Severance Agreement - TIMKEN CO - 3-30-1994 by TKR-Agreements

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									EXHIBIT 10.3f SEVERANCE AGREEMENT This Severance Agreement (the "Agreement") is dated as of the _______ day of ________________________, 19_______, between The Timken Company, an Ohio corporation, and <Employee> (the "Employee"). RECITALS The Employee is a key employee of The Timken Company (the "Company") and has made and is expected to continue to make major contributions to the profitability, growth and financial strength of the Company. The Company wishes to induce its key employees to remain in the employment of the Company and to assure itself of continuity of management in the event of any threatened or actual change in control of the Company. The Company recognizes that a termination of employment may occur following a change in control in circumstances where the Employee should receive additional compensation for services theretofore rendered and for other good reasons, the appropriate amount of which would be difficult to ascertain. Hence, the Company has agreed to provide as severance benefits the amounts set forth herein. NOW, THEREFORE, in consideration of the premises, including the Release provided for in Section 6 hereof, the Company and the Employee hereby agree as follows: 1. DEFINITIONS: 1.1 LIMITED PERIOD: The term "Limited Period" shall mean that period of time commencing on the date of a Change in Control and continuing for a period of three years. 1.2 NOTICE OF TERMINATION: The term "Notice of Termination" shall mean a written notice delivered to the Employee in the manner specified in Section 8 of this Agreement, which notice indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment. 1.3 CHANGE IN CONTROL: The term "Change in Control" shall mean the occurrence of any of the following events: (a) All or substantially all of the assets of the Company are sold or transferred to another corporation or entity, or the Company is merged, consolidated or reorganized into or with another corporation or entity, with the result that upon conclusion 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 acquiring corporation or entity are owned, directly or indirectly, by the shareholders of the Company generally prior to the transaction; or

(b) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 30% or more of the combined voting power of the then-outstanding voting securities of the Company; or (c) The Company shall file a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction;

(b) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 30% or more of the combined voting power of the then-outstanding voting securities of the Company; or (c) The Company shall file a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or (d) The individuals who, at the beginning of any period of two consecutive calendar years, constituted the Directors of the Company cease for any reason to constitute at least a majority thereof unless the nomination for election by the Company's stockholders of each new Director of the Company was approved by a vote of at least two-thirds of the Directors of the Company still in office who were Directors of the Company at the beginning of any such period. 1.4 COMPANY TERMINATION EVENT: The term "Company Termination Event" shall mean the termination, prior to any Employee Termination Event, of the employment of the Employee by the Company in any of the following events: (a) The Employee's death during the Limited Period; (b)If the Employee shall become eligible during the Limited Period to receive and begins actually to receive longterm disability benefits under The Long Term Disability Program of The Timken Company (the "LTD Plan") or any successor plan as in effect immediately prior to the date the Change in Control occurred in an amount not less than the benefits provided by such plans as in effect as of such date; or (c)For Cause. 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 during the Limited Period and such is materially harmful to the Company: (i) An intentional act of fraud, embezzlement or theft in connection with his duties with the Company and resulting or intended to result directly or indirectly in substantial personal gain to the Employee at the expense of the Company; -2-

(ii)Intentional wrongful disclosure of secret processes or confidential information of the Company or a subsidiary; or (iii)Intentional wrongful engagement in any Competitive Activity which would constitute a material breach of the duty of loyalty. For purposes of this Agreement, the term "Competitive Activity" shall mean the Employee's participation, without the written consent of an officer of the Company, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company and such enterprise's sales of any product or service competitive with any product or service of the Company amounted to 25% of such enterprise's net sales for its most recently completed fiscal year and if the Company's net sales of said product or service amounted to 25% of the Company's net sales for its most recently completed fiscal year. "Competitive Activity" shall not include (i) the mere ownership of securities in any enterprise and exercise of rights appurtenant thereto or (ii) participation in management of any enterprise or business operation thereof other than in connection with the competitive operation of such enterprise. For purposes of this Agreement, no act, or failure to act, on the part of the Employee shall be deemed

(ii)Intentional wrongful disclosure of secret processes or confidential information of the Company or a subsidiary; or (iii)Intentional wrongful engagement in any Competitive Activity which would constitute a material breach of the duty of loyalty. For purposes of this Agreement, the term "Competitive Activity" shall mean the Employee's participation, without the written consent of an officer of the Company, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company and such enterprise's sales of any product or service competitive with any product or service of the Company amounted to 25% of such enterprise's net sales for its most recently completed fiscal year and if the Company's net sales of said product or service amounted to 25% of the Company's net sales for its most recently completed fiscal year. "Competitive Activity" shall not include (i) the mere ownership of securities in any enterprise and exercise of rights appurtenant thereto or (ii) participation in management of any enterprise or business operation thereof other than in connection with the competitive operation of such enterprise. For purposes of this Agreement, 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 the Company. 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 paragraph (c) 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. 1.5 EMPLOYEE TERMINATION EVENT: The term "Employee Termination Event" shall mean the termination of the employment of the Employee (including a decision to retire if eligible under The 1984 Retirement Plan for Salaried Employees of The Timken Company [the "Retirement Plan"]) by the Employee in any of the following events: (a) A determination by the Employee made in good faith that upon or after the occurrence of a Change in Control: (i) a significant reduction or other adverse change has occurred in the nature or scope of the responsibilities, authorities, duties, powers or functions of the Employee attached to the Employee's position held immediately prior to the Change in Control; (ii) a change of more than 60 miles has occurred in the location of the Employee's principal office immediately prior to the Change in Control; or (iii) the Employee shall be required to travel away from his office in the course of discharging his responsibilities or duties of his -3-

employment more than 14 consecutive calendar days or an aggregate of more than 90 calendar days in any consecutive 365 calendar-day period without in either case his approval; (b) A failure to elect, reelect or otherwise maintain the Employee in the office or position in the Company which the Employee held immediately prior to a Change in Control, or removal of the Employee as a Director of the Company (or a successor thereto), if the Employee shall have been a Director of the Company immediately prior to the Change in Control; (c) A reduction by the Company in the Employee's annual base salary as in effect on the date this Agreement becomes operative or as the same may be increased from time to time ("Base Salary"); (d) If in any calendar year, or portion of a calendar year, during the Limited Period in or for which the Company pays to any employee any cash incentive compensation (whether pursuant to the Company's Management Performance Plan or any successor similar plan or through any other means [together, "Incentive Payments"]), the

employment more than 14 consecutive calendar days or an aggregate of more than 90 calendar days in any consecutive 365 calendar-day period without in either case his approval; (b) A failure to elect, reelect or otherwise maintain the Employee in the office or position in the Company which the Employee held immediately prior to a Change in Control, or removal of the Employee as a Director of the Company (or a successor thereto), if the Employee shall have been a Director of the Company immediately prior to the Change in Control; (c) A reduction by the Company in the Employee's annual base salary as in effect on the date this Agreement becomes operative or as the same may be increased from time to time ("Base Salary"); (d) If in any calendar year, or portion of a calendar year, during the Limited Period in or for which the Company pays to any employee any cash incentive compensation (whether pursuant to the Company's Management Performance Plan or any successor similar plan or through any other means [together, "Incentive Payments"]), the amount of Incentive Payments received by or awarded to the Employee is less than an amount equal to the Employee's Average Incentive Pay. For purposes of this Agreement, "Average Incentive Pay" shall mean the sum of the Incentive Payments received by the Employee for the three most recent years for which the Company has made Incentive Payments or for which the Company has considered and declined to pay Incentive Payments divided by three (or divided by such lesser number if Employee was not eligible to receive an Incentive Payment as a participant during all or a portion of said three year period); (e) The failure by the Company to continue in effect without substantial change any compensation or benefit plan in which the Employee participates, or the failure by the Company to continue the Employee's participation therein; or the taking of any action by the Company or its subsidiaries which would directly or indirectly materially reduce any of the benefits of such plans enjoyed by the Employee at the time of the Change in Control, or the failure by the Company or its subsidiaries to provide the Employee with the number of paid vacation days to which the Employee is entitled on the basis of years of service with the Company or its subsidiaries in accordance with the normal vacation policy of the Company or of the subsidiary by which the Employee is employed as in effect at the time of the Change in Control, or the taking of any other action by the Company or its subsidiaries which materially adversely changes the conditions or perquisites of the Employee's employment; (f) The purported termination of the Employee's employment which is not effected pursuant to a Notice of -4-

Termination satisfying the requirements of Section 1.2 of this Agreement, which purported termination shall not be effective for purposes of this Agreement; or (g) A failure of any successor company to execute the agreement required by Section 7 of this Agreement. 1.6 SEVERANCE AMOUNT: The term "Severance Amount" shall mean a lump sum amount equal to the sum of: (a) Three times the Employee's Base Salary for the year in which the Employee's employment is terminated; (b) Three times the Employee's Average Incentive Pay; (c) The Supplemental Pension Benefit; and (d) The Supplemental SIP Benefit. 1.7 CODE: The term "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.8 SUPPLEMENTAL PENSION BENEFIT: The term "Supplemental Pension Benefit" shall mean (a) less (b), where:

Termination satisfying the requirements of Section 1.2 of this Agreement, which purported termination shall not be effective for purposes of this Agreement; or (g) A failure of any successor company to execute the agreement required by Section 7 of this Agreement. 1.6 SEVERANCE AMOUNT: The term "Severance Amount" shall mean a lump sum amount equal to the sum of: (a) Three times the Employee's Base Salary for the year in which the Employee's employment is terminated; (b) Three times the Employee's Average Incentive Pay; (c) The Supplemental Pension Benefit; and (d) The Supplemental SIP Benefit. 1.7 CODE: The term "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.8 SUPPLEMENTAL PENSION BENEFIT: The term "Supplemental Pension Benefit" shall mean (a) less (b), where: (a) is the sum of the future pension benefits (converted to a lump sum of actuarial equivalence) which the Employee would have been entitled to receive at or after the end of the Limited Period under (i) the Retirement Plan, (ii) any annuity distributed to the Employee as a result of the termination on October 31, 1984 of the Retirement Plan for Salaried Employees of The Timken Company, (iii) any Employee Excess Benefits Agreement ("Excess Agreement"), and (iv) the Supplemental Pension Plan of The Timken Company ("Supplemental Plan") (any provision in the Excess Agreement and the Supplemental Plan to the contrary notwithstanding, (a) Employee shall be assumed to be eligible for early retirement under the Retirement Plan, the Excess Agreement and the Supplemental Plan upon attaining the minimum age required under the Retirement Plan, the Excess Agreement and the Supplemental Plan, respectively, (b) Employee's benefits under the Retirement Plan, the Excess Agreement and the Supplemental Plan shall be vested and non-forfeitable, and (c) Employee shall be deemed to have satisfied any other provision in the Excess Agreement and the Supplemental Plan which is or may be a condition to his receipt of benefits thereunder), if the Employee had remained in the full-time employment of the Company until the end of the Limited Period at his Base Salary for the calendar year in which the Employee's employment is terminated, and at the Employee's Average Incentive Pay; and (b) is the sum of (i) the future pension benefits (converted to a lump sum of actuarial equivalence) which the Employee is entitled to receive at or after the date the Employee's employment is terminated under (ii) the Retirement Plan, and (iii) any annuity distributed to the Employee as a result of the termination on October -5-

31, 1984 of the Retirement Plan for Salaried Employees of The Timken Company. The calculations of the Supplemental Pension Benefit (and its actuarial equivalence) shall be made, as of the date the Employee's employment is terminated, by The Wyatt Company or such other independent actuary appointed by the administrator of the Retirement Plan and acceptable to the Employee. The lump sum of actuarial equivalence shall be calculated using the UP-1984 Mortality Table and 120 percent of the interest rate(s) which would be used (as of the beginning of the calendar year in which the date of distribution occurs) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. 1.9 SUPPLEMENTAL SIP PLAN BENEFIT: The "Supplemental SIP Plan Benefit" shall mean: (a) The amount of the matching contributions that would have been made to The Timken Company Savings and Investment Pension Plan ("SIP Plan") by the Company and allocated to the Employee's account thereunder as of

31, 1984 of the Retirement Plan for Salaried Employees of The Timken Company. The calculations of the Supplemental Pension Benefit (and its actuarial equivalence) shall be made, as of the date the Employee's employment is terminated, by The Wyatt Company or such other independent actuary appointed by the administrator of the Retirement Plan and acceptable to the Employee. The lump sum of actuarial equivalence shall be calculated using the UP-1984 Mortality Table and 120 percent of the interest rate(s) which would be used (as of the beginning of the calendar year in which the date of distribution occurs) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. 1.9 SUPPLEMENTAL SIP PLAN BENEFIT: The "Supplemental SIP Plan Benefit" shall mean: (a) The amount of the matching contributions that would have been made to The Timken Company Savings and Investment Pension Plan ("SIP Plan") by the Company and allocated to the Employee's account thereunder as of the end of the Limited Period if the Employee had remained in the full-time employment of the Company until the end of the Limited Period at his Base Salary for the calendar year in which the Employee's employment is terminated, at the Employee's Average Incentive Pay, and assuming the Employee's salary deferral was at the maximum permissible level; less (b) The amount of the matching contributions made to the SIP Plan by the Company and allocated to the Employee's account thereunder at the date the Employee's employment is terminated. 2. OPERATION OF AGREEMENT: This Agreement shall be effective immediately upon its execution, but anything in this Agreement to the contrary notwithstanding, neither this Agreement nor any of its provisions shall be operative unless and until a Change in Control has occurred. Upon the occurrence of a Change in Control, this Agreement and all of its provisions shall become operative immediately. 3. SEVERANCE COMPENSATION: 3.1 SEVERANCE COMPENSATION: If the Company shall terminate the Employee's employment during the Limited Period other than pursuant to a Company Termination Event, or if the Employee shall voluntarily terminate his employment during the Limited Period pursuant to an Employee Termination Event, then the Company shall pay as severance compensation to the Employee a lump sum cash payment in the amount of the Severance Amount. The payment of the Severance Amount required by this Section 3.1 and any Gross-Up Payment initially determined to be required by Section 3.5 shall, subject to execution and delivery by the Employee of the Release described in Section 6 hereof, and the expiration of all applicable rights of the Employee to revoke the Release or any provision thereof, be made to the Employee within thirty calendar days of the date of termination of his employment. Upon receipt of the Severance Amount, and since the Severance Amount includes a Supplemental Pension Benefit, the Employee -6-

hereby retroactively waives participation in any non-qualified pension plan of, or benefits under any Employee Excess Benefits Agreement, with the Company providing for benefits in excess of those permitted by the Code to be paid under the Retirement Plan, and which measures service and compensation under such Plan as a basis for benefits. 3.2 COMPENSATION THROUGH TERMINATION: The Company shall pay the Employee (i) his full Base Salary through the date of the termination of the Employee's employment; and (ii) an amount equivalent to the Average Incentive Pay multiplied by a fraction, the numerator of which is the number of days in the current calendar year that have expired prior to the Employee's termination of employment and the denominator of which is three hundred sixty-five. 3.3 SET-OFF: There shall be no right of set-off or counterclaim against, or delay in, any payment of the Severance Amount or the Gross-Up Payment by the Company to the Employee provided for in this Agreement in respect of any claim against or debt or obligation of the Employee, whether arising hereunder or otherwise.

hereby retroactively waives participation in any non-qualified pension plan of, or benefits under any Employee Excess Benefits Agreement, with the Company providing for benefits in excess of those permitted by the Code to be paid under the Retirement Plan, and which measures service and compensation under such Plan as a basis for benefits. 3.2 COMPENSATION THROUGH TERMINATION: The Company shall pay the Employee (i) his full Base Salary through the date of the termination of the Employee's employment; and (ii) an amount equivalent to the Average Incentive Pay multiplied by a fraction, the numerator of which is the number of days in the current calendar year that have expired prior to the Employee's termination of employment and the denominator of which is three hundred sixty-five. 3.3 SET-OFF: There shall be no right of set-off or counterclaim against, or delay in, any payment of the Severance Amount or the Gross-Up Payment by the Company to the Employee provided for in this Agreement in respect of any claim against or debt or obligation of the Employee, whether arising hereunder or otherwise. 3.4 INTEREST ON OVERDUE PAYMENTS: Without limiting the rights of the Employee at law or in equity, if the Company fails to make any payment required to be made under this Agreement on a timely basis, the Company shall pay interest on the amount thereof at an annualized rate of interest equal to eighteen percent (18%). 3.5 INDEMNIFICATION: (a) Anything in this Agreement to the contrary notwithstanding, in the event that this Agreement shall become operative and it shall be determined (as hereafter provided) that any payment or distribution by the Company to or for the benefit of the Employee, whether paid hereunder or paid or payable or distributed or distributable pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse of termination of any of the foregoing (individually and collectively a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered "contingent on a change in ownership or control" of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, being hereafter collectively referred to as the "Excise Tax"), then the Employee shall be entitled to receive an additional payment or payments (individually and collectively, a "Gross-Up Payment"). The Gross-Up Payment shall be in an amount such that, after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Employee retains a portion of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. (b) Subject to the provisions of paragraph (e) of this Section 3.5, all determinations required to be made under this Section 3.5, including whether an Excise Tax is payable by the Employee and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Employee and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized accounting firm (the "Accounting Firm") selected by the Employee in his sole discretion. The Employee shall direct the Accounting Firm to submit its determination and detailed supporting -7-

calculations to both the Company and the Employee within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Employee. If the Accounting Firm determines that any Excise Tax is payable by the Employee, the Company shall pay the required Gross-Up Payment to the Employee within five business days after receipt of such determination and calculations with respect to any Payment to the Employee. The federal tax returns filed by the Employee shall be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Employee. If the Accounting Firm determines that no Excise Tax is payable by the Employee, it shall, at the same time as it makes such determination, furnish the Company and the Employee an opinion that the Employee has substantial authority not to report any Excise Tax on his federal income tax return, and that, as a result of such reporting position, the Employee will not be subject to the imposition of accuracy-related penalties under Section 6662(b)(1) of the Code. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) at the time of any determination by the Accounting Firm hereunder, it

calculations to both the Company and the Employee within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Employee. If the Accounting Firm determines that any Excise Tax is payable by the Employee, the Company shall pay the required Gross-Up Payment to the Employee within five business days after receipt of such determination and calculations with respect to any Payment to the Employee. The federal tax returns filed by the Employee shall be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Employee. If the Accounting Firm determines that no Excise Tax is payable by the Employee, it shall, at the same time as it makes such determination, furnish the Company and the Employee an opinion that the Employee has substantial authority not to report any Excise Tax on his federal income tax return, and that, as a result of such reporting position, the Employee will not be subject to the imposition of accuracy-related penalties under Section 6662(b)(1) of the Code. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to paragraph (e) hereof and the Employee thereafter is required to make a payment of any Excise Tax, the Employee shall direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and the Employee as promptly as possible. Any such Underpayment shall be promptly paid by the Company to, or for the benefit of, the Employee within five business days after receipt of such determination and calculations. (c) The Company and the Employee shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Employee, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by paragraph (b) hereof. (d) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by paragraph (b) hereof shall be borne by the Company. If such fees and expenses are initially paid by the Employee, the Company shall reimburse the Employee the full amount of such fees and expenses within five business days after receipt from the Employee of a statement therefor and reasonable evidence of his payment thereof. (e) The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as promptly as practicable but no later than 10 business days after the Employee actually receives notice of such claim and the Employee shall further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by the Employee). The Employee shall not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due. If the Company notifies -8-

the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: (i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; (iii) cooperate with the Company in good faith in order to effectively contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim;

the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: (i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; (iii) cooperate with the Company in good faith in order to effectively contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and shall indemnify and hold harmless the Employee, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of paragraph (e), the Company shall control all proceedings taken in connection with the contest of any claim contemplated by paragraph (e) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that the Employee may participate therein at his own cost and expense) and may, at its option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Employee to pay the tax claimed and sue for a refund, the Company shall advance the amount of such payment to the Employee on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of any such contested claim shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (f) If, after the receipt by the Employee of an amount advanced by the Company pursuant to paragraph (e) hereof, the Employee receives any refund with respect to such claim, the Employee shall (subject to the Company's complying with the requirements of paragraph (e) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes -9-

applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to paragraph (e) hereof, a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Employee pursuant to this Section 3.5. 4. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL RIGHTS: 4.1 The Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of his employment with the Company, or otherwise.

applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to paragraph (e) hereof, a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Employee pursuant to this Section 3.5. 4. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL RIGHTS: 4.1 The Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of his employment with the Company, or otherwise. 4.2 The provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Employee's existing rights, or rights which would accrue solely as a result of the passage of time, under any other employment agreement or other contract, plan or arrangement with the Company. 5. CONFIDENTIAL INFORMATION; COVENANT NOT TO COMPETE: 5.1 The Employee acknowledges that all trade secrets, customer lists and other confidential business information are the exclusive property of the Company. The Employee shall not (following the execution of this Agreement, during the Limited Period, or at any time thereafter) disclose such trade secrets, customer lists, or confidential business information without the prior written consent of the Company. The Employee also shall not (following the execution of this Agreement, during the Limited Period, or at any time thereafter) directly or indirectly, or by act in concert with others, employ or attempt to employ or solicit for any employment competitive with the Company any person(s) employed by the Company. The Employee recognizes that any violation of this Section 5 is likely to result in immediate and irreparable harm to the Company for which money damages are likely to be inadequate. Accordingly, the Employee consents to the entry of injunctive and other appropriate equitable relief by a court of competent jurisdiction, after notice and hearing and the court's finding of irreparable harm and the likelihood of prevailing on a claim alleging violation of this Section 5, in order to protect the Company's rights under this Section. Such relief shall be in addition to any other relief to which the Company may be entitled at law or in equity. The Employee agrees that the state and federal courts located in the State of Ohio shall have jurisdiction in any action, suit or proceeding against Employee based on or arising out of this Agreement and Employee hereby: (i) submits to the personal jurisdiction of such courts; (ii) consents to service of process in connection with any action, suit or proceeding against Employee; and (iii) waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction, venue or service of process. - 10 -

5.2 For a period of time beginning upon the date of the Employee's termination of employment (the "Termination Date") and ending upon the later of (i) the first anniversary of the Termination Date or (ii) the expiration of the Limited Period, the Employee shall not engage or participate, directly or indirectly, in any Competitive Activity, as defined in Section 1.4. For a period of three years from and after the Termination Date, the Employee shall not solicit or cause to be solicited on behalf of a competitor any person or entity which was a customer of the Company during the term of this Agreement, if the Employee had business contacts with such customer while employed by the Company. 6. RELEASE. Payment of the severance payments set forth in Section 3 hereof is conditioned upon the Employee executing and delivering a release satisfactory to the Company releasing the Company from any and all claims, demands, damages, actions and/or causes of action whatsoever, which he may have had on account of the termination of his employment, and including, but not limited to claims of discrimination, including on the basis of sex, race, age, national origin, religion, or handicapped status (with all applicable periods during which the Employee may revoke

5.2 For a period of time beginning upon the date of the Employee's termination of employment (the "Termination Date") and ending upon the later of (i) the first anniversary of the Termination Date or (ii) the expiration of the Limited Period, the Employee shall not engage or participate, directly or indirectly, in any Competitive Activity, as defined in Section 1.4. For a period of three years from and after the Termination Date, the Employee shall not solicit or cause to be solicited on behalf of a competitor any person or entity which was a customer of the Company during the term of this Agreement, if the Employee had business contacts with such customer while employed by the Company. 6. RELEASE. Payment of the severance payments set forth in Section 3 hereof is conditioned upon the Employee executing and delivering a release satisfactory to the Company releasing the Company from any and all claims, demands, damages, actions and/or causes of action whatsoever, which he may have had on account of the termination of his employment, and including, but not limited to claims of discrimination, including on the basis of sex, race, age, national origin, religion, or handicapped status (with all applicable periods during which the Employee may revoke the Release or any provision thereof having expired); and any and all claims, demands and causes of action for retirement (other than under the Retirement Plan or any Company medical plan with respect to claims thereunder) or severance or other termination pay. Such Release shall not, however, apply to the obligations of the Company arising under this Agreement, under any Indemnification Agreement between the Employee and the Company, or rights of indemnification the Employee may have under the Company's Regulations or by statute. 7. SUCCESSORS AND BINDING AGREEMENT: 7.1 SUCCESSORS: The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company by agreement in form and substance satisfactory to the Employee, to assume and agree to perform this Agreement. 7.2 BINDING AGREEMENT: This Agreement shall inure to the benefit of and be enforceable by the Employee's personal or legal representative, executor, administrators, successors, heirs, distributees and legatees. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of or to the Company, including, without limitation, any person acquiring directly or indirectly all or substantially all of the assets of the Company whether by merger, consolidation, sale or otherwise (and such successor shall thereafter be deemed "the Company" for the purposes of this Agreement), but shall not otherwise be assignable by the Company. 8. NOTICES: For the purpose of this Agreement, all communications provided for herein shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as indicated below, or to such other address as any party may have furnished to the other in writing and in accordance - 11 -

herewith, except that notices of change of address shall be effective only upon receipt. If to the Company: The Timken Company 1835 Dueber Avenue, S.W. Canton, OH 44706 If to the Employee <Street> [CITY] 9. GOVERNING LAW: The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. 10. MISCELLANEOUS: No provisions of this Agreement may be amended, modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with, any

herewith, except that notices of change of address shall be effective only upon receipt. If to the Company: The Timken Company 1835 Dueber Avenue, S.W. Canton, OH 44706 If to the Employee <Street> [CITY] 9. GOVERNING LAW: The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State. 10. MISCELLANEOUS: No provisions of this Agreement may be amended, modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 11. VALIDITY: The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect. 12. COUNTERPARTS: This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same Agreement. 13. EMPLOYMENT RIGHTS: Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Employee to have the Employee remain in the employment of the Company; provided; however, that any termination of the employment of the Employee or removal of the Employee as an elected officer or Director of the Company following the commencement of any discussion with a third party that ultimately results in a Change in Control shall be deemed to be a termination of the Employee after a Change in Control of the Company for purposes of this Agreement. 14. WITHHOLDING OF TAXES: The Company may withhold from any amount payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling. 15. NONASSIGNABILITY: This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations, hereunder, except as provided in Sections 7.1 and 7.2 above. Without limiting the foregoing, the Employee's right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his will or by the laws of descent and distribution and in the event of any attempted assignment or transfer contrary to this Section - 12 -

the Company shall have no liability to pay any amounts so attempted to be assigned or transferred. 16. TERMINATION OF AGREEMENT: The term of this Agreement (the "Term") shall commence as of the date hereof and shall expire as of the later of the close of business on December 31, 1993, and the expiration of the Limited Period; provided, however, that (A) the term of this Agreement shall automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Employee shall have given notice that it or he, as the case may be, does not wish to have the Term extended, and (B) subject to Section 11 hereof, if prior to a Change in Control, the Employee ceases for any reason to be an employee of the Company, thereupon the Term shall be deemed to have expired and this Agreement shall immediately terminate and be of no further effect; and provided further, however, that notwithstanding any notice by the Company to terminate, if a Change in Control shall have occurred during the Term, this Agreement shall continue in effect for a period of three years from the date of the occurrence of the Change in Control.

the Company shall have no liability to pay any amounts so attempted to be assigned or transferred. 16. TERMINATION OF AGREEMENT: The term of this Agreement (the "Term") shall commence as of the date hereof and shall expire as of the later of the close of business on December 31, 1993, and the expiration of the Limited Period; provided, however, that (A) the term of this Agreement shall automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Employee shall have given notice that it or he, as the case may be, does not wish to have the Term extended, and (B) subject to Section 11 hereof, if prior to a Change in Control, the Employee ceases for any reason to be an employee of the Company, thereupon the Term shall be deemed to have expired and this Agreement shall immediately terminate and be of no further effect; and provided further, however, that notwithstanding any notice by the Company to terminate, if a Change in Control shall have occurred during the Term, this Agreement shall continue in effect for a period of three years from the date of the occurrence of the Change in Control. 17. ARBITRATION: In the event of a disagreement between the parties with regard to any determination to be made under this Agreement, such disagreement shall be settled in Canton, Ohio, by arbitration in accordance with the then applicable rules of the American Arbitration Association. 18. INDEMNIFICATION OF LEGAL FEES AND EXPENSES; SECURITY FOR PAYMENT: (a) INDEMNIFICATION OF LEGAL FEES. It is the intent of the Company that the Employee not be required to incur the expenses associated with the enforcement of his rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Employee hereunder. Accordingly, if it should appear to the Employee that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Employee the benefits intended to be provided to the Employee hereunder, the Company irrevocably authorizes the Employee from time to time to retain counsel of his choice, at the expense of the Company as hereafter provided, to represent the Employee in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Employee's entering into an attorney-client relationship with such counsel, and in that connection the Company and the Employee agree that a confidential relationship shall exist between the Employee and such counsel. The Company shall pay or cause to be paid and shall be solely responsible for any and all attorneys' and related fees and expenses incurred by the Employee as a result of the Company's failure to perform this Agreement or any provision hereof or as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid. - 13 -

(b) TRUST AGREEMENTS. To ensure that the provisions of this Agreement can be enforced by the Employee, two agreements ("Amended and Restated Trust Agreement" and "Amended and Restated Trust Agreement No. 2") each dated as of March 26, 1991, as they may have been or may be amended, have been established between a Trustee selected by the members of the Compensation Committee or any officer ("Trustee") and the Company. The Amended and Restated Trust Agreement sets forth the terms and conditions relating to payment pursuant to the Amended and Restated Trust Agreement of the Severance Amount, the Gross-Up Payment and other payments provided for in Section 3.5 hereof pursuant to this Agreement owed by the Company, and Amended and Restated Trust Agreement No. 2 sets forth the terms and conditions relating to payment pursuant to Amended and Restated Trust Agreement No. 2 of attorneys' and related fees and expenses pursuant to paragraph (a) hereof owed by the Company. Employee shall make demand on the Company for any payments due Employee pursuant to paragraph (a) hereof prior to making demand therefor on the Trustee under Amended and Restated Trust Agreement No. 2. Payments by such Trustee shall discharge the Company's liability under paragraph (a) hereof only to the extent that trust assets are used to satisfy such liability. (c) OBLIGATION OF THE COMPANY TO FUND TRUSTS. Upon the earlier to occur of (X) a Change in Control that involves a transaction that was not approved by the Board, and was not recommended to the Company's shareholders by the Board, (Y) a declaration by the Board that the trusts under the Amended and

(b) TRUST AGREEMENTS. To ensure that the provisions of this Agreement can be enforced by the Employee, two agreements ("Amended and Restated Trust Agreement" and "Amended and Restated Trust Agreement No. 2") each dated as of March 26, 1991, as they may have been or may be amended, have been established between a Trustee selected by the members of the Compensation Committee or any officer ("Trustee") and the Company. The Amended and Restated Trust Agreement sets forth the terms and conditions relating to payment pursuant to the Amended and Restated Trust Agreement of the Severance Amount, the Gross-Up Payment and other payments provided for in Section 3.5 hereof pursuant to this Agreement owed by the Company, and Amended and Restated Trust Agreement No. 2 sets forth the terms and conditions relating to payment pursuant to Amended and Restated Trust Agreement No. 2 of attorneys' and related fees and expenses pursuant to paragraph (a) hereof owed by the Company. Employee shall make demand on the Company for any payments due Employee pursuant to paragraph (a) hereof prior to making demand therefor on the Trustee under Amended and Restated Trust Agreement No. 2. Payments by such Trustee shall discharge the Company's liability under paragraph (a) hereof only to the extent that trust assets are used to satisfy such liability. (c) OBLIGATION OF THE COMPANY TO FUND TRUSTS. Upon the earlier to occur of (X) a Change in Control that involves a transaction that was not approved by the Board, and was not recommended to the Company's shareholders by the Board, (Y) a declaration by the Board that the trusts under the Amended and Restated Trust Agreement and Amended and Restated Trust Agreement No. 2 should be funded in connection with a Change in Control that involves a transaction that was approved by the Board, or was recommended to shareholders by the Board, or (Z) a declaration by the Board that a Change in Control is imminent, the Company shall promptly to the extent it has not previously done so, and in any event within five (5) business days: (i)transfer to the Trustee to be added to the principal of the trust under the Amended and Restated Trust Agreement a sum equal to the aggregate value on the date of the Change in Control of the Severance Amount and Gross-Up Payment which could become payable to Executive under the provisions of Section 3.1 and Section 3.5 hereof; provided, however, that the Company shall not be required to transfer, in the aggregate, to the trust under the Amended and Restated Trust Agreement a sum in excess of the maximum amount authorized by its Compensation Committee from time to time. The payment of any Severance Amount, Gross-Up Payment or other payment by the Trustee pursuant to the Amended and Restated Trust Agreement shall, to the extent thereof, discharge the Company's obligation to pay the Severance Amount, Gross-Up Payment or other payment hereunder, it being the intent of the Company that assets in such Amended and Restated Trust Agreement be held as security for the Company's obligation to pay the Severance Amount, Gross-Up Payment and other payments under this Agreement; and (ii) transfer to the Trustee to be added to the principal of the trust under Amended and Restated Trust Agreement No. 2 the sum authorized by the members of the Compensation Committee from time to time. Any payments of attorneys' and related fees and expenses, which are the obligation of the Company under paragraph (a) hereof, by the Trustee pursuant to Amended and Restated Trust Agreement No. 2 shall, to the extent - 14 -

thereof, discharge the Company's obligation hereunder, it being the intent of the Company that such assets in such Amended and Restated Trust Agreement No. 2 be held as security for the Company's obligation under paragraph (a) hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first set forth above. <Employee> THE TIMKEN COMPANY
By:___________________________________ Name: Stephen A. Perry Title: Vice President Human Resources & Logistics

thereof, discharge the Company's obligation hereunder, it being the intent of the Company that such assets in such Amended and Restated Trust Agreement No. 2 be held as security for the Company's obligation under paragraph (a) hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first set forth above. <Employee> THE TIMKEN COMPANY
By:___________________________________ Name: Stephen A. Perry Title: Vice President Human Resources & Logistics

012leg - 15 -

Exhibit 10.4 EMPLOYEE DEATH BENEFIT AGREEMENT THIS AGREEMENT, made this _____ day of ______________, 199?, by and between <Employee> ("Employee"), and THE TIMKEN COMPANY ("Timken"), an Ohio corporation having its principal offices at Canton, Ohio. WHEREAS, Employee has been employed by Timken since <Year> and is currently serving as [TITLE] in a capable and efficient manner; and WHEREAS, Timken desires to retain the services of Employee and to provide additional compensation to Employee for his services; and WHEREAS, Employee is willing to continue in the employ of Timken until his retirement, provided that Timken will pay a death benefit to Employee's Beneficiary upon Employee's death. NOW, THEREFORE, the parties covenant and agree as follows: 1. Upon Employee's death, Timken shall provide the following death benefits: a. If Employee dies after retirement (whether at normal retirement age or early retirement age) Timken shall pay to Employee's beneficiary an amount equal to twice Employee's annual salary in effect at the time of his retirement, said amount increased to offset the United States Federal Income Taxes then in effect. b. If Employee dies prior to retirement Timken shall pay to Employee's beneficiary an amount equal to twice Employee's annual salary in effect at the time of his death, said amount increased to offset the United States Federal Income Taxes then in effect. c. If Employee dies after an involuntary termination of his employment subsequent to a change in control (as defined in Paragraph 7 hereof), an amount equal to twice Employee's annual salary in effect at the time of the change in control shall be paid to Employee's beneficiary, said amount increased to offset the United States Federal Income Taxes then in effect. 2. Any payment under Paragraph 1 shall be in a lump sum and shall be paid to Employee's Beneficiary as soon as administratively feasible following receipt of the information required by Paragraph 9 hereof.

Exhibit 10.4 EMPLOYEE DEATH BENEFIT AGREEMENT THIS AGREEMENT, made this _____ day of ______________, 199?, by and between <Employee> ("Employee"), and THE TIMKEN COMPANY ("Timken"), an Ohio corporation having its principal offices at Canton, Ohio. WHEREAS, Employee has been employed by Timken since <Year> and is currently serving as [TITLE] in a capable and efficient manner; and WHEREAS, Timken desires to retain the services of Employee and to provide additional compensation to Employee for his services; and WHEREAS, Employee is willing to continue in the employ of Timken until his retirement, provided that Timken will pay a death benefit to Employee's Beneficiary upon Employee's death. NOW, THEREFORE, the parties covenant and agree as follows: 1. Upon Employee's death, Timken shall provide the following death benefits: a. If Employee dies after retirement (whether at normal retirement age or early retirement age) Timken shall pay to Employee's beneficiary an amount equal to twice Employee's annual salary in effect at the time of his retirement, said amount increased to offset the United States Federal Income Taxes then in effect. b. If Employee dies prior to retirement Timken shall pay to Employee's beneficiary an amount equal to twice Employee's annual salary in effect at the time of his death, said amount increased to offset the United States Federal Income Taxes then in effect. c. If Employee dies after an involuntary termination of his employment subsequent to a change in control (as defined in Paragraph 7 hereof), an amount equal to twice Employee's annual salary in effect at the time of the change in control shall be paid to Employee's beneficiary, said amount increased to offset the United States Federal Income Taxes then in effect. 2. Any payment under Paragraph 1 shall be in a lump sum and shall be paid to Employee's Beneficiary as soon as administratively feasible following receipt of the information required by Paragraph 9 hereof.

3. If Employee voluntarily terminates his employment with Timken prior to his retirement, or if Timken discharges Employee or requests that he resign his employment, no death benefits shall become due and payable to Employee's Beneficiary and this Agreement shall be considered terminated. If Employee and Timken mutually agree to Employee's termination prior to his retirement under circumstances other than those set forth in the preceding sentence, this Agreement may remain in full force and effect at the discretion of Timken. 4. Employee hereby names ______________ as the beneficiary hereunder. It is agreed that neither Employee nor any beneficiary 5. hereunder shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payment hereunder, which payments and the right thereto are expressly declared to be non-assignable and nontransferable. Any such attempted assignment or transfer shall terminate this Agreement and Timken shall have no further liability hereunder. Timken is hereby designated as the Named Fiduciary of 6. this Agreement, in accordance with the Employee Retirement Income Security Act of 1974 (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.

