performance Period shall be determined by reference to the Performance Matrix for the Performance Period 

1
CLI-1932693v15 

Exhibit 10.1

approved by the Committee on the Date of Grant (the “Performance Matrix”);
		
	(ii)
	In the event that the Company’s achievement with respect to one of the Performance Metrics is between the performance levels specified in the Performance Matrix, the applicable percentage of the PRSUs that shall be earned by Grantee for the Performance Period shall be determined by the Committee using straight-line interpolation; and

		
	(iii)
	The Vesting of the PRSUs pursuant to this Section 3 or pursuant to Section 4 shall be contingent upon a determination of the Committee that the Performance Metrics, as described in this Section 3, have been satisfied. 

		
	(b)
	If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, the manner in which it conducts business or other events or circumstances render the Performance Metrics specified in this Section 3 to be unsuitable, the Committee may modify such Performance Metrics or any related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate; provided, however, that no such action may result in the loss of the otherwise available exemption of the PRSUs under Section 162(m) of the Code. 

		
	(c)
	All determinations involving the Performance Metrics set forth in this Section 3 shall be calculated based on U.S. Generally Accepted Accounting Principles in effect at the time the Performance Metrics are established without regard to any change in accounting standards that may be required by the Financial Accounting Standards Board after the Performance Metrics are established. 

		
	(d)
	Subject to Section 3(a), Section 3(b) and Section 3(c), the PRSUs earned with respect to the Performance Period will Vest if Grantee is in the continuous employ of the Company or a Subsidiary from the Date of Grant through the last day of the Performance Period.  For purposes of this Agreement, the continuous employment of Grantee with the Company or a Subsidiary will 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 Grantee’s employment among the Company and its Subsidiaries.

		
	3.
	Alternative Vesting of PRSUs.  Notwithstanding the provisions of Section 3 of this Agreement, and subject to the payment provisions of Section 6 hereof, Grantee shall Vest in some or all of the PRSUs under the following circumstances: 

2
CLI-1932693v15 

Exhibit 10.1

		
	(a)
	Death or Disability:   If Grantee should die or become permanently disabled while in the employ of the Company or a Subsidiary, then Grantee shall Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such death or permanent disability and the denominator of which is 36.  PRSUs that Vest in accordance with this Section 4(a) will be paid as provided for in Section 6(a) of this Agreement.  For purposes of this Agreement, “permanently disabled” means 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 and is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.

		
	(b)
	Retirement:   If Grantee should retire with the Company’s consent, then Grantee shall Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such retirement and the denominator of which is 36.  PRSUs that Vest in accordance with this Section 4(b) will be paid as provided for in Section 6(a) of this Agreement.  For purposes of this Agreement, “retire with the Company’s consent” means:  (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.

		
	(c)
	Change in Control:  

		
	(i)
	Upon a Change in Control occurring during the Restriction Period while Grantee is an employee of the Company or a Subsidiary or during the period that Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(a), 4

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Exhibit 10.1

(b), 4(d) or 4(e), to the extent the PRSUs have not been forfeited, the PRSUs will Vest (except to the extent that a Replacement Award is provided to Grantee for the PRSUs) as follows:  the Performance Period will terminate and the Committee as constituted immediately before the Change of Control will determine and certify the Vested PRSUs based on actual performance through the most recent date prior to the Change of Control for which achievement of the Performance Metrics can reasonably be determined.  PRSUs that Vest in accordance with this Section 4(c)(i) will be paid as provided for in Section 6(b) of this Agreement.  
		
	(ii)
	For purposes of this Agreement, a “Replacement Award” means an award (A) of performance-based restricted stock units, (B) that has a value at least equal to the value of the PRSUs, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control), (D) the tax consequences of which, under the Code, if Grantee is subject to U.S. federal income tax under the Code, are not less favorable to Grantee than the tax consequences of the PRSUs, (E) that vests upon a termination of Grantee’s employment with Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control) for Good Reason by Grantee or without Cause by such employer within a period of two years after the Change in Control based on actual performance through the date of such termination, and (F) the other terms and conditions of which are not less favorable to Grantee than the terms and conditions of the PRSUs (including the provisions that would apply in the event of a subsequent Change in Control).  A Replacement Award may be granted only to the extent it conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or otherwise does not result in the PRSUs or Replacement Award failing to comply with Section 409A of the Code.  Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the PRSUs if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 4(c)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

