January 1, 2001 (revised December 19, 2001)
THE TIMKEN COMPANY
MANAGEMENT PERFORMANCE PLAN
The purpose of The Timken Company (the "Company") Management Performance Plan (the "Plan") is to
promote the profitable growth of the Company by:
- Providing rewards for achieving increasing levels of return on capital.
- Recognizing corporate, business unit and individual performance achievement.
- Attracting, motivating and retaining superior executive talent.
It is the responsibility of senior management of the Company to execute the provisions of the Plan. Based on
senior management recommendations, the Compensation Committee (the "Committee") approves financial goals,
participation, target bonus awards, actual bonus awards, timing of payment and other actions necessary to the
administration of the Plan.
The participant group includes Company executive officers and other key employees of the Company and its
subsidiaries in positions assigned to Grades 7 or higher (i.e., 750 or more points) based on the Company's job
Each position is assigned a target bonus expressed as a percentage of annual base salary. The targets are based
on market data for companies that are similar for compensation purposes, including companies of similar size and
similar industries. The targets are reviewed annually by management, and the Committee will approve all target
bonuses for officers.
The full target bonus opportunity represents an appropriate bonus award if performance standards are met for
Corporate, Business Unit and Individual results.
Bonus funds for the three components-Corporate, Business Unit and Individual - will be developed
independently based on performance achievement versus the goal(s) for each component. The actual value of
each component can range from 0% to 200% of target based on performance.
For most participants, the total bonus will be the sum of the amounts for Corporate, Business U