3. If Employee voluntarily terminates his employment with Timken prior to his retirement, or if Timken discharges Employee or requests that he resign his employment, no death benefits shall become due and payable to Employee's Beneficiary and this Agreement shall be considered terminated. If Employee and Timken mutually agree to Employee's termination prior to his retirement under circumstances other than those set forth in the preceding sentence, this Agreement may remain in full force and effect at the discretion of Timken. 4. Employee hereby names ______________ as the beneficiary hereunder. It is agreed that neither Employee nor any beneficiary 5. hereunder shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payment hereunder, which payments and the right thereto are expressly declared to be non-assignable and nontransferable. Any such attempted assignment or transfer shall terminate this Agreement and Timken shall have no further liability hereunder. Timken is hereby designated as the Named Fiduciary of 6. this Agreement, in accordance with the Employee Retirement Income Security Act of 1974 (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 Funding Policy of this Agreement shall be that death benefits under this Agreement shall be provided out of the general assets of Timken at the time such benefits are to be paid. No specific amounts, therefore, shall be set aside in advance. In the event that there is a change in control of Timken, prior to such change in control, Timken shall arrange for the funding of a trust established for the purpose of providing death benefits to Employee's Beneficiary to insure that the rights and obligations of Timken under this Agreement are performed. The amount to be contributed to such trust prior to a change in control to insure Timken's obligations under this Agreement shall be calculated, using the actuarial assumptions set forth in Exhibit A to this Agreement, by The Wyatt Company or such other independent actuary appointed by Timken. Upon a change in control, the rights of Employee under this Agreement shall be fully vested and shall be forfeited only if Employee voluntarily terminates his employment prior to retirement. The term "change in control" shall mean the occurrence of any of the following events: -2-

a. All or substantially all of the assets of Timken are sold or transferred to another corporation or entity, or Timken is merged, consolidated or reorganized into or with another corporation or entity, with the result that upon conclusion 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 acquiring corporation or entity are owned, directly or indirectly, by the shareholders of Timken generally prior to the transaction; or b. There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 30% or more of the combined voting power of the then-outstanding voting securities of Timken; or c. Timken shall file a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder (or any successor schedule, form or report or item therein) that a change in control of Timken has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or d. The individuals who, at the beginning of any period of two consecutive calendar years, constituted the Directors of Timken cease for any reason to constitute at least a majority thereof unless the nomination for election by Timken's stockholders of each new Director of Timken was approved by a vote of at least two-thirds of the Directors of Timken still in office who were Directors of Timken at the beginning of any such period. 8. In the event that, in its discretion, Timken purchases an insurance policy or policies insuring the life of

a. All or substantially all of the assets of Timken are sold or transferred to another corporation or entity, or Timken is merged, consolidated or reorganized into or with another corporation or entity, with the result that upon conclusion 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 acquiring corporation or entity are owned, directly or indirectly, by the shareholders of Timken generally prior to the transaction; or b. There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 30% or more of the combined voting power of the then-outstanding voting securities of Timken; or c. Timken shall file a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder (or any successor schedule, form or report or item therein) that a change in control of Timken has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or d. The individuals who, at the beginning of any period of two consecutive calendar years, constituted the Directors of Timken cease for any reason to constitute at least a majority thereof unless the nomination for election by Timken's stockholders of each new Director of Timken was approved by a vote of at least two-thirds of the Directors of Timken still in office who were Directors of Timken at the beginning of any such period. 8. In the event that, in its discretion, Timken purchases an insurance policy or policies insuring the life of Employee to allow Timken to recover in whole or in part, the cost of providing the benefits under this Agreement, neither Employee nor any beneficiary shall have any rights 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. -3-

9. It shall be the duty of Employee's Beneficiary to submit a claim for benefits under this Agreement to Timken. The claim must be in writing and must include a copy of the death certificate. 10. Timken 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 beneficiary. Such decision shall set forth the specific reasons for the denial written to the best of Timken's ability in a manner that may be understood without legal counsel. In addition Timken shall afford a reasonable opportunity to the beneficiary for a full and fair review of the decision denying such claim. 11. Nothing contained in this Agreement shall be construed to be a contract of employment nor as conferring upon 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 death benefits and is not intended to be an employment contract. 12. This Agreement may not be amended, altered or modified, except by a written instrument signed by the parties hereto. 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. 14. All notices, including offers and acceptances, shall be deemed to have been given if delivered or mailed, by certified or registered mail, to the parties entitled thereto at their addresses contained in Timken's records. 15. This Agreement shall be subject to and construed under the laws of the State of Ohio.

9. It shall be the duty of Employee's Beneficiary to submit a claim for benefits under this Agreement to Timken. The claim must be in writing and must include a copy of the death certificate. 10. Timken 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 beneficiary. Such decision shall set forth the specific reasons for the denial written to the best of Timken's ability in a manner that may be understood without legal counsel. In addition Timken shall afford a reasonable opportunity to the beneficiary for a full and fair review of the decision denying such claim. 11. Nothing contained in this Agreement shall be construed to be a contract of employment nor as conferring upon 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 death benefits and is not intended to be an employment contract. 12. This Agreement may not be amended, altered or modified, except by a written instrument signed by the parties hereto. 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. 14. All notices, including offers and acceptances, shall be deemed to have been given if delivered or mailed, by certified or registered mail, to the parties entitled thereto at their addresses contained in Timken's records. 15. This Agreement shall be subject to and construed under the laws of the State of Ohio. Exhibit A attached hereto and made a part hereof is hereby added as an attachment to the Death Benefit Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Death Benefit Agreement in duplicate this ____________ day of ______________, 199?. -4-

<Employee> THE TIMKEN COMPANY By: ______________________ Stephen A. Perry Its: Vice President Human Resources and Logistics 004leg -5-

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 in control shall be calculated using: (1) The UP-1984 Mortality Table, and

<Employee> THE TIMKEN COMPANY By: ______________________ Stephen A. Perry Its: Vice President Human Resources and Logistics 004leg -5-

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 in control shall be calculated using: (1) The UP-1984 Mortality Table, and (2) 120 percent of the interest rate(s) which would be used (as of the beginning of the calendar year in which the date of the contribution to the trust fund occurs) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. 005leg

COMPUTATION OF PER SHARE EARNINGS Year Ended December 31 1993 1992 1991 (Thousands of dollars except per share data) PRIMARY
Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using average market price TOTAL 30,680,372 30,196,346 29,599,552

(1) __________ 30,680,372 ========== ($271,932) ========== ($8.86) =======

(1) __________ 30,196,346 ========== $4,452 ====== $0.15 =====

(1) __________ 29,599,552 ========== ($35,687) ========= ($1.21) =======

Net income (loss)

Per-share amount

FULLY DILUTED Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using the year-end market price, if higher than exercise price

30,680,372

30,196,346

29,599,552

80,001 __________

13,251 __________

5,407 __________

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 in control shall be calculated using: (1) The UP-1984 Mortality Table, and (2) 120 percent of the interest rate(s) which would be used (as of the beginning of the calendar year in which the date of the contribution to the trust fund occurs) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. 005leg

COMPUTATION OF PER SHARE EARNINGS Year Ended December 31 1993 1992 1991 (Thousands of dollars except per share data) PRIMARY
Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using average market price TOTAL 30,680,372 30,196,346 29,599,552

(1) __________ 30,680,372 ========== ($271,932) ========== ($8.86) =======

(1) __________ 30,196,346 ========== $4,452 ====== $0.15 =====

(1) __________ 29,599,552 ========== ($35,687) ========= ($1.21) =======

Net income (loss)

Per-share amount

FULLY DILUTED Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using the year-end market price, if higher than exercise price TOTAL

30,680,372

30,196,346

29,599,552

80,001 __________ 30,760,373 ========== ($271,932) ========== $(8.84) =======

13,251 __________ 30,209,597 ========== $4,452 ====== $0.15 =====

5,407 __________ 29,604,959 ========== ($35,687) ========= $(1.21) =======

Net income (loss)

Per share amount

(1) Incremental number of shares excluded from calculation since they do not have a dilutive effect. EXHIBIT 11

EXHIBIT 13

COMPUTATION OF PER SHARE EARNINGS Year Ended December 31 1993 1992 1991 (Thousands of dollars except per share data) PRIMARY
Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using average market price TOTAL 30,680,372 30,196,346 29,599,552

(1) __________ 30,680,372 ========== ($271,932) ========== ($8.86) =======

(1) __________ 30,196,346 ========== $4,452 ====== $0.15 =====

(1) __________ 29,599,552 ========== ($35,687) ========= ($1.21) =======

Net income (loss)

Per-share amount

FULLY DILUTED Average shares outstanding Net effect of dilutive stock options -- based on the treasury stock method using the year-end market price, if higher than exercise price TOTAL

30,680,372

30,196,346

29,599,552

80,001 __________ 30,760,373 ========== ($271,932) ========== $(8.84) =======

13,251 __________ 30,209,597 ========== $4,452 ====== $0.15 =====

5,407 __________ 29,604,959 ========== ($35,687) ========= $(1.21) =======

Net income (loss)

Per share amount

(1) Incremental number of shares excluded from calculation since they do not have a dilutive effect. EXHIBIT 11

EXHIBIT 13
Financial Summary 1993 1992 _____________________________________________________________________________ (Thousands of dollars, except per share data) Net sales Income (loss) before income taxes and cumulative effect of accounting changes Provision (credit) for income taxes Income (loss) before cumulative effect of accounting changes Cumulative effect of accounting changes on prior years (net of income tax benefit of $132,971) Net income (loss) Net income (loss) per share Dividends paid per share $1,708,761 (20,919) (3,250) (17,669) $1,642,310 13,431 8,979 4,452

(254,263) $ (271,932) $(8.86) $ 1.00

$

-04,452 $0.15 $1.00

EXHIBIT 13
Financial Summary 1993 1992 _____________________________________________________________________________ (Thousands of dollars, except per share data) Net sales Income (loss) before income taxes and cumulative effect of accounting changes Provision (credit) for income taxes Income (loss) before cumulative effect of accounting changes Cumulative effect of accounting changes on prior years (net of income tax benefit of $132,971) Net income (loss) Net income (loss) per share Dividends paid per share The 1993 loss includes an impairment and restructuring charge of $48,000,000; $33,126,000 net of tax, as described in $1,708,761 (20,919) (3,250) (17,669) $1,642,310 13,431 8,979 4,452

(254,263) $ (271,932) $(8.86) $ 1.00

$

-04,452 $0.15 $1.00

Note 3 to the financial statements. In 1993, The Timken Company improved financial performance for the second consecutive year. Excluding restructuring charges and accounting changes, net income was $15.5 million, up $11 million from 1992. Net sales grew 4%. The year ended strong with record fourth quarter sales. To further improve performance, the company is moving aggressively to reduce costs and improve efficiencies in both its administrative and manufacturing operations. Additionally, marketing and manufacturing groups have been restructured and realigned to increase customer focus and, ultimately, improve competitiveness in profitable, highvolume markets. In the following pages, you can see how The Timken Company -- and its associates -- have been crafting a new framework for success.

Quarterly Financial Data Net Income Net (Loss) Dividends Stock Prices Net Gross Income per per _________________ 1993 Sales Profit (Loss)(1,2) Share(1,2,3) Share High Low <F1> <F2> <F1><F2><F3> ___________________________________________________________________________________________________ First Quarter $ 422,477 $ 87,312 $(251,081) $(8.22) $ .25 $30-5/8 $26-1/2 Second Quarter 441,241 99,350 9,556 .31 .25 34-3/8 29-1/2 Third Quarter 405,538 75,557 (446) (.01) .25 34-7/8 29-3/4 Fourth Quarter 439,505 80,378 (29,961) (.97) .25 34-5/8 29-7/8 _____________________________________________________________________________ $1,708,761 $342,597 $(271,932) $(8.86) $1.00 _____________________________________________________________________________ 1992 ___________________________________________________________________________________________________ First Quarter $ 420,936 $ 90,770 $ 4,907 $ .16 $ .25 Second Quarter 419,181 90,505 3,373 .11 .25 Third Quarter 404,018 82,624 (3,940) (.13) .25 Fourth Quarter 398,175 81,900 112 -0.25 ____________________________________________________________________________ $1,642,310 $345,799 $ 4,452 $ .15 $1.00 ____________________________________________________________________________ $27-7/8 30-1/2 28-5/8 27-7/8 $23-1/4 25-3/4 25 23-1/8

Quarterly Financial Data Net Income Net (Loss) Dividends Stock Prices Net Gross Income per per _________________ 1993 Sales Profit (Loss)(1,2) Share(1,2,3) Share High Low <F1> <F2> <F1><F2><F3> ___________________________________________________________________________________________________ First Quarter $ 422,477 $ 87,312 $(251,081) $(8.22) $ .25 $30-5/8 $26-1/2 Second Quarter 441,241 99,350 9,556 .31 .25 34-3/8 29-1/2 Third Quarter 405,538 75,557 (446) (.01) .25 34-7/8 29-3/4 Fourth Quarter 439,505 80,378 (29,961) (.97) .25 34-5/8 29-7/8 _____________________________________________________________________________ $1,708,761 $342,597 $(271,932) $(8.86) $1.00 _____________________________________________________________________________ 1992 ___________________________________________________________________________________________________ First Quarter $ 420,936 $ 90,770 $ 4,907 $ .16 $ .25 Second Quarter 419,181 90,505 3,373 .11 .25 Third Quarter 404,018 82,624 (3,940) (.13) .25 Fourth Quarter 398,175 81,900 112 -0.25 ____________________________________________________________________________ $1,642,310 $345,799 $ 4,452 $ .15 $1.00 ____________________________________________________________________________ $27-7/8 30-1/2 28-5/8 27-7/8 $23-1/4 25-3/4 25 23-1/8

<F1> (1) As described in Note 2 to financial statements, effective January 1, 1993, the company recorded a one-time charge of $254,263,000 or $8.29 per share related primarily to a change in accounting for retiree medical benefits. 1993 income (loss) before the cumulative effect of accounting changes was $(17,669,000), or $(.57) per share. <F2> (2) Fourth quarter 1993 includes an impairment and restructuring charge of $48,000,000, $33,126,000 net of tax. <F3> (3) Annual net income (loss) per share does not equal the sum of the individual quarters due to differences in the average number of shares outstanding during the respective periods.

1

Management's Discussion and Analysis - Summary The Timken Company achieved record annual and fourth quarter sales in 1993. To help future performance growth, the company has moved aggressively to reduce costs, advance manufacturing process quality, increase efficiency and enhance customer service. Much progress was made in 1993. Even more is expected during the next four years. In North America, steel and automotive bearing sales increased substantially, while only moderate gains were made in higher-value industrial bearing sales. Bearing sales to aftermarket, railroad, aerospace and U.S. export customers fell due to weak markets. Continued recessionary economies in Europe and Japan limited our opportunities there. In addition, significantly higher costs for scrap steel contributed to a slightly lower gross profit for the year. Improvements in manufacturing efficiencies, success in implementing programs to improve on-time deliveries and reduce inventories, and aggressive administrative streamlining activities strengthened the company's performance. At December 31, 1993, the streamlining effort, begun in 1992, was ahead of schedule to extract $60 million in annual administrative costs from 1991 levels. All these savings may not be reflected in future operating income as inflation and new initiatives designed to expand the company's business may offset some of these reductions. Selling, administrative and general expenses in 1993 were 7.6% lower than in 1992.

Management's Discussion and Analysis - Summary The Timken Company achieved record annual and fourth quarter sales in 1993. To help future performance growth, the company has moved aggressively to reduce costs, advance manufacturing process quality, increase efficiency and enhance customer service. Much progress was made in 1993. Even more is expected during the next four years. In North America, steel and automotive bearing sales increased substantially, while only moderate gains were made in higher-value industrial bearing sales. Bearing sales to aftermarket, railroad, aerospace and U.S. export customers fell due to weak markets. Continued recessionary economies in Europe and Japan limited our opportunities there. In addition, significantly higher costs for scrap steel contributed to a slightly lower gross profit for the year. Improvements in manufacturing efficiencies, success in implementing programs to improve on-time deliveries and reduce inventories, and aggressive administrative streamlining activities strengthened the company's performance. At December 31, 1993, the streamlining effort, begun in 1992, was ahead of schedule to extract $60 million in annual administrative costs from 1991 levels. All these savings may not be reflected in future operating income as inflation and new initiatives designed to expand the company's business may offset some of these reductions. Selling, administrative and general expenses in 1993 were 7.6% lower than in 1992. In 1993, the company began a program aimed at reducing significantly annual costs in its manufacturing plants. The majority of a $48 million pre-tax charge, recorded in the fourth quarter of 1993, was related to this. The global program is expected to begin showing results in 1995 and be largely completed by 1997. While this initiative is expected to lead to improved margins in all product lines, additional effort is being directed at either enhancing the profitability of low-margin products or eliminating them. Furthermore, organizational realignments will increase customer focus and, ultimately, should improve the company's competitiveness in higher-margin markets. The company adopted Statements of Financial Accounting Standards (FAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions;" No. 109, "Accounting for Income Taxes;" and No. 112, "Employers' Accounting for Postemployment Benefits" in the first quarter of 1993. This resulted in a one-time, cumulative effect, non-cash charge to net income of $254.3 million and increased the company's 1993 pre-tax expense for postretirement benefits by about $19 million. During the first quarter of 1993, the company announced that British Timken's Daventry bearing manufacturing operations would be consolidated into other plants by mid-1994. During the second quarter of 1993, the company's subsidiary, MPB Corporation, completed its acquisition of equipment and inventory from the U.S. jet engine bearing operations of The Torrington Company, a subsidiary of Ingersoll-Rand Company. Also during the quarter, the company's subsidiary, Latrobe Steel Company, announced it will establish a service center for bar products near Franklin, Pennsylvania. Start-up of the facility is planned for April 1994.

In May 1993, the U.S. Department of Commerce determined that Brazilian steel was being dumped in the U.S. market at prices up to 27% below fair value. This government action was in response to an anti-dumping petition filed in 1992 by the company and Republic Engineered Steels, Inc. In July 1993, the International Trade Commission (ITC) ruled that domestic producers of special quality finished hot-rolled steel bars are not being injured by imports from Brazil. The company and Republic appealed this ruling during the third quarter to the U.S. Court of International Trade in New York. The company believes that the ITC ruled incorrectly and that its determination is not supported by fact. In September 1993, the company's Steel Business began operation of its St. Clair Precision Tubing Components plant in Eaton, Ohio. The facility produces sub-components for automotive and industrial customers. 17

In May 1993, the U.S. Department of Commerce determined that Brazilian steel was being dumped in the U.S. market at prices up to 27% below fair value. This government action was in response to an anti-dumping petition filed in 1992 by the company and Republic Engineered Steels, Inc. In July 1993, the International Trade Commission (ITC) ruled that domestic producers of special quality finished hot-rolled steel bars are not being injured by imports from Brazil. The company and Republic appealed this ruling during the third quarter to the U.S. Court of International Trade in New York. The company believes that the ITC ruled incorrectly and that its determination is not supported by fact. In September 1993, the company's Steel Business began operation of its St. Clair Precision Tubing Components plant in Eaton, Ohio. The facility produces sub-components for automotive and industrial customers. 17
Consolidated Statement of Income The Timken Company and Subsidiaries Year Ended December 31 _____________________________________________________________________________________________________ 1993 1992 1991 _____________________________________________________________________________________________________ (Thousands of dollars, except share data) Net sales $ 1,708,761 $ 1,642,310 $1,647,425 Cost of products sold 1,366,164 1,296,511 1,309,893 _____________________________________________________________________________________________________ Gross Profit 342,597 345,799 337,532 Selling, administrative and general expenses 274,141 296,826 297,660 Impairment and restructuring charges 48,000 -041,000 _____________________________________________________________________________________________________ Operating Income (Loss) 20,456 48,973 (1,128) Interest expense (29,619) (28,660) (26,673) Other-net (11,756) (6,882) (14,149) _____________________________________________________________________________________________________ Other Income (Expense) (41,375) (35,542) (40,822) _____________________________________________________________________________________________________ Income (Loss) Before Income Taxes and Cumulative Effect of Accounting Changes (20,919) 13,431 (41,950) Provision (credit) for income taxes (3,250) 8,979 (6,263) _____________________________________________________________________________________________________ Income (Loss) Before Cumulative Effect of Accounting Changes (17,669) 4,452 (35,687)

Cumulative effect of accounting changes on prior years (net of income tax benefit of $132,971) (254,263) -0-0_____________________________________________________________________________________________________ Net Income (Loss) $ (271,932) $ 4,452 $ (35,687) _____________________________________________________________________________________________________ Earnings Per Share: Income (loss) before cumulative effect of accounting changes $ (0.57) $ 0.15 $ (1.21) Cumulative effect of accounting changes (8.29) -0-0_____________________________________________________________________________________________________ Net Income (Loss) Per Share $ (8.86) $ 0.15 $ (1.21) _____________________________________________________________________________________________________ Average number of common shares outstanding 30,680,372 30,196,346 29,599,552 _____________________________________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements on pages 25 through 33.