		
	(iii)
	For purposes of Section 4(c)(ii), “Cause” will be defined not less favorably with respect to Grantee than:  any intentional act of fraud, embezzlement or theft in connection with the Grantee’s 

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Exhibit 10.1

duties with the Company, any intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary, or any intentional wrongful engagement in any competitive activity that would constitute a material breach of Grantee’s duty of loyalty to the Company, and no act, or failure to act, on the part of Grantee shall be deemed “intentional” unless done or omitted to be done by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in or not opposed to the best interest of the Company; provided, that for any Grantee who is party to an individual severance or employment agreement defining Cause, “Cause” will have the meaning set forth in such agreement.  For purposes of Section 4(c)(ii), “Good Reason” will be defined to mean:  a material reduction in the nature or scope of the responsibilities, authorities or duties of Grantee attached to Grantee’s position held immediately prior to the Change in Control, a change of more than 60 miles in the location of Grantee’s principal office immediately prior to the Change in Control, or a material reduction in Grantee’s remuneration upon or after the Change in Control; provided, that no later than 90 days following an event constituting Good Reason Grantee gives notice to the Company of the occurrence of such event and the Company fails to cure the event within 30 days following the receipt of such notice.
		
	(iv)
	If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding PRSUs which at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control and will be paid as provided for in Section 6(b) of this Agreement.

		
	(d)
	Divestiture:  If Grantee’s employment with the Company or a Subsidiary terminates as the result of a divestiture, then Grantee shall Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such termination and the denominator of which is 36.  PRSUs that Vest in accordance with this Section 4(d) will be paid as provided for in Section 6(a) of this Agreement.  For the purposes of this 

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Exhibit 10.1

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.
		
	(e)
	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 Grantee shall Vest in a number of PRSUs equal to the product of (x) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (y) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the end of the specified severance period and the denominator of which is 36.  PRSUs that Vest in accordance with this Section 4(e) will be paid as provided for in Section 6(a) of this Agreement.  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 (A) a reduction in force leading to a permanent downsizing of the salaried workforce, (B) a permanent shutdown of the plant, department or subdivision in which Grantee works, or (C) an elimination of position.

		
	4.
	Forfeiture of PRSUs.  Any PRSUs that have not Vested pursuant to Section 3 or Section 4 at the end of the Performance Period will be forfeited automatically and without further notice after the end of the Performance Period (or earlier  if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the end of the Performance Period for any reason other than as described in Section 4).

		
	5.
	Form and Time of Payment of PRSUs.

		
	(a)
	General.  Subject to Section 5 and Section 6(b), payment for Vested PRSUs will be made in cash or Common Shares (as determined by the Committee) between January 1, 2018 and March 15, 2018.

		
	(b)
	Other Payment Event.  Notwithstanding Section 6(a), to the extent that the PRSUs are Vested on the date of a Change in Control, Grantee will receive payment for Vested PRSUs in cash or Common Shares (as determined by 

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Exhibit 10.1

the Committee) on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Section 6(a).
		
	6.
	Payment of Dividend Equivalents.  With respect to each of the PRSUs covered by this Agreement, Grantee shall be credited on the records of the Company with dividend equivalents in an amount equal to the amount per Common Share of any cash dividends declared by the Board on the outstanding Common Shares during the period beginning on the Date of Grant and ending either on the date on which Grantee receives payment for the PRSUs pursuant to Section 6 hereof or at the time when the PRSUs are forfeited in accordance with Section 5 of this Agreement.  These dividend equivalents will accumulate without interest and, subject to the terms and conditions of this Agreement, will be paid at the same time, to the same extent and in the same manner, in cash or Common Shares (as determined by the Committee) as the PRSUs for which the dividend equivalents were credited.

		
	7.
	Detrimental Activity and Recapture.  

		
	(a)
	Notwithstanding anything in this Agreement to the contrary, in the event that, as determined by the Committee, Grantee shall engage in Detrimental Activity during employment with the Company or a Subsidiary, the PRSUs will be forfeited automatically and without further notice at the time of that determination notwithstanding any other provision of this Agreement.