Consolidated Statement of Income The Timken Company and Subsidiaries Year Ended December 31 _____________________________________________________________________________________________________ 1993 1992 1991 _____________________________________________________________________________________________________ (Thousands of dollars, except share data) Net sales $ 1,708,761 $ 1,642,310 $1,647,425 Cost of products sold 1,366,164 1,296,511 1,309,893 _____________________________________________________________________________________________________ Gross Profit 342,597 345,799 337,532 Selling, administrative and general expenses 274,141 296,826 297,660 Impairment and restructuring charges 48,000 -041,000 _____________________________________________________________________________________________________ Operating Income (Loss) 20,456 48,973 (1,128) Interest expense (29,619) (28,660) (26,673) Other-net (11,756) (6,882) (14,149) _____________________________________________________________________________________________________ Other Income (Expense) (41,375) (35,542) (40,822) _____________________________________________________________________________________________________ Income (Loss) Before Income Taxes and Cumulative Effect of Accounting Changes (20,919) 13,431 (41,950) Provision (credit) for income taxes (3,250) 8,979 (6,263) _____________________________________________________________________________________________________ Income (Loss) Before Cumulative Effect of Accounting Changes (17,669) 4,452 (35,687)

Cumulative effect of accounting changes on prior years (net of income tax benefit of $132,971) (254,263) -0-0_____________________________________________________________________________________________________ Net Income (Loss) $ (271,932) $ 4,452 $ (35,687) _____________________________________________________________________________________________________ Earnings Per Share: Income (loss) before cumulative effect of accounting changes $ (0.57) $ 0.15 $ (1.21) Cumulative effect of accounting changes (8.29) -0-0_____________________________________________________________________________________________________ Net Income (Loss) Per Share $ (8.86) $ 0.15 $ (1.21) _____________________________________________________________________________________________________ Average number of common shares outstanding 30,680,372 30,196,346 29,599,552 _____________________________________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements on pages 25 through 33.

Management's Discussion and Analysis of the Statements of Income 1993 compared to 1992 Net sales increased 4% from 1992. Gross profit was slightly lower due to a less-favorable sales mix, continuing poor business conditions in Europe, higher costs for steel scrap and additional annual expense resulting from the adoption of FAS No. 106. These effects were offset partially by more-efficient manufacturing, better on-time delivery and lower inventory levels. Inventory reductions generated LIFO income credits of $18.5 million compared to $0.9 million in 1992. Operating income for 1993 declined to 1.2% of net sales compared to 3% in 1992. Excluding the $48 million impairment and restructuring charge, 1993 operating income would have increased to 4% of net sales. The major contributor was reduced selling, administrative and general expenses resulting from aggressive administrative streamlining activities. In December 1993, the company initiated a program to accelerate significantly continuous improvement in its

Management's Discussion and Analysis of the Statements of Income 1993 compared to 1992 Net sales increased 4% from 1992. Gross profit was slightly lower due to a less-favorable sales mix, continuing poor business conditions in Europe, higher costs for steel scrap and additional annual expense resulting from the adoption of FAS No. 106. These effects were offset partially by more-efficient manufacturing, better on-time delivery and lower inventory levels. Inventory reductions generated LIFO income credits of $18.5 million compared to $0.9 million in 1992. Operating income for 1993 declined to 1.2% of net sales compared to 3% in 1992. Excluding the $48 million impairment and restructuring charge, 1993 operating income would have increased to 4% of net sales. The major contributor was reduced selling, administrative and general expenses resulting from aggressive administrative streamlining activities. In December 1993, the company initiated a program to accelerate significantly continuous improvement in its manufacturing plants worldwide. The program, which is designed to improve profitability, create more value for customers and strengthen the company's lead over competitors, is expected to reduce employment by approximately 2,200 over the next four years based on the current level of business. Certain costs to implement this program, approximately $28 million, were charged to operations in 1993 as part of a $48 million impairment and restructuring charge. The $28 million, which includes separation and related expenses, will be paid primarily over the next four 18

years from cash expected to be generated from operations. The balance of the $48 million includes a non-cash charge of $17 million for the writedown of inventories, impaired property, plant and equipment and the company's equity investment in its foreign joint venture, Tata Timken Limited. The future reduction of depreciation expense resulting from the writedown of property, plant and equipment is not expected to impact materially future earnings. The charge also includes $3 million for additional administrative streamlining. The program is expected to show positive results by 1995 and reduce annual costs significantly by 1998. Unrelated decisions could affect the degree to which these savings directly reduce cost of products sold. Net sales in the Bearing Business were relatively unchanged in 1993. As in 1992, product mix was skewed toward lower-margin product. Sales volume in U.S. automotive and industrial product lines showed improvement. Aftermarket, railroad and U.S. export sales were weak. Defense and aerospace sales remained depressed. Selling price increases, which were difficult to achieve in 1993, did not cover inflation. In addition, the recession in Europe continued to hurt the Bearing Business. Improved productivity, LIFO income credits and lower selling, administrative and general expenses helped to offset the effects of lower volume and the unfavorable sales mix. The Steel Business increased net sales in 1993 by about 17%. This resulted primarily from substantial increases in alloy bar volume, with growth occurring in almost all product lines. Selling prices remained unchanged from 1992. The added volume, improved plant operating levels, increased productivity and reduced manufacturing costs contributed to higher profitability compared to 1992. Furthermore, the Steel Business has begun to realize the expected benefits from the $47 million investment in the continuous caster at the Harrison Steel Plant in Canton and the $40 million investment in the Precision Forging Facility at the Latrobe Steel Company subsidiary in Pennsylvania, both of which were completed in the third quarter of 1992. Reduced selling, administrative and general expenses also contributed to improved profitability. Steel Business profit was hurt, however, by higher scrap steel costs in the second half of 1993. The company expects scrap prices to remain high, but plans to recover the additional cost through price increases. Companywide, selling, administrative and general expenses were reduced to $274.1 million in 1993 from $296.8 million in 1992. Progress made in the administrative streamlining effort during 1993 exceeded expectations. Actions taken to date to reduce costs will not only result in annualized net savings of more than $50 million compared to 1991 cost levels, but also increase the overall effectiveness and efficiency with which remaining functions are performed. The company expects to meet its goal of removing $60 million from the 1991 administrative cost structure by mid-1995. Selling, administrative and general expenses may not reflect all of this reduction due to inflation and the possible initiation of programs designed to expand the company's business.

years from cash expected to be generated from operations. The balance of the $48 million includes a non-cash charge of $17 million for the writedown of inventories, impaired property, plant and equipment and the company's equity investment in its foreign joint venture, Tata Timken Limited. The future reduction of depreciation expense resulting from the writedown of property, plant and equipment is not expected to impact materially future earnings. The charge also includes $3 million for additional administrative streamlining. The program is expected to show positive results by 1995 and reduce annual costs significantly by 1998. Unrelated decisions could affect the degree to which these savings directly reduce cost of products sold. Net sales in the Bearing Business were relatively unchanged in 1993. As in 1992, product mix was skewed toward lower-margin product. Sales volume in U.S. automotive and industrial product lines showed improvement. Aftermarket, railroad and U.S. export sales were weak. Defense and aerospace sales remained depressed. Selling price increases, which were difficult to achieve in 1993, did not cover inflation. In addition, the recession in Europe continued to hurt the Bearing Business. Improved productivity, LIFO income credits and lower selling, administrative and general expenses helped to offset the effects of lower volume and the unfavorable sales mix. The Steel Business increased net sales in 1993 by about 17%. This resulted primarily from substantial increases in alloy bar volume, with growth occurring in almost all product lines. Selling prices remained unchanged from 1992. The added volume, improved plant operating levels, increased productivity and reduced manufacturing costs contributed to higher profitability compared to 1992. Furthermore, the Steel Business has begun to realize the expected benefits from the $47 million investment in the continuous caster at the Harrison Steel Plant in Canton and the $40 million investment in the Precision Forging Facility at the Latrobe Steel Company subsidiary in Pennsylvania, both of which were completed in the third quarter of 1992. Reduced selling, administrative and general expenses also contributed to improved profitability. Steel Business profit was hurt, however, by higher scrap steel costs in the second half of 1993. The company expects scrap prices to remain high, but plans to recover the additional cost through price increases. Companywide, selling, administrative and general expenses were reduced to $274.1 million in 1993 from $296.8 million in 1992. Progress made in the administrative streamlining effort during 1993 exceeded expectations. Actions taken to date to reduce costs will not only result in annualized net savings of more than $50 million compared to 1991 cost levels, but also increase the overall effectiveness and efficiency with which remaining functions are performed. The company expects to meet its goal of removing $60 million from the 1991 administrative cost structure by mid-1995. Selling, administrative and general expenses may not reflect all of this reduction due to inflation and the possible initiation of programs designed to expand the company's business. Other income and expense for 1993 reflect greater expense than incurred during 1992 due in part to charges related to the company's joint venture in India. Interest expense in 1993 was similar to 1992 as the majority of the company's debt is at fixed interest rates. In 1993, the company had taxable income but a pre-tax loss for financial reporting purposes. The difference was primarily the result of the impairment and restructuring charge and certain accrued expenses for associate benefits, which will not be tax deductible until some future date. In 1992, these income amounts were comparable to each other. The Revenue Reconciliation Act of 1993 did not have an adverse material effect on 1993 income taxes and is not expected to significantly affect the company's future earnings.

1992 compared to 1991 Net sales declined slightly during 1992 as a result of lower sales volume. This was attributed primarily to soft U.S. markets and the continued weakening of the European economy. Gross profit, however, increased in 1992 to 21.1% of net sales from 20.5% in 1991 as a direct result of the company's efforts to reduce costs and increase manufacturing efficiencies. Gross profit for 1992 included LIFO income credits of $0.9 million compared to $15.4 million in 1991. Excluding the effect of the inventory credits in both periods, gross profit would have been 21% of net sales in 1992 and 19.6% in 1991. The company's efforts to reduce administrative costs contributed to a $9.1 million increase in operating income in 1992, excluding the effect of a $41 million restructuring charge in 1991. In 1991, taxable income exceeded pre-tax book income primarily due to restructuring charges.

1992 compared to 1991 Net sales declined slightly during 1992 as a result of lower sales volume. This was attributed primarily to soft U.S. markets and the continued weakening of the European economy. Gross profit, however, increased in 1992 to 21.1% of net sales from 20.5% in 1991 as a direct result of the company's efforts to reduce costs and increase manufacturing efficiencies. Gross profit for 1992 included LIFO income credits of $0.9 million compared to $15.4 million in 1991. Excluding the effect of the inventory credits in both periods, gross profit would have been 21% of net sales in 1992 and 19.6% in 1991. The company's efforts to reduce administrative costs contributed to a $9.1 million increase in operating income in 1992, excluding the effect of a $41 million restructuring charge in 1991. In 1991, taxable income exceeded pre-tax book income primarily due to restructuring charges. 19
Consolidated Balance Sheets The Timken Company and Subsidiaries December 31 __________________________________________________________________________ 1993 1992 __________________________________________________________________________ (Thousands of dollars) Assets Current Assets Cash and cash equivalents $ 5,284 $ 7,863 Accounts receivable, less allowances, 1993-$6,292; 1992-$4,948 223,097 198,549 Deferred income taxes 58,220 38,658 Inventories: Manufacturing supplies 39,392 44,150 Work in process and raw materials 175,920 165,995 Finished products 84,471 100,802 __________________________________________________________________________ 299,783 310,947 __________________________________________________________________________ Total Current Assets 586,384 556,017 Property, Plant and Equipment Land and buildings 347,757 344,623 Machinery and equipment 1,799,892 1,743,979 __________________________________________________________________________ 2,147,649 2,088,602 Less allowances for depreciation 1,122,985 1,039,598 __________________________________________________________________________ 1,024,664 1,049,004 Other Assets Costs in excess of net assets of acquired business, net of amortization, 1993-$9,242; 1992-$6,665 93,825 96,402 Deferred income taxes 52,902 -0Miscellaneous receivables and other assets 21,401 27,406 Deferred charges and prepaid expenses 10,543 9,621 __________________________________________________________________________ 178,671 133,429 __________________________________________________________________________ $1,789,719 $1,738,450 __________________________________________________________________________

Management's Discussion and Analysis of the Balance Sheets The consolidated balance sheets continue to indicate that the company's financial position is solid and one of the best in its industries. Total assets grew by $51.3 million from 1992, primarily as a result of increased accounts receivable and deferred income taxes. The 1993 increase in accounts receivable relates directly to higher sales in December 1993. The

Consolidated Balance Sheets The Timken Company and Subsidiaries December 31 __________________________________________________________________________ 1993 1992 __________________________________________________________________________ (Thousands of dollars) Assets Current Assets Cash and cash equivalents $ 5,284 $ 7,863 Accounts receivable, less allowances, 1993-$6,292; 1992-$4,948 223,097 198,549 Deferred income taxes 58,220 38,658 Inventories: Manufacturing supplies 39,392 44,150 Work in process and raw materials 175,920 165,995 Finished products 84,471 100,802 __________________________________________________________________________ 299,783 310,947 __________________________________________________________________________ Total Current Assets 586,384 556,017 Property, Plant and Equipment Land and buildings 347,757 344,623 Machinery and equipment 1,799,892 1,743,979 __________________________________________________________________________ 2,147,649 2,088,602 Less allowances for depreciation 1,122,985 1,039,598 __________________________________________________________________________ 1,024,664 1,049,004 Other Assets Costs in excess of net assets of acquired business, net of amortization, 1993-$9,242; 1992-$6,665 93,825 96,402 Deferred income taxes 52,902 -0Miscellaneous receivables and other assets 21,401 27,406 Deferred charges and prepaid expenses 10,543 9,621 __________________________________________________________________________ 178,671 133,429 __________________________________________________________________________ $1,789,719 $1,738,450 __________________________________________________________________________

Management's Discussion and Analysis of the Balance Sheets The consolidated balance sheets continue to indicate that the company's financial position is solid and one of the best in its industries. Total assets grew by $51.3 million from 1992, primarily as a result of increased accounts receivable and deferred income taxes. The 1993 increase in accounts receivable relates directly to higher sales in December 1993. The days sales outstanding as of year-end 1993 reflects a slight decrease from 1992. Deferred taxes increased primarily as a result of the adoption of FAS No. 106. Before its adoption, the company's net deferred tax liability was $49.5 million. Afterward, the company's net deferred tax position is an asset of $111.1 million. Management has evaluated this asset using the "more likely than not" criterion established by FAS No. 109 and believes that sufficient taxable income will be generated to realize the asset over the long period that the postretirement benefit obligation will be paid.

For the third consecutive year, the company reduced inventories. During 1993, inventories were cut by $11.2 million due to structural changes resulting from improved scheduling and manufacturing processes. Inventory days declined by 11% during 1993.

For the third consecutive year, the company reduced inventories. During 1993, inventories were cut by $11.2 million due to structural changes resulting from improved scheduling and manufacturing processes. Inventory days declined by 11% during 1993. The company uses the LIFO method of accounting for about 75% of its inventories. Under this method, the cost of products sold approximates current cost and, therefore, reduces the distortion in reporting income due to inflation. Depreciation charged to operations is based on historical cost and is significantly less than were it based on replacement value. The increase in current and non-current liabilities is the result of the 1993 impairment and restructuring charge and the adoption of FAS No. 106, respectively. The cumulative effect of accounting changes adopted in 1993 reduced shareholders' equity by $254.3 million. 20
December 31 ___________________________________________________________________________ 1993 1992 ___________________________________________________________________________ (Thousands of dollars) Liabilities and Shareholders' Equity Current Liabilities Accounts payable and other liabilities $ 221,265 $ 167,388 Accrued pension contributions 11,377 12,523 Accrued postretirement benefits cost 24,330 -0Salaries, wages and payroll taxes 60,680 57,047 Commercial paper 62,907 71,730 Short-term debt 32,129 64,423 Income taxes 19,443 6,468 Current portion of long-term debt 282 10,885 ___________________________________________________________________________ Total Current Liabilities 432,413 390,464 Non-Current Liabilities Long-term debt 181,158 173,477 Accrued pension cost 117,396 101,300 Accrued postretirement benefits cost 373,440 -0Deferred income taxes -088,146 ___________________________________________________________________________ 671,994 362,923 Shareholders' Equity Class I and II Serial Preferred Stock without par value: Authorized-10,000,000 shares each class, none issued -0-0Common stock without par value: Authorized-100,000,000 shares Issued (including shares in treasury) 30,842,952 shares in 1993; 30,625,858 shares in 1992 Stated capital 53,064 53,064 Other paid-in capital 247,699 241,268 Earnings invested in the business 402,566 705,176 Foreign currency translation adjustment (18,016) (11,475) ___________________________________________________________________________ 685,313 988,033 Less cost of common stock in treasury (1993-40 shares; 1992-108,307 shares) 1 2,970 ___________________________________________________________________________ 685,312 985,063 $1,789,719 $1,738,450 ___________________________________________________________________________ Total Shareholders' Equity

December 31 ___________________________________________________________________________ 1993 1992 ___________________________________________________________________________ (Thousands of dollars) Liabilities and Shareholders' Equity Current Liabilities Accounts payable and other liabilities $ 221,265 $ 167,388 Accrued pension contributions 11,377 12,523 Accrued postretirement benefits cost 24,330 -0Salaries, wages and payroll taxes 60,680 57,047 Commercial paper 62,907 71,730 Short-term debt 32,129 64,423 Income taxes 19,443 6,468 Current portion of long-term debt 282 10,885 ___________________________________________________________________________ Total Current Liabilities 432,413 390,464 Non-Current Liabilities Long-term debt 181,158 173,477 Accrued pension cost 117,396 101,300 Accrued postretirement benefits cost 373,440 -0Deferred income taxes -088,146 ___________________________________________________________________________ 671,994 362,923 Shareholders' Equity Class I and II Serial Preferred Stock without par value: Authorized-10,000,000 shares each class, none issued -0-0Common stock without par value: Authorized-100,000,000 shares Issued (including shares in treasury) 30,842,952 shares in 1993; 30,625,858 shares in 1992 Stated capital 53,064 53,064 Other paid-in capital 247,699 241,268 Earnings invested in the business 402,566 705,176 Foreign currency translation adjustment (18,016) (11,475) ___________________________________________________________________________ 685,313 988,033 Less cost of common stock in treasury (1993-40 shares; 1992-108,307 shares) 1 2,970 ___________________________________________________________________________ 685,312 985,063 $1,789,719 $1,738,450 ___________________________________________________________________________ Total Shareholders' Equity

See accompanying Notes to Consolidated Financial Statements on pages 25 through 33.

Debt decreased $44 million to $276.5 million as a result of close management of working capital and careful scrutiny of capital expenditures. 1993 capital spending of $92.9 million was $46.2 million lower than in 1992 and did not exceed depreciation. During 1992, capital expenditures included spending for two large projects in the Steel Business. In addition, certain other capital investments, which would have increased 1993 spending, were delayed in September 1992. During the second quarter of 1993, the company resumed work on its 21st century bearing project, which includes a plant in Asheboro, North Carolina. The status of a plant in Europe, also delayed in 1992, remains unchanged. The ratio of debt to total capital increased to 28.7% from 24.5% in 1992, primarily due to the reduction of equity for the cumulative effect of accounting changes. Excluding this item, debt to total capital would have declined to 22.7%.

Debt decreased $44 million to $276.5 million as a result of close management of working capital and careful scrutiny of capital expenditures. 1993 capital spending of $92.9 million was $46.2 million lower than in 1992 and did not exceed depreciation. During 1992, capital expenditures included spending for two large projects in the Steel Business. In addition, certain other capital investments, which would have increased 1993 spending, were delayed in September 1992. During the second quarter of 1993, the company resumed work on its 21st century bearing project, which includes a plant in Asheboro, North Carolina. The status of a plant in Europe, also delayed in 1992, remains unchanged. The ratio of debt to total capital increased to 28.7% from 24.5% in 1992, primarily due to the reduction of equity for the cumulative effect of accounting changes. Excluding this item, debt to total capital would have declined to 22.7%. To increase financial flexibility, the company amended its revolving credit agreement effective February 26, 1993, to reduce the consolidated tangible net worth plus subordinated liabilities requirement from $900 million to $850 million. The cumulative effect of the accounting changes is disregarded for purposes of this requirement. In addition, the amount of credit available was reduced from $350 million to $300 million. At December 31, 1993, the company had $205 million available through this unsecured credit agreement. 21
Consolidated Statements of Cash Flows The Timken Company and Subsidiaries Year Ended December 31 ___________________________________________________________________________ 1993 1992 1991 ___________________________________________________________________________ (Thousands of dollars) Cash Provided (Used) Operating Activities Net income (loss) $(271,932) $ 4,452 $ (35,687) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting changes 254,263 -0-0Depreciation and amortization 118,403 114,433 109,252 Impairment and restructuring charges 48,000 -041,000 Deferred income tax credit (28,733) (2,104) (16,198) Common stock issued in lieu of cash to benefit plans 3,924 8,184 9,617 Changes in operating assets and liabilities: Accounts receivable (27,233) (16,177) 23,685 Inventories and other assets 10,685 (1,732) 43,203 Accounts payable and accrued expenses 45,944 9,235 (34,426) Foreign currency translation (gain) loss 399 (790) (27) ___________________________________________________________________________ Net Cash Provided by Operating Activities 153,720 115,501 140,419 Investing Activities Purchases of property, plant and equipment-net Financing Activities Purchases of treasury shares Cash dividends paid to shareholders Proceeds from issuance of long-term debt Payments on long-term debt Commercial paper activity-net

(89,049)

(136,122)

(140,126)

-0(25,202) -0(2,847) (8,824)

-0(22,435) 50,000 (3,543) 864

(2,258) (23,071) 23,000 (2,950) (68,210)

Consolidated Statements of Cash Flows The Timken Company and Subsidiaries Year Ended December 31 ___________________________________________________________________________ 1993 1992 1991 ___________________________________________________________________________ (Thousands of dollars) Cash Provided (Used) Operating Activities Net income (loss) $(271,932) $ 4,452 $ (35,687) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting changes 254,263 -0-0Depreciation and amortization 118,403 114,433 109,252 Impairment and restructuring charges 48,000 -041,000 Deferred income tax credit (28,733) (2,104) (16,198) Common stock issued in lieu of cash to benefit plans 3,924 8,184 9,617 Changes in operating assets and liabilities: Accounts receivable (27,233) (16,177) 23,685 Inventories and other assets 10,685 (1,732) 43,203 Accounts payable and accrued expenses 45,944 9,235 (34,426) Foreign currency translation (gain) loss 399 (790) (27) ___________________________________________________________________________ Net Cash Provided by Operating Activities 153,720 115,501 140,419 Investing Activities Purchases of property, plant and equipment-net

(89,049)

(136,122)

(140,126)

Financing Activities Purchases of treasury shares -0-0(2,258) Cash dividends paid to shareholders (25,202) (22,435) (23,071) Proceeds from issuance of long-term debt -050,000 23,000 Payments on long-term debt (2,847) (3,543) (2,950) Commercial paper activity-net (8,824) 864 (68,210) Short-term debt activity-net (30,134) 2,215 53,058 ___________________________________________________________________________ Net Cash Provided (Used) by Financing Activities (67,007) 27,101 (20,431) Effect of exchange rate changes on cash (243) (890) (387) ___________________________________________________________________________ Increase (Decrease) In Cash and Cash Equivalents (2,579) 5,590 (20,525) Cash and cash equivalents at beginning of year 7,863 2,273 22,798 ___________________________________________________________________________ Cash and Cash Equivalents at End of Year $ 5,284 $ 7,863 $ 2,273 ___________________________________________________________________________

See accompanying Notes to Consolidated Financial Statements on pages 25 through 33.

Management's Discussion and Analysis of the Statements of Cash Flows 1993 compared to 1992 Net cash provided from operating activities increased 33% to $153.7 million in 1993 due to changes in operating

Management's Discussion and Analysis of the Statements of Cash Flows 1993 compared to 1992 Net cash provided from operating activities increased 33% to $153.7 million in 1993 due to changes in operating assets and liabilities. Cash generated from net income was basically unchanged from 1992. Cash generated from changes in operating assets and liabilities was primarily due to higher accounts payable and income taxes payable. In addition, the company reduced inventories by $11.2 million in 1993 following a $9.1 million decline in 1992. These reductions resulted from improved manufacturing and scheduling practices. Capital expenditures were $92.9 million in 1993 compared to $139.1 in 1992. During 1992, some capital investments were delayed, which lowered 1993 spending. It is expected that capital expenditures will approximate depreciation expense in 1994. The company reduced its debt by $44 million during the year through aggressive management of its working capital and capital expenditures. In 1993, the company extended $8 million of Ohio Water Development Bonds from 22

1993 to 2007 and replaced the fixed interest rate of 8.95% with a floating rate, which averaged 2.31% during 1993. By the end of 1994, the company expects to further decrease its debt level. The company expects that cash generated from operating activities during 1994 will be sufficient to fund capital expenditures and pay interest and dividends. 1992 compared to 1991 Net cash provided from operations fell 17.7% as the increase in cash from net income and operating activities did not offset the decrease resulting from changes in operating assets and liabilities. During 1992, the company reduced inventories by $9.1 million compared to a reduction of $59.5 million in 1991. The company's 1992 capital expenditures were $139.1 million, which included spending for a $47 million continuous caster at the Harrison Steel Plant and a $40 million Precision Forging Facility at the Latrobe Steel Company subsidiary. The company issued $50 million of medium-term notes to replace commercial paper and short-term debt and extended the scheduled maturity of $21.7 million of Ohio Air and Water Bonds from 1995 to 2001. Total debt increased by $47.4 million. However, by delaying certain capital projects and by implementing other cost control initiatives, the company was able to reduce debt by $32.8 million from October through December of 1992. Management's Discussion and Analysis of Other Information In 1993, the company reduced its discount rate assumption for U.S.-based pension and postretirement benefit plans from 9.5% to 7.5% and made other actuarial assumption changes in its calculation of future pension and postretirement medical expense. As a result of these revisions and other plan changes, annual pension expense is expected to increase by approximately $13 million in 1994. The impact of the discount rate change for postretirement medical expenses was offset by a decrease in the assumed medical inflation trend rate. The company continues to focus on protecting the environment and compliance with environmental protection laws. In doing so, the company has invested in pollution control equipment and updated plant operational practices. To the extent that the company's non-U.S. competitors are not subject to similar laws and regulations in their home countries, the company is placed at a competitive disadvantage. It is very difficult to assess the possible effect of compliance with future requirements that may differ from existing ones. The company believes that the effect of amendments to the Clean Air Act of 1990 on its utility suppliers will increase its costs for electricity by $4 million to $5 million annually by 1995. Furthermore, regulations related to these amendments have been proposed that, if adopted, would mandate significant changes in the way the company monitors air emissions. This would require capital expenditures in excess of $1 million and the addition of personnel. A large cross section of industries have expressed opposition to the proposed regulations for a variety of reasons. It is possible that the U.S. Environmental Protection Agency (EPA) may amend the regulations before they are adopted, lessening substantially their impact on the company.

1993 to 2007 and replaced the fixed interest rate of 8.95% with a floating rate, which averaged 2.31% during 1993. By the end of 1994, the company expects to further decrease its debt level. The company expects that cash generated from operating activities during 1994 will be sufficient to fund capital expenditures and pay interest and dividends. 1992 compared to 1991 Net cash provided from operations fell 17.7% as the increase in cash from net income and operating activities did not offset the decrease resulting from changes in operating assets and liabilities. During 1992, the company reduced inventories by $9.1 million compared to a reduction of $59.5 million in 1991. The company's 1992 capital expenditures were $139.1 million, which included spending for a $47 million continuous caster at the Harrison Steel Plant and a $40 million Precision Forging Facility at the Latrobe Steel Company subsidiary. The company issued $50 million of medium-term notes to replace commercial paper and short-term debt and extended the scheduled maturity of $21.7 million of Ohio Air and Water Bonds from 1995 to 2001. Total debt increased by $47.4 million. However, by delaying certain capital projects and by implementing other cost control initiatives, the company was able to reduce debt by $32.8 million from October through December of 1992. Management's Discussion and Analysis of Other Information In 1993, the company reduced its discount rate assumption for U.S.-based pension and postretirement benefit plans from 9.5% to 7.5% and made other actuarial assumption changes in its calculation of future pension and postretirement medical expense. As a result of these revisions and other plan changes, annual pension expense is expected to increase by approximately $13 million in 1994. The impact of the discount rate change for postretirement medical expenses was offset by a decrease in the assumed medical inflation trend rate. The company continues to focus on protecting the environment and compliance with environmental protection laws. In doing so, the company has invested in pollution control equipment and updated plant operational practices. To the extent that the company's non-U.S. competitors are not subject to similar laws and regulations in their home countries, the company is placed at a competitive disadvantage. It is very difficult to assess the possible effect of compliance with future requirements that may differ from existing ones. The company believes that the effect of amendments to the Clean Air Act of 1990 on its utility suppliers will increase its costs for electricity by $4 million to $5 million annually by 1995. Furthermore, regulations related to these amendments have been proposed that, if adopted, would mandate significant changes in the way the company monitors air emissions. This would require capital expenditures in excess of $1 million and the addition of personnel. A large cross section of industries have expressed opposition to the proposed regulations for a variety of reasons. It is possible that the U.S. Environmental Protection Agency (EPA) may amend the regulations before they are adopted, lessening substantially their impact on the company. The company and its U.S. subsidiaries are involved as potentially responsible parties (PRP), as named by the EPA, for the clean-up of hazardous waste at five non-company sites. It is believed the company's share of liability for these sites would not be material to its financial condition or results of operations because of the company's uncertain or limited involvement at these sites and the number of other identified PRPs. In 1993, the company and its Latrobe Steel subsidiary each participated in one minor settlement agreement, which terminated their respective clean-up obligations at two other sites.

The company's MPB Corporation subsidiary is engaged in environmental clean-up projects at its manufacturing locations in New Hampshire. The costs for these projects, estimated at slightly over $3 million, were recorded previously. A portion of these costs will be recovered from a former owner of the property. MPB has filed suit against its insurance companies for reimbursement of clean-up costs. The full extent of reimbursement cannot be estimated. In late 1993, MPB was notified by the city of Keene, New Hampshire, that city officials were looking to MPB to contribute to the costs of cleaning up alleged soil and groundwater contamination of a city dump, which allegedly had been used by MPB along with many others for industrial waste disposal. This is not a superfund site. No specific monetary request has been made at this time. In December 1993, MPB announced the formation of MPB Singapore PTE. LTD., which will open a

The company's MPB Corporation subsidiary is engaged in environmental clean-up projects at its manufacturing locations in New Hampshire. The costs for these projects, estimated at slightly over $3 million, were recorded previously. A portion of these costs will be recovered from a former owner of the property. MPB has filed suit against its insurance companies for reimbursement of clean-up costs. The full extent of reimbursement cannot be estimated. In late 1993, MPB was notified by the city of Keene, New Hampshire, that city officials were looking to MPB to contribute to the costs of cleaning up alleged soil and groundwater contamination of a city dump, which allegedly had been used by MPB along with many others for industrial waste disposal. This is not a superfund site. No specific monetary request has been made at this time. In December 1993, MPB announced the formation of MPB Singapore PTE. LTD., which will open a manufacturing facility in Singapore. This facility is to be operational by early summer 1994. This will improve service to MPB's existing Pacific Rim area customers and provide direct participation in new growth markets and products. 23
Consolidated Statement of Shareholders' Equity The Timken Company and Subsidiaries Common Stock __________________ Earnings Foreign Other Invested Currency Stated Paid-In in the Translation Treasury Capital Capital Business Adjustment Stock Total _______________________________________________________________________________________________________ (Thousands of dollars) Year Ended December 31, 1991 Balance at January 1, 1991 $ 53,064 $ 243,683 $ 796,230 $ 16,965 $(35,241) $1,074,701 Net loss (35,687) (35,687) Dividends paid - $1.00 per share (29,612) (29,612) Treasury share activity - net (1,276) 15,176 13,900 Foreign currency translation adjustments (net of income tax benefit of $734) (4,331) (4,331) _______________________________________________________________________________________________________ Balance at December 31, 1991 53,064 242,407 730,931 12,634 (20,065) 1,018,971 Year Ended December 31, 1992 Net income 4,452 4,452 Dividends paid - $1.00 per share (30,207) (30,207) Treasury share activity - net (1,139) 17,095 15,956 Foreign currency translation adjustments (net of income tax benefit of $4,170) (24,109) (24,109) _______________________________________________________________________________________________________ Balance at December 31, 1992 53,064 241,268 705,176 (11,475) (2,970) 985,063 Year Ended December 31, 1993 Net loss (271,932) (271,932) Dividends paid - $1.00 per share (30,678) (30,678) Treasury share activity - net 125 2,969 3,094 Issuance of common stock 6,306 6,306 Foreign currency translation adjustments (net of income tax benefit of $2,112) (6,541) (6,541) _______________________________________________________________________________________________________ Balance at December 31, 1993 $ 53,064 $ 247,699 $ 402,566 $(18,016) $ (1) $ 685,312 _______________________________________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements on pages 25 through 33. 24

Notes to Consolidated Financial Statements The Timken Company and Subsidiaries 1. Significant Accounting Policies

Consolidated Statement of Shareholders' Equity The Timken Company and Subsidiaries Common Stock __________________ Earnings Foreign Other Invested Currency Stated Paid-In in the Translation Treasury Capital Capital Business Adjustment Stock Total _______________________________________________________________________________________________________ (Thousands of dollars) Year Ended December 31, 1991 Balance at January 1, 1991 $ 53,064 $ 243,683 $ 796,230 $ 16,965 $(35,241) $1,074,701 Net loss (35,687) (35,687) Dividends paid - $1.00 per share (29,612) (29,612) Treasury share activity - net (1,276) 15,176 13,900 Foreign currency translation adjustments (net of income tax benefit of $734) (4,331) (4,331) _______________________________________________________________________________________________________ Balance at December 31, 1991 53,064 242,407 730,931 12,634 (20,065) 1,018,971 Year Ended December 31, 1992 Net income 4,452 4,452 Dividends paid - $1.00 per share (30,207) (30,207) Treasury share activity - net (1,139) 17,095 15,956 Foreign currency translation adjustments (net of income tax benefit of $4,170) (24,109) (24,109) _______________________________________________________________________________________________________ Balance at December 31, 1992 53,064 241,268 705,176 (11,475) (2,970) 985,063 Year Ended December 31, 1993 Net loss (271,932) (271,932) Dividends paid - $1.00 per share (30,678) (30,678) Treasury share activity - net 125 2,969 3,094 Issuance of common stock 6,306 6,306 Foreign currency translation adjustments (net of income tax benefit of $2,112) (6,541) (6,541) _______________________________________________________________________________________________________ Balance at December 31, 1993 $ 53,064 $ 247,699 $ 402,566 $(18,016) $ (1) $ 685,312 _______________________________________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements on pages 25 through 33. 24

Notes to Consolidated Financial Statements The Timken Company and Subsidiaries 1. Significant Accounting Policies Principles of Consolidation: The consolidated financial statements include the accounts and operations of the company and all of its subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. Cash Equivalents: The company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates fair value. Inventories: Inventories are valued at the lower of cost or market, principally by the last-in, first-out (LIFO) method. If all inventories had been valued at current costs, inventories would have been $159,867,000 and $180,465,000 greater at December 31, 1993 and 1992, respectively. In each of the past three years, inventory quantities were reduced. These reductions resulted in liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years. The effect of the liquidations was to decrease the net loss by approximately $11,600,000 in 1993 and $10,200,000 in 1991 or $.38 and $.34 per share, respectively. The effect of LIFO inventory reductions in 1992 was not material.

Notes to Consolidated Financial Statements The Timken Company and Subsidiaries 1. Significant Accounting Policies Principles of Consolidation: The consolidated financial statements include the accounts and operations of the company and all of its subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. Cash Equivalents: The company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates fair value. Inventories: Inventories are valued at the lower of cost or market, principally by the last-in, first-out (LIFO) method. If all inventories had been valued at current costs, inventories would have been $159,867,000 and $180,465,000 greater at December 31, 1993 and 1992, respectively. In each of the past three years, inventory quantities were reduced. These reductions resulted in liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years. The effect of the liquidations was to decrease the net loss by approximately $11,600,000 in 1993 and $10,200,000 in 1991 or $.38 and $.34 per share, respectively. The effect of LIFO inventory reductions in 1992 was not material. Property, Plant and Equipment: Property, plant and equipment is valued at cost less accumulated depreciation. Provision for depreciation is computed principally by the straight-line method based upon the estimated useful lives of the assets. Costs in Excess of Net Assets of Acquired Business: Costs in excess of net assets of acquired business are amortized on the straight-line method over 40 years. Income Taxes: The company uses the liability method of accounting for income taxes in accordance with the provisions of FAS No. 109, "Accounting for Income Taxes." Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the company's assets and liabilities. The company plans to continue to finance expansion of its operations outside the United States by reinvesting undistributed earnings of its non-U.S. subsidiaries. The amount of undistributed earnings that is considered to be indefinitely reinvested for this purpose was approximately $50,000,000 at December 31, 1993. Accordingly, U.S. income taxes have not been provided on such earnings. While the amount of any U.S. income taxes on these reinvested earnings, if distributed in the future, is not presently determinable, it is anticipated that they would be reduced substantially by the utilization of tax credits or deductions. Such distributions would be subject to withholding taxes. Foreign Exchange Contracts: The company enters into foreign exchange contracts to manage exposure to currency rate fluctuations primarily related to the purchase of inventory and equipment. As these exchange contracts qualify for accounting as designated hedges, the realized and unrealized gains and losses are deferred and included as a component of the related transaction. At December 31, 1993, the company had outstanding foreign exchange contracts totalling $29,038,000, which approximates their fair value. The fair value of foreign exchange contracts is estimated based on quoted market prices of comparable contracts.