		
	(b)
	If a Restatement occurs and the Committee determines that Grantee is personally responsible for causing the Restatement as a result of Grantee’s personal misconduct or any fraudulent activity on the part of Grantee, then the Committee has discretion to, based on applicable facts and circumstances and subject to applicable law, cause the Company to recover all or any portion (but no more than 100%) of the PRSUs earned or payable to Grantee for some or all of the years covered by the Restatement. The amount of any earned or payable PRSUs recovered by the Company shall be limited to the amount by which such earned or payable PRSUs exceeded the amount that would have been earned by or paid to Grantee had the Company’s financial statements for the applicable restated fiscal year or years been initially filed as restated, as reasonably determined by the Committee. The Committee shall also determine whether the Company shall effect any recovery under this Section 8(b) by: (i) seeking repayment from Grantee; (ii) reducing, except with respect to any non-qualified deferred compensation under Section 409A of the Code, 

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Exhibit 10.1

the amount that would otherwise be payable to Grantee under any compensatory plan, program or arrangement maintained by the Company (subject to applicable law and the terms and conditions of such plan, program or arrangement); (iii) by withholding, except with respect to any non-qualified deferred compensation under Section 409A of the Code, payment of future increases in compensation (including the payment of any discretionary bonus amount) that would otherwise have been made to Grantee in accordance with the Company’s compensation practices; or (iv) by any combination of these alternatives.  For purposes of this Agreement, “Restatement” means a restatement of any part of the Company’s financial statements for the current fiscal year or any years thereafter due to material noncompliance with any financial reporting requirement under the U.S. securities laws applicable to such fiscal year or years.
		
	8.
	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 obligated to issue any of the Common Shares covered by this Agreement if the issuance thereof would result in violation of any such law.

		
	9.
	Adjustments.  Subject to Section 12 of the Plan, the Committee shall make any adjustments in the number of PRSUs or kind of shares of stock or other securities underlying the PRSUs 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 10(a) or 10(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.

		
	10.
	Withholding Taxes.  If the Company is required to withhold federal, state, local, employment, or foreign taxes, or, to the extent permitted under Section 409A of the Code, any other applicable taxes, in connection with Grantee’s right to receive Common Shares under this Agreement (regardless of whether Grantee is entitled to the delivery of any Common Shares at that time), and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of any Common Shares or any other benefit provided for under this Agreement that Grantee make arrangements satisfactory to the Company for payment of the balance of the taxes.  Grantee may satisfy such tax obligation by paying the Company cash via personal check.  Alternatively, Grantee may elect 

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Exhibit 10.1

that all or any part of such tax obligation be satisfied by the Company’s retention of a portion of the Common Shares provided for under this Agreement or by Grantee’s surrender of a portion of the Common Shares that he or she has owned for at least 6 months.  In no event, however, shall the Company accept Common Shares for payment of taxes in excess of required tax withholding rates.  If an election is made to satisfy Grantee’s tax obligation with the release or surrender of Common Shares, the Common Shares shall be credited in the following manner: (a) at the Market Value per Share on the date of delivery if the tax obligations arise due to the delivery of Common Shares under this Agreement; or (b) at the Market Value per Share on the date the tax obligation arises, if for a reason other than the delivery of Common Shares under this Agreement.
		
	11.
	Right to Terminate Employment.  No provision of this Agreement will 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.

		
	12.
	Relation to Other Benefits.  Any economic or other benefit to Grantee under this Agreement or the Plan will 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 will 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.

		
	13.
	Amendments.  Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable to this Agreement; provided, however, that no amendment will adversely affect the rights of Grantee with respect to the Common Shares or other securities covered by this Agreement without Grantee’s consent.  Notwithstanding the foregoing, the limitation requiring the consent of Grantee to certain amendments will not apply to any amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code.

		
	14.
	Severability.  In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions of this Agreement, and the remaining provisions of this Agreement will continue to be valid and fully enforceable.

		
	15.
	Governing Law.  This Agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Ohio.

		
	16.
	Compliance with Section 409A of the Code.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Grantee.  This Agreement and the Plan shall be 

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Exhibit 10.1

administered in a manner consistent with this intent.  Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

[SIGNATURES ON FOLLOWING PAGE]

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Exhibit 10.1

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the award of PRSUs covered hereby, subject to the terms and conditions of the Plan and the terms and conditions herein above set forth.

_________________________________
                               Grantee

Date:   ___________________________

This Agreement is executed by the Company on this __ day of ___________, ____.

The Timken Company

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

CLI-1932693v15                                                            10

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