Earnings Per Share: Earnings per share are computed by dividing net income by the average number of common shares outstanding during the year. Dilutive common stock equivalents are not material and, therefore, are not included in the computation of primary earnings per share. 2. Accounting Changes

Effective January 1, 1993, the company and its subsidiaries adopted FAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions,"

Earnings Per Share: Earnings per share are computed by dividing net income by the average number of common shares outstanding during the year. Dilutive common stock equivalents are not material and, therefore, are not included in the computation of primary earnings per share. 2. Accounting Changes

Effective January 1, 1993, the company and its subsidiaries adopted FAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," No. 109, "Accounting for Income Taxes," and No. 112, "Employers' Accounting for Postemployment Benefits." 25

Notes to Consolidated Financial Statements The adoption of these accounting standards resulted in a one-time, non-cash charge to income of $254,263,000 ($8.29 per share) for the cumulative effect of the accounting changes for periods prior to 1993. The charge relates primarily to the adoption of FAS No. 106. In addition, these accounting changes resulted in an increase in the loss before the cumulative effect of accounting changes for 1993 of approximately $10,000,000 ($.33 per share). 3. Impairment and Restructuring Charges During the fourth quarter of 1991, the company initiated a program to streamline operations, strengthen its strategic long-term position and significantly reduce costs. In connection with this program, the company recorded a provision for restructuring of $41,000,000, which increased the 1991 net loss by $26,650,000 or $.90 per share. The program has been largely implemented and included the write-off of certain non-strategic assets, the consolidation of certain operations and the recognition of certain pension costs, severance pay and outplacement services for terminated associates. During 1993, further opportunities were identified to streamline the company and strengthen its strategic long-term position. Accordingly, in the fourth quarter of 1993, the company initiated a program to significantly accelerate continuous improvement in its manufacturing plants worldwide. The company recorded a pre-tax charge of $48,000,000 to cover certain costs associated with the program, other costs related to manufacturing restructuring and severance and the writedown of certain impaired assets. The charge increased the 1993 net loss by $33,126,000 or $1.08 per share. 4. Financing Arrangements Long-term debt at December 31, 1993 and 1992, was as follows: 1993 1992 =========================================================================== (Thousands of dollars) Fixed Rate Medium-Term Notes, Series A, due at various dates through September 2002, with interest rates ranging from 7.20% to 9.25% $133,000 $133,000 7.50%, State of Ohio Pollution Control Revenue Refunding Bonds, maturing on January 1, 2002 17,000 17,000 8.95%, State of Ohio Water Development Revenue Bonds -08,000 Variable rate State of Ohio Water Development Revenue Refunding Bonds, maturing May 1, 2007 (2.75% at December 31, 1993) 8,000 -0Variable rate State of Ohio Air Quality and Water Development Revenue Refunding Bonds, maturing on June 1, 2001 (2.75% at December 31, 1993) 21,700 21,700 Other 1,740 4,662 __________________________________________________________________________ 181,440 184,362 Less current maturities 282 10,885 __________________________________________________________________________ $181,158 $173,477 ========================================================================== The aggregate maturities of long-term debt for the five years subsequent to December 31, 1993, are as follows: 1994--$282,000; 1995--$30,270,000; 1996--$217,000; 1997--$30,239,000; 1998--$23,209,000.

Notes to Consolidated Financial Statements The adoption of these accounting standards resulted in a one-time, non-cash charge to income of $254,263,000 ($8.29 per share) for the cumulative effect of the accounting changes for periods prior to 1993. The charge relates primarily to the adoption of FAS No. 106. In addition, these accounting changes resulted in an increase in the loss before the cumulative effect of accounting changes for 1993 of approximately $10,000,000 ($.33 per share). 3. Impairment and Restructuring Charges During the fourth quarter of 1991, the company initiated a program to streamline operations, strengthen its strategic long-term position and significantly reduce costs. In connection with this program, the company recorded a provision for restructuring of $41,000,000, which increased the 1991 net loss by $26,650,000 or $.90 per share. The program has been largely implemented and included the write-off of certain non-strategic assets, the consolidation of certain operations and the recognition of certain pension costs, severance pay and outplacement services for terminated associates. During 1993, further opportunities were identified to streamline the company and strengthen its strategic long-term position. Accordingly, in the fourth quarter of 1993, the company initiated a program to significantly accelerate continuous improvement in its manufacturing plants worldwide. The company recorded a pre-tax charge of $48,000,000 to cover certain costs associated with the program, other costs related to manufacturing restructuring and severance and the writedown of certain impaired assets. The charge increased the 1993 net loss by $33,126,000 or $1.08 per share. 4. Financing Arrangements Long-term debt at December 31, 1993 and 1992, was as follows: 1993 1992 =========================================================================== (Thousands of dollars) Fixed Rate Medium-Term Notes, Series A, due at various dates through September 2002, with interest rates ranging from 7.20% to 9.25% $133,000 $133,000 7.50%, State of Ohio Pollution Control Revenue Refunding Bonds, maturing on January 1, 2002 17,000 17,000 8.95%, State of Ohio Water Development Revenue Bonds -08,000 Variable rate State of Ohio Water Development Revenue Refunding Bonds, maturing May 1, 2007 (2.75% at December 31, 1993) 8,000 -0Variable rate State of Ohio Air Quality and Water Development Revenue Refunding Bonds, maturing on June 1, 2001 (2.75% at December 31, 1993) 21,700 21,700 Other 1,740 4,662 __________________________________________________________________________ 181,440 184,362 Less current maturities 282 10,885 __________________________________________________________________________ $181,158 $173,477 ========================================================================== The aggregate maturities of long-term debt for the five years subsequent to December 31, 1993, are as follows: 1994--$282,000; 1995--$30,270,000; 1996--$217,000; 1997--$30,239,000; 1998--$23,209,000. Interest paid in 1993, 1992 and 1991 approximated $31,290,000, $31,137,000 and $27,371,000, respectively. This differs from interest expense due to timing of payments and interest capitalized of $1,700,000 in 1993, $2,229,000 in 1992 and $1,987,000 in 1991 as a part of major capital additions.

At December 31, 1993, the company had available $205,000,000 through an unsecured $300,000,000 revolving credit agreement with a group of banks. The agreement, which expires in August 1996, bears interest based upon any one of three rates at the company's option--prime, London Interbank Offered Rate (LIBOR) or the adjusted certificate of deposit rate. The agreement contains certain restrictions relating to investments held and other borrowings by the company and its subsidiaries and restricts borrowing on assets other than accounts receivable. Additionally, the company is required to meet tangible

At December 31, 1993, the company had available $205,000,000 through an unsecured $300,000,000 revolving credit agreement with a group of banks. The agreement, which expires in August 1996, bears interest based upon any one of three rates at the company's option--prime, London Interbank Offered Rate (LIBOR) or the adjusted certificate of deposit rate. The agreement contains certain restrictions relating to investments held and other borrowings by the company and its subsidiaries and restricts borrowing on assets other than accounts receivable. Additionally, the company is required to meet tangible net worth and borrowing covenants. At December 31, 1993, the company was $36,000,000 above the required net worth minimum. 26

The company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on its short-term borrowings. This agreement covers $50,000,000 of short-term borrowings and expires November 15, 1994. The differential between the variable rates on the related short-term borrowings and the fixed rate provided by the agreement is accrued to enable the company to recognize the interest expense at the fixed rate. The counterparties to this agreement are major commercial banks. Management believes the risk of incurring losses relating to credit risk is remote and any losses would be immaterial. At December 31, 1993, the estimated fair value of the company's debt instruments, based on discounted cash flow analysis, exceeds the carrying amount by approximately $18,000,000. 5. Stock Compensation Plans As approved by the shareholders, the company had two stock compensation plans at December 31, 1993, the Long-term Incentive Plan and the 1985 Incentive Plan. The Long-term Incentive Plan, which replaced the 1985 Incentive Plan, was approved in 1992 with 1,400,000 shares to be issued at the discretion of the Compensation Committee of the Board of Directors to officers and key associates in the form of stock options, stock appreciation rights, restricted shares and deferred shares. The Long-term Incentive Plan also allows the awarding of shares to directors not employed by the company. At its inception, the 1985 Incentive Plan reserved 1,000,000 shares to be issued in the form of stock options and restricted stock rights to officers and key associates. At December 31, 1993, options for 682,578 shares were exercisable under the 1985 Incentive Plan at option prices ranging from $21.12 to $35.75. A total of 85,454 restricted stock rights have been awarded. Of the total restricted stock rights, 25,700 were not vested and 11,044 have been cancelled. During 1993, 18,311 common shares were distributed, and 20,570 common shares were distributed in 1992. At December 31, 1993, options for 55,125 shares were exercisable under the Long-term Incentive Plan at an option price of $28.88. A total of 26,400 deferred shares and restricted shares have been awarded to date of which 1,000 shares vested prior to December 31,1993. During 1993, 10,500 deferred shares and 500 restricted shares were granted. In addition during 1993, 1,400 shares of common stock were awarded to outside directors. The following table summarizes certain information relative to stock options: 1993 1992 _____________________________________________________________________________ Number Number of Option Price of Option Price Shares Per Share Shares Per Share ============================================================================= Outstanding at beginning of year 1,043,593 $21.12-$35.75 862,193 $21.12-$35.75 Granted 219,800 $31.25 238,900 $28.88 Exercised (18,015) $25.00-$28.88 (13,600) $22.63-$25.00 Cancelled or expired (13,325) $25.75-$35.75 (43,900) $25.75-$35.75 _____________________________________________________________________________ Outstanding at end of year 1,232,053 $21.12-$35.75 1,043,593 $21.12-$35.75 ============================================================================= Reserved for future use 991,915 1,207,653

The company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on its short-term borrowings. This agreement covers $50,000,000 of short-term borrowings and expires November 15, 1994. The differential between the variable rates on the related short-term borrowings and the fixed rate provided by the agreement is accrued to enable the company to recognize the interest expense at the fixed rate. The counterparties to this agreement are major commercial banks. Management believes the risk of incurring losses relating to credit risk is remote and any losses would be immaterial. At December 31, 1993, the estimated fair value of the company's debt instruments, based on discounted cash flow analysis, exceeds the carrying amount by approximately $18,000,000. 5. Stock Compensation Plans As approved by the shareholders, the company had two stock compensation plans at December 31, 1993, the Long-term Incentive Plan and the 1985 Incentive Plan. The Long-term Incentive Plan, which replaced the 1985 Incentive Plan, was approved in 1992 with 1,400,000 shares to be issued at the discretion of the Compensation Committee of the Board of Directors to officers and key associates in the form of stock options, stock appreciation rights, restricted shares and deferred shares. The Long-term Incentive Plan also allows the awarding of shares to directors not employed by the company. At its inception, the 1985 Incentive Plan reserved 1,000,000 shares to be issued in the form of stock options and restricted stock rights to officers and key associates. At December 31, 1993, options for 682,578 shares were exercisable under the 1985 Incentive Plan at option prices ranging from $21.12 to $35.75. A total of 85,454 restricted stock rights have been awarded. Of the total restricted stock rights, 25,700 were not vested and 11,044 have been cancelled. During 1993, 18,311 common shares were distributed, and 20,570 common shares were distributed in 1992. At December 31, 1993, options for 55,125 shares were exercisable under the Long-term Incentive Plan at an option price of $28.88. A total of 26,400 deferred shares and restricted shares have been awarded to date of which 1,000 shares vested prior to December 31,1993. During 1993, 10,500 deferred shares and 500 restricted shares were granted. In addition during 1993, 1,400 shares of common stock were awarded to outside directors. The following table summarizes certain information relative to stock options: 1993 1992 _____________________________________________________________________________ Number Number of Option Price of Option Price Shares Per Share Shares Per Share ============================================================================= Outstanding at beginning of year 1,043,593 $21.12-$35.75 862,193 $21.12-$35.75 Granted 219,800 $31.25 238,900 $28.88 Exercised (18,015) $25.00-$28.88 (13,600) $22.63-$25.00 Cancelled or expired (13,325) $25.75-$35.75 (43,900) $25.75-$35.75 _____________________________________________________________________________ Outstanding at end of year 1,232,053 $21.12-$35.75 1,043,593 $21.12-$35.75 ============================================================================= Reserved for future use 991,915 1,207,653

6. Retirement Plans The company and its subsidiaries sponsor a number of defined benefit pension plans, which cover substantially all of their associates except those at certain non-U.S. locations who are covered by government plans. These plans provide benefits primarily based on associates' compensation. In general, the company's funding policy is to contribute amounts to the plans sufficient to meet the minimum funding requirements set forth by regulations of each country, such as the Employee Retirement Income Security Act of 1974, plus such additional amounts as the company may determine to be appropriate. In arriving at the pension obligation and net periodic pension costs for the

6. Retirement Plans The company and its subsidiaries sponsor a number of defined benefit pension plans, which cover substantially all of their associates except those at certain non-U.S. locations who are covered by government plans. These plans provide benefits primarily based on associates' compensation. In general, the company's funding policy is to contribute amounts to the plans sufficient to meet the minimum funding requirements set forth by regulations of each country, such as the Employee Retirement Income Security Act of 1974, plus such additional amounts as the company may determine to be appropriate. In arriving at the pension obligation and net periodic pension costs for the company's plans covering most of its associates, the consulting actuary used certain assumptions. These included a discount rate of 7.5% in 1993 and 9.5% in 1992 and 1991, a long-term average rate of increase in employment costs, which varies from 3% to 4% in 27

Notes to Consolidated Financial Statements 1993 and 3% to 5% in 1992 and 1991, dependent upon the plan; and an expected long-term rate of return on the plans' assets of 9.5%. A summary of the components of net periodic pension costs for the defined benefit plans follows: 1993 1992 1991 ============================================================================= (Thousands of dollars) Defined benefit plans: Service cost--benefits earned during the period $ 19,351 $ 19,454 $ 19,027 Interest cost on projected benefit obligation 73,380 69,062 65,667 Actual return on plan assets (99,202) (43,607) (135,523) Net amortization and deferral 30,279 (27,292) 71,570 _____________________________________________________________________________ Total pension expense $ 23,808 $ 17,617 $ 20,741 =============================================================================

The following table sets forth the funded status and amounts recognized in the consolidated balance sheets at December 31, 1993, and 1992, for the company's defined benefit plans: 1993 1992 __________________________________________________________________________________________________ Plans Where Plans Where Plans Where Plans Where Assets Accumulated Assets Accumulated Exceed Benefits Exceed Benefits Accumulated Exceed Accumulated Exceed Benefits Assets Benefits Assets ================================================================================================== (Thousands of dollars) Actuarial present value of benefit obligations: Vested benefit obligation $(294,531) $(440,405) $(225,335) $(346,771) ================================================================================================== Accumulated benefit obligation $(335,973) $(506,239) $(253,107) $(443,867) ================================================================================================== Projected benefit obligation $(397,910) $(561,088) $(321,730) $(481,181) Plan assets at fair value 402,724 414,727 369,164 395,603 __________________________________________________________________________________________________ Projected benefit obligation (in excess of) or less than plan assets 4,814 (146,361) 47,434 (85,578) Unrecognized net gain (18,508) (23,739) (67,909) (68,660) Prior service (credit) cost not yet recognized in net periodic pension cost (9,299) 90,846 (8,965) 101,138 Unrecognized net asset at transition dates, net of amortization (14,268) (12,258) (17,105) (14,178) __________________________________________________________________________________________________ Net pension liability recognized in the balance sheet $ (37,261) $ (91,512) $ (46,545) $ (67,278)

Notes to Consolidated Financial Statements 1993 and 3% to 5% in 1992 and 1991, dependent upon the plan; and an expected long-term rate of return on the plans' assets of 9.5%. A summary of the components of net periodic pension costs for the defined benefit plans follows: 1993 1992 1991 ============================================================================= (Thousands of dollars) Defined benefit plans: Service cost--benefits earned during the period $ 19,351 $ 19,454 $ 19,027 Interest cost on projected benefit obligation 73,380 69,062 65,667 Actual return on plan assets (99,202) (43,607) (135,523) Net amortization and deferral 30,279 (27,292) 71,570 _____________________________________________________________________________ Total pension expense $ 23,808 $ 17,617 $ 20,741 =============================================================================

The following table sets forth the funded status and amounts recognized in the consolidated balance sheets at December 31, 1993, and 1992, for the company's defined benefit plans: 1993 1992 __________________________________________________________________________________________________ Plans Where Plans Where Plans Where Plans Where Assets Accumulated Assets Accumulated Exceed Benefits Exceed Benefits Accumulated Exceed Accumulated Exceed Benefits Assets Benefits Assets ================================================================================================== (Thousands of dollars) Actuarial present value of benefit obligations: Vested benefit obligation $(294,531) $(440,405) $(225,335) $(346,771) ================================================================================================== Accumulated benefit obligation $(335,973) $(506,239) $(253,107) $(443,867) ================================================================================================== Projected benefit obligation $(397,910) $(561,088) $(321,730) $(481,181) Plan assets at fair value 402,724 414,727 369,164 395,603 __________________________________________________________________________________________________ Projected benefit obligation (in excess of) or less than plan assets 4,814 (146,361) 47,434 (85,578) Unrecognized net gain (18,508) (23,739) (67,909) (68,660) Prior service (credit) cost not yet recognized in net periodic pension cost (9,299) 90,846 (8,965) 101,138 Unrecognized net asset at transition dates, net of amortization (14,268) (12,258) (17,105) (14,178) __________________________________________________________________________________________________ Net pension liability recognized in the balance sheet $ (37,261) $ (91,512) $ (46,545) $ (67,278) ==================================================================================================

The projected benefit obligation in excess of plan assets increased approximately $100,000,000 from 1992 to 1993 primarily as a result of reducing the discount rate from 9.5% to 7.5%. Approximately 80% of the plans' assets at December 31, 1993, were invested in listed stocks and bonds. The company also sponsors certain defined contribution retirement and savings plans covering substantially all associates in the United States. The company contributes Timken Company common stock to the salaried and certain other hourly plans based on formulas established in the respective plan agreements. At December 31, 1993, the plans had net assets of $139,882,000, including 2,925,056 shares of Timken Company common stock as well as other stock and cash investments. Company contributions to the plans amounted to $5,936,000 in 1993; $5,881,000 in 1992, and $5,609,000 in 1991.

The projected benefit obligation in excess of plan assets increased approximately $100,000,000 from 1992 to 1993 primarily as a result of reducing the discount rate from 9.5% to 7.5%. Approximately 80% of the plans' assets at December 31, 1993, were invested in listed stocks and bonds. The company also sponsors certain defined contribution retirement and savings plans covering substantially all associates in the United States. The company contributes Timken Company common stock to the salaried and certain other hourly plans based on formulas established in the respective plan agreements. At December 31, 1993, the plans had net assets of $139,882,000, including 2,925,056 shares of Timken Company common stock as well as other stock and cash investments. Company contributions to the plans amounted to $5,936,000 in 1993; $5,881,000 in 1992, and $5,609,000 in 1991. 7. Postretirement Benefits Effective January 1, 1993, the company and its subsidiaries adopted FAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." FAS No. 106 requires the projected cost of providing postretirement health care and life insurance benefits be recognized as an expense as associates render service instead of when benefits are paid, as the company has historically done. In doing so, the company elected immediate recognition of the transition obligation. 28

The company and its subsidiaries sponsor several unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. Depending on retirement date and associate classification, certain health care plans contain contributions and cost-sharing features such as deductibles and coinsurance. The remaining health care plans and the life insurance plans are noncontributory. The postretirement benefit obligation and net periodic postretirement benefit cost were determined by application of the terms of the current medical and life insurance plans, including established deductibles, coinsurance and maximums, together with relevant actuarial assumptions. To establish the accumulated postretirement benefit obligation at January 1, 1993 and expense for 1993, the company assumed a weighted-average annual rate of increase in the per capita cost of health care benefits (health care cost trend rate) of 12.75% declining gradually to 6.5% in 2003 and thereafter. The weighted average discount rate used was 9.5%. Net periodic postretirement benefit cost included the following components for 1993 (in thousands of dollars):
Service cost $ 4,039 Interest cost on accumulated postretirement benefit obligation 35,046 _____________________________________________________________ Net periodic postretirement benefit cost $39,085 =============================================================

The net periodic postretirement benefit cost shown above is about $19,000,000 higher than what it would have been under the previous pay-as-you-go method. In 1992 and 1991, the company paid postretirement benefit costs of $21,355,000 and $18,244,000, respectively. For measurement purposes, at December 31, 1993, the health care cost trend rate was 10% and is assumed to decrease gradually to 5.5% in 2003 and remain at that level thereafter. The weighted-average discount rate used was 7.5%. The following table sets forth the components of the accumulated postretirement benefit obligation recognized in the balance sheet at December 31, 1993 (in thousands of dollars): Accumulated postretirement benefit obligation:
Retirees $(276,499)

The company and its subsidiaries sponsor several unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. Depending on retirement date and associate classification, certain health care plans contain contributions and cost-sharing features such as deductibles and coinsurance. The remaining health care plans and the life insurance plans are noncontributory. The postretirement benefit obligation and net periodic postretirement benefit cost were determined by application of the terms of the current medical and life insurance plans, including established deductibles, coinsurance and maximums, together with relevant actuarial assumptions. To establish the accumulated postretirement benefit obligation at January 1, 1993 and expense for 1993, the company assumed a weighted-average annual rate of increase in the per capita cost of health care benefits (health care cost trend rate) of 12.75% declining gradually to 6.5% in 2003 and thereafter. The weighted average discount rate used was 9.5%. Net periodic postretirement benefit cost included the following components for 1993 (in thousands of dollars):
Service cost $ 4,039 Interest cost on accumulated postretirement benefit obligation 35,046 _____________________________________________________________ Net periodic postretirement benefit cost $39,085 =============================================================

The net periodic postretirement benefit cost shown above is about $19,000,000 higher than what it would have been under the previous pay-as-you-go method. In 1992 and 1991, the company paid postretirement benefit costs of $21,355,000 and $18,244,000, respectively. For measurement purposes, at December 31, 1993, the health care cost trend rate was 10% and is assumed to decrease gradually to 5.5% in 2003 and remain at that level thereafter. The weighted-average discount rate used was 7.5%. The following table sets forth the components of the accumulated postretirement benefit obligation recognized in the balance sheet at December 31, 1993 (in thousands of dollars): Accumulated postretirement benefit obligation:
Retirees $(276,499) Fully eligible active plan participants (75,366) Other active plan participants (94,985) ___________________________________________________________ (446,850) Unrecognized net loss 49,080 __________________________________________________________ Postretirement obligation recognized in the balance sheet $(397,770) ===========================================================

Increasing the assumed health care cost trend rate by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 1993 by approximately $41,700,000 and the net periodic postretirement benefit cost for 1993 by approximately $3,700,000.

In addition to providing the above postretirement benefits, the company also provides certain benefits to former or inactive associates after employment but before retirement. Certain of these benefits have historically been recognized as expense on a pay-as-you-go basis rather than when earned. FAS No. 112, "Employers' Accounting for Postemployment Benefits," requires accrual accounting for these benefits beginning no later than January 1, 1994. The company and its subsidiaries elected to adopt FAS No. 112 effective January 1, 1993. The adoption of FAS No. 112 did not materially affect the cumulative effect adjustment or 1993 operations. 8. Research and Development

In addition to providing the above postretirement benefits, the company also provides certain benefits to former or inactive associates after employment but before retirement. Certain of these benefits have historically been recognized as expense on a pay-as-you-go basis rather than when earned. FAS No. 112, "Employers' Accounting for Postemployment Benefits," requires accrual accounting for these benefits beginning no later than January 1, 1994. The company and its subsidiaries elected to adopt FAS No. 112 effective January 1, 1993. The adoption of FAS No. 112 did not materially affect the cumulative effect adjustment or 1993 operations. 8. Research and Development Expenditures committed to research and development amounted to $37,145,000 in 1993; $41,749,000 in 1992 and $40,905,000 in 1991. 29

Notes to Consolidated Financial Statements 9. Income Taxes Effective January 1, 1993, the company and its subsidiaries adopted FAS No. 109, "Accounting for Income Taxes." Under FAS No. 109, deferred tax assets and liabilities are recognized for the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted marginal tax rates and laws. Prior to this, income tax expense was determined under the provisions of Accounting Principles Board Opinion No. 11 using the deferred method. Deferred tax expense was based on items of income and expense that were reported in different years in the financial statements and tax returns and were measured at the tax rate in effect in the year the difference originated. In adopting FAS No. 109, no prior periods were restated, and the cumulative effect of the accounting change was not material to the company's financial condition or to operations. The provision (credit) for income taxes consisted of the following:
1993 1992 1991 ___________________________________________________________________________ Current Deferred Current Deferred Current Deferred =========================================================================== (Thousands of dollars) United States: Federal $16,835 $(24,047) $ 4,600 $ (616) $4,400 $(16,410) State and local 2,778 (1,843) (21) -0129 -0Foreign 5,870 (2,843) 6,504 (1,488) 5,406 212 ___________________________________________________________________________ $25,483 $(28,733) $11,083 $(2,104) $9,935 $(16,198) ===========================================================================

The company made income tax payments of approximately $20,000,000 in 1993; $2,500,000 in 1992 and $16,400,000 in 1991. Taxes paid differ from current taxes provided, primarily due to the timing of payments. The effect of temporary differences giving rise to deferred tax assets and liabilities at December 31, 1993 was as follows (in thousands of dollars):
Deferred tax assets: Accrued postretirement benefits cost $148,886 Accrued pension cost 44,845 Benefit accruals 22,025 Impairment and restructuring charges 16,405 Foreign tax loss and credit carryforwards 20,224 Alternative minimum tax credit carryforwards 12,205 Inventory valuation 10,112 Other--net 9,784 Valuation allowance (20,224) __________________________________________________________ 264,262

Notes to Consolidated Financial Statements 9. Income Taxes Effective January 1, 1993, the company and its subsidiaries adopted FAS No. 109, "Accounting for Income Taxes." Under FAS No. 109, deferred tax assets and liabilities are recognized for the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted marginal tax rates and laws. Prior to this, income tax expense was determined under the provisions of Accounting Principles Board Opinion No. 11 using the deferred method. Deferred tax expense was based on items of income and expense that were reported in different years in the financial statements and tax returns and were measured at the tax rate in effect in the year the difference originated. In adopting FAS No. 109, no prior periods were restated, and the cumulative effect of the accounting change was not material to the company's financial condition or to operations. The provision (credit) for income taxes consisted of the following:
1993 1992 1991 ___________________________________________________________________________ Current Deferred Current Deferred Current Deferred =========================================================================== (Thousands of dollars) United States: Federal $16,835 $(24,047) $ 4,600 $ (616) $4,400 $(16,410) State and local 2,778 (1,843) (21) -0129 -0Foreign 5,870 (2,843) 6,504 (1,488) 5,406 212 ___________________________________________________________________________ $25,483 $(28,733) $11,083 $(2,104) $9,935 $(16,198) ===========================================================================

The company made income tax payments of approximately $20,000,000 in 1993; $2,500,000 in 1992 and $16,400,000 in 1991. Taxes paid differ from current taxes provided, primarily due to the timing of payments. The effect of temporary differences giving rise to deferred tax assets and liabilities at December 31, 1993 was as follows (in thousands of dollars):
Deferred tax assets: Accrued postretirement benefits cost $148,886 Accrued pension cost 44,845 Benefit accruals 22,025 Impairment and restructuring charges 16,405 Foreign tax loss and credit carryforwards 20,224 Alternative minimum tax credit carryforwards 12,205 Inventory valuation 10,112 Other--net 9,784 Valuation allowance (20,224) __________________________________________________________ 264,262 Deferred tax liability--depreciation (153,140) __________________________________________________________ Net deferred tax asset $111,122 ==========================================================

FAS No. 109 specifies that deferred tax assets are to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 1993, the company has deferred tax assets attributable to foreign tax loss and credit carryforwards. As a majority of these carryforwards expire in five years or less, realization is considered uncertain and a valuation allowance has been recorded. The items generating the remaining deferred tax assets, except for accrued postretirement benefits cost, are expected to reverse over the same general period as depreciation and are therefore likely to be realized. The deferred tax asset relative to accrued postretirement benefits cost, which has a very long reversal period, is

FAS No. 109 specifies that deferred tax assets are to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 1993, the company has deferred tax assets attributable to foreign tax loss and credit carryforwards. As a majority of these carryforwards expire in five years or less, realization is considered uncertain and a valuation allowance has been recorded. The items generating the remaining deferred tax assets, except for accrued postretirement benefits cost, are expected to reverse over the same general period as depreciation and are therefore likely to be realized. The deferred tax asset relative to accrued postretirement benefits cost, which has a very long reversal period, is deemed realizable based on the company's anticipated future earnings. 30

The reasons for the difference between the provision (credit) for income taxes and the amount computed by applying the statutory U.S. federal income tax rate (35% in 1993 and 34% in 1992 and 1991) to income (loss) before taxes were as follows:
1993 1992 1991 ============================================================================= (Thousands of dollars) Income tax (credit) at the statutory federal rate $(7,322) $4,567 $(14,263) Adjustments: Tax on remitted foreign earnings 1,021 405 994 Amortization of costs in excess of net assets of acquired business 902 876 876 Losses without current tax benefits 3,668 2,065 3,951 Higher tax rates outside the United States -0963 1,636 State and local income taxes, net of federal tax benefit 608 -085 Change in deferred tax rate upon enactment of new tax law (1,981) -0-0Non-deductible unrealized exchange losses -0-01,206 Other items (146) 103 (748) _____________________________________________________________________________ Total income taxes (credit) $(3,250) $8,979 $ (6,263) ============================================================================= Effective income tax rate (16)% 67% (15)% =============================================================================

10. Common Stock Activity A summary of activity in shares and dollar amounts of common stock, other paid-in capital and treasury stock is as follows:
Common Stock ___________________________ Amount ________________ Treasury Stock __________________

Number Other Number of Stated Paid-In of Shares Capital Capital Shares Amount ============================================================================= (Thousands of dollars, except share data) Year Ended December 31, 1991 Balance at January 1, 1991 30,625,858 $53,064 $243,683 1,279,379 $(35,241) Shares issued in connection with various benefit plans (629) (373,044) 10,246 Shares issued in connection with dividend reinvestment plan (647) (261,869) 7,188 Treasury shares purchased 87,600 (2,258) _____________________________________________________________________________ Balance at December 31, 1991 30,625,858 $53,064 $242,407 732,066 $(20,065)

The reasons for the difference between the provision (credit) for income taxes and the amount computed by applying the statutory U.S. federal income tax rate (35% in 1993 and 34% in 1992 and 1991) to income (loss) before taxes were as follows:
1993 1992 1991 ============================================================================= (Thousands of dollars) Income tax (credit) at the statutory federal rate $(7,322) $4,567 $(14,263) Adjustments: Tax on remitted foreign earnings 1,021 405 994 Amortization of costs in excess of net assets of acquired business 902 876 876 Losses without current tax benefits 3,668 2,065 3,951 Higher tax rates outside the United States -0963 1,636 State and local income taxes, net of federal tax benefit 608 -085 Change in deferred tax rate upon enactment of new tax law (1,981) -0-0Non-deductible unrealized exchange losses -0-01,206 Other items (146) 103 (748) _____________________________________________________________________________ Total income taxes (credit) $(3,250) $8,979 $ (6,263) ============================================================================= Effective income tax rate (16)% 67% (15)% =============================================================================

10. Common Stock Activity A summary of activity in shares and dollar amounts of common stock, other paid-in capital and treasury stock is as follows:
Common Stock ___________________________ Amount ________________ Treasury Stock __________________

Number Other Number of Stated Paid-In of Shares Capital Capital Shares Amount ============================================================================= (Thousands of dollars, except share data) Year Ended December 31, 1991 Balance at January 1, 1991 30,625,858 $53,064 $243,683 1,279,379 $(35,241) Shares issued in connection with various benefit plans (629) (373,044) 10,246 Shares issued in connection with dividend reinvestment plan (647) (261,869) 7,188 Treasury shares purchased 87,600 (2,258) _____________________________________________________________________________ Balance at December 31, 1991 30,625,858 $53,064 $242,407 732,066 $(20,065) Year Ended December 31, 1992 Shares issued in connection with various benefit plans (725) (325,233) 8,909 Shares issued in connection with dividend reinvestment plan (414) (298,526) 8,186 _____________________________________________________________________________ Balance at December 31, 1992 30,625,858 $53,064 $241,268 108,307 $ (2,970)

Year Ended December 31, 1993 Shares issued in connection with various benefit plans Shares issued in connection

85,415

2,362

(56,955)

1,562

Year Ended December 31, 1993 Shares issued in connection with various benefit plans 85,415 2,362 (56,955) 1,562 Shares issued in connection with dividend reinvestment plan 131,679 4,069 (51,312) 1,407 _____________________________________________________________________________ Balance at December 31, 1993 30,842,952 $53,064 $247,699 40 $ (1) =============================================================================

11. Contingencies The company is subject to various lawsuits, claims and proceedings, including environmental matters, which arise in the ordinary course of its business. Management believes that any ultimate liability with respect to these actions will not materially affect the company's operations or consolidated financial position. 31

Notes to Consolidated Financial Statements 12. Segment Information The company manufactures products that fall into two major classifications. The first includes anti-friction bearings used in a multitude of applications to reduce friction and conserve energy. The second classification is steel products of alloy, intermediate alloy and carbon grades. Sales of these products are made predominantly to manufacturers in the automotive, machinery, railroad, aerospace, agricultural industries and service replacement markets following normal credit practices. Net sales by segment include both sales to unaffiliated customers and intersegment sales. Intersegment sales and transfers between geographic areas are accounted for at values based on market prices.
Information by Industry 1993 1992 1991 ============================================================================= (Thousands of dollars) Net sales: Bearings--To customers $1,153,987 $1,169,035 $1,128,972 Steel--To customers 554,774 473,275 518,453 Steel--Intersegment sales 162,133 156,525 132,513 _____________________________________________________________________________ 716,907 629,800 650,966 Elimination--intersegment sales 162,133 156,525 132,513 _____________________________________________________________________________ Consolidated $1,708,761 $1,642,310 $1,647,425 ============================================================================= Operating income (loss): (1) Bearings $ 12,821 $ 60,062 $ 33,854 Steel 7,635 (11,089) (34,982) _____________________________________________________________________________ 20,456 48,973 (1,128) Other income (expense) (41,375) (35,542) (40,822) _____________________________________________________________________________ Income (loss) before income taxes (20,919) 13,431 (41,950) Provision (credit) for income taxes (3,250) 8,979 (6,263) _____________________________________________________________________________ Income (loss) before cumulative effect of accounting changes (17,669) 4,452 (35,687) Cumulative effect of accounting changes (254,263) -0-0_____________________________________________________________________________ Net income (loss) $ (271,932) $ 4,452 $ (35,687) ============================================================================= Assets employed at year-end: Bearings

$

996,549

$

986,617

$1,023,047

Notes to Consolidated Financial Statements 12. Segment Information The company manufactures products that fall into two major classifications. The first includes anti-friction bearings used in a multitude of applications to reduce friction and conserve energy. The second classification is steel products of alloy, intermediate alloy and carbon grades. Sales of these products are made predominantly to manufacturers in the automotive, machinery, railroad, aerospace, agricultural industries and service replacement markets following normal credit practices. Net sales by segment include both sales to unaffiliated customers and intersegment sales. Intersegment sales and transfers between geographic areas are accounted for at values based on market prices.
Information by Industry 1993 1992 1991 ============================================================================= (Thousands of dollars) Net sales: Bearings--To customers $1,153,987 $1,169,035 $1,128,972 Steel--To customers 554,774 473,275 518,453 Steel--Intersegment sales 162,133 156,525 132,513 _____________________________________________________________________________ 716,907 629,800 650,966 Elimination--intersegment sales 162,133 156,525 132,513 _____________________________________________________________________________ Consolidated $1,708,761 $1,642,310 $1,647,425 ============================================================================= Operating income (loss): (1) Bearings $ 12,821 $ 60,062 $ 33,854 Steel 7,635 (11,089) (34,982) _____________________________________________________________________________ 20,456 48,973 (1,128) Other income (expense) (41,375) (35,542) (40,822) _____________________________________________________________________________ Income (loss) before income taxes (20,919) 13,431 (41,950) Provision (credit) for income taxes (3,250) 8,979 (6,263) _____________________________________________________________________________ Income (loss) before cumulative effect of accounting changes (17,669) 4,452 (35,687) Cumulative effect of accounting changes (254,263) -0-0_____________________________________________________________________________ Net income (loss) $ (271,932) $ 4,452 $ (35,687) ============================================================================= Assets employed at year-end: Bearings $ 996,549 $ 986,617 $1,023,047 Steel 793,170 751,833 736,092 _____________________________________________________________________________ $1,789,719 $1,738,450 $1,759,139 ============================================================================= Depreciation and amortization: Bearings $ 62,965 $ 63,125 $ 60,635 Steel 55,438 51,308 48,617 _____________________________________________________________________________ $ 118,403 $ 114,433 $ 109,252 =============================================================================

Capital expenditures: Bearings $ 72,915 $ 73,292 $ 81,250 Steel 20,025 65,804 63,428 _____________________________________________________________________________ $ 92,940 $ 139,096 $ 144,678 =============================================================================

Capital expenditures: Bearings $ 72,915 $ 73,292 $ 81,250 Steel 20,025 65,804 63,428 _____________________________________________________________________________ $ 92,940 $ 139,096 $ 144,678 =============================================================================

(1) The 1993 and 1991 impairment and restructuring charges of $48,000,000, and $41,000,000, respectively have been treated as expenses of the related industry segments. 32
Information by Geographic Area 1993 1992 1991 ============================================================================ (Thousands of dollars) Net sales from: United States $1,351,565 $1,242,602 $1,246,088 Europe 209,688 255,625 262,061 Other countries 147,508 144,083 139,276 ____________________________________________________________________________ $1,708,761 $1,642,310 $1,647,425 ============================================================================= Operating income (loss): (1) United States $ 20,440 $ 32,145 $ (11,284) Europe (12,074) 520 (155) Other countries 12,090 16,308 10,311 _____________________________________________________________________________ $ 20,456 $ 48,973 $ (1,128) ============================================================================= Income (loss) before income taxes: United States $ (11,232) $ 5,603 $ (38,645) Europe (14,485) (1,722) (5,181) Other countries 4,798 9,550 1,876 _____________________________________________________________________________ $ (20,919) $ 13,431 $ (41,950) ============================================================================= Income (loss) before cumulative effect of accounting changes: United States $ (4,955) $ 1,640 $ (26,764) Europe (14,815) (2,161) (8,704) Other countries 2,101 4,973 (219) _____________________________________________________________________________ $ (17,669) $ 4,452 $ (35,687) ============================================================================= Assets employed at year-end: United States $1,533,882 $1,454,961 $1,435,187 Europe 188,376 204,468 239,981 Other countries 67,461 79,021 83,971 _____________________________________________________________________________ $1,789,719 $1,738,450 $1,759,139 =============================================================================

(1) The 1993 and 1991 impairment and restructuring charges of $48,000,000 and $41,000,000, respectively have been treated as expenses of the related geographic segments. Note: Foreign currency exchange losses were $7,246,000 in 1993; $4,853,000 in 1992 and $10,317,000 in 1991.

Report of Independent Auditors Board of Directors The Timken Company

Information by Geographic Area 1993 1992 1991 ============================================================================ (Thousands of dollars) Net sales from: United States $1,351,565 $1,242,602 $1,246,088 Europe 209,688 255,625 262,061 Other countries 147,508 144,083 139,276 ____________________________________________________________________________ $1,708,761 $1,642,310 $1,647,425 ============================================================================= Operating income (loss): (1) United States $ 20,440 $ 32,145 $ (11,284) Europe (12,074) 520 (155) Other countries 12,090 16,308 10,311 _____________________________________________________________________________ $ 20,456 $ 48,973 $ (1,128) ============================================================================= Income (loss) before income taxes: United States $ (11,232) $ 5,603 $ (38,645) Europe (14,485) (1,722) (5,181) Other countries 4,798 9,550 1,876 _____________________________________________________________________________ $ (20,919) $ 13,431 $ (41,950) ============================================================================= Income (loss) before cumulative effect of accounting changes: United States $ (4,955) $ 1,640 $ (26,764) Europe (14,815) (2,161) (8,704) Other countries 2,101 4,973 (219) _____________________________________________________________________________ $ (17,669) $ 4,452 $ (35,687) ============================================================================= Assets employed at year-end: United States $1,533,882 $1,454,961 $1,435,187 Europe 188,376 204,468 239,981 Other countries 67,461 79,021 83,971 _____________________________________________________________________________ $1,789,719 $1,738,450 $1,759,139 =============================================================================

(1) The 1993 and 1991 impairment and restructuring charges of $48,000,000 and $41,000,000, respectively have been treated as expenses of the related geographic segments. Note: Foreign currency exchange losses were $7,246,000 in 1993; $4,853,000 in 1992 and $10,317,000 in 1991.

Report of Independent Auditors Board of Directors The Timken Company We have audited the accompanying consolidated balance sheets of The Timken Company and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We

Report of Independent Auditors Board of Directors The Timken Company We have audited the accompanying consolidated balance sheets of The Timken Company and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Timken Company and subsidiaries at December 31, 1993 and 1992, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. As described in Note 2 to the financial statements, in 1993 the company changed its methods of accounting for postretirement benefits, postemployment benefits and income taxes. Canton, Ohio February 3, 1994 33

Summary of Operations and Other Comparative Data
The Timken Company and Subsidiaries 1993 1992 1991 _____________________________________________________________________________ Statements of Income Net sales: Bearings $1,153,987 $1,169,035 $1,128,972 Steel 554,774 473,275 518,453 _____________________________________________________________________________ Total net sales 1,708,761 1,642,310 1,647,425 Cost of products sold Selling, administrative and general expenses Impairment and restructuring charges Operating income (loss) Earnings before interest and taxes (EBIT) Interest expense Income (loss) before income taxes Provision for income taxes (credit) Income (loss) before extraordinary item and cumulative effect of accounting changes Net income (loss) Balance Sheets Inventory Current assets Working capital Property, plant and equipment 1,366,164 274,141 48,000 20,456 8,700 29,619 (20,919) (3,250) 1,296,511 296,826 -048,973 42,091 28,660 13,431 8,979 1,309,893 297,660 41,000 (1,128) (15,277) 26,673 (41,950) (6,263)

(17,669) $ (271,932) $

4,452 4,452

$

(35,687) (35,687)

$

299,783 586,384 153,971

$

310,947 556,017 165,553

$

320,076 562,496 148,950

Summary of Operations and Other Comparative Data
The Timken Company and Subsidiaries 1993 1992 1991 _____________________________________________________________________________ Statements of Income Net sales: Bearings $1,153,987 $1,169,035 $1,128,972 Steel 554,774 473,275 518,453 _____________________________________________________________________________ Total net sales 1,708,761 1,642,310 1,647,425 Cost of products sold Selling, administrative and general expenses Impairment and restructuring charges Operating income (loss) Earnings before interest and taxes (EBIT) Interest expense Income (loss) before income taxes Provision for income taxes (credit) Income (loss) before extraordinary item and cumulative effect of accounting changes Net income (loss) Balance Sheets Inventory Current assets Working capital Property, plant and equipment (less depreciation) Total assets Total debt Total liabilities Shareholders' equity Other Comparative Data Net income (loss)/Total assets Net income (loss)/Net sales EBIT/Beginning invested capital Inventory days (FIFO) Net sales per associate Capital expenditures Depreciation and amortization Capital expenditures/Depreciation Dividends paid per share (Note 2) Income (loss) before extraordinary item and cumulative effect of accounting changes per share (Notes 1 and 2) Debt to total capitalization Number of associates Number of shareholders (Note 3) Notes 1,366,164 274,141 48,000 20,456 8,700 29,619 (20,919) (3,250) 1,296,511 296,826 -048,973 42,091 28,660 13,431 8,979 1,309,893 297,660 41,000 (1,128) (15,277) 26,673 (41,950) (6,263)

(17,669) $ (271,932) $

4,452 4,452

$

(35,687) (35,687)

$

299,783 586,384 153,971

$

310,947 556,017 165,553

$

320,076 562,496 148,950

1,024,664 1,789,719 276,476 1,104,407 $ 685,312

1,049,004 1,738,450 320,515 753,387 $ 985,063

1,058,872 1,759,139 273,104 740,168 $1,018,971

$ $ $ $

(15.2)% (15.9)% 0.5% 122.8 106,898 92,940 118,403 80.2% 1.00

$ $ $ $

0.3% 0.3% 2.6% 138.3 98,171 139,096 114,433 124.4% 1.00

$ $ $ $

(2.0)% (2.2)% (0.9)% 140.5 92,865 144,678 109,252 135.6% 1.00

$

(0.57) 28.7% 15,985 20,684

$

0.15 24.5% 16,729 24,041

$

(1.21) 21.1% 17,740 26,048

(1) Excludes the cumulative effect of accounting changes in 1993, which related to the adoption of FAS No. 106, 109 and 112, and the cumulative effect of accounting changes in 1986, which related to the adoption of FAS No. 87 and a change in the method of accounting for depreciation. Also excluded is the extraordinary item recorded in 1985, which resulted from the utilization of foreign tax credit carryforwards. (2) Based on the average number of shares outstanding during each year. (3) Includes an estimated count of shareholders having common stock held for their accounts by banks, brokers and trustees for benefit plans.

1990* 1989 1988 1987 1986 1985 1984

1990* 1989 1988 1987 1986 1985 1984 (Thousands of dollars, except per share data) $1,173,056 $1,042,122 $1,002,412 $ 826,383 $ 762,903 $ 774,922 $ 808,610
527,955 490,840 551,731 403,875 295,152 315,752 341,298 _____________________________________________________________________________ 1,701,011 1,532,962 1,554,143 1,230,258 1,058,055 1,090,674 1,149,908 1,284,232 286,427 -0130,352 125,155 26,339 98,816 43,574 1,157,125 250,676 -0125,161 113,710 17,217 96,493 41,148 1,178,839 235,072 -0140,232 132,745 20,879 111,866 45,954 959,847 222,207 -048,204 47,891 25,037 22,854 12,535 875,006 219,654 80,000 (116,605) (118,902) 25,069 (143,971) (61,233) 883,590 233,131 -0(26,047) (32,797) 1,748 (34,545) (27,579) 863,323 231,599 -054,986 53,199 1,587 51,612 5,555

$

55,242 55,242 $

55,345 55,345 $

65,912 65,912

$

10,319 10,319 $

(82,738) 2,736 $

(6,966) (3,903) $

46,057 46,057

$

379,543 $ 657,865 238,486

344,135 $ 608,224 359,773

350,410 619,456 348,322

$

278,567 $ 485,163 255,910

247,615 406,206 100,716

$ 242,562 415,511 151,915 935,673 1,375,419 218,530 586,138

$ 259,143 433,141 112,743 814,423 1,279,124 238,111 489,253

1,025,565 1,814,909 266,392 740,208

932,828 1,565,961 80,647 501,157

941,121 1,593,031 182,341 619,315

957,641 1,466,634 180,805 543,541

976,600 1,403,529 263,219 596,907

$1,074,701 $1,064,804 $ 973,716 $ 923,093 $ 806,622 $ 789,281 $ 789,871
3.0% 3.2% 8.3% 163.2 90,191 120,090 101,260 120.4% 0.98 3.5% 3.6% 7.6% 167.5 88,878 91,536 91,070 100.5% 0.92 4.1% 4.2% 9.6% 161.0 86,102 78,943 88,756 88.9% 0.70 0.7% 0.8% 3.6% 162.9 73,576 52,119 84,649 61.6% 0.50 0.2% 0.3% (9.2)% 165.7 63,873 55,175 87,646 63.0% 0.50 (0.3)% (0.4)% (2.6)% 164.8 62,108 195,288 77,682 251.4% 0.90 3.6% 4.0% 4.8% 175.0 59,541 241,640 76,839 314.5% 1.00

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$

1.85 $ 19.9% 18,860 25,090

1.88 $ 7.0% 17,248 22,445

2.34 15.8% 18,050 21,184

$

0.39 $ 16.4% 16,721 22,470

(3.35) 24.6% 16,565 23,186

$

(0.29) 21.7% 17,561 26,136

$

1.96 23.2% 19,313 26,958

*Includes MPB Corporation operations for seven months. 35

APPENDIX TO EXHIBIT 13 On page 34 of the printed document, two bar charts were shown that contain the following information: (1) Total Net Sales (in Billions of Dollars)
Bearings Steel

APPENDIX TO EXHIBIT 13 On page 34 of the printed document, two bar charts were shown that contain the following information: (1) Total Net Sales (in Billions of Dollars)
Bearings ________ 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 $ 0.809 0.775 0.763 0.826 1.002 1.042 1.173 1.129 1.169 1.154 Steel _____ $ 0.341 0.316 0.295 0.404 0.552 0.491 0.528 0.518 0.473 0.555

(2) Return on Net Sales (before extraordinary items and cumulative effect of accounting changes):
Operating Income (Loss) _______________________ 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 4.8% -2.4% -11.0% 3.9% 9.0% 8.2% 7.7% -.1% 3.0% 1.2% Income (Loss) _____________ 4.0% -.6% -7.8% .8% 4.2% 3.6% 3.2% -2.2% .3% -1.0%

On page 35 of the printed document, two bar charts were shown that contain the following information: (1) Earnings (before extraordinary items and cumulative effect of accounting changes) and Dividends per Share:
Earnings ________ 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 $1.96 -.29 -3.35 .39 2.34 1.88 1.85 -1.21 .15 -.57 Dividends _________ $1.00 0.90 0.50 0.50 0.70 0.92 0.98 1.00 1.00 1.00

(2) Total Assets (in Billions of Dollars) Bearings ________ 1984 1985 1986 1987 1988 $0.661 0.639 0.662 0.717 0.803 Steel _____ $0.618 0.737 0.741 0.750 0.790

(2) Total Assets (in Billions of Dollars) Bearings ________ 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 $0.661 0.639 0.662 0.717 0.803 0.823 1.046 1.023 0.987 0.997 Steel _____ $0.618 0.737 0.741 0.750 0.790 0.743 0.769 0.736 0.752 0.793

Exhibit 21. Subsidiaries of the Registrant The Timken Company has no parents. The active subsidiaries of the Company (all of which are included in the consolidated financial statements of the Company and its subsidiaries) are as follows:
State or sovereign Percentage of power under laws voting securities Name of which organized owned by Company ____________________________________________________________________________ Timken Communications Company Timken do Brasil Commercio e Industria, Ltda. Timken de Mexico S.A. de C.V. Australian Timken Proprietary, Limited Timken Europa GmbH Timken South Africa (Pty.) Limited Canadian Timken, Limited Nihon Timken K.K. Latrobe Steel Company The Timken Service & Sales Co. Timken Italia, S.R.L. EDC, Inc. M.P.B. Corporation Timken Espana, S.L. Ohio State of Sao Paulo, Brazil Mexico State of Victoria, Australia West Germany South Africa Province of Ontario, Canada Japan Pennsylvania Ohio Italy Ohio Delaware Spain 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

The Company also has a number of inactive subsidiaries which were incorporated for name-holding purposes. EXHIBIT 21

Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference of our report dated February 3, 1994, with respect to the consolidated financial statements and schedules of The Timken Company included in this Annual Report (Form 10-K) for the year ended December 31, 1993, in the following Registration Statements and in the related Prospectuses:

Exhibit 21. Subsidiaries of the Registrant The Timken Company has no parents. The active subsidiaries of the Company (all of which are included in the consolidated financial statements of the Company and its subsidiaries) are as follows:
State or sovereign Percentage of power under laws voting securities Name of which organized owned by Company ____________________________________________________________________________ Timken Communications Company Timken do Brasil Commercio e Industria, Ltda. Timken de Mexico S.A. de C.V. Australian Timken Proprietary, Limited Timken Europa GmbH Timken South Africa (Pty.) Limited Canadian Timken, Limited Nihon Timken K.K. Latrobe Steel Company The Timken Service & Sales Co. Timken Italia, S.R.L. EDC, Inc. M.P.B. Corporation Timken Espana, S.L. Ohio State of Sao Paulo, Brazil Mexico State of Victoria, Australia West Germany South Africa Province of Ontario, Canada Japan Pennsylvania Ohio Italy Ohio Delaware Spain 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

The Company also has a number of inactive subsidiaries which were incorporated for name-holding purposes. EXHIBIT 21

Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference of our report dated February 3, 1994, with respect to the consolidated financial statements and schedules of The Timken Company included in this Annual Report (Form 10-K) for the year ended December 31, 1993, in the following Registration Statements and in the related Prospectuses:
Registration Number Registration Statement Dated

2-93847 2-81738

Form S-3 Post-effective Amendment No. 3 to Form S-3 Form S-3 Form S-3 Post-effective Amendment No. 1 to Form S-8 Post-effective

October 30, 1984 October 30, 1984

33-11823 33-35773 2-97340

February 6, 1987 July, 19, 1990 November 19, 1990

33-36839

November 19, 1990

Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference of our report dated February 3, 1994, with respect to the consolidated financial statements and schedules of The Timken Company included in this Annual Report (Form 10-K) for the year ended December 31, 1993, in the following Registration Statements and in the related Prospectuses:
Registration Number Registration Statement Dated

2-93847 2-81738

Form S-3 Post-effective Amendment No. 3 to Form S-3 Form S-3 Form S-3 Post-effective Amendment No. 1 to Form S-8 Post-effective Amendment No. 1 to Form S-8 Form S-8 Form S-8 Form S-8 Form S-8 Form S-8 Form S-3 Form S-8 Form S-8

October 30, 1984 October 30, 1984

33-11823 33-35773 2-97340

February 6, 1987 July, 19, 1990 November 19, 1990

33-36839

November 19, 1990

33-47185 33-50872 33-54360 33-54362 33-54452 33-62904 33-50609 33-50613

April 20, 1992 August 10, 1992 November 6, 1992 November 6, 1992 November 6, 1992 May 18, 1993 October 15, 1993 October 15, 1993 ERNST & YOUNG

Canton, Ohio March 28, 1994

POWER OF ATTORNEY The undersigned Directors and Officers of The Timken Company, an Ohio corporation (the "Company"), hereby constitute and appoint W. R. Timken, Jr., Joseph F. Toot, Jr., Gene E. Little and Larry R. Brown, and each of them, their true and lawful attorney or attorneys-in-fact, with full power of substitution and resubstitution, for them and in their name, place and stead, to sign on their behalf as a Director of the Company, an Annual Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1993 and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney or attorney-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and

POWER OF ATTORNEY The undersigned Directors and Officers of The Timken Company, an Ohio corporation (the "Company"), hereby constitute and appoint W. R. Timken, Jr., Joseph F. Toot, Jr., Gene E. Little and Larry R. Brown, and each of them, their true and lawful attorney or attorneys-in-fact, with full power of substitution and resubstitution, for them and in their name, place and stead, to sign on their behalf as a Director of the Company, an Annual Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1993 and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney or attorney-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorney or attorneysin-fact or any of them or their substitutes, may lawfully do or cause to be done by virtue thereof. EXECUTED this 4th day of February, 1994.
/s/ Robert Anderson _______________________________ Robert Anderson, Director /s/ Peter J. Ashton _______________________________ Peter J. Ashton, Director; Executive Vice President/ President - Bearings /s/ Stanley C. Gault _______________________________ Stanley C. Gault, Director /s/ Ward J. Timken _________________________________ Ward J. Timken, Director /s/ W. R. Timken, Jr. _________________________________ W. R. Timken, Jr., Director and Chairman - Board of Directors

/s/ Joseph F. Toot, Jr. _________________________________ Joseph F. Toot, Jr., Director; President and Chief Executive Officer /s/ Charles H. West ________________________________ Charles H. West, Director; Executive Vice President/ President - Steel /s/ Alton W. Whitehouse _________________________________ Alton W. Whitehouse, Director /s/ Gene E. Little _________________________________ Gene E. Little, Vice President Finance (Principal Financial Accounting Officer)

/s/ J. Clayburn La Force, Jr. _______________________________ J. Clayburn La Force, Jr., Director

/s/ Robert W. Mahoney _______________________________ Robert W. Mahoney, Director /s/ James W. Pilz _______________________________ James W. Pilz, Director /s/ John M. Timken, Jr. _______________________________ John M. Timken, Jr., Director

EXHIBIT 24


								
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